<PAGE>
EVERGREEN(SM)
STATE TAX-FREE
FUNDS
(Drawings of the states of Georgia, North Carolina, South Carolina, Virginia,
Florida, and Florida)
Semi-Annual
Report
February 29, 1996
(Picture of Pine Tree)
Evergreen Funds
<PAGE>
EVERGREEN STATE TAX-FREE FUNDS
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
Economic Overview......................................................... 1
A Report From Your Portfolio Manager -- Florida High Income
Municipal Bond Fund....................................................... 3
A Report From Your Portfolio Managers..................................... 5
(Drawing of Florida) FLORIDA Statement of Investments.................................................. 6
HIGH INCOME Statement of Assets and Liabilities....................................... 9
MUNICIPAL BOND FUND Statement of Operations................................................... 10
Statement of Changes in Net Assets........................................ 11
Financial Highlights...................................................... 12
(Drawing of Florida) FLORIDA MUNICIPAL Statement of Investments.................................................. 13
BOND FUND Statement of Assets and Liabilities....................................... 17
Statement of Operations................................................... 18
Statement of Changes in Net Assets........................................ 19
Financial Highlights...................................................... 20
(Drawing of Georgia) GEORGIA Statement of Investments.................................................. 22
MUNICIPAL BOND Statement of Assets and Liabilities....................................... 24
FUND Statement of Operations................................................... 25
Statement of Changes in Net Assets........................................ 26
Financial Highlights...................................................... 27
(Drawing of North Carolina) NORTH CAROLINA Statement of Investments.................................................. 29
MUNICIPAL BOND Statement of Assets and Liabilities....................................... 31
FUND Statement of Operations................................................... 32
Statement of Changes in Net Assets........................................ 33
Financial Highlights...................................................... 34
(Drawing of South Carolina) SOUTH CAROLINA Statement of Investments.................................................. 36
MUNICIPAL BOND Statement of Assets and Liabilities....................................... 38
FUND Statement of Operations................................................... 39
Statement of Changes in Net Assets........................................ 40
Financial Highlights...................................................... 41
(Drawing of Virginia) VIRGINIA Statement of Investments.................................................. 43
MUNICIPAL BOND Statement of Assets and Liabilities....................................... 45
FUND Statement of Operations................................................... 46
Statement of Changes in Net Assets........................................ 47
Financial Highlights...................................................... 48
Combined Notes to Financial Statements.................................... 50
Trustees and Officers..........................................Inside Back Cover
</TABLE>
EVERGREEN(SM) is a Service Mark of Evergreen Asset Management Corp.
Copyright 1995, Evergreen Asset Management Corp.
<PAGE>
EVERGREEN STATE TAX-FREE FUNDS
ECONOMIC OVERVIEW
BY EVERGREEN ASSET MANAGEMENT CHAIRMAN
STEPHEN A. LIEBER
The volatility of investment markets during the (Photo of
first quarter of 1996 reflected a virtually constant Stephen A.
reappraisal of economic prospects. The prospects of sporadic Lieber)
commodity inflation, evidence of resurgent employment trends, failure of
political negotiations to achieve a balanced budget agreement, declining demand
in personal computer-based technological products, sizable consumer credit
growth and greater credit card losses, the increase in imports without
concomitant increases in exports, and the rise of the dollar, all drove the
markets to mirror the fast changing trends of new statistics. The question of
whether inflation might be reappearing was central to the investor reaction to
these concerns. Fears of inflation increased through the first quarter, as
evidenced by the sizable rise in bond market yields. By early April, long-term
U.S. Treasury bond yields reached 7%, a level last seen in August 1995, and up
more than one full percentage point from the beginning of the year. Clearly,
investors were demanding more of an inflation premium in interest rates.
The background with which this year has begun is inconclusive in its trends.
We have previously held to the view that a wage-driven inflation is unlikely in
the present economic environment due to the easy substitution of imported goods
for many domestic goods, while competitive pressures for U.S. and world markets
mount from the broadening dispersion of technology, capital, and capital goods.
The strength of American industry, it is generally held, must come from its
product innovation, its quality, and the rising productivity of its work force.
These internal and external pressures have had a major impact in restraining
wage-driven inflation. Monetary inflation has shown improving trends as the
budget deficit, as a percentage of gross domestic product, continues to decline.
Attention, however, must still be given to the longer term issues of potentially
destabilized Federal budgeting due to entitlements. While no solution to this
issue of government deficit control emerged from this year's political
negotiations, it is at least better established on the political agenda than
ever before.
Investment markets demand a risk premium when faced with elements of
uncertainty. The risk premium lately built into the fixed income markets not
only reflects the arguable issue of whether there is a risk of wage inflation in
the United States, but also the sharp recent increases in some key commodity
prices. The combination of a dearth of rainfall and reduced acreage in key
agricultural states has spiked up major food commodity prices. Similarly, the
draining of oil inventories because of the heat requirements of the abnormally
long and cold winter in northern states, together with the cautious inventory
policies of the oil industry faced with the possibility that Iraqi supplies
might return to the market, has caused prices of oil and refined products to
rise. Many watchers for inflationary trends have jumped on these commodity
rises, which have lead them to conclude that the inflation rate will rise and,
therefore, that bond yields have to go up. The dissent is widespread, arguing
that these are temporary interruptions, which will in the long run serve more to
shrink profit margins than to raise prices and arguing that these are only
interruptions to a fundamentally steady low inflation trend. They point to the
2.8% increase in the Consumer Price Index for the twelve months ended March 31.
More important in the analysis of the potentials for bond yields, many
economists argue, is the current trend toward the reduction of interest rates in
Europe, led by the recent half percent discount rate cut by the German
Bundesbank. The revival of economic growth in Europe, it is felt, requires lower
interest rates which in turn will facilitate a decline in rates in the United
States, merely from reduced competitive investment pressures. We conclude that
negative trends which have dominated the bond market in the first months of the
year, as marked by the sharp rise in yields, may well reflect shorter-term
factors rather than long-term trends. Federal Reserve Bank Governors in numerous
recent speeches and interviews have made the point that they are confident about
the underlying trend of well-controlled inflation, suggesting that they are not
aiming to increase the discount rates or to put any pressures to slow the
economy. We conclude that the Federal Reserve is not aiming to stimulate the
1
<PAGE>
EVERGREEN STATE TAX-FREE FUNDS
ECONOMIC OVERVIEW -- (CONTINUED)
economy at this time, but will act to sustain a reasonable growth in the better
than 2% range if there is any further evidence of broadly slowing economic
activity. International competitive interest rate pressures are diminishing, the
trade balance is improving and the economy has remained resilient in the recent
period of inventory correction. These are all factors suggesting a period of
comparative stability for the months ahead.
The tax-exempt securities markets in late 1994 and 1995, and again in early
1996, were negatively affected by the flat tax proposals. The differential
between the yields of taxable fixed income debt and tax-exempt debt shrank to
record lows for recent years. For those who were convinced that a flat tax, or a
substantially reduced income tax level, was not to be expected in the near-term,
the tax-exempt fixed income market presented an outstanding comparative
investment opportunity. The loss in the Presidential primaries of the one
candidacy which featured a flat tax has already restored considerable confidence
in the continuation of the present tax structure, and increased the spread
between taxable and tax-exempt bonds. As the fall election campaign nears, the
comparative strength of the tax-exempt market will reflect the positions of the
candidates. Unless there is a major surprise in the conventions, tax-exempt
obligations seem favorably situated.
Credit issues in the tax-exempt market have not been paramount since the rare
case of the Orange County, California default. The ripple effect of that default
was shorter lived than many expected, and the resolution of Orange County's
fiscal difficulties is well underway. Its positive impact was to develop
pressure for many municipalities and agencies to tighten their controls on cash
management policies and shift to a more prudent, credit worthy structure than
had often been used.
With our overall expectation of a gradual reduction in interest rates as the
inflation premium recently built into the market is reduced, we anticipate an
attractive total return for high-quality fixed income investments, and further
relative gains for the tax-exempt securities market.
2
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
A REPORT FROM YOUR
PORTFOLIO MANAGER
RICHARD K. MARRONE
Investors of tax exempt securities who were able to maintain
a long-term investment perspective as 1994 came to an end and (Photo of
1995 began, were amply rewarded for their foresight and Richard K.
patience. After suffering through the worst bond market on Marrone)
record in 1994, the municipal market rebounded sharply and
produced its best total return performance since 1986. As 1994
came to close, we expected 1995 to produce good news for
municipals due to continuing interest rate declines and strong
supply/demand technicals. This combination was expected to lift
municipals to all-time highs, and very optimistic forecasts for
the market were commonplace. This rosy scenario did not immediately
materialize, however.
During the second quarter of 1995, the issue of the tax exempt status of
municipal securities began to haunt the market as various tax reform/flat tax
alternatives were proposed. In mid-April, just before tax reform talk began,
ten-year municipals yielded approximately 73% of the yield of ten-year
treasuries. Prices then began to reflect the fears of the flat tax and by
year-end, this ratio had risen to more than 82%. Similarly, but not quite to the
same degree, the ratio of 20-year municipals yielded approximately 83% of the
yield of the comparable Treasury. This ratio had risen to approximately 87% by
the end of the year. During this period (May to late August/early September),
municipal yields were rising more quickly than their taxable counterparts.
Many investors were shifting their municipal investments down the yield curve
to reduce risk from the increasing likelihood of a flat tax. By doing so,
negative price movement was minimized. They were anticipating that real tax
reform probably would not be enacted until after the 1996 election, maybe even
not until early 1997, by which time some of these bonds would have matured. It
appeared at the time, that the tax reform premium attached to long municipal
yields indicated there existed significant concern from the investing public.
The shorter maturities performed better because of this demand shift. These
actions resulted in a significant steepening of the municipal yield curve.
During the fourth quarter, this steepening trend reversed. Municipal
investors, particularly mutual fund portfolio mangers, accepted the flat tax
risk rather than risk underperforming their benchmarks. As interest rates
continued to decline again, the rally in bond prices regained momentum and many
portfolio managers lengthened their durations. This reversal in demand caused
the municipal to Treasury ratio for five-year maturities to increase by
approximately six percentage points from late September, while the ratio for
long maturities increased by only one percentage point. This whipsaw action
exhibits the follies of "trading the market" or taking a short-term perspective.
We manage Evergreen Florida High Income Municipal Bond Fund with a long-term
perspective. The focus of this Fund is to provide a high yield and a high level
of tax-exempt income that is not subject to Florida's intangibles tax. The Fund
has exhibited great growth since 1995. Assets have increased by approximately
24% since the end of fiscal 1995, most of which has come from new money into the
Fund. The inflow of cash into the Fund enabled us to take advantage of the rise
in rates, and therefore yields, that occcured in late
3
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
A REPORT FROM YOUR
PORTFOLIO MANAGER -- (CONTINUED)
summer and early fall, by allowing us to purchase several high yielding new
issues that provide good coupon income.
The best performing sector of the municipal market during 1995 was lower
rated credits, of which this Fund is primarily composed. As a result of
continuing strong performance by the economy, several credits, such as airlines,
exhibited improved economic fundamentals (strong revenue growth and low cost
increases due to low inflation). This served to contribute to ratings upgrades,
as happened with several Fund holdings, and consolidation where a stronger
entity bought a weaker one. In addition, increasing demand for high yield
securities as interest rates continued to decline also boosted the performance
of lower rated credits. These actions put this Fund in a very enviable position
versus its peers.
Evergreen Florida High Income Municipal Bond Fund (Class A shares) received
Morningstar's highest rating of five-stars as of February 29, 1996*. The Fund's
three-year total return through December 31, 1995, ranked #1 among the 22
Florida Municipal Debt Funds tracked by Lipper Analytical Servces during that
time**. For the twelve months ended December 31, the Fund ranked #24 among the
73 Florida Municipal Debt Funds tracked by Lipper. The Fund's total return for
the three-year period ended February 29, 1996, ranked #1 among the 29 Florida
Municipal Debt Funds tracked by Lipper during that time. The Fund's 12-month
total return ended February 29, ranked #4 among the 73 Florida Municipal Debt
Funds tracked by Lipper during that time.
