<PAGE>
Semiannual Report
as of September 30, 1999
Evergreen
State Municipal Bond Funds
[LOGO OF EVERGREEN FUNDS] Evergreen Funds/SM/
SINCE 1932
<PAGE>
Table of Contents
Letter to Shareholders ................................................... 1
Evergreen Connecticut Municipal
Bond Fund
Fund at a Glance ...................................................... 2
Portfolio Manager Interview ........................................... 3
Evergreen New Jersey Municipal
Bond Fund
Fund at a Glance ...................................................... 4
Portfolio Manager Interview ........................................... 5
Evergreen Pennsylvania Municipal
Bond Fund
Fund at a Glance ...................................................... 6
Portfolio Manager Interview ........................................... 7
Financial Highlights
Evergreen Connecticut Municipal
Bond Fund ............................................................. 8
Evergreen New Jersey Municipal
Bond Fund ............................................................. 10
Evergreen Pennsylvania Municipal
Bond Fund ............................................................. 12
Schedule of Investments
Evergreen Connecticut Municipal
Bond Fund ............................................................. 14
Evergreen New Jersey Municipal
Bond Fund ............................................................. 16
Evergreen Pennsylvania Municipal
Bond Fund ............................................................. 21
Statements of Assets and Liabilities ..................................... 29
Statements of Operations ................................................. 30
Statements of Changes in Net Assets ...................................... 31
Combined Notes to Financial
Statements ............................................................... 33
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 semiannual report must be preceded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees and expenses, and should be read carefully before
investing or sending money.
Mutual Funds: NOT FDIC INSURED May lose value . Not bank guaranteed
Evergreen Distributor, Inc.
Evergreen/SM/ is a Service Mark of Evergreen Investment Services, Inc.
<PAGE>
Letter to Shareholders
----------------------
November 1999
[PHOTO]
William M. Ennis
President and CEO
We are pleased to provide the Evergreen State Municipal Bond Funds semiannual
report, which covers the six-month period ended September 30, 1999.
Uncertainty over Interest Rates Influences the Markets
After the Federal Reserve Board lowered interest rates three times in 1998 in an
attempt to insulate the U.S. economy from global economic turmoil, it reversed
course halfway through 1999 and raised interest rates twice during the fiscal
period because of concerns about an overheated U.S. economy. Amidst the
volatility, the yield on the bellwether 30-year Treasury bond rose from a low of
4.72% in October of 1998 to 6.05% by September 30, 1999, the end of the fiscal
period.
The Federal Reserve Bank's "tightening bias" leads many to anticipate further
interest rate increases in order to stem even the slightest inflationary
pressure. We believe that the economy is still fundamentally strong, and that
inflation will stay contained, producing only moderate upward pressure on
interest rates. We believe bonds are relatively attractive over the long term
compared to other asset classes, particularly because "real" interest rates are
high by historical standards.
Evergreen Funds is Ready for the Year 2000/1/
We have been addressing the Year 2000 challenge since February of 1996 and have
committed the time, resources and people necessary to prepare for any
ramifications from the millennium bug. Today, we are confident that our
preparations will enable us to continue to deliver the high-quality Evergreen
products and services on which our shareholders rely. In addition, Evergreen
portfolio managers have placed great emphasis on monitoring portfolios for Y2K
readiness.
We believe that sound investing is about taking steps to meet your long-term
financial needs and goals. We remind you to take advantage of your financial
advisor's expertise to develop and refine a financial plan that will enable you
to meet your objectives. Evergreen Funds offers a broad mix of stock, bond and
money market funds that should make it simple for you to choose the most
appropriate for your portfolio.
We would like to 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
Connecticut Municipal Bond Fund
Fund at a Glance as of September 30, 1999
Portfolio
Characteristics
---------------
Total Net Assets $74,483,532
- --------------------------------------------------------------------------------
Average Credit Quality AA
- --------------------------------------------------------------------------------
Average Maturity 10.8 years
- --------------------------------------------------------------------------------
Average Duration 7.2 years
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
[GRAPHIC]
Morningstar's Style Box is based on a portfolio date as of 9/30/1999.
The Fixed-Income Style Box placement is based on a fund's average effective
maturity or duration and the average credit rating of the bond portfolio.
/1/ Source: 1999 Morningstar, Inc.
/2/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads, fees and expenses paid by the
shareholders investing in each class. The investment return and principal value
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost.
Historical performance shown for Class Y prior to its inception is based on the
Fund's predecessor common trust fund's (CTF) performance, adjusted for estimated
mutual fund expenses. The CTF was not registered under the 1940 Act and was not
subject to certain investment restrictions. If the CTF had been registered, its
performance might have been adversely affected. For Classes A and B prior to
their inception, the historical performance shown is based on the performance of
Class Y and has not been adjusted to reflect the effect of each Class' 12b-1
fees. These fees for Class A are 0.25% and for Class B are 1.00%. If these fees
had been reflected, returns for Classes A and B would have been lower.
Performance for the common trust fund has been adjusted to include the effect of
estimated mutual fund class gross expense ratios at the time the Fund was
converted to a mutual fund. If fee waivers and expense reimbursements had been
calculated into the mutual fund class expense ratio, the total returns would be
as follows: Class A - 3 year = 2.35%, 5 year = 3.73%, 10 year = 4.59% and since
01/31/81 = 6.21%; Class B - 3 year = 2.34%, 5 year = 3.62%, 10 year = 4.32% and
since 01/31/81 = 5.70%; Class Y - 3 year = 4.30%, 5 year = 5.00%, 10 year =
5.36% and since 01/31/81 = 6.75%.
PERFORMANCE AND RETURNS/2/
Portfolio Inception Date: 1/31/1981 Class A Class B Class Y
Class Inception Date 12/30/1997 1/9/1998 11/24/1997
- --------------------------------------------------------------------------------
Average Annual Returns*
- --------------------------------------------------------------------------------
6 months with sales charge -7.50% -7.98% n/a
- --------------------------------------------------------------------------------
6 months w/o sales charge -2.86% -3.23% -2.74%
- --------------------------------------------------------------------------------
1 year with sales charge -7.11% -7.80% n/a
- --------------------------------------------------------------------------------
1 year w/o sales charge -2.43% -3.16% -2.18%
- --------------------------------------------------------------------------------
3 years 2.25% 2.23% 4.19%
- --------------------------------------------------------------------------------
5 years 3.56% 3.44% 4.82%
- --------------------------------------------------------------------------------
10 years 4.36% 4.09% 5.13%
- --------------------------------------------------------------------------------
Since Portfolio Inception 5.96% 5.44% 6.50%
- --------------------------------------------------------------------------------
Maximum Sales Charge 4.75% 5.00% 1.00%
Front-End CDSC CDSC
- --------------------------------------------------------------------------------
30-day SEC Yield 3.88% 3.32% 4.33%
- --------------------------------------------------------------------------------
Taxable Equivalent Yield** 6.42% 5.50% 7.17%
- --------------------------------------------------------------------------------
6-month distributions per share $0.13 $0.11 $0.14
- --------------------------------------------------------------------------------
* Adjusted for maximum applicable sales charges unless noted.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
LONG TERM GROWTH
[GRAPH]
Lehman Brothers Consumer Price Evergreen Connecticut
Municipals Index - US Muni Bond A
31-Dec-97 10,000 10,000 9,524
30-Jun-98 10,268 10,105 9,712
31-Dec-98 10,648 10,161 10,051
30-Jun-99 10,558 10,304 9,842
30-Sep-99 10,511 10,384 9,799
Comparison of a $10,000 investment in Evergreen Connecticut Municipal Bond Fund,
Class A shares/2/, versus a similar investment in the Lehman Brothers Municipal
Bond Index (LBMBI) and the Consumer Price Index (CPI).
The LBMBI is an unmanaged market index and 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.
The LBMBI is a broad measure of the municipal bond market. To be included in
this index, bonds must have a minimum credit rating of at least BBB, and
outstanding par value of at least $3 million and be issued as part of a
transaction of at least $50 million. The bonds must have been issued after
December 31, 1990 and have a remaining maturity of at least one year. Taxable
municipal bonds, bonds with floating rates, derivatives, and certificates of
participation are excluded.
2
<PAGE>
EVERGREEN
Connecticut Municipal Bond Fund
Portfolio Manager Interview
Portfolio
Management
- --------------------------------------------------------------------------------
[PHOTO]
Jocelyn Turner
Tenure: November 1997
For the six-month period ended September 30, 1999 the Evergreen Connecticut
Municipal Bond Class A shares posted a -2.86% total return, unadjusted for any
sales charges, compared to the -2.16% return from the Lehman Brothers Municipal
Bond Index. The average Connecticut Municipal Bond Fund lost 2.43% according to
Lipper, Inc., an independent fund tracking company. Within the portfolio, we
continued to focus on the Fund's yield-oriented strategy throughout the period,
an approach we feel continues to provide our shareholders a higher degree of
price stability. Early in the period we sold some non-callable and zero-coupon
bonds--securities that are typically more volatile--and selectively added more
stable, high-yielding securities. Our strategy to reduce duration from 8.1 years
to 7.2 years in the six months also had a positive impact on performance as
interest rates rose during this period.
PORTFOLIO COMPOSITION
(based on 9/30/1999 portfolio assets)
[CHART]
General Obligation-State -- 28.3%
Hospital/Healthcare -- 22.1%
Water & Sewer -- 11.9%
Housing -- 6.4%
Transportation -- 6.3%
Utility -- 6.1%
Sales Tax -- 4.6%
Education -- 3.8%
Other -- 10.5%
PORTFOLIO QUALITY
(based on 9/30/1999 portfolio assets)
[CHART]
AAA -- 56.0%
AA -- 29.5%
A -- 5.7%
BBB -- 8.8%
3
<PAGE>
EVERGREEN
New Jersey Municipal Bond Fund
Fund at a Glance as of September 30, 1999
Portfolio
Characteristics
---------------
Total Net Assets $224,945,671
- --------------------------------------------------------------------------------
Average Credit Quality AA
- --------------------------------------------------------------------------------
Average Maturity 11.7 years
- --------------------------------------------------------------------------------
Average Duration 7.6 years
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
[GRAPHIC]
Morningstar's Style Box is based on a portfolio date as of 9/30/1999.
The Fixed-Income Style Box placement is based on a fund's average effective
maturity or duration and the average credit rating of the bond portfolio.
/1/ Source: 1999 Morningstar, Inc.
/2/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than original cost.
Historical performance shown for Classes B and Y prior to their inception is
based on the performance of Class A, the original class offered. These
historical returns for Classes B and Y have not been adjusted to reflect the
effect of each Class' 12b-1 fees. These fees for Class A are 0.25% and for Class
B are 1.00%. Class Y does not pay a 12b-1 fee. If these fees had been reflected,
returns for Class B would have been lower while returns for Class Y would have
been higher.
/3/ 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 ending 9/30/1999, the Fund's Class A shares ranked 10 out of
32 New Jersey Municipal Debt funds tracked by Lipper. For the 3-year period
ending 9/30/1999, the Fund's Class B and Y shares ranked 38 and 12,
respectively, out of 42 New Jersey Municipal Debt funds tracked by Lipper. Past
performance is no guarantee of future results.
PERFORMANCE AND RETURNS/2/
Portfolio Inception Date: 7/16/1991 Class A Class B Class Y
Class Inception Date 7/16/1991 1/30/1996 2/8/1996
- --------------------------------------------------------------------------------
Average Annual Returns*
- --------------------------------------------------------------------------------
6 months with sales charge -7.09% -7.63% n/a
- --------------------------------------------------------------------------------
6 months w/o sales charge -2.43% -2.86% -2.37%
- --------------------------------------------------------------------------------
1 year with sales charge -6.62% -7.49% n/a
- --------------------------------------------------------------------------------
1 year w/o sales charge -1.96% -2.83% -1.86%
- --------------------------------------------------------------------------------
3 years 3.00% 2.82% 4.78%
- --------------------------------------------------------------------------------
5 years 4.89% 4.93% 5.99%
- --------------------------------------------------------------------------------
Since Portfolio Inception 5.69% 5.91% 6.36%
- --------------------------------------------------------------------------------
Maximum Sales Charge 4.75% 5.00% n/a
Front-End CDSC
- --------------------------------------------------------------------------------
30-day SEC Yield 4.52% 3.83% 4.84%
- --------------------------------------------------------------------------------
Taxable Equivalent Yield** 7.48% 6.34% 8.01%
- --------------------------------------------------------------------------------
6-month distributions per share $0.25 $0.20 $0.26
- --------------------------------------------------------------------------------
Lipper Ranking out of 59 New Jersey
Municipal Debt Funds/3/
(for the six-month period ended 9/30/1999) 12 25 10
- --------------------------------------------------------------------------------
* Adjusted for maximum applicable sales charge unless noted.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
LONG TERM GROWTH
[GRAPH]
Lehman Brothers Consumer Price Evergreen NJ
Municipals Index - US MUNI A
31-Jul-91 10,000 10,000 9,524
30-Sep-91 10,264 10,073 9,734
30-Sep-92 11,337 10,374 10,716
30-Sep-93 12,781 10,653 12,163
30-Sep-94 12,469 10,969 11,772
30-Sep-95 13,864 11,248 12,963
30-Sep-96 14,702 11,586 13,687
30-Sep-97 16,027 11,836 14,685
30-Sep-98 17,424 12,012 16,014
30-Sep-99 17,303 12,298 15,701
Comparison of a $10,000 investment in Evergreen New Jersey Municipal Bond Fund,
Class A shares/2/, versus a similar investment in the Lehman Brothers Municipal
Bond Index (LBMBI) and the Consumer Price Index (CPI).
The LBMBI is an unmanaged index which 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.
The LBMBI is a broad measure of the municipal bond market. To be included in
this index, bonds must have a minimum credit rating of at least BBB, and
outstanding par value of at least $3 million and be issued as part of a
transaction of at least $50 million. The bonds must have been issued after
December 31, 1990 and have a remaining maturity of at least one year. Taxable
municipal bonds, bonds with floating rates, derivatives, and certificates of
participation are excluded.
4
<PAGE>
EVERGREEN
New Jersey Municipal Bond Fund
Portfolio Manager Interview
Portfolio
Management
- --------------------------------------------------------------------------------
[PHOTO]
Jocelyn Turner
Tenure: November 1992
The Evergreen New Jersey Municipal Bond Fund, Class A shares posted a -2.43%
total return for the six-month period ended September 30, 1999, unadjusted for
any sales charges, compared to a -2.16% return for the Lehman Brothers Municipal
Bond Index. For the past year, the Fund's Class A Shares had a -1.96% total
return, unadjusted for any sales charges, which outpaced the -2.53% average
return of all New Jersey municipal bond funds tracked by Lipper Inc., an
independent mutual fund rating company. Our duration strategy had a positive
impact on performance, with duration reduced from 8.3 years to 7.6 years during
the six months. This reduced stance enhanced total return as interest rates
climbed higher in the period. In addition, adjustments made to the portfolio
continued to focus on the Fund's yield-oriented strategy, an approach we feel
continues to provide our shareholders a higher degree of price stability.
Consistent with this strategy, non-callable and zero-coupon bonds were sold and
replaced with more stable, high-yielding securities.
PORTFOLIO COMPOSITION
(based on 9/30/1999 portfolio assets)
[CHART]
General Obligation-State -- 23.5%
Hospital/Healthcare -- 14.5%
Water & Sewer -- 11.8%
Prerefunded/Escrowed -- 10.7%
Transportation -- 9.5%
Port Authority -- 8.4%
Housing -- 4.2%
Lease Revenue -- 2.8%
Education -- 2.6%
Other -- 12.0%
PORTFOLIO QUALITY
(based on 9/30/1999 portfolio assets)
[CHART]
AAA -- 60.4%
AA -- 24.6%
A -- 5.0%
BBB -- 4.8%
BB -- 1.4%
Not Rated -- 3.8%
5
<PAGE>
EVERGREEN
Pennsylvania Municipal Bond Fund
Fund at a Glance as of September 30, 1999
Portfolio
Characteristics
---------------
Total Net Assets $908,894,735
Average Credit Quality AA
Average Maturity 11.1 years
Average Duration 7.4 years
CURRENT INVESTMENT STYLE/1/
[GRAPHIC]
Morningstar's Style Box is based on a portfolio date as of 9/30/1999.
The Fixed-Income Style Box placement is based on a fund's average effective
maturity or duration and the average credit rating of the bond portfolio.
/1/ Source: 1999 Morningstar, Inc.
/2/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than original cost.
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 Class A are 0.25%, for Class B
are 1.00% and for Class C are 1.00%. 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.
/3/ 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 ending 9/30/1999, Class A, B and C shares ranked 19, 33 and 33
out of 43 Pennsylvania Municipal Debt funds. For the 3-year period ending
9/30/1999, the Fund's Class A, B and C shares ranked 7, 31 and 31 out of 51
Pennsylvania Municipal Debt funds tracked by Lipper. Past performance is no
guarantee of future results.
PERFORMANCE AND RETURNS/2/
Portfolio Inception Date: 12/27/1990 Class A Class B Class C Class Y
Class Inception Date 12/27/1990 2/1/1993 2/1/1993 11/24/1997
- --------------------------------------------------------------------------------
Average Annual Returns*
- --------------------------------------------------------------------------------
6 months with sales charge -7.24% -7.64% -3.82% n/a
- --------------------------------------------------------------------------------
6 months w/o sales charge -2.63% -2.88% -2.87% -2.51%
- --------------------------------------------------------------------------------
1 year with sales charge -6.49% -7.07% -3.34% n/a
- --------------------------------------------------------------------------------
1 year w/o sales charge -1.79% -2.43% -2.41% -1.55%
- --------------------------------------------------------------------------------
3 years 3.26% 3.31% 4.23% 5.13%
- --------------------------------------------------------------------------------
5 years 4.83% 4.79% 5.12% 5.96%
- --------------------------------------------------------------------------------
Since Portfolio Inception 6.52% 6.51% 6.51% 7.17%
- --------------------------------------------------------------------------------
Maximum Sales Charge 4.75% 5.00% 1.00% n/a
Front-End CDSC CDSC
- --------------------------------------------------------------------------------
30-day SEC Yield 4.54% 4.01% 4.01% 5.01%
- --------------------------------------------------------------------------------
Taxable Equivalent Yield ** 7.52% 6.64% 6.64% 8.29%
- --------------------------------------------------------------------------------
6-month distributions per share $0.27 $0.22 $0.22 $0.28
- --------------------------------------------------------------------------------
Lipper Ranking out of 60 Pennsylvania
Municipal Debt Funds/3/
(for the six-month period
ended 9/30/1999) 8 12 11 6
- --------------------------------------------------------------------------------
* 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.
LONG TERM GROWTH
[GRAPH]
Lehman Brothers Consumer Price Evergreen PA
Municipals Index - US MUNI A
31-Dec-90 10,000 10,000 9,524
30-Sep-91 10,850 10,254 10,434
30-Sep-92 11,985 10,561 11,607
30-Sep-93 13,512 10,845 13,367
30-Sep-94 13,182 11,166 12,811
30-Sep-95 14,656 11,450 13,938
30-Sep-96 15,542 11,794 14,725
30-Sep-97 16,943 12,048 16,064
30-Sep-98 18,419 12,227 17,340
30-Sep-99 18,292 12,519 17,029
Comparison of a $10,000 investment in Evergreen Pennsylvania Municipal Bond
Fund, Class A shares/2/, versus a similar investment in the Lehman Brothers
Municipal Bond Index (LBMBI) and the Consumer Price Index (CPI).
The LBMBI is an unmanaged market index and 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.
The LBMBI is a broad measure of the municipal bond market. To be included in
this index, bonds must have a minimum credit rating of at least BBB, and
outstanding par value of at least $3 million and be issued as part of a
transaction of at least $50 million. The bonds must have been issued after
December 31, 1990 and have a remaining maturity of at least one year. Taxable
municipal bonds, bonds with floating rates, derivatives, and certificates of
participation are excluded.
6
<PAGE>
EVERGREEN
Pennsylvania Municipal Bond Fund
Portfolio Manager Interview
Portfolio
Management
- --------------------------------------------------------------------------------
[PHOTO]
Jocelyn Turner
Tenure: November 1997
Amid a rising interest rate environment, the Evergreen Pennsylvania Municipal
Bond Fund, Class A shares posted a -2.63% total return for the six-month period
ended September 30, 1999, unadjusted for any sales charges, compared to a -2.16%
return from the Lehman Brothers Municipal Bond Index. Over the past year, the
Fund's Class A shares had a -1.79% return, unadjusted for any sales charges,
which ranked in the top 15% of all Pennsylvania municipal bond funds tracked by
Lipper Inc., an independent mutual fund rating company. Performance was due, in
part, to a favorable duration stance. Duration was reduced rather significantly
from 8.8 years to 7.4 years during the six months and positively impacted
performance as interest rates rose. Within the portfolio, we continued to focus
on the Fund's yield-oriented strategy throughout the period; an approach we feel
continues to provide our shareholders a higher degree of price stability.
Higher-volatility issues such as zero-coupon bonds were sold and replaced with
higher-yielding, more stable securities.
PORTFOLIO COMPOSITION
(based on 9/30/1999 portfolio assets)
[CHART]
Hospital/Healthcare -- 24.2%
Prerefunded/Escrowed -- 19.7%
Education -- 13.7%
Industrial Development -- 7.1%
General Obligation-Local -- 6.6%
General Obligation-State -- 6.6%
Water & Sewer -- 5.5%
Housing -- 3.9%
Transportation -- 3.6%
Other -- 9.1%
PORTFOLIO QUALITY
(based on 9/30/1999 portfolio assets)
[CHART]
AAA -- 61.7%
AA -- 17.4%
A -- 9.4%
BBB -- 7.4%
Not Rated -- 4.1%
7
<PAGE>
EVERGREEN
Connecticut Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended March 31,
September 30, 1999 ------------------------
(Unaudited) 1999 1998 (a)
<S> <C> <C> <C>
CLASS A SHARES
Net asset value, beginning of
period $ 6.38 $ 6.38 $ 6.40
------ ---------- ---------
Income from investment operations
Net investment income 0.13 0.26 0.07
Net realized and unrealized gains
or losses on securities (0.31) 0.06 (0.02)
------ ---------- ---------
Total from investment operations (0.18) 0.32 0.05
------ ---------- ---------
Less distributions to
shareholders from
Net investment income (0.13) (0.26) (0.07)
Net realized gains 0 (0.06) 0
------ ---------- ---------
Total distributions to
shareholders (0.13) (0.32) (0.07)
------ ---------- ---------
Net asset value, end of period $ 6.07 $ 6.38 $ 6.38
------ ---------- ---------
Total return* (2.86%) 5.14% 0.77%
Ratios and supplemental data
Net assets, end of period
(thousands) $ 816 $ 570 $ 146
Ratios to average net assets
Expenses# 0.86%+ 0.84% 0.86%+
Net investment income 4.11%+ 4.04% 4.38%+
Portfolio turnover rate 38% 42% 17%
<CAPTION>
Six Months Ended Year Ended March 31,
September 30, 1999 ------------------------
(Unaudited) 1999 1998 (b)
<S> <C> <C> <C>
CLASS B SHARES
Net asset value, beginning of
period $ 6.38 $ 6.38 $ 6.44
------ ---------- ---------
Income from investment operations
Net investment income 0.11 0.21 0.05
Net realized and unrealized gains
or losses on securities (0.31) 0.06 (0.06)
------ ---------- ---------
Total from investment operations (0.20) 0.27 (0.01)
------ ---------- ---------
Less distributions to
shareholders from
Net investment income (0.11) (0.21) (0.05)
Net realized gains 0 (0.06) 0
------ ---------- ---------
Total distributions to
shareholders (0.11) (0.27) (0.05)
------ ---------- ---------
Net asset value, end of period $ 6.07 $ 6.38 $ 6.38
------ ---------- ---------
Total return* (3.23%) 4.35% (0.21%)
Ratios and supplemental data
Net assets, end of period
(thousands) $1,507 $ 1,180 $ 331
Ratios to average net assets
Expenses# 1.60%+ 1.58% 1.61%+
Net investment income 3.31%+ 3.25% 3.36%+
Portfolio turnover rate 38% 42% 17%
</TABLE>
(a) For the period from December 30, 1997 (commencement of class operations) to
March 31, 1998.
(b) For the period from January 9, 1998 (commencement of class operations) to
March 31, 1998.
* Excluding applicable sales charges.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and
includes fee waivers.
See Combined Notes to Financial Statements.
8
<PAGE>
EVERGREEN
Connecticut Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended March 31,
September 30, 1999 ------------------------
(Unaudited) 1999 1998 (a)
<S> <C> <C> <C>
CLASS Y SHARES
Net asset value, beginning of
period $ 6.38 $ 6.37 $ 6.32
------- ---------- ----------
Income from investment operations
Net investment income 0.14 0.28 0.10
Net realized and unrealized gains
or losses on securities (0.31) 0.07 0.05
------- ---------- ----------
Total from investment operations (0.17) 0.35 0.15
------- ---------- ----------
Less distributions to
shareholders from
Net investment income (0.14) (0.28) (0.10)
Net realized gains 0 (0.06) 0
------- ---------- ----------
Total distributions to
shareholders (0.14) (0.34) (0.10)
------- ---------- ----------
Net asset value, end of period $ 6.07 $ 6.38 $ 6.37
------- ---------- ----------
Total return (2.74%) 5.56% 2.39%
Ratios and supplemental data
Net assets, end of period
(thousands) $72,160 $ 73,890 $ 67,675
Ratios to average net assets
Expenses# 0.60%+ 0.58% 0.61%+
Net investment income 4.34%+ 4.33% 4.50%+
Portfolio turnover rate 38% 42% 17%
</TABLE>
(a) For the period from November 24, 1997 (commencement of class operations) to
March 31, 1998.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and
includes fee waivers.
See Combined Notes to Financial Statements.
9
<PAGE>
EVERGREEN
New Jersey Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended March 31, Year Ended February 28,
September 30, 1999 -------------------------- Period Ended ------------------------
(Unaudited) 1999 1998 1997 (a) August 31, 1996 (b) 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 11.16 $ 11.11 $ 10.74 $ 10.75 $ 11.01 $ 10.53 $ 10.99
------- ------- ------- ------- ------- ----------- -----------
Income from investment
operations
Net investment income 0.25 0.51 0.53 0.31 0.28 0.56 0.57
Net realized and
unrealized gains or
losses on securities (0.52) 0.11 0.46 (0.01) (0.26) 0.48 (0.46)
------- ------- ------- ------- ------- ----------- -----------
Total from investment
operations (0.27) 0.62 0.99 0.30 0.02 1.04 0.11
------- ------- ------- ------- ------- ----------- -----------
Less distributions to
shareholders from
Net investment income (0.25) (0.51) (0.53) (0.31) (0.28) (0.56) (0.57
Net realized gains 0 (0.06) (0.09) 0 0 0 0
------- ------- ------- ------- ------- ----------- -----------
Total distributions to
shareholders (0.25) (0.57) (0.62) (0.31) (0.28) (0.56) (0.57)
------- ------- ------- ------- ------- ----------- -----------
Net asset value, end of
period $ 10.64 $ 11.16 $ 11.11 $ 10.74 $ 10.75 $ 11.01 $ 10.53
------- ------- ------- ------- ------- ----------- -----------
Total return* (2.43%) 5.66% 9.34% 2.83% 0.19% 10.08% 1.41%
Ratios and supplemental
data
Net assets, end of
period (thousands) $29,965 $33,657 $31,614 $31,434 $32,377 $ 41,762 $ 34,852
Ratios to average net
assets
Expenses# 0.54%+ 0.50% 0.50% 0.44%+ 0.34%+ 0.36% 0.25%
Net investment income 4.59%+ 4.52% 4.77% 5.02%+ 5.08%+ 5.15% 5.52%
Portfolio turnover rate 17% 40% 37% 15% 0% 4% 8%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended March 31,
September 30, 1999 -------------------------- Period Ended Period Ended
(Unaudited) 1999 1998 1997 (a) August 31, 1996 (b) February 29, 1996 (c)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 11.16 $ 11.11 $ 10.74 $10.75 $11.01 $11.08
------- ------- ------- ------ ------ ------
Income from investment
operations
Net investment income 0.20 0.40 0.43 0.25 0.24 0.05
Net realized and
unrealized gains or
losses on securities (0.52) 0.11 0.46 0 (0.26) (0.07)
------- ------- ------- ------ ------ ------
Total from investment
operations (0.32) 0.51 0.89 0.25 (0.02) (0.02)
------- ------- ------- ------ ------ ------
Less distributions to
shareholders from
Net investment income (0.20) (0.40) (0.43) (0.26) (0.24) (0.05)
Net realized gains 0 (0.06) (0.09) 0 0 0
------- ------- ------- ------ ------ ------
Total distributions to
shareholders (0.20) (0.46) (0.52) (0.26) (0.24) (0.05)
------- ------- ------- ------ ------ ------
Net asset value, end of
period $ 10.64 $ 11.16 $ 11.11 $10.74 $10.75 $11.01
------- ------- ------- ------ ------ ------
Total return* (2.86%) 4.71% 8.35% 2.29% (0.20%) (0.22%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $20,852 $20,199 $13,645 $7,847 $2,709 $ 186
Ratios to average net
assets
Expenses# 1.45%+ 1.41% 1.41% 1.36%+ 1.28%+ 0.31%+
Net investment income 3.67%+ 3.59% 3.85% 4.07%+ 4.14%+ 5.23%+
Portfolio turnover rate 17% 40% 37% 15% 0% 4%
</TABLE>
(a) For the seven months ended March 31, 1997. The Fund changed its fiscal year
end from August 31 to March 31, effective March 31, 1997.
(b) For the six months ended August 31, 1996. The Fund changed its fiscal year
end from February 28 to August 31, effective August 31, 1996.
(c) For the period from January 30, 1996 (commencement of class operations) to
February 29, 1996.
* Excluding applicable sales charges.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and
includes fee waivers.
See Combined Notes to Financial Statements.
10
<PAGE>
EVERGREEN
New Jersey Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended March 31,
September 30, 1999 ---------------------------- Period Ended Period Ended
(Unaudited) 1999 1998 1997 (a) August 31, 1996 (b) February 29, 1996 (c)
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $ 11.16 $ 11.11 $ 10.74 $10.75 $11.01 $11.14
-------- -------- -------- ------ ------ ------
Income from investment
operations
Net investment income 0.26 0.52 0.54 0.32 0.28 0.03
Net realized and
unrealized gains or
losses on securities (0.52) 0.11 0.46 (0.01) (0.26) (0.13)
-------- -------- -------- ------ ------ ------
Total from investment
operations (0.26) 0.63 1.00 0.31 0.02 (0.10)
-------- -------- -------- ------ ------ ------
Less distributions to
shareholders from
Net investment income (0.26) (0.52) (0.54) (0.32) (0.28) (0.03)
Net realized gains 0 (0.06) (0.09) 0 0 0
-------- -------- -------- ------ ------ ------
Total distributions to
shareholders (0.26) (0.58) (0.63) (0.32) (0.28) (0.03)
-------- -------- -------- ------ ------ ------
Net asset value, end of
period $ 10.64 $ 11.16 $ 11.11 $10.74 $10.75 $11.01
-------- -------- -------- ------ ------ ------
Total return (2.37%) 5.76% 9.44% 2.88% 0.20% (0.87%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $174,128 $123,419 $105,331 $9,436 $9,076 $ 18
Ratios to average net
assets
Expenses# 0.45%+ 0.41% 0.41% 0.36%+ 0.31%+ 0.31%+
Net investment income 4.68%+ 4.61% 4.79% 5.08%+ 5.12%+ 5.28%+
Portfolio turnover rate 17% 40% 37% 15% 0% 4%
</TABLE>
(a) For the seven months ended March 31, 1997. The Fund changed its fiscal year
end from August 31 to March 31, effective March 31, 1997.
(b) For the six months ended August 31, 1996. The Fund changed its fiscal year
end from February 28 to August 31, effective August 31, 1996.
(c) For the period from February 8, 1996 (commencement of class operations) to
February 29, 1996.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and
includes fee waivers.
See Combined Notes to Financial Statements.
11
<PAGE>
EVERGREEN
Pennsylvania Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended March 31,
September 30, 1999 -------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 11.66 $ 11.70 $ 11.14 $ 11.15 $ 10.91 $ 11.01
------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.26 0.51 0.55 0.59 0.60 0.61
Net realized and
unrealized gains or
losses on securities (0.56) 0.10 0.55 (0.01) 0.23 (0.09)
------- ------- ------- ------- ------- -------
Total from investment
operations (0.30) 0.61 1.10 0.58 0.83 0.52
------- ------- ------- ------- ------- -------
Less distributions to
shareholders from
Net investment income (0.27) (0.51) (0.54) (0.59) (0.59) (0.62)
Net realized gains 0 (0.14) 0 0 0 0
------- ------- ------- ------- ------- -------
Total distributions to
shareholders (0.27) (0.65) (0.54) (0.59) (0.59) (0.62)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 11.09 $ 11.66 $ 11.70 $ 11.14 $ 11.15 $ 10.91
------- ------- ------- ------- ------- -------
Total return* (2.63%) 5.36% 10.02% 5.30% 7.66% 4.91%
Ratios and supplemental
data
Net assets, end of
period (thousands) $33,023 $28,646 $24,119 $24,535 $28,710 $30,450
Ratios to average net
assets
Expenses# 0.76%+ 0.82% 0.76% 0.76% 0.76% 0.75%
Net investment income 4.65%+ 4.36% 4.79% 5.26% 5.29% 5.65%
Portfolio turnover rate 7% 69% 54% 84% 55% 97%
<CAPTION>
Six Months Ended Year Ended March 31,
September 30, 1999 -------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 11.52 $ 11.55 $ 10.99 $ 11.00 $ 10.81 $ 10.98
------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.22 0.42 0.46 0.49 0.51 0.54
Net realized and
unrealized gains or
losses on securities (0.55) 0.11 0.54 (0.01) 0.22 (0.10)
------- ------- ------- ------- ------- -------
Total from investment
operations (0.33) 0.53 1.00 0.48 0.73 0.44
------- ------- ------- ------- ------- -------
Less distributions to
shareholders from
Net investment income (0.22) (0.42) (0.44) (0.49) (0.54) (0.61)
Net realized gains 0 (0.14) 0 0 0 0
------- ------- ------- ------- ------- -------
Total distributions to
shareholders (0.22) (0.56) (0.44) (0.49) (0.54) (0.61)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 10.97 $ 11.52 $ 11.55 $ 10.99 $ 11.00 $ 10.81
------- ------- ------- ------- ------- -------
Total return* (2.88%) 4.68% 9.27% 4.50% 6.84% 4.15%
Ratios and supplemental
data
Net assets, end of
period (thousands) $36,369 $37,823 $37,036 $37,215 $37,719 $30,657
Ratios to average net
assets
Expenses# 1.51%+ 1.58% 1.52% 1.51% 1.48% 1.50%
Net investment income 3.89%+ 3.60% 4.04% 4.50% 4.55% 4.89%
Portfolio turnover rate 7% 69% 54% 84% 55% 97%
</TABLE>
* Excluding applicable sales charges.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits.