We will continue too search out and research credits to supply the Fund with
good yield and coupon income. There are diamonds in the rough out there and we
can find them through our emphasis on credit research. The Fund's Florida-based
analyst enables us to uncover attractive investments quickly and efficiently so
we can help provide the Fund's shareholders with the high yield and income they
have come to expect.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
* MORNINGSTAR PROPRIETARY RATINGS REFLECT HISTORICAL RISK-ADJUSTED PERFORMANCE
AS OF 2/29/96. THE RATINGS ARE SUBJECT TO CHANGE EVERY MONTH. MORNINGSTAR
RATINGS ARE CALCULATED FROM THE FUND'S THREE-YEAR AVERAGE ANNUAL RETURN IN
EXCESS OF 90-DAY TREASURY BILL MONTHLY RETURNS WITH APPROPRIATE FEE
ADJUSTMENTS AND A RISK FACTOR THAT REFLECTS FUND PERFORMANCE BELOW 90-DAY
TREASURY BILL MONTHLY RETURNS. TEN PERCENT OF THE FUNDS IN AN INVESTMENT
CATEGORY RECEIVE FIVE STARS, 22.5% RECEIVE FOUR STARS, 35% RECEIVE THREE
STARS, 22.5% RECEIVE TWO STARS, AND 10% RECEIVE ONE STAR. THE FUND WAS RATED
WITH 835 OTHER MUNICIPAL BOND FUNDS.
** LIPPER ANALYTICAL SERVICES, INC., IS AN INDEPENDENT MUTUAL FUNDS PERFORMANCE
MONITOR. THE FUND'S CLASS B SHARES WERE NOT RANKED AS THEY WERE NOT IN
EXISTENCE FOR THE FULL 12 MONTHS ENDED 2/29/96.
LIPPER RANKINGS DO NOT INCLUDE THE EFFECT OF SALES CHARGES. IF INCLUDED,
RANKINGS COULD BE DIFFERENT.
4
<PAGE>
EVERGREEN STATE MUNICIPAL BOND FUNDS
A REPORT FROM YOUR
PORTFOLIO MANAGERS
ROBERT EVANS,
RICHARD K. MARRONE,
ROBERT DRYE,
CHARLES JEANNE
During most of the past six months, the market enjoyed (Photo of
impressive performance. Yields on long-term municipal bonds were Robert Evans)
lower by as much as 65 basis points in January as they were at
the end of August 1995, but gave back as much as 30 basis points (Photo of
by the end of February. In February, the government reported Richard K.
stronger than expected housing starts and consumer confidence Marrone)
numbers, along with lower than expected initial jobless claims.
Consumer Price Index (CPI) and Producer Price Index (PPI) (Photo of
numbers showed that inflation seemed to be under control, Robert Drye)
however, the economy appeared to be moving along faster than
expected, and the hopes of another interest rate (Photo of
cut by the Federal Reserve faded. Charles Jeanne)
Throughout this period, however, municipal bonds outperformed
treasuries by a good margin. In fact, municipal yields as a
percentage of treasuries were trading near the richer end of
their three-month range. For example, ten-year municipals were
77.1% of treasuries, and 20-year municipals were 84.9% of
treasuries. We also began to see the municipal yield curve
steepen from its flatter posture in January, by about 30 basis
points. In addition, concerns about tax reform pushed the
long-term yield ratios between treasuries and municipals to
around 90%, the most attractive levels seen in a long time, and
we took advantage of this by lengthening the portfolios durations.
Now the fears of tax reform's negative impact on the municipal
market have begun to recede as the difficulty of passing this
legislation have become more apparent.
Municipal bond funds have experienced flat to negative cash
flows during the past six months. Much of this was the result of
tax reform proposals and competition from a booming stock
market. The total outstanding supply of municipal debt is
expected to decrease by about $22 billion due to low issuance,
advanced refunding, and principal redemptions. The declining
municipal supply should help to support the market.
During the past six months, we set our durations and made
structural changes to the Funds' portfolios such that we would
be able to take advantage of an environment of declining
interest rates. We purchased lower coupon, longer maturity
bonds, and better call protection. As the year progressed and
rates declined, our strategy was rewarded with continued
outperformance. For Class A shares, the total returns of
Evergreen North Carolina Municipal Bond Fund, Evergreen South
Carolina Municipal Bond Fund, and Evergreen Virginia Municipal
Bond Fund ranked, respectively, #1 out of 31, #1 out of 14, and
#1 out of 30, state-specific municipal bond funds tracked by Lipper
Analytical Services for the 12 months ended December 31, 1995*. For the
Class B shares of these Funds, the 12-month total returns through December 31,
ranked #4, #2, and #6, respectively. For the 12 months ended February
29, 1996, these Funds ranked #4 out of 32, #2 out of 15, and #13 out of 30 state
municipal bond funds in their respective Lipper universes. The 12-month total
returns through February 29 for these Funds' Class B shares, ranked #11, #5, and
#22, respectively. (The Funds' Class A shares are subject to a maximum 4.75%
front-end sales charge. Class B shares are subject to a maximum 5% contingent
deferred sales charge). The Funds continue to focus on purchasing investment
grade issues, with yields higher than those on standard general obligation
bonds, that provide good value relative to historic norms. Examples of such
purchases include Industrial Development Revenue Bonds or Housing Bonds that
provide lower volatility with additional yield pickup. New purchases made during
this period were usually financed by the sale of shorter, lower yielding, high
grade bonds. Our municipal credit analyst carefully monitors existing holdings
and seeks out new investment opportunities.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
* LIPPER ANALYTICAL SERVICES, INC., IS AN INDEPENDENT MUTUAL FUNDS PERFORMANCE
MONITOR. LIPPER RANKINGS DO NOT INCLUDE THE EFFECT OF SALES CHARGES. IF
INCLUDED, RANKINGS COULD BE DIFFERENT.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE. INVESTORS' SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
5
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- 97.9%
FLORIDA -- 97.9%
$ 660 Alachua Cnty.,
Health Facs. Auth. RB,
(Santa Fe Healthcare Facs. Proj.),
7.60%, 11/15/13....................... $ 762,115
825 Alachua Cnty.,
Health Facs. RB,
(Beverly Enterprises Proj.),
10.125%, 4/1/10....................... 915,783
1,000 Bay Cnty.,
Hosp. Sys. RB,
(Bay Med. Ctr. Proj.),
8.00%, 10/1/12........................ 1,112,850
300 Baytree Cmnty.,
Dev. Dist. Spl. Assmt. RB,
8.75%, 5/1/12......................... 321,354
1,875 Brevard Cnty.,
Health Facs. Auth. RB,
(Courtenay Springs Vlg.),
7.50%, 11/15/12....................... 1,923,937
1,000 Brevard Cnty.,
Tourist Dev. Tax RB,
(Marlins Spring),
6.875%, 3/1/13........................ 1,061,620
1,000 Broward Cnty.,
Hsg. Fin. Auth. (Ser A.),RB,
7.35%, 3/1/23, (GNMA)................. 1,048,940
1,125 Crossings at Fleming Is.,
Cmnty. Dev. Dist. Util. RB,
7.375%, 10/1/19....................... 1,086,311
2,240 Dade Cnty. IDA,
(Miami Cerebral Palsy Svcs. Proj.),
8.00%, 6/1/22......................... 2,299,853
2,310 Duval Cnty.,
Hsg. Fin. Auth. RB,
(St. Augustine Apts. Proj.),
6.00%, 3/1/21......................... 2,307,020
485 Escambia Cnty.,
Health Facs. Auth. RB,
(Azalea Trace Inc.),
8.50%, 1/1/19......................... 506,587
535 Escambia Cnty.,
Health Facs. Auth. RB,
(Azalea Trace Inc.),
9.25%, 1/1/06......................... 578,603
235 Escambia Cnty.,
Health Facs. Auth. RB,
(Azalea Trace Inc.),
9.25%, 1/1/12......................... 254,153
PRINCIPAL
AMOUNT
(000) VALUE
$ 1,500 Escambia Cnty.,
Health Facs. Auth. (Ser. B), RB,
(Baptist Hosp. Inc.),
6.00%, 10/1/14........................ $ 1,459,005
2,000 Escambia Cnty. PCR,
(Champion Intl. Corp. Proj.),
6.90%, 8/1/22......................... 2,141,060
1,000 Florida,
Hsg. Fin. Agy. (Ser. H), RB,
(The Vinyards Proj.),
6.50%, 11/1/25........................ 1,011,300
1,710 Hernando Cnty. IDR,
(Florida Crushed Stone Co.),
8.50%, 12/1/14........................ 1,896,476
1,545 Hialeah Gardens, IDR,
(Waterford Convalescent-A),
7.875%, 12/1/07....................... 1,607,866
600 Hillsborough Cnty.,
Aviation Auth. RB,
(US Air Proj.),
8.60%, 1/15/22........................ 646,146
1,150 Hillsborough Cnty.,
Cap. Impt. (Ser. 2), RB,
(Cnty. Ctr. Proj.),
6.75%, 7/1/22......................... 1,321,661
3,430 Homestead, IDR,
(Cmnty. Rehab. Providers Prog-A)
7.95%, 11/1/18........................ 3,579,788
2,500 Indian Trace Cmnty. GO,
(Wtr. Mgmt. Spl. Benefit Sub-B)
8.25%, 5/1/11......................... 2,669,025
750 Jacksonville,
Health Facs. Auth. RB,
(Cypress Vlg. Proj.),
7.00%, 12/1/14........................ 778,943
1,000 Jacksonville,
Health Facs. Auth. IDR,
(Cypress Vlg. Proj.),
7.00%, 12/1/22........................ 1,036,560
850 Lee Cnty. IDA,
(Encore Nursing Ctr. Partner),
8.125%, 12/1/07....................... 920,737
2,920 Leon Cnty.,
Ed. Facs. Auth. (Ser. A), RB,
8.25%, 5/1/14......................... 2,995,978
1,175 Martin Cnty. IDR,
Indiantown Cogeneration PJ-A,
7.875%, 12/15/25...................... 1,343,765
</TABLE>
6
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
$ 1,245 Meadow Pointe II,
Cmnty. Dev. Dist.,
Cap. Impt. RB,
7.75%, 5/1/18......................... $ 1,262,716
1,310 North Springs,
Impt. Dist. Wtr. Mgmt.,
(Ser. A), Spl. Assmt.,
8.20%, 5/1/24......................... 1,411,263
500 Northern Palm Beach Cnty.,
Wtr Ctl. Dist. Spl. Assmt.,
6.875%, 11/1/13....................... 529,440
500 Northern Palm Beach Cnty.,
Wtr Ctl. Dist. Spl. Assmt.,
7.00%, 8/1/15......................... 532,965
1,500 Northwood,
Cmnty. Dev. Dist.,
Spl. Assmt. RB,
7.60%, 5/1/17......................... 1,506,435
1,040 Orange Cnty.,
Health Facs. Auth. RB,
(Lakeside Alts. Inc.),
6.50%, 7/1/13......................... 1,058,938
2,000 Osceola Cnty. IDA,
(Cmnty. Provider Pooled Ln. Pg. A)
7.75%, 7/1/17......................... 2,072,180
2,000 Palm Beach Cnty.,
Solid Waste, IDR,
(Okeelanta Pwr. LP Proj. A)
6.85%, 2/15/21........................ 2,039,800
1,000 Palm Beach Cnty.,
Solid Waste, IDR,
(Osceola Pwr. Proj. A)
6.95%, 1/1/22......................... 1,018,850
685 Pinellas Cnty.,
Edl. Facs. Auth. RB,
(Eckerd College,)
7.75%, 7/1/14......................... 752,582
PRINCIPAL
AMOUNT
(000) VALUE
$ 5,000 Polk Cnty. IDA,
7.525%, 1/1/15........................ $ 5,273,100
1,000 Port Everglades,
(Ser. A), RB,
7.50%, 9/1/12......................... 1,059,790
1,710 Quantum Cmnty.,
Dev. Dist. Spl. Assmt.
7.75%, 3/1/14......................... 1,736,693
2,100 Riverwood Cmnty.,
Swr. Sys. RB,
7.75%, 10/1/14........................ 2,134,629
2,500 St. Johns Cnty.,
(Ser. A), IDA,
(Vicars Landing Proj.),
6.75%, 2/15/12........................ 2,502,600
1,500 Sarasota Cnty.,
Health Fac. Auth. RB,
(Manatee Jewish),
6.70%, 7/1/25......................... 1,406,115
1,000 Sarasota Cnty.,
Health Fac. Auth. RB,
(Sunnyside Properties),
6.00%, 5/15/10........................ 953,950
1,500 South Indian River,
Wtr. Ctl. Dist. RB,
(Egret Landing Phase I)
7.50%, 11/1/18........................ 1,629,510
3,000 Tampa,
(Aquarium Inc. Proj.), RB,
7.75%, 5/1/27......................... 3,186,660
1,000 Tarpon Springs,
Health Facs. Auth. RB,
(Helen Ellis Mem. Hosp. Proj.),
7.50%, 5/1/11......................... 1,045,700
</TABLE>
7
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
$ 2,000 Virgin Islands,
Wtr. & Pwr. Auth. (Ser. B), RB,
7.60%, 1/1/12......................... $ 2,192,820
1,775 Westchase East,
Cmnty. Dev. Dist.,
Cap. Impt. RB,
7.50%, 5/1/17......................... 1,769,480
1,000 Winter Garden, IDR,
(Beverly Enterprises),
8.75%, 7/1/12......................... 1,119,930
250 Winter Haven,
Hsg. Auth. (Ser. C),
(Abbey Lane Apts.)