See Combined Notes to Financial Statements.
12
<PAGE>
EVERGREEN
Pennsylvania Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended March 31,
September 30, 1999 --------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value,
beginning of period $11.55 $11.59 $11.02 $11.03 $10.83 $11.00
------ ------ ------ ------ ------ ------
Income from investment
operations
Net investment income 0.22 0.42 0.45 0.47 0.51 0.53
Net realized and
unrealized gains or
losses on securities (0.55) 0.10 0.57 0.01 0.23 (0.10)
------ ------ ------ ------ ------ ------
Total from investment
operations (0.33) 0.52 1.02 0.48 0.74 0.43
------ ------ ------ ------ ------ ------
Less distributions to
shareholders from
Net investment income (0.22) (0.42) (0.45) (0.49) (0.54) (0.60)
Net realized gains 0 (0.14) 0 0 0 0
------ ------ ------ ------ ------ ------
Total distributions to
shareholders (0.22) (0.56) (0.45) (0.49) (0.54) (0.60)
------ ------ ------ ------ ------ ------
Net asset value, end of
period $11.00 $11.55 $11.59 $11.02 $11.03 $10.83
------ ------ ------ ------ ------ ------
Total return* (2.87%) 4.59% 9.34% 4.49% 6.92% 4.05%
Ratios and supplemental
data
Net assets, end of
period (thousands) $6,632 $6,945 $6,414 $6,830 $9,675 $9,559
Ratios to average net
assets
Expenses# 1.51%+ 1.58% 1.52% 1.51% 1.48% 1.50%
Net investment income 3.89%+ 3.60% 4.05% 4.52% 4.57% 4.90%
Portfolio turnover rate 7% 69% 54% 84% 55% 97%
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended March 31,
September 30, 1999 --------------------
(Unaudited) 1999 1998 (a)
<S> <C> <C> <C>
CLASS Y SHARES
Net asset value, beginning of period $ 11.66 $ 11.70 $ 11.60
-------- -------- --------
Income from investment operations
Net investment income 0.28 0.54 0.19
Net realized and unrealized gains or
losses on securities (0.57) 0.10 0.10
-------- -------- --------
Total from investment operations (0.29) 0.64 0.29
-------- -------- --------
Less distributions to shareholders
from
Net investment income (0.28) (0.54) (0.19)
Net realized gains 0 (0.14) 0
-------- -------- --------
Total distributions to shareholders (0.28) (0.68) (0.19)
-------- -------- --------
Net asset value, end of period $ 11.09 $ 11.66 $ 11.70
-------- -------- --------
Total return (2.51%) 5.63% 2.54%
Ratios and supplemental data
Net assets, end of period (thousands) $832,871 $181,919 $152,960
Ratios to average net assets
Expenses# 0.50%+ 0.57% 0.59%+
Net investment income 4.98%+ 4.61% 4.75%+
Portfolio turnover rate 7% 69% 54%
</TABLE>
(a) For the period from November 24, 1997 (commencement of class operations) to
March 31, 1998.
* Excluding applicable sales charges.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits.
See Combined Notes to Financial Statements.
13
<PAGE>
EVERGREEN
Connecticut Municipal Bond Fund
Schedule of Investments
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 89.3%
Connecticut - 70.4%
Bristol, CT GO:
$ 130,000 5.00%, 6/15/2005 $ 133,034
355,000 5.25%, 6/15/2008 366,492
275,000 Cheshire, CT GO,
5.75%, 8/15/2009 286,858
Connecticut Clean Wtr. Fund RB:
1,000,000 5.13%, 9/1/2014 973,120
1,000,000 5.13%, 9/1/2015 963,700
2,675,000 5.25%, 7/15/2014 2,626,235
2,000,000 Connecticut Dev. Auth. PCRB,
United Illuminating,
4.35%, 6/1/2026 1,949,000
Connecticut Dev. Auth. RB:
Church Homes, Inc. Proj.:
710,000 4.80%, 4/1/2001 709,290
425,000 4.90%, 4/1/2002 424,503
1,000,000 5.80%, 4/1/2021 923,870
1,500,000 Life Care Fac., Seabury Proj.,
5.00%, 9/1/2021 1,315,035
890,000 Connecticut Dev. Auth. Spl. Obl. RB, State General
Fund, Ser. A, (FGIC), 5.50%, 5/1/2008 926,383
1,000,000 Connecticut Dev. Auth., Wtr. Facs. RB, Bridgeport
Hydraulic Corp.,
6.15%, 4/1/2035 1,009,020
Connecticut GO:
Ser. A:
2,795,000 5.25%, 3/15/2010 2,844,472
1,000,000 6.00%, 3/1/2006 1,071,850
3,000,000 6.25%, 5/15/2006 3,261,900
Ser. B:
1,000,000 5.30%, 9/15/2007 1,034,060
500,000 6.00%, 11/15/2002 525,925
200,000 Ser. C,
5.88%, 8/15/2009 213,770
2,000,000 Connecticut HFA Hsg. RB Mtge. Fin. Program, Ser. H 1,
5.10%, 5/15/2017 1,861,220
100,000 Connecticut HFA RB, Mtge. Fin
Proj., Ser. C 1,
5.75%, 5/15/2005 102,499
300,000 Connecticut Higher Ed. Loan Auth
RB, Ser. A,
7.00%, 11/15/2000 306,591
Connecticut Hlth. & Edl. Facs. RB:
225,000 Choate Rosemary Hall, Ser. A,
6.50%, 7/1/2009 245,662
500,000 Greenwich Hosp. Assn., Ser. A, 5.40%, 7/1/2009 513,640
500,000 Hebrew Home & Hosp., Ser. B, 5.15%, 8/1/2028 444,500
2,000,000 Hosp. for Spl. Care, Ser. B,
5.13%, 7/1/2007 1,957,680
1,000,000 Hosp. of St. Raphael,
Ser. H, (AMBAC),
5.00%, 7/1/2006 1,015,960
1,000,000 Kent Sch. Corp., Ser. B,
5.50%, 7/1/2015 998,860
625,000 Lawrence & Mem. Hosp., Ser. D,
4.88%, 7/1/2007 624,756
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Connecticut - continued
Connecticut Hlth. & Edl. Facs
RB - continued:
$ 250,000 New Britain General Hosp.,
Ser. B, (AMBAC),
5.88%, 7/1/2008 $ 262,675
Newington Children's Hosp.,
Ser. A, (MBIA):
1,000,000 5.90%, 7/1/2008 1,052,010
250,000 6.05%, 7/1/2010 262,382
1,000,000 Stamford Hosp., Ser. F,
5.25%, 7/1/2011 992,990
1,500,000 Suffield Academy, Ser. A,
5.40%, 7/1/2027 1,431,480
100,000 Trinity College, Ser. F, (MBIA),
5.00%, 7/1/2015 94,065
1,000,000 Veterans Mem. Med. Ctr., Ser. A, 5.38%, 7/1/2014 976,540
1,500,000 Westminster Sch., Ser. A,
5.50%, 7/1/2016 1,485,300
1,000,000 Yale New Haven Hosp.,
5.63%, 7/1/2016 988,690
Connecticut Spl. Tax Obl. RB
Trans. Infrastructure:
1,000,000 Ser. A, (FGIC),
6.00%, 6/1/2006 1,072,430
2,455,000 Ser. B, (FSA),
5.50%, 11/1/2011 2,524,796
1,000,000 Ser. C, (MBIA),
6.00%, 10/1/2009 1,077,960
525,000 Guilford, CT GO,
5.00%, 11/15/2007 531,830
Hamdem, CT GO, (MBIA):
1,000,000 5.38%, 8/15/2010 1,024,390
1,275,000 5.40%, 8/15/2011 1,299,212
Middletown, CT GO:
445,000 5.60%, 4/15/2000 449,548
1,000,000 6.00%, 4/15/2007 1,075,160
500,000 Milford, CT GO,
5.20%, 1/15/2013 495,140
Montville, CT GO:
250,000 5.15%, 12/1/2007 256,860
300,000 5.25%, 12/1/2008 309,675
250,000 Naugatuck, CT GO,
5.40%, 3/15/2008 259,588
500,000 New Haven, CT GO, (FSA),
6.50%, 8/1/2000 511,060
1,100,000 Newtown, CT GO, (MBIA),
5.13%, 6/15/2015 1,060,367
385,000 Putnam, CT GO, (MBIA),
5.60%, 11/15/2000 392,384
185,000 Stamford, CT GO,
6.25%, 1/15/2000 186,404
2,500,000 Stamford, CT Hsg. Auth. MHRB,
Fairfield Apts. Proj.,
4.75%, 12/1/2028 2,355,875
Wallingford, CT GO:
170,000 5.50%, 6/15/2008 178,252
170,000 5.60%, 6/15/2009 178,428
-----------
52,415,376
-----------
</TABLE>
14
<PAGE>
EVERGREEN
Connecticut Municipal Bond Fund
Schedule of Investments(continued)
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Guam - 0.3%
$ 250,000 Guam Pwr. Auth. RB, Ser. A,
(AMBAC),
5.90%, 10/1/2008 $ 272,880
-----------
Puerto Rico - 18.6%
Cmnwlth. of Puerto Rico Aqueduct & Swr. Auth. RB,
(MBIA):
1,000,000 5.20%, 7/1/2008 1,030,400
1,000,000 6.25%, 7/1/2012 1,097,880
4,000,000 Cmnwlth. of Puerto Rico Elec. Pwr. Auth. RB, Ser. F,
5.25%, 7/1/2010 4,095,440
5,000 Cmnwlth. of Puerto Rico HFA SFHRB, 5.80%,
10/15/2000.. 5,040
Cmnwlth. of Puerto Rico Hwy. & Trans. Auth. RB:
2,100,000 Ser. A, (AMBAC),
5.50%, 7/1/2011 2,175,285
2,000,000 Ser. Z, (FSA),
6.00%, 7/1/2018 2,108,660
1,000,000 Cmnwlth. of Puerto Rico Pub. Bldg. Auth. RB, Pub. Ed
& Hlth. Facs. RB, Ser. M, (AMBAC),
5.70%, 7/1/2009 1,064,070
Cmnwlth. of Puerto Rico GO:
1,000,000 5.38%, 7/1/2025 940,890
(MBIA):
205,000 5.50%, 7/1/2008 215,590
1,000,000 6.50%, 7/1/2014 1,116,200
-----------
13,849,455
-----------
Total Municipal Obligations (cost $67,508,359) 66,537,711
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES - 1.3% (cost $1,000,000)
U.S. Virgin Islands - 1.3%
$1,000,000 Virgin Islands, Pub. Fin. Auth. RB,
Ser. B,
7.00%, 10/1/1999 $ 1,000,100
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND SHARES - 8.4%
2,627,338 Federated Connecticut Municipal Cash Trust 2,627,338
3,610,117 Federated Tax Free Obligations Fund 3,610,117
-----------
Total Mutual Fund Shares (cost $6,237,455) 6,237,455
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $74,745,814) 99.0% 73,775,266
Other Assets and
Liabilities - net 1.0 708,266
----- -----------
Net Assets 100.0% $74,483,532
===== ===========
</TABLE>
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
FGIC Insured by Financial Guaranty Insurance Company
FSA Insured by Financial Security Assurance, Inc.
GO General Obligation
HFA Housing Finance Authority
MBIA Insured by Municipal Bond Investors Assurance Corporation
MHRB Multifamily Housing Revenue Bond
PCRB Pollution Control Revenue Bond
RB Revenue Bond
SFHRB Single Family Housing Revenue Bond
See Combined Notes to Financial Statements.
15
<PAGE>
EVERGREEN
New Jersey Municipal Bond Fund
Schedule of Investments
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 98.2%
Delaware - 2.2%
Delaware River & Bay Auth. RB:
$ 2,000,000 4.80%, 1/1/2007 $ 1,992,120
1,000,000 5.00%, 1/1/2017 923,680
1,000,000 5.35%, 1/1/2013 1,001,370
1,000,000 5.40%, 1/1/2016 987,140
------------
4,904,310
------------
Illinois - 1.0%
2,500,000 Chicago, Il O'Hare Int'l. Arpt. Special Facs. RB,
United Air Lines Inc., Proj., Ser. A,
5.35%, 9/1/2016 2,277,875
------------
New Jersey - 83.0%
2,000,000 Atlantic City, NJ Board of Ed. GO, 5.88%,
12/1/2011 2,129,740
300,000 Atlantic Cnty., NJ GO, Spl. Services Vocational
Sch., (MBIA), 5.70%, 8/1/2006 316,806
Bayonne, NJ GO:
150,000 5.90%, 5/1/2008 160,104
1,105,000 Sch. Refunding, (FSA), 5.00%, 5/1/2014 1,051,087
Bergen Cnty., NJ GO:
1,000,000 5.25%, 10/1/2010 1,015,660
200,000 6.25%, 11/15/2000 205,403
Bergen Cnty., NJ Util. Auth. Wtr. PCRB, (FGIC):
1,000,000 5.50%, 12/15/2006 1,047,740
500,000 Ser. B,
5.63%, 12/15/2004 525,820
160,000 Branchburg Township, NJ GO,
6.45%, 8/1/2005 173,456
500,000 Brick Township, NJ Muni. Util. Auth. RB, (FGIC),
5.00%, 12/1/2016 467,665
400,000 Bridgewater Township, NJ GO, 6.40%, 7/15/2001 415,620
500,000 Brigantine, NJ GO, (MBIA), 6.35%, 8/1/2004 528,880
Burlington Cnty., NJ Bridge Commission Sys. RB:
1,000,000 5.20%, 10/1/2006 1,022,950
500,000 5.30%, 10/1/2013 499,315
Camden Cnty., NJ Impt. Auth. Lease RB:
500,000 5.63%, 10/1/2015 501,755
1,270,000 Ser. A,
5.00%, 12/1/2008 1,270,838
Camden Cnty., NJ Muni. Util. Auth. Swr. RB:
1,705,000 5.20%, 7/15/2014 1,658,914
1,500,000 5.50%, 7/15/2008 1,559,205
500,000 Camden Cnty., NJ Prop. & Equip. Program RB,
5.60%, 12/1/2004 523,130
500,000 Cape May Cnty., NJ Impt. Auth. RB, 5.85%,
4/15/2002 518,705
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
$ 500,000 Cape May Cnty., NJ Muni. Util. Auth. Swr. RB, Ser
A, (MBIA), 5.75%, 1/1/2016 $ 504,455
Cherry Hill Township, NJ GO:
50,000 5.90%, 6/1/2005 52,523
500,000 6.00%, 6/1/2006 526,735
250,000 Eatontown, NJ GO,
6.70%, 10/1/2004 272,525
Essex Cnty., NJ Impt. Auth. RB:
2,705,000 6.00%, 7/1/2018 2,789,288
325,000 6.65%, 12/1/2000 335,029
500,000 Ser. A, (AMBAC), 5.80%, 11/1/2007 528,695
Essex Cnty., NJ Util. Auth. Solid Wst. RB, Ser. A,
(FSA):
3,500,000 5.00%, 4/1/2022 3,175,060
250,000 5.50%, 4/1/2011 264,935
250,000 5.60%, 4/1/2016 266,322
1,000,000 Fair Lawn, NJ GO, (FGIC), 4.70%, 8/1/2010 960,350
50,000 Flemington Raritan, NJ Sch. Dist. GO, 5.70%,
5/1/2006 53,410
Franklin Township, NJ GO:
1,355,000 5.60%, 11/1/2005 1,415,149
160,000 5.90%, 11/1/2008 168,931
500,000 Franklin Township, Somerset Cnty., NJ Sch. Dist
GO,
6.20%, 4/1/2005 539,005
300,000 Gloucester Cnty., NJ GO, (MBIA), 6.25%, 2/1/2006 318,765
500,000 Gloucester Cnty., NJ Impt. Auth. GO, (MBIA),
6.25%, 2/1/2008 531,275
1,600,000 Gloucester Cnty., NJ Solid Wst. RB, Ser. A,
6.20%, 9/1/2007 1,660,528
Gloucester Cnty., NJ Util. Auth. Swr. RB:
1,300,000 5.45%, 1/1/2024 1,264,939
500,000 6.50%, 1/1/2021 519,160
Gloucester Township, NJ GO, (AMBAC):
500,000 5.45%, 7/15/2007 522,205
500,000 6.38%, 9/15/2004 525,825
Gloucester Township, NJ Muni. Util. Auth. RB,
(AMBAC):
390,000 5.25%, 3/1/2006 400,881
1,000,000 5.55%, 3/1/2009 1,038,590
1,000,000 Hamilton Township, Atlantic Cnty.,
NJ Sch. Dist. GO, (FGIC), 5.88%, 12/15/2006 1,052,990
700,000 Hamilton Township, Mercer Cnty., NJ GO, Ser. A,
(AMBAC), 5.15%, 2/1/2005 719,320
500,000 Hunterdon Cnty., NJ GO, 5.50%, 12/1/2002 519,220
1,000,000 Hunterdon, NJ Central Regional High Sch. Dist. GO,
(FSA),
5.65%, 5/1/2014 1,016,580
</TABLE>
16
<PAGE>
EVERGREEN
New Jersey Municipal Bond Fund
Schedule of Investments(continued)
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
Jersey City, NJ GO, Ser. A, (AMBAC):
$ 1,000,000 5.10%, 10/1/2007 $ 1,017,080
250,000 5.30%, 10/1/2009 254,838
1,500,000 Jersey City, NJ Sch. Dist. GO, (MBIA), 5.50%,
3/15/2016 1,490,340
225,000 Kearny, NJ GO, (FSA), 6.30%, 2/1/2002 235,307
400,000 Lakewood Township, NJ Sch. Dist. GO, (AMBAC),
6.25%, 2/15/2012 437,564
900,000 Mercer Cnty., NJ Impt. Auth. Lease RB,
5.40%, 12/1/2005 931,473
500,000 Mercer Cnty., NJ Impt. Auth. RB, Ser. A,
5.95%, 12/15/2012 532,995
500,000 Mercer Cnty., NJ Sch. Dist. GO, Ser. A,
5.40%, 12/15/2003 518,790
Middlesex Cnty., NJ Impt. Auth. RB, Golf Course
Proj.:
1,150,000 5.13%, 10/1/2019 1,071,685
1,000,000 5.13%, 10/1/2024 920,130
Middlesex Cnty., NJ Util. Auth. Swr. RB:
1,250,000 5.13%, 12/1/2016 1,182,312
1,150,000 Ser. A, (FGIC),
5.38%, 9/15/2015 1,134,832
335,000 Middletown Township, NJ GO, 5.20%, 8/1/2007 342,983
960,000 Millburn Township, NJ Board of Ed. GO,
5.35%, 7/15/2011 982,704
Monmouth Cnty., NJ Impt. Auth. RB:
800,000 6.40%, 8/1/2008 846,944
200,000 6.40%, 8/1/2009 211,736
40,000 6.63%, 12/1/2005 40,992
200,000 Montgomery Township, NJ GO, 6.75%, 6/1/2002 212,218
1,000,000 Morris Cnty., NJ GO, 6.00%, 7/15/2004 1,067,480
1,000,000 New Brunswick, NJ Hsg. Auth. Lease RB, Rutgers
State Univ., (FGIC), 5.00%, 7/1/2012 968,760
New Jersey Bldg. Auth. RB:
1,000,000 5.00%, 6/15/2013 962,460
100,000 6.75%, 6/15/2002 106,140
New Jersey Ed'l. Facs. Auth. RB:
2,000,000 Ser. A,
5.13%, 9/1/2010 2,005,720
1,500,000 Ser. C,
6.38%, 7/1/2022 1,608,585
500,000 Ser. D, (AMBAC),
6.20%, 7/1/2017 523,405
1,000,000 Montclair State Univ., Ser. C, (AMBAC),
5.25%, 7/1/2007 1,026,810
250,000 Princeton Univ., Ser. A, 5.75%, 7/1/2009 258,142
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
New Jersey Ed'l. Facs. Auth
RB - continued
Stevens Institute Technology, Ser. I:
$ 150,000 4.60%, 7/1/2008 $ 142,731
200,000 5.00%, 7/1/2009 195,608
500,000 Trenton State College, Ser. B, (AMBAC),
5.80%, 7/1/2009 532,205
2,000,000 New Jersey EDA Lease Rental RB, Liberty State Park
Proj.,
6.80%, 3/15/2022 2,154,180
New Jersey EDA RB:
3,000,000 Continental Airlines Inc. Proj.,
6.63%, 9/15/2012 3,158,280
1,400,000 First Mtge. Reformed Church Proj. A,
5.38%, 12/1/2018 1,234,226
First Mtge., Fellowship Village, Ser. A:
530,000 5.20%, 1/1/2009 505,164
585,000 5.30%, 1/1/2010 555,206
3,295,000 5.50%, 1/1/2018 3,044,679
4,500,000 First Mtge., Franciscan Oaks Proj., 5.75%,
10/1/2023 4,077,450
3,550,000 First Mtge., Keswick Pines, 5.70%, 1/1/2018 3,291,489
500,000 NJ Performing Arts Ctr. Proj., (AMBAC),
5.50%, 6/15/2013 504,430
1,000,000 Pub. Schs. Small Proj. Loan Program,
5.40%, 8/15/2013 1,003,420
55,000 Rutgers State Univ. Civic Square,
6.13%, 7/1/2024 57,131
300,000 Ser. A,
6.60%, 8/1/2021 313,020
785,000 The Evergreens,
6.00%, 10/1/2022 756,591
1,000,000 Trans. Proj. Sublease, Ser. A, (FSA),
5.75%, 5/1/2011 1,051,810
1,000,000 Trenton Office Complex, (AMBAC), 5.13%, 6/15/2007 1,018,080
Trenton Office Complex:
2,605,000 5.25%, 6/15/2012 2,604,792
200,000 6.63%, 6/15/2001 207,928
1,000,000 New Jersey Environmental Infrastructure RB,
4.50%, 9/1/2015 874,530
New Jersey GO:
890,000 4.75%, 3/1/2015 808,236
5,000,000 5.50%, 2/1/2011 5,165,850
500,000 6.25%, 8/1/2006 530,830
Ser. D:
3,000,000 5.75%, 2/15/2006 3,173,310
500,000 5.80%, 2/15/2007 531,035
3,000,000 Ser. F,
5.50%, 8/1/2011 3,102,720
945,000 New Jersey Higher Ed. Student Loan RB, Ser. A,
5.80%, 6/1/2016 958,882
</TABLE>
17
<PAGE>
EVERGREEN
New Jersey Municipal Bond Fund
Schedule of Investments(continued)
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
New Jersey Hlth. Care Facs. Fin. Auth. RB:
$ 1,345,000 AHS Hosp. Corp., Ser. A, (AMBAC), 6.00%, 7/1/2011 $ 1,436,164
3,825,000 Burdette Tomlin Mem. Hosp., 5.60%, 7/1/2019 3,639,602
750,000 Hackensack Med. Ctr., (FGIC), 6.63%, 7/1/2017 795,225
500,000 Kimball Med. Center,
4.75%, 7/1/2019 434,980
Meridian Hlth. Sys., (FSA):
3,750,000 5.50%, 7/1/2010 3,850,763
6,235,000 5.63%, 7/1/2011 6,414,381
500,000 Shore Mem. Hlth. Care Sys., (MBIA),
5.00%, 7/1/2012 482,140
1,000,000 St. Joseph's Hosp. & Med. Ctr., Ser. D,
5.70%, 7/1/2011 1,029,750
New Jersey Hlth. Care Facs. RB:
50,000 Bridgeton Hosp., Ser. B,
6.00%, 7/1/2013 53,074
50,000 Burlington Cnty. Mem. Hosp. Proj., 6.00%, 7/1/2012 53,218
New Jersey Hsg. & Mtge. Fin. Agcy. MHRB:
500,000 5.25%, 4/1/2026 463,640
3,140,000 5.30%, 10/1/2008 3,146,468
4,385,000 5.40%, 10/1/2009 4,388,859
1,000,000 Ser. A, (FSA),
5.05%, 11/1/2018 921,650
400,000 New Jersey Hsg. Fin. Agcy. General Resolution RB,
Ser. A,
6.70%, 11/1/2004 417,748
New Jersey Hwy. Auth. RB:
1,500,000 6.25%, 1/1/2014 1,572,090
1,000,000 Sr. Parkway,
5.15%, 1/1/2007 1,020,530
New Jersey Sports & Exposition Auth. RB, Ser. A:
1,000,000 5.38%, 9/1/2015 986,800
200,000 6.00%, 3/1/2002 207,832
1,000,000 6.00%, 3/1/2021 1,024,415
New Jersey Trans. Sys. Trust Fund Auth. RB:
Ser. A:
1,500,000 5.63%, 6/15/2014 1,523,145
1,000,000 6.00%, 6/15/2002 1,043,470
Ser. B:
3,175,000 5.00%, 6/15/2004 3,236,087
5,000,000 5.25%, 6/15/2014 4,889,400
2,750,000 5.25%, 6/15/2015 2,666,812
1,000,000 Ser. B, (MBIA),
6.50%, 6/15/2010 1,116,080
300,000 New Jersey Transit Corp., COP, (FSA),
6.50%, 10/1/2016 324,654
New Jersey Univ. of Medicine & Dentistry RB, Ser. E:
400,000 5.75%, 12/1/2021 413,080
500,000 6.50%, 12/1/2018 533,195
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
New Jersey Wst. & Wtr. Treatment Trust RB, Ser. A:
$ 1,000,000 5.25%, 9/1/2012 $ 999,030
2,000,000 6.00%, 7/1/2011 2,099,533
1,000,000 North Bergen Township, NJ Muni. Util. Auth. Swr
RB, (FGIC), 5.38%, 12/15/2012 1,005,410
North Brunswick Township, NJ Board of Ed. GO:
700,000 5.00%, 2/1/2012 679,259
150,000 6.30%, 2/1/2012 161,639
250,000 7.15%, 12/15/2004 279,412
North Brunswick Township, NJ GO:
1,000,000 6.00%, 12/1/2008 1,066,330
350,000 6.13%, 5/15/2004 370,139
1,000,000 North Hudson, NJ Swr. Auth. RB, (FGIC),
5.50%, 8/1/2006 1,043,870
North Jersey Dist. Wtr. Supply RB, Wanaque North
Proj.:
1,090,000 5.05%, 11/15/2011 1,071,906
350,000 Ser. B, (MBIA),
6.25%, 11/15/2017 365,502
1,000,000 Northwest Bergen Cnty., NJ Util. Auth. Sys. RB,
(MBIA),
6.00%, 7/15/2009 1,066,040
500,000 Ocean City., NJ GO, (MBIA), 5.90%, 3/15/2003 523,645
Ocean Cnty., NJ GO:
1,250,000 4.75%, 6/1/2013 1,159,512
250,000 6.38%, 4/15/2003 266,193
1,000,000 Ser. A,
6.25%, 10/1/2010 1,058,480
Ocean Cnty., NJ Util. Auth. Wst. & Wtr. RB, Ser. A:
500,000 5.75%, 1/1/2018 508,040
200,000 6.60%, 1/1/2011 207,406
300,000 Ocean Township, NJ Muni. Util. Auth. RB, (MBIA),
5.20%, 8/1/2005 307,314
Old Bridge Township, NJ Muni. Util. Auth. RB,
(FGIC):
285,000 5.75%, 11/1/2000 290,714
500,000 6.25%, 11/1/2016 527,110
500,000 Orange Township, NJ GO, (FSA), 6.60%, 2/1/2007 535,130
Parsippany Troy Hills Township, NJ GO:
1,000,000 4.75%, 12/1/2011 959,730
1,000,000 5.00%, 2/1/2008 1,007,390
Passaic Cnty., NJ GO:
500,000 5.40%, 12/1/2002 517,450
1,295,000 Ser. A,
6.00%, 9/1/2007 1,390,144
500,000 Passaic Valley, NJ Sewage Commissioners RB, Ser. D,
(AMBAC),
5.75%, 12/1/2013 509,340
</TABLE>
18
<PAGE>
EVERGREEN
NEW JERSEY MUNICIPAL BOND FUND
Schedule of Investments(continued)
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
$ 500,000 Patterson, NJ GO, (FSA),
6.20%, 2/15/2002 $ 521,280
Pleasantville, NJ Sch. Dist. GO:
1,050,000 4.75%, 2/15/2007 1,044,782
550,000 5.00%, 2/15/2010 544,269
500,000 Princeton, NJ Reg'l. Sch. Dist. GO,
6.05%, 4/15/2007 541,445
200,000 Randolph Township, NJ Muni. Util. Auth. RB,
6.70%, 3/1/2010 205,476
500,000 Randolph Township, NJ Sch. Dist. GO, (FSA),
6.30%, 3/15/2006 544,630
500,000 Rutgers State Univ. College & Univ. RB, Ser. 1,
5.25%, 5/1/2012 500,215
500,000 Secaucus, NJ Muni. Util. Auth. Swr. RB, Ser. A,
6.10%, 12/1/2010 530,530
100,000 Somerset Raritan Valley, NJ Swr. Auth. RB, Ser. E,
6.95%, 7/1/2003 108,414
1,000,000 South Brunswick Township, NJ Board of Ed. GO, (FGIC),
6.40%, 8/1/2011 1,091,670
1,100,000 Sparta Township, NJ GO, (MBIA),
5.80%, 9/1/2023 1,171,390
Stafford, NJ Muni. Util. Auth. RB:
500,000 6.20%, 6/1/2007 531,389
375,000 6.25%, 6/1/2014 396,311
Stafford, NJ Muni. Util. Auth. Wtr
& Swr. RB, (FGIC):
400,000 6.30%, 6/1/2006 414,012
460,000 Ser. A,
5.80%, 12/1/2008 480,792
Stony Brook, NJ Reg'l. Sewage Auth. RB:
400,000 Ser. A,
5.40%, 12/1/2004 415,216
500,000 Ser. B,
5.45%, 12/1/2012 509,380
500,000 Sussex Cnty., NJ GO, (AMBAC),
6.00%, 4/1/2002 520,570
1,000,000 Sussex Cnty., NJ Muni. Util. Auth. Solid Wst. RB,
Ser. B, (MBIA),
5.50%, 12/1/2013 1,003,370
Tinton Falls, NJ Schs. GO: (MBIA),
490,000 5.85%, 10/15/2002 512,707
745,000 5.85%, 10/15/2004 791,622
Toms River, NJ Board of Ed., Sch. Bond Reserve Act
GO, (FGIC):
1,010,000 5.25%, 7/15/2013 1,006,000
1,065,000 5.25%, 7/15/2014 1,050,910
1,095,000 5.75%, 7/15/2019 1,166,263
200,000 Totowa, NJ GO,
7.20%, 1/15/2001 207,094
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
$ 500,000 Trenton, NJ GO, (MBIA),
6.55%, 8/15/2009 $ 539,615
370,000 Voorhees Township, NJ Board of Ed. GO,
5.95%, 7/15/2007 395,722
200,000 Voorhees Township, NJ GO,
6.88%, 9/1/2004 220,004
200,000 Warren Township, NJ Sewage Auth. RB,
6.65%, 12/1/2012 217,716
130,000 Washington Township, NJ Board of Ed. GO,
7.50%, 4/15/2009 152,906
200,000 West Morris, NJ Reg'l. High Sch
Dist. GO,
5.88%, 1/15/2001 204,454
50,000 West Windsor Township, NJ Pkg. Auth. RB,
6.10%, 12/1/2012 52,295
Winslow Township, NJ GO, (FGIC):
400,000 6.10%, 10/1/2002 421,072
500,000 6.50%, 10/1/2018 540,140
------------
186,596,302
------------
New York - 3.6%
1,000,000 Port Auth. NY & NJ Port, Arpt. & Marine RB, Ser
104, (AMBAC),
5.20%, 7/15/2015 965,250
Port Auth. NY & NJ RB:
300,000 Ser. 78,
6.20%, 10/15/2003 315,618
50,000 Ser. 81,
5.70%, 8/1/2007 51,586
650,000 Ser. 94,
5.60%, 12/1/2009 672,256
5,000,000 Ser. 108,
5.50%, 7/15/2013 5,010,350
1,000,000 Port Auth. NY & NJ Spl. Obl., JFK Int'l. Arpt
Terminal,
5.75%, 12/1/2025 1,003,140
------------
8,018,200
------------
Pennsylvania - 2.8%
100,000 Allegheny Cnty., PA., Hosp. Dev
RB, Presbyterian Univ. Hosp.,
3.85%, VRDN (a) 100,000
Delaware River Port Auth., PA & NJ RB:
2,500,000 5.40%, 1/1/2015 2,471,650
1,000,000 5.40%, 1/1/2016 982,930
2,000,000 5.50%, 1/1/2026 1,945,680
Delaware River, PA Joint Toll Brdg. Commission RB:
300,000 6.00%, 7/1/2002 313,323
475,000 6.25%, 7/1/2012 493,763
------------
6,307,346
------------
</TABLE>
19
<PAGE>
EVERGREEN
NEW JERSEY MUNICIPAL BOND FUND
Schedule of Investments(continued)
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Puerto Rico - 4.3%
$ 1,000,000 Cmnwlth. of Puerto Rico, Capital Guaranty
Certificates,
6.50%, 7/1/2023 $ 1,109,940
500,000 Cmnwlth. of Puerto Rico Elec. Pwr. Auth. RB, Ser
P,
7.00%, 7/1/2021 536,115
Cmnwlth. of Puerto Rico GO:
1,000,000 5.38%, 7/1/2021 968,150
500,000 5.50%, 7/1/2013 500,195
1,115,000 6.50%, 7/1/2008 1,249,068
1,000,000 6.50%, 7/1/2014 1,116,200
1,425,000 Cmnwlth. of Puerto Rico Hwy. & Trans. Auth., Hwy
RB, Ser. Y, (MBIA),
6.25%, 7/1/2014 1,554,561
2,500,000 Cmnwlth. of Puerto Rico Indl
Tourist Ed'l Facs., Int'l American Univ., Ser. A,
5.00%, 10/1/2011 2,471,125
250,000 Cmnwlth. of Puerto Rico Pub. Bldg. Auth. RB,
(AMBAC),
6.25%, 7/1/2009 276,510
------------
9,781,864
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
U. S. Virgin Islands - 1.3%
$ 3,000,000 Virgin Islands, Pub. Fin. Auth. RB,
Sr. Lien, Ser. A,
5.50%, 10/1/2013 $ 2,889,480
------------
Total Municipal Obligations
(cost $221,806,691) 220,775,377
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND SHARES - 1.5%
57,694 Dreyfus Municipal Money Market Fund 57,694
871,628 Federated Municipal Cash Trust 871,628
2,519,910 Federated Tax Free Obligations Fund 2,519,910
-----------
Total Mutual Fund Shares
(cost $3,449,232) 3,449,232
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $225,255,923) 99.7% 224,224,609
Other Assets and
Liabilities - net 0.3 721,062
----- ------------
Net Assets - 100.0% $224,945,671
===== ============
</TABLE>
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
COP Certificates of Participation
EDA Economic Development Authority
FGIC Insured by Financial Guaranty Insurance Company
FSA Insured by Financial Security Assurance, Inc.