7.00%, 7/1/12, (FNMA)................. 266,188
250 Winter Haven,
Hsg. Auth. (Ser. C),
(Abbey Lane Apts.),
7.00%, 7/1/24, (FNMA)................. 262,345
TOTAL INVESTMENTS
(COST $73,929,180)....... 97.9% $76,312,115
OTHER ASSETS AND
LIABILITIES -- NET....... 2.1 1,656,139
NET ASSETS.................. 100.0% $77,968,254
</TABLE>
Summary of Abbreviations:
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
GO -- General Obligation Bond
IDA -- Industrial Development Authority
IDR -- Industrial Development Revenue Bond
PCR -- Pollution Control Revenue Bond
RB -- Revenue Bond
See accompanying notes to financial statements.
8
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $73,929,180)............................................................. $76,312,115
Cash........................................................................................................... 1,673,068
Receivable for securities sold................................................................................. 3,097,548
Interest receivable............................................................................................ 1,478,759
Receivable for Fund shares sold................................................................................ 167,568
Deferred organization expenses and other assets................................................................ 19,150
Total assets............................................................................................. 82,748,208
LIABILITIES:
Payable for securities purchased............................................................................... 4,421,622
Dividends payable.............................................................................................. 222,575
Accrued expenses............................................................................................... 51,695
Payable for Fund shares redeemed............................................................................... 42,121
Distribution fee payable....................................................................................... 23,690
Accrued advisory fee........................................................................................... 18,251
Total liabilities........................................................................................ 4,779,954
NET ASSETS........................................................................................................ $77,968,254
NET ASSETS CONSIST OF:
Paid-in capital................................................................................................ $76,908,948
Distributions in excess of net investment income............................................................... (7,223)
Accumulated net realized loss on investment transactions....................................................... (1,316,406)
Net unrealized appreciation of investments..................................................................... 2,382,935
Net assets............................................................................................... $77,968,254
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($65,871,624 (division sign) 6,202,769 shares of beneficial interest outstanding)............... $ 10.62
Sales charge -- 4.75% of offering price........................................................................ .53
Maximum offering price................................................................................... $ 11.15
Class B Shares ($11,179,145 (division sign) 1,052,686 shares of beneficial interest outstanding)............... $ 10.62
Class Y Shares ($917,485 (division sign) 86,396 shares of beneficial interest outstanding)..................... $ 10.62
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest........................................................................................... $2,448,605
EXPENSES:
Advisory fee....................................................................................... $213,830
Administrative personnel and service fees.......................................................... 18,897
Distribution fee -- Class A Shares................................................................. 80,543
Distribution fee -- Class B Shares................................................................. 23,900
Shareholder services fee -- Class B Shares......................................................... 7,966
Registration and filing fees....................................................................... 21,986
Custodian fee...................................................................................... 20,548
Transfer agent fee................................................................................. 18,788
Professional fees.................................................................................. 14,678
Reports and notices to shareholders................................................................ 8,807
Trustees' fees and expenses........................................................................ 5,933
Amortization of organizational expense............................................................. 974
Miscellaneous...................................................................................... 3,228
440,078
Less: Fee waivers..................................................................................... (106,915)
Net expenses....................................................................................... 333,163
Net investment income................................................................................. 2,115,442
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions....................................................... 41,341
Net change in unrealized appreciation of investments............................................... 1,376,565
Net gain on investments............................................................................ 1,417,906
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................................. $3,533,348
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FOUR MONTHS
FEBRUARY 29, ENDED
1996 AUGUST 31,
(UNAUDITED) 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................................................... $ 2,115,442 $ 1,225,081
Net realized gain on investment transactions................................................ 41,341 150,049
Net change in unrealized appreciation of investments........................................ 1,376,565 1,449,591
Net increase in net assets resulting from operations..................................... 3,533,348 2,824,721
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares.............................................................................. (1,933,150) (1,214,190)
Class B Shares.............................................................................. (167,589) (10,891)
Class Y Shares.............................................................................. (14,703) --
Total distributions to shareholders from net investment income.............................. (2,115,442) (1,225,081)
IN EXCESS OF NET INVESTMENT INCOME:
Class A Shares.............................................................................. -- (8,411)
Class B Shares.............................................................................. -- (76)
Total distributions to shareholders in excess of net investment income...................... -- (8,487)
Total distributions to shareholders...................................................... (2,115,442) (1,233,568)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold................................................................... 25,068,330 10,600,090
Proceeds from reinvestment of distributions................................................. 754,131 307,200
Payment for shares redeemed................................................................. (11,960,344) (14,853,087)
Net increase (decrease) from Fund share transactions..................................... 13,862,117 (3,945,797)
Net increase (decrease) in net assets.................................................... 15,280,023 (2,354,644)
NET ASSETS:
Beginning of period......................................................................... 62,688,231 65,042,875
End of period (includes distributions in excess of net investment income of ($7,223), at
February 29, 1996 and August 31, 1995).................................................... $ 77,968,254 $ 62,688,231
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
CLASS A SHARES
SIX MONTHS FOUR MONTHS CLASS B SHARES
ENDED ENDED YEAR ENDED APRIL JUNE 17, 1992* SIX MONTHS ENDED
FEBRUARY 29, 1996 AUGUST 31, 30, THROUGH FEBRUARY 29, 1996
(UNAUDITED) 1995# 1995 1994 APRIL 30, 1993 (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning
of
period.................... $10.40 $10.16 $10.08 $10.36 $10.00 $10.40
Income (loss) from
investment operations:
Net investment income..... .32 .21 .65 .68 .61 .28
Net realized and
unrealized gain (loss)
on investments.......... .22 .24 .08 (.26) .39 .22
Total from investment
operations............ .54 .45 .73 .42 1.00 .50
Less distributions to
shareholders from:
Net investment income..... (.32) (.21) (.65) (.68) (.61) (.28)
Net realized gain on
investments............. -- -- -- (.02) (.03) --
Total distributions..... (.32) (.21) (.65) (.70) (.64) (.28)
Net asset value, end of
period.................... $10.62 $10.40 $10.16 $10.08 $10.36 $10.62
TOTAL RETURN+............... 5.2% 4.4% 7.6% 3.3% 10.3% 4.8%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted)........... $65.872 $59,551 $65,043 $72,683 $33,541 $11,179
Ratios to average net
assets:
Expenses.................. .87%++** 1.07%++** .60%** .14%** .00%** 1.62%++**
Net investment income..... 6.00%++** 5.92%++** 6.52%** 6.16%** 5.92%++** 5.26%++**
Portfolio turnover rate..... 21% 14% 28% 31% 50% 21%
</TABLE>
<TABLE>
<CAPTION>
CLASS Y SHARES
SEPTEMBER 20, 1995*
JULY 10, 1995* THROUGH
THROUGH FEBRUARY 29, 1996
AUGUST 31, 1995 (UNAUDITED)
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning
of
period.................... $10.41 $ 10.40
Income (loss) from
investment operations:
Net investment income..... .08 0.29
Net realized and
unrealized gain (loss)
on investments.......... (.01) 0.22
Total from investment
operations............ .07 0.51
Less distributions to
shareholders from:
Net investment income..... (.08) (0.29)
Net realized gain on
investments............. -- --
Total distributions..... (.08) (.29)
Net asset value, end of
period.................... $10.40 $ 10.62
TOTAL RETURN+............... .6% 5.0%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted)........... $3,137 $917
Ratios to average net
assets:
Expenses.................. 1.09%++ .61%++**
Net investment income..... 3.40%++ 6.26%++**
Portfolio turnover rate..... 14% 21%
</TABLE>
# The Fund changed its fiscal year end from April 30 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales charges or contingent deferred
sales charges are not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS B CLASS Y
CLASS A SHARES SHARES SHARES
SIX MONTHS FOUR MONTHS SIX MONTHS SEPTEMBER 20, 1995*
ENDED ENDED YEAR ENDED JUNE 17, 1992* ENDED THROUGH
FEBRUARY 29, 1996 AUGUST 31, APRIL 30, THROUGH FEBRUARY 29, 1996 FEBRUARY 29, 1996
(UNAUDITED) 1995# 1995 1994 APRIL 30, 1993 (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Expenses............... 1.17% 1.42% 1.26% 1.12% 1.12% 1.92% .91%
Net investment income.. 5.70% 5.57% 5.86% 5.18% 4.80% 4.96% 5.96%
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- 92.1%
FLORIDA -- 92.1%
$1,500 Alachua Cnty.,
Health Fac. RB,
(Mental Health Svcs. Proj. A)
7.75%, 7/1/10, (FSA)............... $ 1,700,805
2,000 Altamonte Springs,
Health Fac. Auth. Hosp. (Ser. B),
RB,
(Adventis Health Sunbelt)
5.125%, 11/15/18, (AMBAC).......... 1,861,580
1,600 Boynton Beach,
Wtr. & Swr. RB,
Prerefunded @ $102
7.40%, 11/1/15, (AMBAC)............ 1,848,032
795 Brevard Cnty.,
Hsg. Fin. Auth. (Ser. B), RB,
7.00%, 3/1/13, (FSA)............... 845,435
1,375 Broward Cnty.,
Hsg. Fin. Auth. (Ser. B), RB,
7.125%, 3/1/17, (GNMA)............. 1,461,488
205 Broward Cnty.,
Hsg. Fin. Auth. (Ser. B), RB,
7.55%, 3/1/15, (GNMA).............. 218,253
2,925 Broward Cnty.,
Health Care Facs. RB,
(North Beach Hosp. Proj.)
7.00%, 8/15/11, (MBIA)............. 3,297,089
105 Charlotte Cnty.,
Peachland Muni. Ser. Tax
& Ben. Unit,
7.25%, 10/1/10, (MBIA)............. 118,278
1,000 Charlotte Cnty.,
Util. RB, Prefunded @ $102
7.00%, 10/1/14, (FGIC)............. 1,153,450
500 Collier Cnty.,
Health Facs. Auth. RB,
(The Moorings, Inc. Proj.)
7.00%, 12/1/19..................... 518,085
1,000 Cooper City,
Sales Tax RB,
7.25%, 10/1/11..................... 1,110,180
1,000 Dade Cnty.,
Courthouse Ctr. Proj. RB,
6.25%, 4/1/09,..................... 1,076,680
2,070 Dade Cnty.,
Edl. Facs. Auth. RB,
(Florida Intl. Univ. N. Miami
Proj.), Prerefunded @ $102
7.10%, 10/1/16..................... 2,397,867
PRINCIPAL
AMOUNT
(000) VALUE
$2,000 Dade Cnty.,
Edl. Facs. Auth. RB,
St. Thomas Univ.,
6.00%, 1/1/14,
(LOC: Sun Bank Miami).............. $ 2,016,060
1,000 Dade Cnty.,
Edl. Facs. Auth. RB,
St. Thomas Univ.,
6.125%, 1/1/19,
(LOC: Sun Bank Miami).............. 1,013,540
1,600 Dade Cnty.,
Edl. Facs. Auth. RB,
St. Thomas Univ,
Prerefunded @ $102
7.65%, 1/1/14,
(LOC: Sun Bank Miami).............. 1,824,048
5,280 Dade Cnty.,
Gtd. Entitlement RB,
Cap Apprec. Ref. (Ser. A),
Zero Coupon, 2/1/08, (MBIA)........ 2,813,606
245 Dade Cnty.,
Health Fac. Auth. Hosp. RB,
(South Shore Hosp. & Med. Center)
7.60%, 8/1/24...................... 267,239
500 Dade Cnty.,
Hsg. Fin. Auth. (Ser. D), RB,
6.95%, 12/15/12, (FSA)............. 532,045
135 Dade Cnty.,
Hsg. Fin. Auth. (Ser. A), RB,
7.10%, 3/1/17, (GNMA).............. 143,354
270 Dade Cnty.,
Hsg. Fin. Auth. (Ser A), RB,
7.50%, 9/1/13, (GNMA).............. 287,736
2,000 Dade Cnty.,
(Miami Cerebral Palsy Svcs. Proj.),
IDR,
8.00%, 6/1/22...................... 2,053,440
3,815 Dade Cnty.,
Pub. Facs. (Ser. A), RB,
(Jackson Memorial Hosp. Proj.)
4.875%, 6/1/15, (MBIA)............. 3,520,864
840 Duval Cnty.,
Hsg. Fin. Auth. RB,
7.35%, 7/1/24, (FGIC).............. 894,449
215 Duval Cnty.,
Hsg. Fin. Auth. RB,
7.50%, 6/1/15, (GNMA).............. 229,074
4,615 Escambia Cnty. PCR,
(Champion Intl. Corp. Proj.)
5.875%, 6/1/22..................... 4,499,440
</TABLE>
13
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
$1,000 Escambia Cnty.,
Health Facs. Auth. (Ser. B), RB,
(Baptist Hosp. Inc.)
6.00%, 10/1/14..................... $ 972,670
3,000 Escambia Cnty. PCR,
(Gulf Power Co. Proj.)
8.25%, 6/1/17...................... 3,197,610
2,000 FSU Financial Assistance, Inc.,
Edl. & Athletic Facs. (Ser. A), RB,
Prerefunded @ $102
6.75%, 10/1/16
(LOC- Sun Bank Orlando)............ 2,282,240
1,895 Florida,
Hsg. Fin. Agy. (Ser. A), RB,
6.875%, 10/1/12.................... 1,978,096
3,600 Florida,
Hsg. Fin. Agy. RB,
8.00%, 12/1/20, (GMNA)............. 3,788,028
2,000 Florida State,
Brd. of Ed. Cap.Outlay (Ser. E),
RB,
5.25%, 6/1/23...................... 1,878,680
2,500 Florida State,
Brd. Regt. Univ. Sys. RB,
6.70%, 7/1/12, (AMBAC)............. 2,767,475
2,000 Florida State,
Div. Bd. Fin. Dept. RB,
6.75%, 7/1/13, (AMBAC)............. 2,220,660
4,000 Florida State,
Muni. Pwr. Agy. RB,
(Stanton II Proj.),
4.50%, 10/1/27, (AMBAC)............ 3,366,920
1,235 Hialeah,
Cap. Impt. RB,
5.50%, 10/1/13..................... 1,183,920
1,000 Hillsborough Cnty.,
Fla. Aviation Auth. (Ser. A), RB,
(Tampa Intl. Airport)
6.90%, 10/1/11, (FGIC)............. 1,097,470
2,000 Hillsborough Cnty. IDR,
(Univ. Community Hosp.),
6.50%, 8/15/19, (MBIA)............. 2,290,640
1,000 Homestead,
Excise Tax RB,
7.15%, 10/1/11, (MBIA)............. 1,122,360
2,500 Jacksonville,
Elec. Auth. RB,
(Bulk Pwr. Supply Scherer)
Prerefunded @ $101.5
6.75%, 10/1/21..................... 2,804,475
PRINCIPAL
AMOUNT
(000) VALUE
$2,135 Jacksonville,
Elec. Auth. RB,
(Bulk Pwr. Supply Scherer)
Prerefunded @ $101.5
7.00%, 10/1/12..................... $ 2,417,119
4,085 Jacksonville,
Elec. Auth. RB,
Elec. Sys, (Ser. 3-A)
5.25%, 10/1/28..................... 3,796,885
2,000 Jacksonville,
Health Facs. Auth. RB,
Prerefunded @ $102
7.50%, 11/1/15..................... 2,318,460
1,500 Jacksonville,
Health Facs. Auth. Hosp. RB,
(St. Lukes Hosp. Assn. Proj.)
6.75%, 11/15/13.................... 1,611,150
1,500 Jacksonville,
Health Facs. Auth. Hosp. RB,
(St. Lukes Hosp. Assn. Proj.)
7.125%, 11/15/20................... 1,639,140
1,025 Leon Cnty.,
Hsg. Fin. Auth. (Ser. B), RB,
(Multi-Cnty. Prog.),
6.25%, 7/1/19, (GNMA).............. 1,036,316
1,510 Manatee Cnty. GO,
4.75%, 10/1/13, (FGIC)............. 1,391,314
1,000 Manatee Cnty.,
Community Redevelopment, RB,
(Admin. Center Proj.)
7.00%, 4/1/08, (MBIA).............. 1,106,660
3,500 Manatee Cnty.,
Pub. Utils. (Ser. 1991A), RB,
Prerefunded @ $102
6.75%, 10/1/13, (MBIA)............. 3,993,920
1,500 Martin Cnty.,
Hosp. (Ser. B), RB,
7.10%, 11/15/20, (MBIA)............ 1,674,510
2,000 Miami Beach,
Redevelopment Agy.,
Tax Increment RB,
(City Center-Historic
Convention Vlg.)
5.625%, 12/1/09.................... 1,987,520
3,000 Miami Beach,
Redevelopment Agy.,
Tax Increment RB,
(City Center-Historic
Convention Vlg.)
5.80%, 12/1/13..................... 2,915,550
</TABLE>
14
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
$2,000 Miami Beach,
Redevelopment Agy.,
Tax Increment RB,
(City Center-Historic Convention
Vlg.)
5.875%, 12/1/22.................... $ 1,912,900
2,400 Miami,
Sports & Exhibit Auth. RB,
Prerefunded @ $102
7.20%, 10/1/20, (FGIC)............. 2,717,040
1,000 North Tampa,
Hsg. Dev. Corp. (Ser. A), RB,
(Country Oaks Apts.),
6.90%, 1/1/24, (FNMA).............. 1,043,650
1,000 Okaloosa Cnty.,
Wtr. & Swr. RB,
6.00%, 7/1/11, (AMBAC)............. 1,088,190
3,000 Orange Cnty.,
Health Facs. Auth. RB,
Lakeside Alternatives, Inc.,
6.50%, 7/1/13...................... 3,054,630
1,000 Orlando,
Util. Comm. Wtr. & Elec.,
(Ser. D), RB,
6.75%, 10/1/17..................... 1,182,210
3,000 Palm Beach Cnty.,
Criminal Justice Facs. RB,
7.20%, 6/1/15, (FGIC).............. 3,686,490
1,000 Palm Beach Cnty.,
Hsg. Fin. Auth. (Ser. A), RB,
6.50%, 10/1/21, (GNMA)............. 1,018,340
4,440 Palm Beach Cnty.,
Hsg. Fin. Auth. (Ser. B), RB,
7.60%, 3/1/23, (GNMA).............. 4,725,359
5,000 Pensacola,
Health Facs. Auth. RB,
(Daughters Charity Natl. Health)
5.25%, 1/1/11...................... 4,839,450
2,195 Palm Beach Cnty.,
Health Facs. Auth. RB,
(Good Samaritan Health Sys.)
6.20%, 10/1/11..................... 2,240,941
6,000 Palm Beach Cnty.,
Health Facs. Auth. RB,
(Good Samaritan Health Sys.)
6.30%, 10/1/22..................... 6,138,180
PRINCIPAL
AMOUNT
(000) VALUE
$860 Polk Cnty.,
Hsg. Fin. Auth. (Ser. A), RB,
7.00%, 9/1/15...................... $ 894,168
1,000 Port Everglades,
Port Auth. RB,
(Escrowed to Maturity),
7.125%, 11/1/16.................... 1,203,720
1,500 Reedy Creek,
Impt. Dist. Util. (Ser. 1), RB,
5.00%, 10/1/19, (MBIA)............. 1,392,135
750 St. Johns Cnty.,
Solid Waste Disp. RB,
7.25%, 11/1/10, (FGIC)............. 846,120
1,000 St. Petersburg,
Health Facs. Auth. RB,
(St. Mary's Allegheny Health Sys.)
7.00%, 12/1/21, (MBIA)............. 1,125,700
1,955 Sanford,
Wtr. & Swr. RB,
4.50%, 10/1/21, (AMBAC)............ 1,683,333
1,740 Sanford,
Wtr. & Swr. RB,
4.75%, 10/1/18, (AMBAC)............ 1,568,140
1,800 Sarasota Cnty.,
Health Fac. Auth. RB,
Sunnyside Pptys.,
6.00%, 5/15/10..................... 1,717,110
1,000 Sarasota Cnty.,
Util. Sys. RB,
6.50%, 10/1/14, (FGIC)............. 1,149,350
3,590 Seacoast,
Util. Auth. Wtr. & Swr.
(Ser. A), RB,
5.50%, 3/1/18, (FGIC).............. 3,659,143
750 Tampa,
Gtd. Entitlement RB,
7.05%, 10/1/07, (AMBAC)............ 849,255
540 University Community,
Hosp. Inc. RB,
Prerefunded @ $102
7.50%, 9/1/11, (FSA)............... 623,587
</TABLE>
15
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
$850 Winter Haven,
Hsg. Auth. (Ser. C), RB,
(Abbey Lane Apts.)
7.00%, 7/1/12, (FNMA).............. $ 905,038
1,750 Winter Haven
Hsg. Auth. (Ser. C), RB,
(Abbey Lane Apts.)
7.00%, 7/1/24, (FNMA).............. 1,836,415
TOTAL LONG-TERM MUNICIPAL
SECURITIES
(COST $136,275,876)........... 147,642,499
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000)
<S> <C> <C> <C>
MUTUAL FUND SHARES -- 4.7%
7,578 Lehman Municipal Money
Market Fund
(COST $7,578,000)............... 7,578,000
TOTAL INVESTMENTS
(COST $143,853,876)........ 96.8% 155,220,499
OTHER ASSETS AND
LIABILITIES -- NET......... 3.2 5,102,415
NET ASSETS.................... 100.0% $160,322,914
</TABLE>
Summary of Abbreviations:
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Financial Guaranty Insurance Company
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
GO -- General Obligation Bond
IDR -- Industrial Development Revenue Bond
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PCR -- Pollution Control Revenue Bond
RB -- Revenue Bond
See accompanying notes to financial statements.
16
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $143,853,876)........................................................... $155,220,499
Cash.......................................................................................................... 241
Receivable for securities sold................................................................................ 5,828,615
Interest receivable........................................................................................... 2,804,423
Receivable for Fund shares sold............................................................................... 67,742
Prepaid expenses.............................................................................................. 11,472
Total assets............................................................................................ 163,932,992
LIABILITIES:
Payable for securities purchased.............................................................................. 2,866,106
Dividends payable............................................................................................. 461,269
Payable for Fund shares redeemed.............................................................................. 178,801
Accrued expenses.............................................................................................. 39,440
Distribution fee payable...................................................................................... 35,928
Accrued advisory fee.......................................................................................... 28,534
Total liabilities....................................................................................... 3,610,078
NET ASSETS....................................................................................................... $160,322,914
NET ASSETS CONSIST OF:
Paid-in capital............................................................................................... $149,129,959
Undistributed net investment income........................................................................... 106,659
Accumulated net realized loss on investment transactions...................................................... (280,327)
Net unrealized appreciation of investments.................................................................... 11,366,623
Net assets.............................................................................................. $160,322,914
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($124,223,358 (division sign) 12,484,840 shares of beneficial interest outstanding)............ $ 9.95
Sales charge -- 4.75% of offering price....................................................................... .50
Maximum offering price.................................................................................. $ 10.45
Class B Shares ($29,499,068 (division sign) 2,965,083 shares of beneficial interest outstanding).............. $ 9.95
Class Y Shares ($6,600,488 (division sign) 663,372 shares of beneficial interest outstanding)................. $ 9.95
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest........................................................................................... $4,929,626
EXPENSES:
Advisory fee....................................................................................... $406,765
Administrative personnel and service fees.......................................................... 43,116
Distribution fee -- Class A Shares................................................................. 150,004
Distribution fee -- Class B Shares................................................................. 106,170
Shareholder services fee -- Class B Shares......................................................... 35,390
Transfer agent fee................................................................................. 54,740
Custodian fee...................................................................................... 35,119
Registration and filing fees....................................................................... 28,654
Professional fees.................................................................................. 20,699
Reports and notices to shareholders................................................................ 13,587
Amortization of organizational expense............................................................. 8,235
Trustees' fees and expenses........................................................................ 2,606
Insurance expense.................................................................................. 2,080
Miscellaneous...................................................................................... 3,927
911,092
Less: Fee waivers and expense reimbursements....................................................... (278,822)
Net expenses................................................................................. 632,270
Net investment income................................................................................. 4,297,356
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions....................................................... 1,103,058
Net change in unrealized appreciation of investments............................................... 2,347,535
Net gain on investments............................................................................ 3,450,593
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................................. $7,747,949
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FOUR MONTHS
FEBRUARY 29, ENDED
1996 AUGUST 31,
(UNAUDITED) 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income.................................................................... $ 4,297,356 $ 2,976,370
Net realized gain on investment transactions............................................. 1,103,058 865,584
Net change in unrealized appreciation of investments..................................... 2,347,535 2,620,594
Net increase in net assets resulting from operations.................................. 7,747,949 6,462,548
DISTRIBUTIONS TO SHAREHOLDERS:
FROM NET INVESTMENT INCOME:
Class A Shares........................................................................... (3,449,102) (2,733,700)
Class B Shares........................................................................... (624,013) (211,396)
Class Y Shares........................................................................... (140,244) (31,274)
Total distributions from net investment income..................................... (4,213,359) (2,976,370)
IN EXCESS OF NET INVESTMENT INCOME:
Class A Shares........................................................................... -- (210,099)
FROM NET REALIZED GAINS:
Class A Shares........................................................................... -- (820,461)
Total distributions to shareholders................................................... (4,213,359) (4,006,930)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold................................................................ 10,630,686 4,227,591
Proceeds from shares issued in acquisition of First Union
Florida Municipal Bond Portfolio...................................................... -- 38,045,323
Proceeds from reinvestment of distributions.............................................. 1,342,780 1,604,983
Payment for shares redeemed.............................................................. (22,587,313) (47,473,841)
Net decrease resulting from Fund share transactions................................... (10,613,847) (3,595,944)
Net decrease in net assets............................................................ (7,079,257) (1,140,326)
NET ASSETS:
Beginning of period...................................................................... 167,402,171 168,542,497
End of period (includes undistributed net investment income of $106,659 and $22,662,
respectively).......................................................................... $ 160,322,914 $ 167,402,171
</TABLE>
See accompanying notes to financial statements.