GO General Obligation
MBIA Insured by Municipal Bond Investors Assurance Corporation
MHRB Multifamily Housing Revenue Bond
RB Revenue Bond
VRDN Variable Rate Demand Notes
See Combined Notes to Financial Statements.
20
<PAGE>
EVERGREEN
PENNSYLVANIA MUNICIPAL BOND FUND
Schedule of Investments
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 97.2%
Delaware - 0.1%
$ 1,000,000 Delaware River & Bay Auth. RB,
(FGIC),
5.40%, 1/1/2016 $ 991,190
------------
Pennsylvania - 92.1%
Abington, PA Sch. Dist., GO,
(FGIC):
280,000 4.85%, 5/15/2018 247,845
Ser. A:
2,000,000 5.625%, 5/15/2020 2,104,760
2,000,000 5.75%, 5/15/2025 2,117,940
2,090,000 Ser. Aa,
5.625%, 5/15/2020 2,048,513
2,000,000 Albert Gallatin, PA Area Sch. Dist
GO, (MBIA),
5.30%, 9/1/2017 1,910,500
Allegheny Cnty., PA GO,
Ser. C-43:
1,500,000 5.70%, 9/15/2008 1,578,285
60,000 5.875%, 9/15/2010 63,592
Allegheny Cnty., PA Higher Ed. Bldg. Auth. RB:
6,075,000 Chatham College, Ser. A,
5.375%, 9/1/2028 5,309,003
1,000,000 Community College, (MBIA),
5.80%, 6/1/2013 1,024,790
Duquesne Univ. Proj., (AMBAC):
3,350,000 5.50%, 3/1/2016 3,334,858
1,750,000 5.50%, 3/1/2020 1,714,073
Allegheny Cnty., PA Hosp. Dev. Auth. RB:
825,000 Allegheny General Hosp. Proj.,
7.25%, 7/1/2003 827,417
1,000,000 Children's Hosp. of Pittsburgh,
(MBIA),
5.375%, 7/1/2017 958,370
90,000 Montefiore Hosp. Assn. of
Western PA,
5.80%, 10/1/2003 92,117
Pittsburgh Mercy Hlth. Sys.:
1,865,000 5.40%, 8/15/2009 1,920,931
1,510,000 5.50%, 8/15/2010 1,555,360
2,445,000 5.50%, 8/15/2011 2,506,981
2,000,000 5.625%, 8/15/2018 2,033,540
3,870,000 5.625%, 8/15/2026 3,883,584
200,000 6.45%, 4/1/2001 206,632
1,000,000 Presbyterian Univ. Hosp.:
Ser. A, (MBIA),
6.00%, 4/1/2005 1,061,490
Ser. B:
2,000,000 5.125%, 7/1/2022 1,818,600
3,715,000 5.50%, 12/15/2012 3,736,919
2,755,000 5.50%, 12/15/2013 2,751,308
8,295,000 5.50%, 12/15/2014 8,216,529
1,000,000 6.00%, 11/1/2006 1,050,850
25,000 6.00%, 11/1/2012 26,130
1,000,000 South Hills Hlth. Sys.,
Ser. A,
5.125%, 5/1/2023 860,890
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Allegheny Cnty., PA Hosp. Dev. Auth. RB - continued
Univ. of Pittsburgh Med. Ctr
Hlth. Sys., Presbyterian Univ. Hosp., (MBIA):
$ 1,000,000 5.30%, 12/1/2012 $ 988,420
360,000 6.25%, 11/1/2023 379,670
Allegheny Cnty., PA IDA RB,
Env. Impt., USX Corp.:
20,500,000 5.50%, 12/1/2029 18,295,635
2,000,000 Ser. A,
6.70%, 12/1/2020 2,098,900
5,000 Allegheny Cnty., PA Redev. Auth. RB, Home Impt
Loan,
Ser. A, (FHA),
5.70%, 2/1/2007 5,037
955,000 Allegheny Cnty., PA Residential
Fin. Auth. SFHRB, Ser. Y, (GNMA),
6.60%, 11/1/2014 1,003,266
Allegheny Cnty., PA
Sanitation Auth. Swr. RB:
500,000 6.80%, 7/1/2003 525,775
2,000,000 Ser. B,
6.50%, 12/1/2011 2,070,760
Allegheny Cnty., PA SFHRB:
1,410,000 7.15%, 6/1/2017 1,461,578
250,000 7.30%, 12/1/2004 253,177
Allentown, PA Area Hosp. Auth. RB, Sacred Heart
Healthcare Sys., Ser. A:
2,550,000 4.75%, 7/1/2008 2,335,494
2,350,000 5.00%, 7/1/2010 2,207,096
Allentown, PA GO:
1,000,000 5.65%, 7/15/2010 1,041,310
1,500,000 6.90%, 7/15/2011 1,569,075
1,000,000 Allentown, PA Wtr. RB, 6.85%, 7/15/2008 1,038,590
445,000 Armstrong, PA Sch. Dist. GO, 7.75%, 12/1/2004 484,859
Berks Cnty., PA GO:
1,000,000 6.05%, 11/15/2003 1,060,900
2,000,000 6.10%, 11/15/2004 2,124,240
Berks Cnty., PA Muni. Auth. Hosp. RB:
1,355,000 Healthcare Pooled Financing Proj.,
5.00%, 3/1/2028 1,162,956
2,110,000 Reading Hosp. & Med. Ctr. Proj.:
5.70%, 10/1/2014 2,139,519
65,000 Ser. B,
5.60%, 10/1/2006 67,857
250,000 Bethlehem, PA Ctr. Sch. Dist. GO, 6.95%, 6/1/2011 261,153
Bradford, PA Area Sch. Dist. GO:
1,000,000 5.35%, 10/1/2008 1,037,280
1,000,000 5.40%, 10/1/2009 1,039,870
1,105,000 5.50%, 10/1/2010 1,154,780
2,000,000 5.75%, 10/1/2015 2,115,980
</TABLE>
21
<PAGE>
EVERGREEN
PENNSYLVANIA MUNICIPAL BOND FUND
Schedule of Investments(continued)
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Bucks Cnty., PA GO:
$ 2,095,000 5.50%, 12/1/2010 $ 2,151,795
Ser. A:
2,000,000 6.10%, 3/1/2003 2,105,060
5,500,000 6.20%, 3/1/2004 5,880,875
5,000,000 Bucks Cnty., PA St. Mary's Hosp. Auth. RB, Catholic
Hlth. Initiatives, Ser. A,
5.00%, 12/1/2018 4,454,700
Bucks Cnty., PA Wtr. & Swr
Auth. RB:
2,000,000 Collection Sewer Sys.,
6.50%, 12/1/2012 2,129,620
1,000,000 Neshaminy Interceptor, (FGIC), 6.20%, 12/1/2003 1,035,940
4,485,000 Cambria Cnty., PA GO,
Ser. A, (FGIC),
6.625%, 8/15/2012 4,893,225
Center City, PA Dist. Bus. Impt. Spl. Assmt. RB:
1,085,000 5.45%, 12/1/2006 1,125,264
1,145,000 5.55%, 12/1/2007 1,196,159
1,210,000 5.60%, 12/1/2008 1,266,446
Central Bucks, PA Sch. Dist. GO:
175,000 6.60%, 2/1/2003 179,833
3,000,000 6.90%, 2/1/2008 3,090,780
Ser. A:
1,000,000 6.90%, 11/15/2013 1,105,550
1,405,000 6.90%, 11/15/2014 1,553,298
Central Dauphin, PA Sch. Dist. GO:
1,000,000 5.90%, 6/1/2000 1,013,610
2,125,000 Ser. Aa,
4.50%, 12/1/2018 1,792,140
Chester Cnty., PA GO:
3,000,000 7.00%, 12/15/2011 3,149,760
4,290,000 Ser. B,
5.625%, 11/15/2016 4,513,552
3,275,000 Cocalico, PA Lancaster Cnty. Sch. Dist. GO, (MBIA),
6.85%, 3/1/2011 3,395,258
4,755,000 Columbia Cnty., PA Hosp. Auth. RB, Bloomburg Hosp
Proj., 5.80%, 6/1/2019 4,411,023
2,500,000 Conestoga Valley, PA Sch. Dist. GO, 7.10%, 5/1/2011 2,611,800
1,500,000 Conrad Weiser, PA Area Sch. Dist. GO, (MBIA),
6.85%, 12/15/2014 1,660,800
1,405,000 Cornwall & Lebanon, PA Suburban Joint Sch. Auth. RB,
(FGIC), 5.60%, 3/1/2007 1,446,771
2,000,000 Council Rock, PA Sch. Dist. GO, 6.60%, 3/1/2003 2,058,400
1,000,000 Crawford Cnty., PA Hosp. Auth. RB, Wesbury United
Methodist Community Hosp.,
6.125%, 8/15/2019 971,110
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Crawford, PA Central Sch. Dist. GO, (FGIC):
$ 1,500,000 5.55%, 2/15/2008 $ 1,564,755
2,085,000 5.65%, 2/15/2009 2,184,809
1,000,000 Dauphin Cnty., PA General Auth. Hlth. Sys. RB,
Pinnacle Hlth. Sys. Proj., (MBIA),
5.50%, 5/15/2017 972,300
Dauphin Cnty., PA General Auth. RB:
15,000,000 Forum Pl. Office & Pkg.,
Ser. A,
6.00%, 1/15/2025 13,965,600
6,300,000 Hyatt Regency Hotel & Conf. Ctr., 6.00%, 1/1/2010 6,096,321
3,000,000 Dauphin Cnty., PA GO,
5.45%, 8/1/2007 3,109,500
Delaware Cnty., PA Auth. College RB,
Haverford College, (MBIA):
1,000,000 7.00%, 11/15/2005 1,053,960
1,250,000 7.25%, 11/15/2010 1,320,813
Delaware Cnty., PA Auth. Univ. RB, Villanova Univ.:
200,000 5.40%, 8/1/2008 205,644
1,000,000 5.70%, 8/1/2015 1,006,180
7,250,000 5.80%, 8/1/2025 7,221,000
3,000,000 6.85%, 8/1/2011 3,141,600
Delaware Cnty., PA GO:
940,000 5.50%, 10/1/2015 939,295
1,750,000 5.55%, 10/1/2010 1,829,258
2,385,000 Prerefunded,
5.50%, 10/1/2015 2,486,100
Delaware Cnty., PA Hosp. Auth. RB, Riddle Memorial
Hosp.:
5,345,000 5.25%, 1/1/2016 5,085,233
9,450,000 5.50%, 1/1/2022 9,040,059
1,350,000 Delaware Cnty., PA IDA PCRB, Philadelphia Elec. Co.,
Ser. A,
7.375%, 4/1/2021 1,440,693
1,300,000 Delaware Cnty., PA Reg'l. Wtr. RB,
Ser. A,
7.20%, 5/1/2004 1,302,925
Delaware River Port Auth., PA & NJ RB, (FGIC):
1,000,000 5.30%, 1/1/2010 1,016,700
1,400,000 5.45%, 1/1/2012 1,420,398
Delaware Valley, PA Sch. Dist. GO, Ser. A:
1,000,000 6.40%, 4/1/2000 1,012,860
200,000 6.50%, 10/1/2001 208,666
15,000 Dover Township, PA Swr. Auth. RB, 6.25%, 5/1/2012 15,563
1,700,000 Downingtown, PA Area Sch. Dist. GO, 7.25%, 4/1/2007 1,757,732
1,540,000 Easton, PA Area Joint Swr. Auth. RB, Ser. B,
5.00%, 12/1/2018 1,399,906
</TABLE>
22
<PAGE>
EVERGREEN
PENNSYLVANIA MUNICIPAL BOND FUND
Schedule of Investments(continued)
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
$ 1,000,000 Elizabeth Forward, PA Sch. Dist. GO,
7.00%, 1/15/2003 $ 1,008,860
4,600,000 Elizabethtown, PA Area Sch. Dist. GO, 5.125%,
9/1/2009 4,616,606
5,000,000 Erie Cnty., PA GO, Ser. B,
6.75%, 9/1/2016 5,237,450
500,000 Erie Cnty., PA IDA Env. Impt. RB, Int'l. Paper Co
Proj., Ser. A, 7.625%, 11/1/2018 555,295
1,000,000 Fox Chapel, PA Area Sch. Dist., GO,
5.50%, 8/15/2009 1,015,890
1,000,000 Gateway, PA Allegheny Cnty. Sch. Dist. GO, (FGIC),
5.25%, 7/15/2017 949,850
Geisinger, PA Hlth. Sys. Auth. RB, Ser. A:
6,540,000 5.00%, 8/15/2028 5,575,873
1,685,000 5.50%, 8/15/2010 1,690,982
1,385,000 6.00%, 7/1/2006 1,468,663
1,000,000 Gettysburg, PA Muni. Auth. College RB, Gettysburg
College, (MBIA), 5.375%, 8/15/2013 999,160
1,500,000 Greene Cnty., PA IDA RB, Monongahela Power Co.,
Ser. B,
5.10%, 2/1/2012 1,437,045
1,000,000 Harrisburg, PA Lease Auth. RB, (FSA), 6.25%,
6/1/2001 1,033,520
2,985,000 Hatboro Horsham, PA Sch. Dist. GO, Ser. A,
6.75%, 4/1/2010 3,075,445
750,000 Haverford Township, PA GO, 6.70%, 12/1/2011 788,520
Hempfield, PA Lancaster Cnty. Sch. Dist. GO:
2,405,000 6.10%, 8/15/2002 2,521,546
300,000 7.10%, 10/15/2005 300,252
3,650,000 Horizon Hosp. Sys. Auth. PA RB, Horizon Hosp. Sys
Inc., 6.35%, 5/15/2026 3,703,107
9,600,000 Indiana Cnty., PA IDA PCRB, PA
Elec. Co. Proj., (MBIA), 5.35%, 11/1/2010 9,723,840
Lancaster Cnty., PA Hosp. Auth. RB,
Lancaster General Hosp. Proj., (AMBAC):
1,220,000 4.70%, 7/1/2009 1,179,472
3,000,000 4.75%, 7/1/2011 2,845,620
Lancaster, PA Sch. Dist. GO, (FGIC):
1,000,000 5.60%, 5/15/2007 1,031,850
1,585,000 5.80%, 5/15/2009 1,637,210
1,000,000 Lancaster, PA Solid Wst. Mgmt. Auth. RB, Resource
Recovery Sys., Ser. A,
6.30%, 12/15/2000 1,022,610
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Latrobe, PA IDA College RB,
St. Vincent College Proj.:
$ 2,635,000 5.375%, 5/1/2018 $ 2,393,766
5,600,000 5.375%, 5/1/2024 5,033,280
1,000,000 Lehigh Cnty., PA GO, Ser. B, 5.55%, 11/15/2012 1,013,590
Lehigh Cnty., PA General Purpose Auth. RB:
Good Shepherd Rehab. Hosp.:
1,700,000 7.30%, 11/15/2004 1,837,156
1,000,000 7.50%, 11/15/2021 1,084,680
1,600,000 Healtheast Inc., (MBIA),
7.00%, 7/1/2015 1,655,744
Lehigh Valley Hosp. Inc.:
2,245,000 5.875%, 7/1/2015 2,276,093
Ser. A, (MBIA),
1,250,000 7.00%, 7/1/2016 1,432,375
Lower Merion Township, PA GO:
100,000 5.625%, 8/1/2005 102,703
1,000,000 5.75%, 8/1/2009 1,021,280
Manheim, PA Central Sch. Dist., GO:
1,085,000 5.60%, 5/15/2006 1,121,825
100,000 6.10%, 5/15/2014 104,307
1,370,000 McKeesport, PA Area Sch. Dist. GO, Ser. A,
6.80%, 4/1/2000 1,389,906
150,000 Millcreek Township, PA Swr. Auth. RB,
6.00%, 11/1/2006 150,245
1,305,000 Mon Valley, PA Swr. Auth. RB, (MBIA),
6.55%, 11/1/2019 1,424,447
1,340,000 Montgomery Cnty., PA GO, Ser. B,
5.35%, 10/15/2016 1,307,585
Montgomery Cnty., PA Higher Ed. & Hlth. Auth. RB:
1,000,000 Abington Memorial Hosp.,
Ser. A, (AMBAC),
6.40%, 6/1/2002 1,035,900
1,560,000 Beaver College,
5.70%, 4/1/2027 1,489,332
1,025,000 Cnty. Cmnty. College Proj.,
6.75%, 11/1/2002 1,056,765
1,665,000 St. Joseph's Univ.,
6.40%, 12/15/2006 1,779,185
950,000 Montgomery Cnty., PA IDA PCRB, Philadelphia Elec
Co.,
Ser. A,
7.60%, 4/1/2021 1,011,579
22,000,000 Montgomery Cnty., PA IDA RB, Retirement Life
Communities, 5.25%, 11/15/2028 19,116,900
1,000,000 Neshaminy, PA Sch. Dist. GO, 6.10%, 2/15/2007 1,048,460
1,905,000 Neshaminy, PA Wtr. Resources
Auth. RB,
5.40%, 3/1/2013 1,899,495
</TABLE>
23
<PAGE>
EVERGREEN
PENNSYLVANIA MUNICIPAL BOND FUND
Schedule of Investments(continued)
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
$ 2,560,000 New Morgan, PA Muni. Auth. RB, Cmnwlth. Office
Proj.,
Ser. A,
6.50%, 6/1/2025 $ 2,438,016
1,000,000 Norristown, PA Area Sch. Dist. GO, 6.90%, 9/1/2011 1,049,270
3,550,000 North Penn, PA Sch. Dist. GO, Ser. A
6.15%, 9/15/2009 3,731,724
North Penn, PA Wtr. Auth. RB, (FGIC):
3,705,000 5.75%, 11/1/2018 3,707,705
1,000,000 6.00%, 11/1/2007 1,040,180
North Wales, PA Wtr. Auth. RB, (FGIC):
4,530,000 5.60%, 11/1/2020 4,425,493
100,000 6.75%, 11/1/2010 110,051
Northampton Cnty., PA Higher Ed. Auth. RB:
Lehigh Univ., (MBIA):
1,000,000 6.90%, 10/15/2006 1,071,750
2,900,000 7.00%, 11/15/2004 2,968,208
3,000,000 7.00%, 10/15/2011 3,221,010
Moravian College:
500,000 5.125%, 7/1/2019 452,330
1,000,000 5.50%, 7/1/2008 1,035,870
1,000,000 Northampton Cnty., PA Hosp. Auth
RB, Easton Hosp.,
7.70%, 1/1/2004 1,022,700
1,030,000 Northampton Cnty., PA IDA RB, Strawbridge Proj.,
7.20%, 12/15/2001 1,081,243
2,345,000 Northeastern PA Hosp. Auth. RB,
7.50%, 7/1/2007 2,453,574
2,000,000 Owen J. Roberts Sch. Dist., PA
GO, Ser. A, (MBIA),
5.375%, 5/15/2018 1,921,180
Parkland, PA Sch. Dist. GO:
1,535,000 5.60%, 9/1/2010 1,567,757
2,125,000 5.65%, 9/1/2011 2,164,482
2,250,000 5.70%, 9/1/2012 2,288,070
1,325,000 5.75%, 9/1/2014 1,338,807
1,000,000 Penn Hills, PA GO, (AMBAC), 5.60%, 12/1/2005 1,038,520
Pennridge, PA Sch. Dist. GO, Ser. A:
1,000,000 6.05%, 2/15/2002 1,038,380
1,000,000 6.15%, 2/15/2003 1,038,090
1,000,000 6.30%, 3/15/2000 1,009,320
Pennsylvania Convention Ctr. Auth. RB, Ser. A,
(FGIC):
1,000,000 6.60%, 9/1/2000 1,025,370
5,425,000 6.70%, 9/1/2016 6,102,799
1,000,000 6.75%, 9/1/2019 1,087,860
2,000,000 Ser. A, (Eff. Yield 6.95%) (a), (FGIC),
0.00%, 9/1/2008 1,268,340
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Pennsylvania Econ. Dev. Financing Auth. Resource
Recovery RB, Ser. D:
$ 1,000,000 7.05%, 12/1/2010 $ 1,079,880
1,000,000 7.125%, 12/1/2015 1,083,200
3,000,000 7.15%, 12/1/2018 3,252,930
1,500,000 Pennsylvania Fin. Auth. Community College RB,
Beaver Cnty. Proj.,
Ser. A,
6.00%, 12/1/2014 1,601,685
5,000,000 Pennsylvania Fin. Auth. RB, Muni. Capital Impts
Program, 6.60%, 11/1/2009 5,384,050
Pennsylvania HFA SFHRB:
660,000 7.30%, 10/1/2017 683,272
1,300,000 Rental Hsg., (FNMA),
6.40%, 7/1/2012 1,358,201
3,465,000 Ser. 1991-32,
7.15%, 4/1/2015 3,585,374
1,305,000 Ser. 33,
6.90%, 4/1/2017 1,363,229
2,000,000 Ser. 34A, (FHA),
6.85%, 4/1/2016 2,071,340
3,000,000 Ser. 36,
5.45%, 10/1/2014 2,929,380
750,000 Ser. 40,
6.80%, 10/1/2015 784,072
1,840,000 Ser. 50A,
6.00%, 10/1/2013 1,879,578
1,005,000 Ser. 52A, (FHA),
5.85%, 10/1/2014 1,028,829
1,500,000 Ser. 57B, (FHA),
5.625%, 10/1/2011 1,529,985
1,000,000 Ser. 59B,
5.40%, 4/1/2014 968,170
6,205,000 Ser. 61A,
5.50%, 4/1/2029 5,819,794
5,000,000 Ser. 65A,
5.20%, 10/1/2018 4,650,300
Ser. Y, (FHA):
350,000 7.30%, 10/1/2003 357,000
300,000 7.45%, 4/1/2016 306,000
2,415,000 Single Family Mtge. Ser. 61B RB,
5.20%, 10/1/2014 2,288,333
Pennsylvania Higher Edl. Facs
Auth. RB:
15,250,000 5.125%, 6/15/2024 13,868,655
1,720,000 6.80%, 12/1/2000 1,769,794
1,500,000 7.25%, 5/1/2010 1,529,640
485,000 Ser. A, (MBIA),
6.625%, 8/15/2009 517,641
5,260,000 Ser. M, (AMBAC),
5.625%, 6/15/2019 5,182,099
Allegheny-Delaware Valley Obl.: Hlth. Svcs., Ser
3,000,000 A,
5.50%, 11/15/2008 2,989,470
3,550,000 5.875%, 11/15/2021 3,414,035
</TABLE>
24
<PAGE>
EVERGREEN
PENNSYLVANIA MUNICIPAL BOND FUND
Schedule of Investments(continued)
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Pennsylvania Higher Edl. Facs.
Auth. RB - continued
Bryn Mawr College:
$ 2,450,000 5.40%, 12/1/2009 $ 2,507,893
2,000,000 5.625%, 12/1/2027 1,940,940
Drexel Univ.:
5,185,000 4.80%, 5/1/2021 4,464,700
1,855,000 5.20%, 5/1/2008 1,883,381
2,065,000 5.20%, 5/1/2009 2,082,491
2,200,000 2nd Ser., (MBIA),
5.375%, 5/1/2016 2,132,592
Lasalle Univ., (MBIA):
1,095,000 5.25%, 5/1/2013 1,081,039
1,000,000 5.625%, 5/1/2017 991,540
750,000 6.75%, 5/1/2011 766,575
State Sys.:
Ser. D:
200,000 7.00%, 6/15/2005 204,442
1,000,000 7.10%, 6/15/2007 1,022,880
2,000,000 Ser. E,
7.00%, 6/15/2011 2,092,840
2,800,000 Ser. K, (AMBAC),
5.50%, 6/15/2010 2,833,180
Ser. N, (MBIA):
3,500,000 5.80%, 6/15/2024 3,490,725
4,000,000 5.875%, 6/15/2021 4,013,240
Thomas Jefferson Univ.:
3,720,000 (AMBAC),
5.375%, 7/1/2013 3,688,268
285,000 Ser. A, (MBIA),
5.15%, 11/1/2010 278,055
1,115,000 Ser. A, Prerefunded,
6.625%, 8/15/2009 1,202,817
Univ. of PA:
Ser. A:
1,100,000 5.70%, 1/1/2011 1,087,735
2,715,000 6.00%, 1/1/2003 2,797,455
3,440,000 6.00%, 1/1/2004 3,556,031
Ser. B:
1,000,000 5.30%, 9/1/2006 1,023,120
1,520,000 5.50%, 1/1/2009 1,494,206
2,725,000 5.55%, 9/1/2009 2,787,484
2,145,000 5.60%, 9/1/2010 2,193,005
4,000,000 5.75%, 1/1/2017 3,867,200
3,740,000 5.85%, 9/1/2013 3,870,825
Univ. of PA Hlth. Svcs.:
Ser. A:
2,525,000 5.60%, 1/1/2010 2,488,741
4,500,000 5.875%, 1/1/2015 4,420,575
1,000,000 6.00%, 1/1/2007 1,026,980
100,000 6.00%, 1/1/2010 102,635
4,460,000 Ser. B,
5.70%, 1/1/2011 4,410,271
Pennsylvania IDA RB:
Econ. Dev., (AMBAC):
2,215,000 5.80%, 1/1/2008 2,327,456
250,000 5.80%, 7/1/2009 262,575
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Pennsylvania IDA RB
Econ. Dev., (AMBAC) - continued
$ 7,595,000 6.00%, 1/1/2005 $ 8,042,270
2,000,000 6.00%, 7/1/2006 2,131,740
305,000 6.00%, 7/1/2009 324,971
2,000,000 7.00%, 1/1/2006 2,224,140
7,215,000 Ser. 1994,
6.00%, 1/1/2012 7,587,943
Pennsylvania Infrastructure,
Pennvest Loan Pool Program, (MBIA):
3,845,000 5.30%, 9/1/2008 3,936,699
4,365,000 5.40%, 9/1/2009 4,427,850
2,140,000 5.50%, 9/1/2010 2,185,582
Pennsylvania Intergovernmental Cooperative Auth
Spl. Tax RB, Philadelphia Funding Program, (FGIC):
3,665,000 5.60%, 6/15/2012 3,709,017
3,000,000 5.625%, 6/15/2013 3,025,110
1,650,000 6.75%, 6/15/2021 1,823,200
Pennsylvania Pub. Sch. Bldg. Auth. College RB:
2,400,000 Harrisburg Area Community College, Ser. D, (MBIA),
6.75%, 4/1/2011 2,538,528
2,070,000 Lehigh Carbon Community College, Ser. F, (AMBAC),
5.00%, 11/1/2014 1,942,012
1,260,000 Montgomery Cnty. Community College, Ser. B,
5.60%, 11/1/2005 1,313,071
1,500,000 Pennsylvania Pub. Sch. Bldg. Auth. Sch. RB,
Tuscarora Sch. Dist. Refunding Proj., Ser. B,
5.70%, 10/15/2003 1,547,505
Pennsylvania State GO:
5,000,000 5.125%, 9/15/2010 5,014,050
2,500,000 6.50%, 11/15/2010 2,652,875
3,000,000 1st Ser.,
5.00%, 3/1/2017 2,756,850
2nd Ser.:
3,000,000 5.50%, 6/15/2010 3,077,340
25,000 6.00%, 7/1/2005 26,714
5,000,000 6.25%, 7/1/2010 5,477,250
5,060,000 6.25%, 7/1/2011 5,515,653
350,000 3rd Ser. 1993,
5.00%, 9/1/2012 339,500
Pennsylvania State Univ. RB:
1,000,000 5.30%, 8/15/2003 1,028,360
2,535,000 5.50%, 8/15/2016 2,469,141
3,035,000 6.15%, 3/1/2005 3,187,417
1,000,000 6.25%, 3/1/2011 1,049,660
1,000,000 6.60%, 7/1/2002 1,058,710
4,000,000 7.00%, 7/1/2016 4,261,400
</TABLE>
25
<PAGE>
EVERGREEN
PENNSYLVANIA MUNICIPAL BOND FUND
Schedule of Investments(continued)
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Pennsylvania Turnpike Commission, Oil Franchise Tax
RB:
Ser. A, (AMBAC):
$ 5,670,000 5.25%, 12/1/2014 $ 5,500,978
2,360,000 5.45%, 12/1/2003 2,453,031
2,000,000 5.50%, 12/1/2004 2,090,040
Turnpike RB:
Ser. L, (AMBAC):
1,000,000 6.45%, 6/1/2003 1,050,760
1,000,000 6.60%, 6/1/2005 1,049,020
3,500,000 Ser. N,
5.50%, 12/1/2017 3,409,070
Ser. O, (FGIC):
3,000,000 5.45%, 12/1/2003 3,113,340
1,000,000 5.60%, 12/1/2005 1,039,000
1,500,000 5.70%, 12/1/2006 1,572,480
Ser. P:
150,000 5.10%, 12/1/1999 150,340
2,075,000 5.80%, 12/1/2006 2,160,262
5,000,000 Ser. U, (FGIC),
5.80%, 12/1/2007 5,212,400
Philadelphia, PA Arpt. Pkg. Auth. RB:
400,000 5.75%, 9/1/2007 422,348
1,000,000 5.75%, 9/1/2008 1,054,280
Philadelphia, PA Arpt. RB,
Philadelphia Arpt. Sys.,
Ser. A:
4,215,000 5.125%, 6/15/2013 4,078,392
5,485,000 5.25%, 6/15/2014 5,324,564
Philadelphia, PA GO:
1,530,000 5.00%, 5/15/2015 1,425,731
2,375,000 5.25%, 3/15/2013 2,327,096
1,500,000 5.25%, 3/15/2015 1,447,275
Ser. B:
2,315,000 5.80%, 11/15/2007 2,472,852
Philadelphia, PA Hosp. & Higher Ed. Facs. Auth. RB:
1,015,000 Ser. A,
7.00%, 8/15/2017 1,077,636
375,000 Agnes Med. Ctr. Proj., (FHA),
6.75%, 8/15/2001 381,097
Chestnut Hill College:
1,565,000 5.35%, 10/1/2007 1,514,607
1,000,000 6.00%, 10/1/2029 934,360
Children's Hosp. Proj.,
Ser. A:
1,470,000 5.20%, 2/15/2005 1,481,054
3,035,000 6.00%, 2/15/2002 3,119,950
1,500,000 6.25%, 2/15/2005 1,592,745
Children's Seashore House:
500,000 7.40%, 8/15/2000 515,420
500,000 7.40%, 8/15/2001 515,420
150,000 7.50%, 8/15/2002 154,752
4,000,000 Ser. A,
7.00%, 8/15/2022 4,244,680
Community College,
Ser. B, (MBIA):
1,135,000 6.25%, 5/1/2005 1,219,478
1,205,000 6.25%, 5/1/2006 1,299,520
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Philadelphia, PA Hosp. & Higher Ed. Facs. Auth. RB -
continued
Jefferson Hlth. Sys., Ser. A:
$ 3,395,000 5.125%, 5/15/2011 $ 3,231,938
3,555,000 5.125%, 5/15/2012 3,343,833
5,895,000 5.25%, 5/15/2013 5,774,978
1,250,000 Presbyterian Med. Ctr.,
5.80%, 12/1/2001 1,292,550
Philadelphia, PA IDA RB:
Nat'l. Board of Med Examiners Proj.:
830,000 6.15%, 5/1/2001 854,601
580,000 6.25%, 5/1/2002 606,808
Simpson House Proj.:
1,000,000 5.25%, 8/15/2015 907,380
2,200,000 5.375%, 8/15/2020 2,115,520
1,900,000 Philadelphia, PA Reg'l Port Auth. RB,
6.00%, 9/1/2007 1,982,289
4,000,000 Philadelphia, PA Sch. Dist. GO, Ser. B, 5.50%,
9/1/2025 3,824,600
4,000,000 Philadelphia, PA Wtr. & Wst. Wtr. RB, (MBIA),
6.25%, 8/1/2012 4,352,800
500,000 Philadelphia, PA IDA RB, Girard Estate Coal Mining
Proj.,
5.25%, 11/15/2009 505,855
2,000,000 Philadelphia, PA Muni. Auth. RB, Justice Lease, Ser
B,
7.10%, 11/15/2011 2,155,480
1,260,000 Pike Cnty., PA GO, (AMBAC),
4.75%, 10/1/2011 1,199,646
2,750,000 Pittsburgh & Allegheny Cnty., PA Pub. Auditorium RB,
Reg'l. Asset Dist. Sales Tax, (AMBAC),
5.25%, 2/1/2014 2,670,855
Pittsburgh, PA GO:
3,115,000 Ser. A, (AMBAC),
5.50%, 9/1/2014 3,126,681
25,000 Ser. D, (AMBAC),
6.125%, 9/1/2017 26,653
Pittsburgh, PA Wtr. & Swr. Sys. RB
(FGIC):
1,000,000 7.25%, 9/1/2014 1,145,310
First Lien, Ser. A:
2,845,000 5.40%, 9/1/2012 2,956,922
2,715,000 5.50%, 9/1/2013 2,835,709
1,000,000 Pleasant Valley, PA Sch. Dist. GO, (FGIC),
5.60%, 11/15/2014 1,002,270
2,000,000 Pocono Mtn., PA Sch. Dist. GO, Ser. AA, (AMBAC),
6.10%, 10/1/2003 2,077,880
195,000 Radnor Township, PA Sch. Auth. Sch. RB, Ser. C,
9.875%, 9/15/2000 200,831
3,800,000 Schuylkill Cnty., PA IDA RB, Variable Pine Grove
Landfill, Inc.,
5.10%, 4/1/2009 3,605,858
</TABLE>
26
<PAGE>
EVERGREEN
PENNSYLVANIA MUNICIPAL BOND FUND
Schedule of Investments(continued)
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Schuylkill Valley, PA Sch. Dist. GO, (MBIA):
$ 1,110,000 5.55%, 4/15/2007 $ 1,151,270
1,185,000 5.65%, 4/15/2008 1,232,898
250,000 Scranton-Lackwanna, PA Hlth. & Welfare Auth. RB:
Mercy Hlth. Sys. Proj., Ser. B, (MBIA)
5.00%, 1/1/2006 252,070
Univ. of Scranton Proj.:
1,000,000 5.10%, 11/1/2010 992,030
150,000 Ser. A,
6.15%, 3/1/2003 155,903
105,000 Seneca Valley, PA Sch. Dist. GO, (FGIC),
5.85%, 2/15/2015 111,504
2,000,000 Sharon, PA Reg'l. Hlth. Sys. Auth. RB, 5.00%,
12/1/2018 1,807,320
3,450,000 Solanco, PA Sch. Dist. GO, 5.90%, 2/15/2009 3,637,714
13,970,000 South Fork, PA Muni. Hosp. Auth. RB, Conemaugh Valley
Memorial Hosp., Ser. B, (MBIA),
5.375%, 7/1/2022 13,139,344
Southeastern, PA Trans. Auth. Spl. RB:
Ser. A:
3,090,000 5.625%, 3/1/2007 3,259,518
1,290,000 5.75%, 3/1/2008 1,368,406
185,000 Prerefunded, Ser. A, (FGIC),
5.625%, 3/1/2007 195,149
2,405,000 Stroudsburg, PA Area Sch. Dist. GO, 5.65%,
10/1/2009 2,532,008
500,000 Swarthmore Borough, PA College Auth. RB,
6.85%, 9/15/2001 518,970
3,055,000 Union Cnty., PA Higher Edl. Facs. RB, Bucknell Univ.,
(MBIA),
4.50%, 4/1/2018 2,585,874
Unionville-Chadds Ford, PA Sch. Dist. GO:
1,000,000 5.80%, 6/1/2013 1,045,020
1,000,000 6.65%, 6/1/2004 1,034,340
1,000,000 6.70%, 6/1/2005 1,034,970
Univ. of Pittsburgh, PA RB:
40,000 Ser. A, (MBIA),
6.125%, 6/1/2021 40,649
Ser. B, (MBIA):
4,010,000 5.50%, 6/1/2009 4,131,984
5,000 5.90%, 6/1/2003 5,249
3,265,000 6.10%, 6/1/2005 3,458,954
2,000,000 6.25%, 6/1/2008 2,125,358
4,255,000 University, PA Area Joint Swr. Auth. RB, (MBIA),
5.25%, 11/1/2014 4,162,794
540,000 Upper Merion, PA Area Sch. Dist. GO, 5.00%,
7/15/2012 523,892
Upper Merion, PA GO:
2,595,000 5.55%, 8/15/2007 2,682,062
2,910,000 6.90%, 9/1/2016 3,053,376
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Upper Merion, PA Muni. Util. Auth., Swr. RB:
$ 1,000,000 6.00%, 8/15/2012 $ 1,033,580
2,325,000 6.00%, 8/15/2016 2,385,055
Upper Moreland-Hatboro, PA Joint Swr. Auth. RB,
(MBIA):
1,025,000 6.25%, 10/15/2002 1,080,565
1,000,000 6.35%, 10/15/2003 1,070,370
2,065,000 Valley View, PA Sch. Dist. GO, Ser. A, (FGIC),
5.375%, 11/15/2010 2,086,001
1,000,000 Wallenpaupack, PA Area Sch. Dist. GO, Ser. B,
(FGIC),
6.00%, 9/1/2003 1,014,180
1,300,000 Washington Cnty., PA Hosp. Auth. RB, Shadyside
Hosp. Proj.,
5.875%, 12/15/2004 1,383,915
West Chester, PA Area Sch. Dist. GO:
2,195,000 6.20%, 9/1/2012 2,287,717
1,000,000 Ser. A,
6.70%, 1/15/2011 1,030,950
West Mifflin, PA Muni. Sanitation Swr. Auth. RB:
1,000,000 (FGIC),
5.70%, 8/1/2015 1,055,920
2,500,000 Ser. A,
5.80%, 8/1/2024 2,654,250
6,240,000 West View, PA Muni. Auth. Wtr. RB, 5.15%,
11/15/2017 5,840,578
8,530,000 Westmoreland Cnty., PA IDA RB, Citizens General
Hosp.,
5.00%, 7/1/2008 8,016,835
1,000,000 Wyoming Valley, PA Sanitation Swr. Auth. RB,
7.00%, 11/15/2000 1,023,520
1,000,000 York Cnty., PA GO, (FGIC),
6.00%, 10/1/2004 1,033,990
7,805,000 York Cnty., PA Hosp. Auth. RB,
York Hosp., (AMBAC),
5.25%, 7/1/2017 7,372,369
75,000 York, PA City Sch. Dist. GO, (FGIC), 5.60%,
3/1/2007 76,649
------------
837,009,667
------------
Virginia - 1.7%
1,000,000 Arlington Cnty., VA IDA MHRB, Woodbury Park Apts.,
Ser. B, 6.50%, 7/1/2024 949,190
14,000,000 Loudoun Cnty., VA IDA Residential Care Facs. RB,
Falcons Landing Project, (LOC: Bank of Scotland),
3.70%, 11/1/2028, VRDN (b) 14,000,000
------------
14,949,190
------------
Puerto Rico - 2.8%
Cmnwlth. of Puerto Rico GO: Linked BPO, Ser. D (c),
3,950,000 (MBIA),
7.00%, 7/1/2010 4,538,155
Pub. Impt.:
6,500,000 5.00%, 7/1/2028 5,765,715
</TABLE>
27
<PAGE>
EVERGREEN
PENNSYLVANIA MUNICIPAL BOND FUND
Schedule of Investments(continued)
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Puerto Rico - continued
Cmnwlth. of Puerto Rico, Hwy. & Trans. Auth. RB:
$ 4,200,000 Ser. A,
5.50%, 7/1/2009 $ 4,404,330
1,000,000 Ser. W, (MBIA),
5.50%, 7/1/2013 1,025,880
Ser. Y, (FSA):
100,000 5.25%, 7/1/2015 98,602
2,500,000 5.50%, 7/1/2036 2,386,800
3,250,000 Cmnwlth. of Puerto Rico, Indl., Tourist, Edl., Med
& Env. Control Facs. RB, Hospital Auxilio Mutuo
Oblig., Group A, (MBIA),
6.25%, 7/1/2024 3,437,233
1,000,000 Cmnwlth. of Puerto Rico, Muni. Fin. Agy. RB, Ser
A, (FSA),
6.00%, 7/1/2011 1,088,500
1,800,000 Cmnwlth. of Puerto Rico, Pub. Bldgs. Auth. RB, Gtd
Pub. Ed. & Hlth. Facs., Ser. M,
5.70%, 7/1/2009 1,879,686
1,000,000 Univ. of Puerto Rico, Univ. RB,
Ser. N, (MBIA),
6.25%, 6/1/2007 1,100,070
------------
25,724,971
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
U.S. Virgin Islands - 0.5%
$ 5,000,000 Virgin Islands, Pub. Fin. Auth. RB,
Sr. Lien, Ser. A,
5.50%, 10/1/2018 $ 4,739,750
------------
Total Municipal Obligations
(cost $884,527,517) 883,414,768
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND SHARES - 1.8%
15,249,557 Federated Tax Free Obligations Fund 15,249,557
748,459 Pennsylvania Municipal Cash Trust, Institutional
Service Shares 748,459
------------
Total Mutual Fund Shares
(cost $15,998,016) 15,998,016
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $900,525,527) 99.0% 899,412,784
Other Assets and Liabilities - net 1.0 9,481,951
----- ------------
Net Assets - 100.0% $908,894,735
===== ============
</TABLE>
(a) Effective yield (calculated at date of purchase) is the annual yield at
which the bond accretes until its 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 in-
terest upon surrendering the security to the issuing agent.
(c) At the discretion of the portfolio manager, these securities may be sepa-
rated into securities with interest or principal payments that are linked
to another rate or index and therefore would be considered derivative secu-
rities.
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