19
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
CLASS A SHARES
SIX MONTHS
ENDED FOUR MONTHS
FEBRUARY 29, ENDED
1996 AUGUST 31, YEAR ENDED APRIL 30,
(UNAUDITED) 1995*| 1995| 1994| 1993|
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period.................... $9.74 $9.61 $9.52 $9.95 $9.35
Income (loss) from investment operations:
Net investment income................................. .27 .19 .54 .56 .56
Net realized and unrealized gain (loss) on
investments......................................... .21 .22 .11 (.36) .67
Total from investment operations.................... .48 .41 .65 .20 1.23
Less distributions to shareholders from:
Net investment income................................. (.27) (.19) (.54) (.56) (.56)
In excess of net investment income.................... -- (.03) -- -- --
Net realized gain on investments...................... -- (.06) (.02) (.07) (.07)
Paid-in capital....................................... -- -- -- -- --
Total distributions................................. (.27) (.28) (.56) (.63) (.63)
Net asset value, end of period.......................... $9.95 $9.74 $9.61 $9.52 $9.95
TOTAL RETURN+........................................... 4.9% 4.2% 7.1% 1.9% 13.6%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............... $124,223 $136,449 $168,542 $199,612 $198,286
Ratios to average net assets:
Expenses.............................................. .61%++** .82%++** .61% .56% .58%
Net investment income................................. 5.45%++** 4.89%++** 5.73% 5.37% 5.66%
Portfolio turnover rate................................. 5% 29% 53% 32% 24%
</TABLE>
<TABLE>
<CAPTION>
1992|
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period.................... $9.21
Income (loss) from investment operations:
Net investment income................................. .61
Net realized and unrealized gain (loss) on
investments......................................... .22
Total from investment operations.................... .83
Less distributions to shareholders from:
Net investment income................................. (.61)
In excess of net investment income.................... --
Net realized gain on investments...................... (.04)
Paid-in capital....................................... (.04)
Total distributions................................. (.69)
Net asset value, end of period.......................... $9.35
TOTAL RETURN+........................................... 9.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............... $147,996
Ratios to average net assets:
Expenses.............................................. .41%**
Net investment income................................. 6.12%**
Portfolio turnover rate................................. 24%
</TABLE>
* The Fund changed its fiscal year end from April 30 to August 31.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sale charge is not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS A SHARES
SIX MONTHS
ENDED FOUR MONTHS
FEBRUARY 29, ENDED YEAR ENDED
1996 AUGUST 31, APRIL 30,
(UNAUDITED) 1995* 1992
<S> <C> <C> <C>
Expenses............................................................ .79% 1.05% .68%
Net investment income............................................... 5.27% 4.66% 5.85%
</TABLE>
| On June 30, 1995, ABT Florida Tax-Free Fund sold its net assets to First
Union Florida Municipal Bond Portfolio which was subsequently renamed
Evergreen Florida Municipal Bond Fund. ABT Florida Tax-Free Fund was the
accounting survivor in the combination. Accordingly, the information stated
in the above table prior to the combination reflects the results of ABT
Florida Tax-Free Fund. The net asset values per share and related per share
data have been restated to reflect the conversion of shares.
See accompanying notes to financial statements.
20
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state
of Florida)
<TABLE>
<CAPTION>
CLASS Y
CLASS B SHARES SHARES
SIX MONTHS SIX MONTHS
ENDED JUNE 30, 1995* ENDED
FEBRUARY 29, THROUGH FEBRUARY 29,
1996 AUGUST 31, 1996
(UNAUDITED) 1995#| (UNAUDITED)
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period................................. $9.74 $9.67 $9.74
Income from investment operations:
Net investment income.............................................. .22 .07 .27
Net realized and unrealized gain on investments.................... .21 .10 .21
Total from investment operations................................. .43 .17 .48
Less distributions to shareholders from:
Net investment income.............................................. (.22) (.07) (.27)
In excess of net investment income................................. -- (.03) --
Total distributions.............................................. (.22) (.10) (.27)
Net asset value, end of period....................................... $9.95 $9.74 $9.95
TOTAL RETURN+........................................................ 4.4% 1.5% 4.9%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................ $29,499 $27,351 $6,600
Ratios to average net assets:
Expenses........................................................... 1.56%++ 1.44%++ .56%++
Net investment income.............................................. 4.50%++ 3.22%++ 5.49%++
Portfolio turnover rate.............................................. 5% 29% 5%
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1995*
THROUGH
AUGUST 31,
1995#|
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period................................. $9.67
Income from investment operations:
Net investment income.............................................. .09
Net realized and unrealized gain on investments.................... .10
Total from investment operations................................. .19
Less distributions to shareholders from:
Net investment income.............................................. (.09)
In excess of net investment income................................. (.03)
Total distributions.............................................. (.12)
Net asset value, end of period....................................... $9.74
TOTAL RETURN+........................................................ 1.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................ $3,602
Ratios to average net assets:
Expenses........................................................... .59%++
Net investment income.............................................. 4.93%++
Portfolio turnover rate.............................................. 29%
</TABLE>
# The Fund changed its fiscal year end from April 30 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Contingent deferred sales charges are not
reflected.
++ Annualized.
| On June 30, 1995, ABT Florida Tax-Free Fund sold its net assets to First
Union Florida Municipal Bond Portfolio which was subsequently renamed
Evergreen Florida Municipal Bond Fund. ABT Florida Tax-Free Fund was the
accounting survivor in the combination. Accordingly, the information stated
in the above table prior to the combination reflects the results of ABT
Florida Tax-Free Fund. The net asset values per share and related per share
data have been restated to reflect the conversion of shares.
See accompanying notes to financial statements.
21
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Georgia)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- 98.6%
GEORGIA -- 96.3%
$ 500 Appling Cnty. Dev. Auth. PCR, 7.15%,
1/1/21, (MBIA)........................ $ 571,660
160 Atlanta, Arpt. Facs. RB,
7.25%, 1/1/17, (AMBAC)................ 177,152
1,750 Atlanta, Urban Res. Fin. Auth.,
Zero Coupon, 10/1/16, (FNMA).......... 506,835
500 Burke Cnty. Dev. Auth. PCR, 8.00%,
1/1/22, (MBIA)........................ 609,395
300 Butts Cnty. COP,
6.75%, 12/1/14, (MBIA)................ 340,263
350 Cartersville, Dev. Auth. RB, Wtr. &
Waste Facs.,
7.40%, 11/1/10........................ 422,867
120 Cartersville, GO,
6.70%, 1/1/12......................... 137,147
500 Cherokee Cnty. Wtr. & Swr. Auth.
Ref. & Impt. RB,
5.50%, 8/1/18, (MBIA)................. 505,780
500 Clayton Cnty. Hsg. Auth. Mtg. RB,
7.125%, 12/1/25, (FHA/VA)............. 531,005
500 Columbia Cnty. Wtr. & Swr. RB, 6.25%,
6/1/12................................ 532,900
250 Crisp Cnty. Hosp. Auth. RANS, 5.45%,
7/1/15, (FSA)......................... 246,455
500 DeKalb Cnty. Hsg. Auth. RB,
(The Lakes at Indian Creek Proj.)
7.15%, 1/1/25, (FSA).................. 528,130
500 DeKalb Cnty. School Dist. (Ser. A), GO
6.25%, 7/1/11......................... 552,180
345 Douglasville Cnty. Wtr. & Swr. Auth.
RB,
5.625%, 6/1/15, (AMBAC)............... 353,356
500 Forsyth Cnty. School Dist. GO, 6.75%,
7/1/16................................ 582,660
$ 300 Fulton Cnty. Dev. Auth. RB,
(Clark Atlanta Univ. Proj.)
5.375%, 1/1/20........................ $ 283,617
400 Fulton Cnty. Wtr. & Swr. RB, 6.375%,
1/1/14, (FGIC)........................ 444,268
500 George L. Smith ll, World Congress
Ctr. Auth. RB, (Domed Stadium Proj.)
7.875%, 7/1/20........................ 553,745
400 Georgia State, Hsg. & Fin. Auth. (Ser.
A), RB,
6.55%, 12/1/27, (FHA/VA).............. 407,532
400 Georgia State, Muni. Elec. Auth. Pwr.
(Series EE), RB
7.25%, 1/1/24, (AMBAC)................ 503,176
500 Hall Cnty., Georgia School Dist. GO,
6.70%, 12/1/14........................ 563,830
330 Metro Atlanta Rapid Tran. Auth.,
Sales Tax RB,
7.00%, 7/1/11, (FGIC)................. 393,000
500 Putnam Cnty. School Dist. GO, 6.90%,
2/1/14, (AMBAC)....................... 572,165
500 Savannah, Eco. Dev. Auth. IDR,
(Hershey Foods Corp. Proj.)
6.60%, 6/1/12......................... 546,280
500 Savannah, Hosp. Auth. RB,
(St. Joseph's Hosp. Proj.)
6.125%, 7/1/12........................ 514,085
500 Savannah, Hosp. Auth. RB,
(St. Joseph's Hosp. Proj.)
6.20%, 7/1/23......................... 500,300
300 Washington Cnty. School Dist. GO,
6.875%, 1/1/14, (AMBAC)............... 342,483
12,222,266
</TABLE>
22
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Georgia)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- (CONTINUED)
PUERTO RICO -- 2.3%
$ 265 Puerto Rico Commonwealth, GO, 6.25%,
7/1/11, (MBIA)........................ $ 296,230
TOTAL LONG-TERM
MUNICIPAL SECURITIES
(COST $11,730,556)............... 12,518,496
SHARES
MUTUAL FUND SHARES -- .5%
59,000 Lehman Municipal Money
Market Fund
(COST $59,000)............. 59,000
TOTAL INVESTMENTS (COST
$11,789,556).......... 99.1% 12,577,496
OTHER ASSETS AND
LIABILITIES-NET....... .9 115,011
NET ASSETS............... 100.0% $12,692,507
</TABLE>
Summary of Abbreviations:
AMBAC -- American Municipal Bond Assurance Corporation
COP -- Certificates of Participation
FGIC -- Financial Guaranty Insurance Company
FHA/VA -- Federal Housing Authority/Veteran Administration
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GO -- General Obligation Bond
IDR -- Industrial Development Revenue Bond
MBIA -- Municipal Bond Investors Assurance
PCR -- Pollution Control Revenue Bond
RANS -- Revenue Anticipation Notes
RB -- Revenue Bond
See accompanying notes to financial statements.
23
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Georgia)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $11,789,556)............................................................. $12,577,496
Cash........................................................................................................... 515
Interest receivable............................................................................................ 138,894
Receivable for Fund shares sold................................................................................ 22,052
Prepaid expenses............................................................................................... 7,118
Total assets............................................................................................. 12,746,075
LIABILITIES:
Accrued expenses............................................................................................... 30,575
Dividends payable.............................................................................................. 18,467
Distribution fee payable....................................................................................... 4,526
Total liabilities........................................................................................ 53,568
NET ASSETS........................................................................................................ $12,692,507
NET ASSETS CONSIST OF:
Paid-in capital................................................................................................ $12,582,429
Undistributed net investment income............................................................................ 4,756
Accumulated net realized loss on investment transactions....................................................... (682,618)
Net unrealized appreciation of investments..................................................................... 787,940
Net assets............................................................................................... $12,692,507
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($2,080,276 (division sign) 211,995 shares of beneficial interest outstanding).................. $ 9.81
Sales charge -- 4.75% of offering price........................................................................ .49
Maximum offering price................................................................................... $ 10.30
Class B Shares ($8,508,391 (division sign) 866,963 shares of beneficial interest outstanding).................. $ 9.81
Class Y Shares ($2,103,840 (division sign) 214,400 shares of beneficial interest outstanding).................. $ 9.81
</TABLE>
See accompanying notes to financial statements.