BPO Bond Payment Obligation
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, Inc.
GNMA Insured by Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
IDA Industrial Development Authority
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.
28
<PAGE>
EVERGREEN
State Municipal Bond Funds
Statements of Assets and Liabilities
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Connecticut New Jersey Pennsylvania
Fund Fund Fund
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Identified cost of securities $74,745,814 $225,255,923 $900,525,527
Net unrealized gains or losses on
securities (970,548) (1,031,314) (1,112,743)
- -------------------------------------------------------------------------------
Market value of securities 73,775,266 224,224,609 899,412,784
Receivable for Fund shares sold 0 4,000 68,726
Interest receivable 1,033,981 3,233,118 14,269,579
Prepaid expenses and other assets 4,549 4,436 64,350
- -------------------------------------------------------------------------------
Total assets 74,813,796 227,466,163 913,815,439
- -------------------------------------------------------------------------------
Liabilities
Distributions payable 266,146 857,973 3,785,177
Payable for securities purchased 0 1,548,812 0
Payable for Fund shares redeemed 0 0 615,420
Advisory fee payable 36,950 57,982 293,699
Distribution Plan expenses
payable 329 0 20,606
Due to other related parties 3,157 4,230 0
Accrued expenses and other
liabilities 23,682 51,495 205,802
- -------------------------------------------------------------------------------
Total liabilities 330,264 2,520,492 4,920,704
- -------------------------------------------------------------------------------
Net assets $74,483,532 $224,945,671 $908,894,735
- -------------------------------------------------------------------------------
Net assets represented by
Paid-in capital $75,790,055 $226,505,436 $911,958,508
Overdistributed net investment
income (20,568) (35,243) (117,335)
Accumulated net realized gains or
losses on securities (315,407) (493,208) (1,833,695)
Net unrealized gains or losses on
securities (970,548) (1,031,314) (1,112,743)
- -------------------------------------------------------------------------------
Total net assets $74,483,532 $224,945,671 $908,894,735
- -------------------------------------------------------------------------------
Net assets consists of
Class A $ 816,391 $ 29,965,410 $ 33,022,944
Class B 1,507,204 20,852,040 36,369,350
Class C 0 0 6,631,802
Class Y 72,159,937 174,128,221 832,870,639
- -------------------------------------------------------------------------------
Total net assets $74,483,532 $224,945,671 $908,894,735
- -------------------------------------------------------------------------------
Shares outstanding
Class A 134,432 2,816,120 2,978,308
Class B 248,185 1,959,654 3,316,298
Class C -- -- 603,015
Class Y 11,882,274 16,364,356 75,122,208
- -------------------------------------------------------------------------------
Net asset value per share
Class A $ 6.07 $ 10.64 $ 11.09
- -------------------------------------------------------------------------------
Class A--Offering price (based on
sales charge of 4.75%) $ 6.37 $ 11.17 $ 11.64
- -------------------------------------------------------------------------------
Class B $ 6.07 $ 10.64 $ 10.97
- -------------------------------------------------------------------------------
Class C -- -- $ 11.00
- -------------------------------------------------------------------------------
Class Y $ 6.07 $ 10.64 $ 11.09
- -------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
29
<PAGE>
EVERGREEN
State Municipal Bond Funds
Statements of Operations
Six Months Ended September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Connecticut New Jersey Pennsylvania
Fund Fund Fund
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment income
Interest $ 1,850,134 $ 5,199,177 $ 16,437,771
- -------------------------------------------------------------------------------
Expenses
Advisory fee 224,338 506,045 1,087,624
Distribution Plan expenses 7,969 145,829 259,980
Administrative services fees 8,995 24,208 46,700
Transfer agent fee 714 20,505 40,049
Trustees' fees and expenses 747 2,022 5,923
Printing and postage expenses 6,159 17,974 75,574
Custodian fee 8,170 33,558 104,310
Registration and filing fees 5,106 10,154 53,014
Professional fees 12,282 13,737 15,912
Other 12,171 21,693 86,452
- -------------------------------------------------------------------------------
Total expenses 286,651 795,725 1,775,538
Less:Fee credits (1,453) (4,594) (11,074)
Fee waivers and expense
reimbursements (52,891) (221,972) 0
- -------------------------------------------------------------------------------
Net expenses 232,307 569,159 1,764,464
- -------------------------------------------------------------------------------
Net investment income 1,617,827 4,630,018 14,673,307
- -------------------------------------------------------------------------------
Net realized and unrealized gains or
losses on securities
Net realized gains or losses on
securities (527,818) (1,004,794) (2,380,061)
Net change in unrealized gains or
losses on securities (3,129,767) (8,198,854) (21,568,241)
- -------------------------------------------------------------------------------
Net realized and unrealized gains or
losses on securities (3,657,585) (9,203,648) (23,948,302)
- -------------------------------------------------------------------------------
Net decrease in net assets resulting
from operations $(2,039,758) $(4,573,630) $ (9,274,995)
- -------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
30
<PAGE>
EVERGREEN
State Municipal Bond Funds
Statements of Changes in Net Assets
Six Months Ended September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Connecticut New Jersey Pennsylvania
Fund Fund Fund
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Net investment income $ 1,617,827 $ 4,630,018 $ 14,673,307
Net realized gains or losses on
securities (527,818) (1,004,794) (2,380,061)
Net change in unrealized gains or
losses on securities (3,129,767) (8,198,854) (21,568,241)
- -------------------------------------------------------------------------------
Net decrease in net assets
resulting from operations (2,039,758) (4,573,630) (9,274,995)
- -------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income
Class A (14,052) (731,774) (701,007)
Class B (23,976) (396,024) (738,924)
Class C 0 0 (134,849)
Class Y (1,598,757) (3,541,098) (13,106,349)
- -------------------------------------------------------------------------------
Total distributions to
shareholders (1,636,785) (4,668,896) (14,681,129)
- -------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold 8,545,327 24,485,687 63,892,622
Net asset value of shares issued in
reinvestment of distributions 25,922 719,726 874,220
Payment for shares redeemed (6,050,248) (16,207,196) (54,522,143)
Net asset value of shares issued in
acquisitions 0 47,915,180 667,273,557
- -------------------------------------------------------------------------------
Net increase in net assets
resulting from capital share
transactions 2,521,001 56,913,397 677,518,256
- -------------------------------------------------------------------------------
Total increase (decrease) in net
assets (1,155,542) 47,670,871 653,562,132
Net assets
Beginning of period 75,639,074 177,274,800 255,332,603
- -------------------------------------------------------------------------------
End of period $74,483,532 $224,945,671 $908,894,735
- -------------------------------------------------------------------------------
Overdistributed net investment
income $ (20,568) $ (35,243) $ (117,335)
- -------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
31
<PAGE>
EVERGREEN
State Municipal Bond Funds
Statements of Changes in Net Assets
Year Ended March 31, 1999
<TABLE>
<CAPTION>
Connecticut New Jersey Pennsylvania
Fund Fund Fund
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Net investment income $ 3,068,565 $ 7,400,681 $ 10,561,862
Net realized gains on securities and
foreign currency related
transactions 446,743 1,059,203 2,213,443
Net change in unrealized gains or
losses on securities 211,471 500,469 (103,155)
- --------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 3,726,779 8,960,353 12,672,150
- --------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income
Class A (14,533) (1,503,706) (1,183,965)
Class B (20,474) (599,178) (1,343,223)
Class C 0 0 (232,806)
Class Y (3,035,168) (5,302,623) (7,805,137)
Net realized gains
Class A (3,518) (186,362) (354,194)
Class B (7,346) (96,217) (459,774)
Class C 0 0 (79,621)
Class Y (648,594) (645,270) (2,122,788)
- --------------------------------------------------------------------------------
Total distributions to
shareholders (3,729,633) (8,333,356) (13,581,508)
- --------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold 16,967,545 43,862,993 51,920,065
Net asset value of shares issued in
reinvestment of distributions 672,410 2,333,384 4,457,478
Payment for shares redeemed (10,150,268) (22,427,518) (40,292,580)
Net asset value of shares issued in
acquisitions 0 2,289,213 19,628,667
- --------------------------------------------------------------------------------
Net increase in net assets
resulting from capital share
transactions 7,489,687 26,058,072 35,713,630
- --------------------------------------------------------------------------------
Total increase in net assets 7,486,833 26,685,069 34,804,272
Net assets
Beginning of period 68,152,241 150,589,731 220,528,331
- --------------------------------------------------------------------------------
End of period $75,639,074 $177,274,800 $255,332,603
- --------------------------------------------------------------------------------
Undistributed (overdistributed) net
investment income $ (1,610) $ 3,635 $ (109,513)
- --------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
32
<PAGE>
Combined Notes to Financial Statements(Unaudited)
1. ORGANIZATION
The Evergreen State Municipal Bond Funds consist of Evergreen Connecticut Mu-
nicipal Bond Fund ("Connecticut Fund"), Evergreen New Jersey Municipal Bond
Fund ("New Jersey Fund"), and Evergreen Pennsylvania Municipal Bond Fund
("Pennsylvania Fund"), (collectively, the "Funds"). Each Fund is a non-diversi-
fied 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 Funds offer Class A, Class B, Class C and Class Y shares. Class A shares
are sold with a maximum front-end sales charge of 4.75%. Class B and Class C
shares are sold without a front-end sales charge, but pay a higher ongoing dis-
tribution fee than Class A. Class B shares are sold subject to a contingent de-
ferred sales charge that is payable upon redemption and decreases depending on
how long the shares have been held. Class B shares purchased after January 1,
1997 will automatically convert to Class A shares after seven years. Class B
shares purchased prior to January 1, 1997 retain their existing conversion
rights. Class C shares are sold subject to a contingent deferred sales charge
payable on shares redeemed within one year after the month of purchase. Class Y
shares are sold at net asset value and are not subject to contingent deferred
sales charges or distribution fees. Class Y shares are sold only to investment
advisory clients of First Union Corporation ("First Union") and its affiliates,
certain institutional investors or Class Y shareholders of record of certain
other funds managed by First Union and its affiliates as of December 30, 1994.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently fol-
lowed by the Funds in the preparation of their financial statements. The poli-
cies are in conformity with generally accepted accounting principles, which re-
quire management to make estimates and assumptions that affect amounts reported
herein. Actual results could differ from these estimates.
A. Valuation of Securities
An independent pricing service values each Fund's municipal bonds at fair value
using a variety of factors which may include yield, liquidity, interest rate
risk, credit quality, coupon, maturity and type of issue. Securities for which
valuations are not available from an independent pricing service may be valued
by brokers which use prices provided by market makers or estimates of market
value obtained from yield data relating to investments or securities with simi-
lar characteristics. Otherwise, securities for which valuations are not avail-
able from an independent pricing service (including restricted securities) are
valued at fair value as determined in good faith according to procedures estab-
lished by the Board of Trustees.
Mutual Fund shares are valued at the net asset value of each fund.