24
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Georgia)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................................................................ $343,239
EXPENSES:
Advisory fee........................................................................................ $29,470
Administrative personnel and services fees.......................................................... 3,161
Distribution fee -- Class A Shares.................................................................. 2,529
Distribution fee -- Class B Shares.................................................................. 29,788
Shareholder services fee -- Class B Shares.......................................................... 9,930
Transfer agent fee.................................................................................. 32,440
Registration and filing fees........................................................................ 31,591
Custodian fee....................................................................................... 29,129
Professional fees................................................................................... 12,716
Reports and notices to shareholders................................................................. 9,295
Amortization of organizational expense.............................................................. 2,704
Insurance expense................................................................................... 1,487
Miscellaneous....................................................................................... 4,332
198,572
Less: Fee waivers and expense reimbursements........................................................ (120,486)
Net expenses.................................................................................. 78,086
Net investment income.................................................................................. 265,153
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions........................................................ 30,052
Net change in unrealized appreciation of investments................................................ 367,804
Net gain on investments................................................................................ 397,856
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................... $663,009
</TABLE>
See accompanying notes to financial statements.
25
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state
of Georgia)
<TABLE>
<CAPTION>
SIX MONTHS EIGHT
ENDED MONTHS
FEBRUARY 29, ENDED
1996 AUGUST 31,
(UNAUDITED) 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income........................................................................ $ 265,153 $ 315,309
Net realized gain on investment transactions................................................. 30,052 178,194
Net change in unrealized appreciation of investments......................................... 367,804 571,056
Net increase in net assets resulting from operations...................................... 663,009 1,064,559
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares............................................................................... (50,033) (61,558)
Class B Shares............................................................................... (166,566) (232,039)
Class Y Shares............................................................................... (47,205) (21,712)
Total distributions to shareholders....................................................... (263,804) (315,309)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold.................................................................... 2,552,411 2,941,604
Proceeds from reinvestment of distributions.................................................. 164,000 212,632
Payment for shares redeemed.................................................................. (1,397,700) (1,511,506)
Net increase resulting from Fund share transactions....................................... 1,318,711 1,642,730
Net increase in net assets................................................................ 1,717,916 2,391,980
NET ASSETS:
Beginning of period.......................................................................... 10,974,591 8,582,611
End of period (includes undistributed net investment income of $4,756 and $3,407,
respectively).............................................................................. $ 12,692,507 $10,974,591
</TABLE>
See accompanying notes to financial statements.
26
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS JULY 2, SIX MONTHS
ENDED EIGHT MONTHS 1993* ENDED EIGHT MONTHS
FEBRUARY 29, ENDED YEAR ENDED THROUGH FEBRUARY 29, ENDED YEAR ENDED
1996 AUGUST 31, DECEMBER 31, DECEMBER 31, 1996 AUGUST 31, DECEMBER 31,
(UNAUDITED) 1995# 1994 1993 (UNAUDITED) 1995# 1994
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
period....................... $9.47 $8.74 $10.19 $10.00 $9.47 $8.74 $10.19
Income (loss) from investment
operations:
Net investment income........ .24 .33 .48 .20 .20 .28 .43
Net realized and unrealized
gain (loss) on
investments................ .34 .73 (1.45) .19 .34 .73 (1.45)
Total from investment
operations................. .58 1.06 (.97) .39 .54 1.01 (1.02)
Less distributions to
shareholders from net
investment income............ (.24) (.33) (.48) (.20) (.20) (.28) (.43)
Net asset value, end of
period....................... $9.81 $9.47 $8.74 $10.19 $9.81 $9.47 $8.74
TOTAL RETURN+.................. 6.2% 12.3% (9.6%) 4.0% 5.8% 11.7% (10.2%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted).............. $2,080 $2,098 $1,387 $817 $8,508 $7,538 $6,912
Ratios to average net assets:
Expenses **.................. .86%++ .71%++ .53% .25%++ 1.61%++ 1.46%++ 1.13%
Net investment
income **.................. 4.97%++ 5.39%++ 5.26% 4.71%++ 4.22%++ 4.64%++ 4.66%
Portfolio turnover rate........ 8% 91% 147% 15% 8% 91% 147%
</TABLE>
<TABLE>
<CAPTION>
JULY 2,
1993*
THROUGH
DECEMBER 31,
1993
<S> <C>
PER SHARE DATA:
Net asset value, beginning of
period....................... $10.00
Income (loss) from investment
operations:
Net investment income........ .18
Net realized and unrealized
gain (loss) on
investments................ .19
Total from investment
operations................. .37
Less distributions to
shareholders from net
investment income............ (.18)
Net asset value, end of
period....................... $10.19
TOTAL RETURN+.................. 3.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted).............. $3,692
Ratios to average net assets:
Expenses **.................. .75%++
Net investment
income **.................. 4.15%++
Portfolio turnover rate........ 15%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales charge or contingent deferred
sales charges are not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets, exclusive
of any applicable state expense limitations, would have been the following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS JULY 2, SIX MONTHS
ENDED EIGHT MONTHS 1993* ENDED EIGHT MONTHS
FEBRUARY 29, ENDED YEAR ENDED THROUGH FEBRUARY 29, ENDED YEAR ENDED
1996 AUGUST 31, DECEMBER 31, DECEMBER 31, 1996 AUGUST 31, DECEMBER 31,
(UNAUDITED) 1995# 1994 1993 (UNAUDITED) 1995# 1994
<S> <C> <C> <C> <C> <C> <C> <C>
Expenses........... 2.90% 2.83% 3.61% 6.82% 3.65% 3.58% 4.21%
Net investment
income (loss).... 2.93% 3.27% 2.18% (1.86%) 2.18% 2.52% 1.58%
</TABLE>
<TABLE>
<CAPTION>
JULY 2,
1993*
THROUGH
DECEMBER 31,
1993
<S> <C>
Expenses........... 7.32%
Net investment
income (loss).... (2.42%)
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state
of Georgia)
<TABLE>
<CAPTION>
CLASS Y SHARES
SIX MONTHS
ENDED EIGHT MONTHS
FEBRUARY 29, ENDED
1996 AUGUST 31,
(UNAUDITED) 1995#
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period..................................................... $9.47 $8.74
Income (loss) from investment operations:
Net investment income.................................................................. .25 .35
Net realized and unrealized gain (loss) on investments................................. .34 .73
Total from investment operations....................................................... .59 1.08
Less distributions to shareholders from net investment income............................ (.25) (.35)
Net asset value, end of period........................................................... $9.81 $9.47
TOTAL RETURN+............................................................................ 6.3% 12.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................................................ $2,104 $1,339
Ratios to average net assets:
Expenses **............................................................................ .61%++ .46%++
Net investment income **............................................................... 5.21%++ 5.64%++
Portfolio turnover rate.................................................................. 8% 91%
</TABLE>
<TABLE>
<CAPTION>
FEBRUARY 28,
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period..................................................... $ 9.83
Income (loss) from investment operations:
Net investment income.................................................................. .42
Net realized and unrealized gain (loss) on investments................................. (1.09)
Total from investment operations....................................................... (.67)
Less distributions to shareholders from net investment income............................ (.42)
Net asset value, end of period........................................................... $ 8.74
TOTAL RETURN+............................................................................ (6.9%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................................................ $284
Ratios to average net assets:
Expenses **............................................................................ .31%++
Net investment income **............................................................... 5.68%++
Portfolio turnover rate.................................................................. 147%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets, exclusive
of any applicable state expense limitations, would have been the following:
<TABLE>
<CAPTION>
CLASS Y SHARES
SIX MONTHS
ENDED EIGHT MONTHS FEBRUARY 28,
FEBRUARY 29, ENDED 1994* THROUGH
1996 AUGUST 31, DECEMBER 31,
(UNAUDITED) 1995# 1994
<S> <C> <C> <C>
Expenses.......................................................................... 2.65% 2.58% 3.39%
Net investment income............................................................. 3.17% 3.52% 2.60%
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of North Carolina)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- 101.1%
NORTH CAROLINA -- 94.8%
$1,410 Burlington,
Hsg. Auth. Mtg. RB
Burlington Homes (Sec 8-A),
6.00%, 8/1/09......................... $ 1,422,338
1,000 Chapel Hill,
Parking Fac. COP,
6.35%, 12/1/18........................ 1,060,310
1,480 Charlotte,
Hsg. Dev. Corp. Mtg. RB
(Vantage 78 Apts),
6.60%, 7/15/21........................ 1,510,873
1,000 Concord,
Util. Sys. RB,
5.50%, 12/1/14 (MBIA)................. 1,002,480
2,390 Cumberland Cnty.,
Civic Center Proj. (Ser. A), COP,
6.40%, 12/1/24 (AMBAC)................ 2,580,794
1,390 Durham, GO,
5.10%, 2/1/14......................... 1,353,318
2,000 Forsyth Cnty. GO,
4.75%, 2/1/13......................... 1,882,280
955 Fremont,
Hsg. Dev. Corp. First Lien RB,
(Torhunta Apts.)
6.75%, 7/15/22, (FHA)................. 982,790
1,000 Gastonia,
Combined Util. Sys. RB,
6.00%, 5/1/14, (MBIA)................. 1,042,430
3,000 Greensboro,
Enterprise Sys. (Ser. A) RB,
5.30%, 6/1/15, (MBIA)................. 2,894,490
1,000 Harnett Cnty. COP,
6.40%, 12/1/14, (AMBAC)............... 1,090,280
1,000 Haywood Cnty.,
Indl. Facs. & Poll. Control
Fing. Auth.,
Champion Intl. Corp. Proj. RB,
6.25%, 9/1/25......................... 1,029,770
1,000 Haywood Cnty.,
Indl. Facs. & Poll. Control
Fing. Auth.,
Champion Intl. Corp. Proj. RB,
(Ser. A),
5.75%, 12/1/25........................ 970,800
4,750 Martin Cnty.,
Indl. Facs. & Poll. Control
Fing. Auth.,
(Solid Waste Weyerhaeuser Co.) RB,
6.80%, 5/1/24......................... 5,125,772
PRINCIPAL
AMOUNT
(000) VALUE
$ 360 Monroe,
Combined Enterprise Sys. RB,
6.00%, 3/1/14......................... $ 373,147
4,000 North Carolina Eastn. Muni.,
Pwr. Sys. Agy. (Ser. A), RB,
5.00%, 1/1/21......................... 3,803,280
2,500 North Carolina Eastn. Muni.,
Pwr. Sys. Agy,
Elec. RRB, (Ser. C), RB,
6.00%, 1/1/18, (AMBAC)................ 2,677,425
2,500 North Carolina Eastn. Muni.,
Pwr. Sys. Agy. (Ser. B) RB,
6.00%, 1/1/22......................... 2,539,375
3,750 North Carolina Eastn. Muni.,
Pwr. Sys. Agy. (Ser. A), RB,
6.50%, 1/1/18 (ETM)................... 4,067,475
1,300 North Carolina Eastn Muni.,
Pwr. Sys. Agy. (Ser. A) RB,
7.00%, 1/1/24......................... 1,360,099
2,200 North Carolina, GO,
4.75%, 2/1/12......................... 2,093,608
2,000 North Carolina,
Ed. Fac. Fin. Agy. (Ser. B), RB,
5.00%, 10/1/17........................ 1,863,460
500 North Carolina,
Med Care Comm. Hlth. Care Fac. RB,
6.875%, 10/1/09....................... 522,685
1,500 North Carolina,
Med Care Comm. Hosp. RB,
(Gaston Mem. Hosp. Proj.),
5.50%, 2/15/19........................ 1,466,685
2,000 North Carolina,
Med Care Comm. Hosp. RB,
(Rex Hosp. Proj.)
6.25%, 6/1/17......................... 2,128,340
3,000 North Carolina,
Muni. Pwr. Agy.Catawba Elec. RB,
5.00%, 1/1/20......................... 2,855,400
1,000 North Carolina,
Med Care Comm. Hosp. RB,
(Alamance Health Ser. Inc.)
6.375%, 8/15/12....................... 1,079,260
500 North Carolina,
Muni. Pwr. Agy. (Ser. B), RB
Catawba Elec.
6.00%, 1/1/20......................... 496,815
2,000 North Carolina,
Student Ed. Assist. Auth.
(Ser. A), RB
6.30%, 7/1/15......................... 2,030,560
</TABLE>
29
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of North Carolina)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
$ 1,000 Onslow Cnty.,
Combined Enterprise Sys. RB,
6.00%, 6/1/15, (MBIA)................. $ 1,043,480
1,000 Pitt Cnty.,
Mem. Hosp. RB,
5.50%, 12/1/15........................ 990,400
1,500 Rowan Cnty.,
Justice Center Proj. COP,
6.25%, 12/1/07........................ 1,644,015
870 Shelby,
Comb Enterprise Sys. (Ser. A), RB,
5.50%, 5/1/17......................... 854,984
1,500 Thomasville,
Cityhall & Util. Impts. Projs. COP,
6.00%, 6/1/17, (FSA).................. 1,564,740
59,403,958
PUERTO RICO -- 6.3%
2,000 Puerto Rico,
Commonwealth, GO
6.25%, 7/1/11, (MBIA)................. 2,235,700
600 Puerto Rico,
Commonwealth, Hwy. & Tran. Auth.
(Ser. W), RB,
5.50%, 7/1/15......................... 597,126
1,000 Puerto Rico, Univ.
(Ser. N), RB,
6.25%, 06/1/17........................ 1,130,120
3,962,946
TOTAL LONG-TERM MUNICIPAL SECURITIES
(COST $60,071,574).................. 63,366,904
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C> <C>
MUTUAL FUND SHARES -- 0.0%*
13,000 Lehman Municipal Money Market
Fund
(COST $13,000)............... $ 13,000
TOTAL INVESTMENTS
(COST $60,084,574)....... 101.1% 63,379,904
OTHER ASSETS AND
LIABILITIES -- NET...... (1.1) (686,334)
NET ASSETS................. 100.0% $62,693,570
</TABLE>
Summary of Abbreviations:
AMBAC -- American Municipal Bond Assurance Corporation
COP -- Certificates of Participation
ETM -- Escrowed to Maturity
FHA -- Federal Housing Authority
GO -- General Obligation Bond
MBIA -- Municipal Bond Investors Assurance
RB -- Revenue Bond
RRB -- Revenue Refunding Bond
*Less than one-tenth of a percent.
See accompanying notes to financial statements.
30
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of North Carolina)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $60,084,574)............................................................. $63,379,904
Cash........................................................................................................... 319
Interest receivable............................................................................................ 780,821
Receivable for securities sold................................................................................. 505,641
Receivable for Fund shares sold................................................................................ 201,931
Prepaid expenses............................................................................................... 19,628
Total assets............................................................................................. 64,888,244
LIABILITIES:
Payable for securities purchased............................................................................... 1,936,300
Accrued expenses............................................................................................... 78,715
Dividends payable.............................................................................................. 68,839
Payable for Fund shares redeemed............................................................................... 54,228
Distribution fee payable....................................................................................... 47,277
Accrued advisory fee........................................................................................... 9,315
Total liabilities........................................................................................ 2,194,674
NET ASSETS........................................................................................................ $62,693,570
NET ASSETS CONSIST OF:
Paid-in capital................................................................................................ $62,642,494
Undistributed net investment income............................................................................ 83,986
Accumulated net realized loss on investment transactions....................................................... (3,328,240)
Net unrealized appreciation of investments..................................................................... 3,295,330
Net assets............................................................................................... $62,693,570
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($8,635,514 (division sign) 834,607 shares of beneficial interest outstanding).................. $ 10.35
Sales charge -- 4.75% of offering price........................................................................ .52
Maximum offering price................................................................................... $ 10.87
Class B Shares ($51,147,600 (division sign) 4,943,382 shares of beneficial interest outstanding)............... $ 10.35
Class Y Shares ($2,910,456 (division sign) 281,251 shares of beneficial interest outstanding).................. $ 10.35
</TABLE>
See accompanying notes to financial statements.
31
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of North Carolina)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest.......................................................................................... $1,770,333
EXPENSES:
Advisory fee...................................................................................... $ 152,346
Administrative personnel and service fees......................................................... 16,354
Distribution fee -- Class A Shares................................................................ 10,439
Distribution fee -- Class B Shares................................................................ 188,550
Shareholder services fee -- Class B Shares........................................................ 62,850
Reports and notices to shareholders............................................................... 59,719
Custodian fee..................................................................................... 39,682
Professional fees................................................................................. 24,781
Transfer agent fee................................................................................ 21,784
Registration and filing fees...................................................................... 16,462
Amortization of organizational expense............................................................ 2,229
Trustees' fees and expenses....................................................................... 1,519
Insurance expense................................................................................. 640
Miscellaneous..................................................................................... 23,832
621,187
Less: Fee waivers................................................................................. (127,619)
Net expenses................................................................................... 493,568
Net investment income................................................................................ 1,276,765
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions...................................................... 966,932
Net change in unrealized appreciation of investments.............................................. 1,356,326
Net gain on investments.............................................................................. 2,323,258
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................. $3,600,023
</TABLE>
See accompanying notes to financial statements.
32
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state
of North Carolina)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED EIGHT MONTHS
FEBRUARY 29, ENDED
1996 AUGUST 31,
(UNAUDITED) 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income........................................................................ $ 1,276,765 $ 1,697,080
Net realized gain on investment transactions................................................. 966,932 668,311
Net change in unrealized appreciation of investments......................................... 1,356,326 3,902,872
Net increase in net assets resulting from operations...................................... 3,600,023 6,268,263
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares............................................................................... (195,816) (279,937)
Class B Shares............................................................................... (990,325) (1,389,260)
Class Y Shares............................................................................... (56,773) (27,883)
Total distributions to shareholders....................................................... (1,242,914) (1,697,080)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold.................................................................... 6,043,557 6,832,112
Proceeds from reinvestment of distributions.................................................. 864,638 1,191,861
Payment for shares redeemed.................................................................. (4,896,232) (7,507,588)
Net increase resulting from Fund share transactions....................................... 2,011,963 516,385
Net increase in net assets................................................................ 4,369,072 5,087,568
NET ASSETS:
Beginning of period.......................................................................... 58,324,498 53,236,930
End of period (includes undistributed net investment income of $83,986 and $50,135,
respectively).............................................................................. $ 62,693,570 $ 58,324,498
</TABLE>
See accompanying notes to financial statements.
33
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
(Drawing of the state
of North Carolina)
<TABLE>
<CAPTION>
CLASS A SHARES
SIX MONTHS
ENDED EIGHT MONTHS
FEBRUARY 29, ENDED YEAR ENDED
1996 AUGUST 31, DECEMBER 31,
(UNAUDITED) 1995# 1994
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period...................................... $9.95 $9.16 $10.61
Income (loss) from investment operations:
Net investment income................................................... .25 .33 .49
Net realized and unrealized gain (loss) on investments.................. .39 .79 (1.45)
Total from investment operations........................................ .64 1.12 (.96)
Less distributions to shareholders from:
Net investment income................................................... (.24) (.33) (.49)
Net realized gain on investments........................................ -- -- --
Total distributions..................................................... (.24) (.33) (.49)
Net asset value, end of period............................................ $10.35 $9.95 $9.16
TOTAL RETURN+............................................................. 6.5% 12.3% (9.1%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................................. $8,636 $8,279 $7,979
Ratios to average net assets:
Expenses **............................................................. 1.01%++ .92%++ .79%
Net investment income **................................................ 4.80%++ 5.09%++ 5.11%
Portfolio turnover rate................................................... 45% 117% 126%
</TABLE>
<TABLE>
<CAPTION>
JANUARY 11,
1993* THROUGH
DECEMBER 31,
1993
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period...................................... $10.00
Income (loss) from investment operations:
Net investment income................................................... .46
Net realized and unrealized gain (loss) on investments.................. .64
Total from investment operations........................................ 1.10
Less distributions to shareholders from:
Net investment income................................................... (.46)
Net realized gain on investments........................................ (.03)
Total distributions..................................................... (.49)
Net asset value, end of period............................................ $10.61
TOTAL RETURN+............................................................. 11.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................................. $12,739
Ratios to average net assets:
Expenses **............................................................. .32%++
Net investment income **................................................ 4.91%++
Portfolio turnover rate................................................... 57%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales charge or contingent deferred
sales charges are not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS A SHARES
SIX MONTHS
ENDED EIGHT MONTHS JANUARY 11,
FEBRUARY 29, ENDED YEAR ENDED 1993* THROUGH
1996 AUGUST 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1995# 1994 1993
<S> <C> <C> <C> <C>
Expenses............................................. 1.43% 1.27% 1.18% 1.25%
Net investment income................................ 4.38% 4.74% 4.72% 3.98%
</TABLE>
See accompanying notes to financial statements.
34
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state
of North Carolina)
<TABLE>
<CAPTION>
CLASS B SHARES CLASS Y SHARES
SIX MONTHS SIX MONTHS
ENDED EIGHT MONTHS JANUARY 11, ENDED EIGHT MONTHS
FEBRUARY 29, ENDED YEAR ENDED 1993* THROUGH FEBRUARY 29, ENDED
1996 AUGUST 31, DECEMBER 31, DECEMBER 31, 1996 AUGUST 31,
(UNAUDITED) 1995# 1994 1993 (UNAUDITED) 1995#
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period........ $9.95 $9.16 $10.61 $10.00 $9.95 $9.16
Income (loss) from investment operations:
Net investment income..................... .21 .28 .44 .42 .25 .35
Net realized and unrealized gain (loss) on
investments............................. .39 .79 (1.45) .64 .40 .79
Total from investment operations.......... .60 1.07 (1.01) 1.06 .65 1.14
Less distributions to shareholders from:
Net investment income..................... (.20) (.28) (.44) (.42) (.25) (.35)
Net realized gain on investments.......... -- -- -- (.03) -- --
Total distributions....................... (.20) (.28) (.44) (.45) (.25) (.35)
Net asset value, end of period.............. $10.35 $9.95 $9.16 $10.61 $10.35 $9.95
TOTAL RETURN+............................... 6.1% 11.8% (9.6%) 10.8% 6.6% 12.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)... $51,148 $49,040 $44,616 $45,168 $2,910 $1,006
Ratios to average net assets:
Expenses **............................... 1.76%++ 1.67%++ 1.37% .79%++ .76%++ .67%++
Net investment income **.................. 4.05%++ 4.34%++ 4.53% 4.47%++ 5.03%++ 5.34%++
Portfolio turnover rate..................... 45% 117% 126% 57% 45% 117%
</TABLE>
<TABLE>
<CAPTION>
FEBRUARY 28,
1994* THROUGH
DECEMBER 31,
1994
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period........ $10.31
Income (loss) from investment operations:
Net investment income..................... .43
Net realized and unrealized gain (loss) on
investments............................. (1.15)
Total from investment operations.......... (.72)
Less distributions to shareholders from:
Net investment income..................... (.43)
Net realized gain on investments.......... --
Total distributions....................... (.43)
Net asset value, end of period.............. $9.16
TOTAL RETURN+............................... (7.0%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)... $642
Ratios to average net assets:
Expenses **............................... .59%++
Net investment income **.................. 5.58%++
Portfolio turnover rate..................... 126%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Contingent deferred sales charges are not
reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS B SHARES CLASS Y SHARES
SIX MONTHS SIX MONTHS
ENDED EIGHT MONTHS JANUARY 11, ENDED EIGHT MONTHS FEBRUARY 28,
FEBRUARY 29, ENDED YEAR ENDED 1993* THROUGH FEBRUARY 29, ENDED 1994* THROUGH
1996 AUGUST 31, DECEMBER 31, DECEMBER 31, 1996 AUGUST 31, DECEMBER 31,
(UNAUDITED) 1995# 1994 1993 (UNAUDITED) 1995# 1994
<S> <C> <C> <C> <C> <C> <C> <C>
Expenses................................ 2.18% 2.02% 1.76% 1.74% 1.17% 1.02% .98%
Net investment income................... 3.63% 3.99% 4.14% 3.52% 4.63% 4.99% 5.19%
</TABLE>
See accompanying notes to financial statements.
35
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of South Carolina)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- 94.6%
SOUTH CAROLINA -- 93.4%
$ 540 Aiken Cnty.,
(Beloit Corp. Proj.), RB,
6.00%, 12/1/11......................... $ 549,601
100 Barnwell Cnty.,
School Dist. #45, GO,
5.50%, 2/1/11, (AMBAC)................. 101,059
200 Bennettsville,
Combined Util. Sys. (Ser. B), RB,
6.00%, 7/1/09, (MBIA).................. 213,810
300 Charleston Cnty.,
Health Facs. RB,
First Mtg. Episcopal Church,
7.125%, 4/1/20......................... 307,500
250 Charleston Cnty.,
Wtr. & Swr. Fac. RB,
6.00%, 1/1/18.......................... 257,530
200 Citadel Military College,
Student & Faculty Hsg. RB,
5.50%, 10/1/14,........................ 199,758
100 Coastal Carolina Univ. RB,
6.80%, 6/1/19, (MBIA).................. 112,720
100 Colleton Cnty. GO,
5.60%, 3/1/09.......................... 100,227
100 Columbia,
Wtr. & Swr. Sys. RB,
5.70%, 2/1/10.......................... 105,413
500 Darlington Cnty.,
(Nucor Corp. Proj.), (Ser. A), RB,
5.75%, 8/1/23.......................... 491,510
200 Georgetown Cnty.,
Wtr. & Swr. Dist. RB,
6.50%, 6/1/17.......................... 204,136
250 Laurens,
Pub. Util. Sys. RB,
5.00, 1/1/18, (FGIC)................... 231,510
300 Marion Cnty.,
Hosp. Dist. RB,
5.50%, 11/1/10......................... 294,648
650 Marion Cnty.,
Hosp. Dist. RB,
5.50%, 11/1/15......................... 638,456
100 Medical Univ.,
Hosp. Facs. (Ser. A), RB,
7.00%, 7/1/01.......................... 111,018
200 Oconee Cnty.,
School Dist. RB,
5.10%, 9/1/12.......................... 193,076
350 Piedmont,
Pwr. Agy. Elec. RB,
5.50%, 1/1/12.......................... 362,996
PRINCIPAL
AMOUNT
(000) VALUE
$ 100 Piedmont,
Pwr. Agy. Elec. RB,
6.05%, 1/1/04.......................... $ 102,226
350 Richland Cnty.,
Solid Waste Disp. Facs. (Ser. A),
RB, (Union Camp Corp. Proj.)