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.
33
<PAGE>
Combined Notes to Financial Statements(Unaudited) (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 taxable in-
come, net tax-exempt income and net capital gains, if any, to their sharehold-
ers. The Funds also intend to avoid any excise tax liability by making the re-
quired distributions under the Code. Accordingly, no provision for federal
taxes is required. To the extent that realized capital gains can be offset by
capital loss carryforwards, it is each Fund's policy not to distribute such
gains.
E. Distributions
Distributions from net investment income for the Funds are declared daily and
paid monthly. Distributions from net realized capital gains, if any, are paid
at least annually. Distributions to shareholders are recorded at the close of
business on the ex-dividend date.
Income and capital gains distributions to shareholders are determined in accor-
dance with income tax regulations, which may differ from generally accepted ac-
counting principles. The significant differences between financial statement
amounts available for distributions and distributions made in accordance with
income tax regulations are primarily due to differing treatment of market dis-
count on securities.
F. Class Allocations
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the rela-
tive net assets of each class. Currently, class specific expenses are limited
to expenses incurred under the Distribution Plans for each class.
3. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
First Union National Bank ("FUNB") a subsidiary of First Union serves as the
investment advisor to the Connecticut Fund and New Jersey Fund and is paid a
management fee that is computed daily and paid monthly. The Connecticut Fund
pays FUNB an annual fee for its services equal to 0.60% of the average daily
net assets of the Fund. The New Jersey Fund pays FUNB a fee for its services
which is computed by applying percentage rates, which start at 0.50% and de-
cline to 0.35% per annum as net assets increase, to the average daily net as-
sets of the Fund.
Evergreen Investment Management Company ("EIMC"), a subsidiary of First Union,
is the investment advisor for the Pennsylvania Fund. In return for providing
investment management and administrative services, the Fund pays EIMC a manage-
ment fee that is calculated daily and paid monthly. The management fee is com-
puted by applying percentage rates starting at 0.55% and declining to 0.25% per
annum as net assets increase, to the average daily net assets of the Fund.
For the six months ended September 30, 1999, the amount of investment advisory
fees waived by each investment advisor and the impact on each Fund's expense
ratio represented as a percentage of its average net assets were as follows:
<TABLE>
<CAPTION>
% of Average
Fees Daily
Waived Net Assets
----------------------
<S> <C> <C>
Connecticut Fund.......................... $ 52,891 0.14%
New Jersey Fund........................... 196,664 0.19%
</TABLE>
Evergreen Investment Services ("EIS"), a subsidiary of First Union, serves as
the administrator and The BISYS Group, Inc. ("BISYS") serves as the sub-admin-
istrator to the Funds. As administrator, EIS provides the Funds with facili-
ties, equipment and personnel. As sub-administrator to the Funds, BISYS pro-
vides the officers of the Funds. Officers of the Funds and affiliated Trustees
receive no compensation directly from the Funds.
For the Connecticut Fund and New Jersey Fund, the administrator and sub-admin-
istrator for each Fund is entitled to an annual fee based on the average daily
net assets of the funds administered by EIS for which First Union or its in-
vestment advisory subsidiaries are also the investment advisors. The adminis-
tration fee is
34
<PAGE>
Combined Notes to Financial Statements(Unaudited) (continued)
calculated by applying percentage rates, which start at 0.05% and decline to
0.01% per annum as net assets increase, to the average daily net assets of each
Fund. The sub-administration fee is calculated by applying percentage rates,
which start at 0.01% and decline to 0.004% per annum as net assets increase, to
the average daily net assets of each Fund.
For the six months ended September 30, 1999, the Connecticut Fund and New Jer-
sey Fund paid or accrued the following amounts for administrative and sub-ad-
ministrative services:
<TABLE>
<CAPTION>
Administration Sub-administration
Fee Fee
------------------------------
<S> <C> <C>
Connecticut Fund.............. $ 7,138 $1,857
New Jersey Fund............... 19,120 5,088
</TABLE>
For the six months ended September 30, 1999, the Pennsylvania Fund reimbursed
EIMC $46,700 for certain administration and accounting expenses.
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". Under the Distribu-
tion Plans, Class A incurs distributions fees equal to 0.25% of the average
daily net asset of the class, all of which is used to pay for shareholder serv-
ice fees. Class B and Class C incur distribution fees equal to 1.00% of the av-
erage daily net assets of each class. Of this amount, 0.25% of the distribution
fees incurred is used to pay for shareholder service fees and 0.75% is used to
pay for distribution-related costs. Distribution Plan expenses are calculated
daily and paid at least quarterly.
During the six months ended September 30, 1999, amounts paid or accrued to EDI
pursuant to each Fund's Class A, Class B, and Class C Distribution Plans were
as follows:
<TABLE>
<CAPTION>
% of Class A
Fees Waived Average
Class A Class B Class C Class A Net Assets
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
Connecticut
Fund........... $ 844 $ 7,125 -- -- --
New Jersey
Fund........... 39,543 106,286 -- $25,308 0.16%
Pennsylvania
Fund........... 37,366 188,281 $34,333 -- --
</TABLE>
With respect to Class B and Class C shares, the principal underwriter may pay
distribution fees greater than the allowable annual amounts each Fund is per-
mitted to pay under the Distribution Plans.
Each of the Distribution Plans may be terminated at any time by vote of the In-
dependent Trustees or by vote of a majority of the outstanding voting shares of
the respective class.
5. ACQUISITIONS
Effective on the close of business on July 27, 1998, the New Jersey Fund ac-
quired substantially all the assets and assumed certain liabilities of CoreFund
New Jersey Municipal Bond Fund in an exchange for Class A and Class Y shares of
New Jersey Fund. Also, the Pennsylvania Fund acquired substantially all the as-
sets and assumed certain liabilities of CoreFund Pennsylvania Municipal Bond
Fund in an exchange for Class A and Class Y shares of Pennsylvania Fund.
On June 25, 1999, as a result of the conversion of common trust funds managed
by FUNB, the New Jersey Fund and Pennsylvania Fund each acquired substantially
all of the net assets of comparable common trusts in exchange for Class Y
shares of the respective Funds.
35
<PAGE>
Combined Notes to Financial Statements(Unaudited) (continued)
These conversions and acquisitions were accomplished by a tax-free exchange of
the respective shares of each Fund. The value of net assets acquired, number of
shares issued, unrealized appreciation acquired and the aggregate net assets of
each Fund immediately after the acquisition were as follows:
<TABLE>
<CAPTION>
Value of Net Number of Unrealized Net Assets
Acquiring Fund Acquired Fund Assets Acquired Shares Issued Appreciation After Acquisition
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
New Jersey Fund CoreFund New Jersey Municipal Bond Fund $ 2,289,213 205,813 $ 104,332 $160,691,863
Common Trust Fund 47,915,180 4,436,670 (1,033,417) 223,996,388
Pennsylvania Fund CoreFund Pennsylvania Municipal Bond Fund 19,628,667 1,676,246 443,113 242,223,339
Common Trust Fund 667,273,557 59,201,637 (12,011,107) 922,757,172
</TABLE>
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:
Connecticut Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
September 30, 1999 March 31, 1999
--------------------- -----------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 77,597 $ 481,991 134,138 $ 866,051
Shares issued in reinvestment
of distributions 874 5,437 1,796 11,544
Shares redeemed (33,338) (206,754) (69,560) (447,872)
- ------------------------------------------------------------------------------
Net increase 45,133 $ 280,674 66,374 $ 429,723
- ------------------------------------------------------------------------------
Class B
Shares sold 89,119 $ 558,279 130,130 $ 839,983
Shares issued in reinvestment
of distributions 2,009 12,480 2,852 18,307
Shares redeemed (27,858) (172,897) 0 0
- ------------------------------------------------------------------------------
Net increase 63,270 $ 397,862 132,982 $ 858,290
- ------------------------------------------------------------------------------
Class Y
Shares sold 1,207,655 $7,505,057 2,378,864 $15,261,511
Shares issued in reinvestment
of distributions 1,296 8,005 100,241 642,559
Shares redeemed (910,075) (5,670,597) (1,511,719) (9,702,396)
- ------------------------------------------------------------------------------
Net increase 298,876 $1,842,465 967,386 $ 6,201,674
- ------------------------------------------------------------------------------
</TABLE>
New Jersey Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
September 30, 1999 March 31, 1999
---------------------- ------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 228,977 $ 2,494,963 471,657 $ 5,285,409
Shares issued in
reinvestment of
distributions 34,711 378,892 93,355 1,046,688
Shares redeemed (462,506) (5,054,791) (469,865) (5,263,660)
Shares issued in acquisition
of
CoreFund New Jersey
Municipal Bond Fund 0 0 74,925 833,392
- --------------------------------------------------------------------------------
Net increase (decrease) (198,818) $(2,180,936) 170,072 $ 1,901,829
- --------------------------------------------------------------------------------
Class B
Shares sold 336,450 $ 3,688,174 708,495 $ 7,932,617
Shares issued in
reinvestment of
distributions 22,369 244,042 46,484 521,268
Shares redeemed (208,548) (2,254,174) (173,473) (1,935,932)
- --------------------------------------------------------------------------------
Net increase 150,271 $ 1,678,042 581,506 $ 6,517,953
- --------------------------------------------------------------------------------
Class Y
Shares sold 1,679,746 $18,302,550 2,736,002 $ 30,644,967
Shares reinvestment of
distributions 8,873 96,792 68,267 765,428
Shares redeemed (816,467) (8,898,231) (1,358,173) (15,227,926)
Shares issued in acquisition
of:
Common Trust Fund 4,436,670 47,915,180 0 0
CoreFund New Jersey
Municipal Bond Fund 0 0 130,888 1,455,821
- --------------------------------------------------------------------------------
Net increase 5,308,822 $57,416,291 1,576,984 $ 17,638,290
- --------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
Combined Notes to Financial Statements(Unaudited) (continued)
Pennsylvania Fund
<TABLE>
<CAPTION>
Six Months Ended Year Ended
September 30, 1999 March 31, 1999
------------------------ ------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 946,029 $ 10,728,270 422,289 $ 4,962,719
Shares issued in
reinvestment of
distributions 27,480 312,107 73,831 866,664
Shares redeemed (451,539) (5,104,864) (617,772) (7,248,653)
Shares issued in
acquisition of CoreFund
Pennsylvania Municipal
Bond Fund 0 0 517,010 6,054,216
- --------------------------------------------------------------------------------
Net increase $ 21,970 $ 5,935,513 395,358 $ 4,634,946
- --------------------------------------------------------------------------------
Class B
Shares sold 427,446 $ 4,834,783 599,763 $ 6,993,005
Shares issued in
reinvestment of
distributions 34,252 385,033 94,274 1,092,986
Shares redeemed (427,992) (4,810,650) (617,387) (7,159,590)
- --------------------------------------------------------------------------------
Net increase 33,706 $ 409,166 76,650 $ 926,401
- --------------------------------------------------------------------------------
Class C
Shares sold 42,800 $ 488,641 82,623 $ 962,589
Shares issued in
reinvestment of
distributions 7,242 81,658 18,631 216,583
Shares redeemed (48,179) (542,953) (53,731) (622,506)
- --------------------------------------------------------------------------------
Net increase 1,863 $ 27,346 47,523 $ 556,666
- --------------------------------------------------------------------------------
Class Y
Shares sold 4,233,457 $ 47,840,928 3,324,052 $ 39,001,752
Shares issued in
reinvestment of
distributions 8,388 95,422 195,060 2,281,245
Shares redeemed (3,920,531) (44,063,676) (2,151,154) (25,261,831)
Shares issued in
acquisition of:
Common Trust Fund 59,201,637 667,273,557 0 0
CoreFund Pennsylvania
Municipal Bond Fund 0 0 1,159,236 13,574,451
- --------------------------------------------------------------------------------
Net increase 59,522,951 $671,146,231 2,527,194 $ 29,595,617
- --------------------------------------------------------------------------------
</TABLE>
7. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities) were as follows for the six months ended September 30,
1999:
<TABLE>
<CAPTION>
Cost of Purchases Proceeds from Sales
--------------------------------
<S> <C> <C>
Connecticut Fund $26,412,837 $28,192,899
New Jersey Fund 41,836,240 34,378,632
Pennsylvania Fund 43,353,935 63,997,064
</TABLE>
As of March 31, 1999, the Funds had no capital loss carryforwards for federal
income tax purposes
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 % of Average
Credits Received Daily Net Assets
------------------------------
<S> <C> <C>
Connecticut Fund $ 1,453 0.00%
New Jersey Fund 4,594 0.01%
Pennsylvania Fund 11,074 0.00%
</TABLE>
9. DEFERRED TRUSTEES' FEES
Each Independent Trustee of each Fund may defer any or all compensation related
to performance of their duties as Trustees. The Trustees' deferred balances are
allocated to deferral accounts, which are included in the accrued expenses for
the Fund. The investment performance of the deferral accounts are based on the
investment performance of certain Evergreen Funds. Any gains earned or losses
incurred in the deferral accounts are reported in the Fund's Trustees' fees and
expenses. Trustees will be paid either in one lump sum
37
<PAGE>
Combined Notes to Financial Statements(Unaudited) (continued)
or in quarterly installments for up to ten years at their election, not earlier
than either the year in which the Trustee ceases to be a member of the Board of
Trustees or January 1, 2000.
10. FINANCING AGREEMENTS
Certain Evergreen Funds and State Street Bank and Trust Company ("State
Street") and a group of banks (collectively, the "Banks") entered into a fi-
nancing agreement dated December 22, 1997, as amended on November 20, 1998. Un-
der this agreement, the Banks provided an unsecured credit facility in the ag-
gregate amount of $400 million ($275 million committed and $125 million uncom-
mitted). The credit facility was allocated, under the terms of the financing
agreement, among the Banks. The credit facility was accessed by the Funds for
temporary or emergency purposes only and was subject to each Fund's borrowing
restrictions. Borrowings under this facility bear interest at 0.50% per annum
above the Federal Funds rate. A commitment fee of 0.065% per annum will be in-
curred on the unused portion of the committed facility, which was allocated to
all funds. For its assistance in arranging this financing agreement, the Capi-
tal Market Group of First Union was paid a one-time arrangement fee of $27,500.
State Street serves as administrative agent for the Banks, and as administra-
tive agent is entitled to a fee of $20,000 per annum which is allocated to all
of the funds.
This agreement was amended and renewed on December 22, 1998. The amended fi-
nancing agreement became effective on December 22, 1998 among all of the Ever-
green Funds, State Street and The Bank of New York ("BONY"). Under this agree-
ment, State Street and BONY provide an unsecured credit facility in the aggre-
gate amount of $150 million ($125 million committed and $25 million uncommit-
ted). The remaining terms and conditions of the agreement 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 credit agreement. Under this agreement, the Lenders provide
an unsecured revolving credit commitment in the aggregate amount of $1.050 bil-
lion. The credit facility is allocated, under the terms of the financing agree-
ment, among the Lenders. The credit facility is accessed by the Funds for tem-
porary or emergency purposes to fund the redemption of their shares or as gen-
eral 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 annum above the Federal Funds rate during the period
from and including December 1, 1999 through and including January 31, 2000). A
commitment fee of 0.10% per annum is incurred on the average daily unused por-
tion of the revolving credit commitment. The commitment fee is allocated to all
funds. For its assistance 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 annum which is allocated to all of the funds.
During the six months ended September 30, 1999, the Funds had no borrowings un-
der these agreements.
11. CONCENTRATION OF CREDIT RISK
Each Fund invests a substantial portion of its assets in issuers of municipal
debt securities located in a single state, therefore, it may be more affected
by economic and political developments in that state or region than would be a
comparable general tax-exempt mutual fund.
12. YEAR 2000
Like other investment companies, the Funds could be adversely affected if the
computer systems used by the Funds' investment advisors and the Funds' other
service providers are not able to perform their intended functions effectively
after 1999 because of the inability of computer software to distinguish the
year 2000 from the year 1900. The Funds' investment advisors are taking steps
to address this potential year 2000 problem with respect to the computer sys-
tems that they use and to obtain satisfactory assurances that comparable steps
are being taken by the Funds' other major service providers. At this time, how-
ever, there can be no assurance that these steps will be sufficient to avoid
any adverse impact on the Funds from this problem.
38
<PAGE>
Evergreen Funds
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New Jersey Municipal Money Market Fund
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Municipal Income Fund
Connecticut Municipal Bond Fund
Florida Municipal Bond Fund
Florida High Income Municipal Bond Fund
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Maryland Municipal Bond Fund
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Pennsylvania Municipal Bond Fund
South Carolina Municipal Bond Fund
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Income
Capital Preservation and Income Fund
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Intermediate Term Bond Fund
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Diversified Bond Fund
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High Yield Bond Fund
Quality Income Fund
Short-Duration Income Fund
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Balanced
Balanced Fund
Tax Strategic Foundation Fund
Foundation Fund
Capital Balanced Fund
Capital Income and Growth Fund
Growth & Income
Utility Fund
Income and Growth Fund
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Value Fund
Blue Chip Fund
Growth and Income Fund
Small Cap Value Fund
Select Equity Index Fund
Domestic Growth
Tax Strategic Equity Fund
Strategic Growth Fund
Stock Selector Fund
Evergreen Fund
Masters Fund
Omega Fund
Small Company Growth Fund
Aggressive Growth Fund
Growth Fund
Capital Growth Fund
Select Special Equity Fund
Global International
Global Leaders Fund
International Growth Fund
Global Opportunities Fund
Precious Metals Fund
Emerging Markets Growth Fund
Latin America Fund
Perpetual Global Fund
Perpetual International Fund
Express Line
800.346.3858
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800.343.2898
www.evergreen-funds.com
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