6.75%, 5/1/22.......................... 370,311
300 South Carolina Jobs,
Eco. Dev. Auth. Hosp. Facs. RB,
(Anderson Area Med. Center Inc.),
5.25%, 2/1/15.......................... 286,146
200 South Carolina Jobs,
Eco. Dev. Auth. Hosp. Facs. RB,
(Oconee Mem. Hosp.)
6.15%, 3/1/15,......................... 209,784
200 South Carolina Jobs,
Eco. Dev. Auth. Hosp. Facs.
(Ser. A), (Tuomey Regl. Med. Center),
5.75%, 11/1/15......................... 201,674
250 South Carolina State,
Ed. Assist. Auth. RB,
5.875%, 9/1/07......................... 258,412
100 South Carolina State,
Hsg. Fin. & Dev. Auth. (Ser. A),
RB, 6.80%, 11/15/11.................... 105,579
100 South Carolina State,
Hsg. Fin. & Dev. Auth. Mtg.
(Ser. A) RB,
6.55%, 7/1/15.......................... 102,931
595 South Carolina State,
Hsg. Fin. & Dev. Auth. Mtg. RB,
(Heritage Crt. Apts.)
6.15%, 7/1/25.......................... 601,503
200 South Carolina State,
Hsg. Fin. & Dev. Auth. (Ser. A),
RB, (Homeownership Mtg.)
7.55%, 7/1/11.......................... 211,850
265 South Carolina State,
Hsg Fin & Dev. Auth. RB,
(Hunting Ridge Apts.)
6.75%, 6/1/25.......................... 269,993
300 South Carolina State,
Hsg. Fin. & Dev. Auth. RB,
(Runaway Bay Apts.),
6.125%, 12/1/15........................ 296,748
200 South Carolina State,
Pub. Service Auth. (Ser. C), RB,
5.125%, 1/1/21......................... 185,304
</TABLE>
36
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of South Carolina)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- (CONTINUED)
$ 500 York Cnty.,
Indl. RB,
(Exempt Fac. Hoechst Celanese),
5.70%, 1/1/24.......................... $ 482,395
8,159,824
PUERTO RICO -- 1.2%
100 Puerto Rico,
Commonwealth GO,
5.65%, 7/1/15.......................... 104,071
TOTAL LONG-TERM MUNICIPAL SECURITIES
(COST $7,979,672)................. 8,263,895
</TABLE>
<TABLE>
<CAPTION>
SHARES
<C> <S> <C> <C>
MUTUAL FUND SHARES -- 3.7%
315,000 Lehman Municipal Money Market
Fund.......................... 315,000
12,000 Lehman Tax Free Money Market
Fund.......................... 12,000
TOTAL MUTUAL FUND SHARES
(COST $327,000).......... 327,000
TOTAL INVESTMENTS
(COST $8,306,672)........ 98.3% 8,590,895
OTHER ASSETS AND
LIABILITIES -- NET....... 1.7% 145,208
NET ASSETS.................. 100.0% $8,736,103
</TABLE>
Summary of abbreviations:
AMBAC -- American Municipal Bond Assurance Corp.
FGIC -- Financial Guaranty Insurance Co.
GO -- General Obligation
IDR -- Industrial Development Revenue
MBIA -- Municipal Bond Investors Assurance
RB -- Revenue Bond
See accompanying notes to financial statements.
37
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of South Carolina)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $8,306,672)................................................................ $8,590,895
Cash............................................................................................................. 336
Interest receivable.............................................................................................. 122,374
Receivable for Fund shares sold.................................................................................. 47,751
Prepaid expenses................................................................................................. 12,511
Total assets............................................................................................... 8,773,867
LIABILITIES:
Accrued expenses................................................................................................. 22,413
Dividends payable................................................................................................ 11,543
Distribution fee payable......................................................................................... 3,808
Total liabilities.......................................................................................... 37,764
NET ASSETS.......................................................................................................... $8,736,103
NET ASSETS CONSIST OF:
Paid-in capital.................................................................................................. $8,435,312
Undistributed net investment income.............................................................................. 1,111
Accumulated net realized gain on investment transactions......................................................... 15,457
Net unrealized appreciation of investments....................................................................... 284,223
Net assets................................................................................................. $8,736,103
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($833,607 (division sign) 84,426 shares of beneficial interest outstanding)....................... $ 9.87
Sales charge -- 4.75% of offering price.......................................................................... .49
Maximum offering price..................................................................................... $ 10.36
Class B Shares ($4,018,780 (division sign) 406,968 shares of beneficial interest outstanding).................... $ 9.87
Class Y Shares ($3,883,716 (division sign) 393,290 shares of beneficial interest outstanding).................... $ 9.87
</TABLE>
See accompanying notes to financial statements.
38
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of South Carolina)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................................................................ $208,671
EXPENSES:
Advisory fee........................................................................................ $ 17,961
Administrative personnel and service fees........................................................... 1,896
Distribution fee -- Class A Shares.................................................................. 892
Distribution fee -- Class B Shares.................................................................. 14,265
Shareholder services fee -- Class B Shares.......................................................... 4,755
Custodian fee....................................................................................... 36,865
Transfer agent fee.................................................................................. 29,138
Professional fees................................................................................... 13,743
Reports and notices to shareholders................................................................. 11,076
Registration and filing fees........................................................................ 10,676
Amortization of organizational expense.............................................................. 10,363
Insurance expense................................................................................... 1,233
Trustees' fees and expenses......................................................................... 242
Miscellaneous....................................................................................... 5,966
159,071
Less: Fee waivers and expense reimbursements........................................................ (118,818)
Net expenses.................................................................................. 40,253
Net investment income.................................................................................. 168,418
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions........................................................ 20,705
Net change in unrealized appreciation of investments................................................ 173,743
Net gain on investments................................................................................ 194,448
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................... $362,866
</TABLE>
See accompanying notes to financial statements.
39
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state
of South Carolina)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED EIGHT MONTHS
FEBRUARY 29, ENDED
1996 AUGUST 31,
(UNAUDITED) 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income.................................................................. $ 168,418 $ 128,517
Net realized gain on investment transactions........................................... 20,705 29,060
Net change in unrealized appreciation of investments................................... 173,743 330,261
Net increase in net assets resulting from operations................................ 362,866 487,838
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares......................................................................... (17,791) (17,293)
Class B Shares......................................................................... (80,668) (94,373)
Class Y Shares......................................................................... (69,747) (16,851)
Total distributions to shareholders................................................. (168,206) (128,517)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold.............................................................. 2,956,856 2,853,928
Proceeds from reinvestment of distributions............................................ 107,886 83,256
Payment for shares redeemed............................................................ (348,391) (332,153)
Net increase resulting from Fund share transactions.............................. 2,716,351 2,605,031
Net increase in net assets....................................................... 2,911,011 2,964,352
NET ASSETS:
Beginning of period.................................................................... 5,825,092 2,860,740
End of period (includes undistributed net investment income of $1,111 and $899,
respectively)........................................................................ $ 8,736,103 $ 5,825,092
</TABLE>
See accompanying notes to financial statements.
40
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
(Drawing of the state
of South Carolina)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS SIX MONTHS
ENDED EIGHT MONTHS JANUARY 3, ENDED EIGHT MONTHS
FEBRUARY 29, ENDED 1994* THROUGH FEBRUARY 29, ENDED
1996 AUGUST 31, DECEMBER 31, 1996 AUGUST 31,
(UNAUDITED) 1995# 1994 (UNAUDITED) 1995#
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period...................... $ 9.59 $ 8.62 $ 10.00 $ 9.59 $ 8.62
Income (loss) from investment operations:
Net investment income................................... .24 .34 .46 .21 .29
Net realized and unrealized gain (loss) on
investments........................................... .28 .97 (1.38) .28 .97
Total from investment
operations.......................................... .52 1.31 (.92) .49 1.26
Less distributions to shareholders from net investment
income.................................................. (.24) (.34) (.46) (.21) (.29)
Net asset value, end of period............................ $ 9.87 $ 9.59 $ 8.62 $ 9.87 $ 9.59
TOTAL RETURN+............................................. 5.5% 15.4% (9.3%) 5.1% 14.8%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................. $834 $610 $312 $4,019 $3,542
Ratios to average net assets:
Expenses**.............................................. .82%++ .53%++ .25%++ 1.56%++ 1.28%++
Net investment income**................................. 4.99%++ 5.41%++ 5.57%++ 4.25%++ 4.66%++
Portfolio turnover rate................................... 25% 66% 23% 25% 66%
</TABLE>
<TABLE>
<CAPTION>
JANUARY 3,
1994* THROUGH
DECEMBER 31,
1994
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period...................... $ 10.00
Income (loss) from investment operations:
Net investment income................................... .41
Net realized and unrealized gain (loss) on
investments........................................... (1.38)
Total from investment
operations.......................................... (.97)
Less distributions to shareholders from net investment
income.................................................. (.41)
Net asset value, end of period............................ $ 8.62
TOTAL RETURN+............................................. (9.8%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................. $ 2,456
Ratios to average net assets:
Expenses**.............................................. .87%++
Net investment income**................................. 4.88%++
Portfolio turnover rate................................... 23%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales charge or contingent deferred
sales charges are not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income (loss) to average net assets,
exclusive of any applicable state expense limitations, would have been the
following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS SIX MONTHS
ENDED EIGHT MONTHS JANUARY 3, ENDED EIGHT MONTHS JANUARY 3,
FEBRUARY 29, ENDED 1994* THROUGH FEBRUARY 29, ENDED 1994* THROUGH
1996 AUGUST 31, DECEMBER 31, 1996 AUGUST 31, DECEMBER 31,
(UNAUDITED) 1995# 1994 (UNAUDITED) 1995# 1994
<S> <C> <C> <C> <C> <C> <C>
Expenses.................................... 4.12% 6.50% 10.71% 4.87% 7.25% 11.33%
Net investment income (loss)................ 1.69% (.56%) (4.89%) .94% (1.31%) (5.58%)
</TABLE>
See accompanying notes to financial statements.
41
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state
of South Carolina)
<TABLE>
<CAPTION>
CLASS Y SHARES
SIX MONTHS ENDED EIGHT MONTHS
FEBRUARY 29, 1996 ENDED
(UNAUDITED) AUGUST 31, 1995#
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period........................................ $ 9.59 $ 8.62
Income (loss) from investment operations:
Net investment income..................................................... .26 .35
Net realized and unrealized gain (loss) on investments.................... .28 .97
Total from investment operations........................................ .54 1.32
Less distributions to shareholders from net investment income............... (.26) (.35)
Net asset value, end of period.............................................. $ 9.87 $ 9.59
TOTAL RETURN+............................................................... 5.6% 15.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................................... $ 3,884 $1,673
Ratios to average net assets:
Expenses**................................................................ .57%++ .28%++
Net investment income**................................................... 5.24%++ 5.66%++
Portfolio turnover rate..................................................... 25% 66%
</TABLE>
<TABLE>
<CAPTION>
FEBRUARY 28,
1994* THROUGH
DECEMBER 31, 1994
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period........................................ $ 9.74
Income (loss) from investment operations:
Net investment income..................................................... .43
Net realized and unrealized gain (loss) on investments.................... (1.12)
Total from investment operations........................................ (.69)
Less distributions to shareholders from net investment income............... (.43)
Net asset value, end of period.............................................. $ 8.62
TOTAL RETURN+............................................................... (7.1%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................................... $92
Ratios to average net assets:
Expenses**................................................................ .00%++
Net investment income**................................................... 5.92%++
Portfolio turnover rate..................................................... 23%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income (loss) to average net assets,
exclusive of any applicable state expense limitations, would have been the
following:
<TABLE>
<CAPTION>
CLASS Y SHARES
SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 28,
FEBRUARY 29, 1996 ENDED 1994* THROUGH
(UNAUDITED) AUGUST 31, 1995# DECEMBER 31, 1994
<S> <C> <C> <C>
Expenses...................................... 3.88%++ 6.25%++ 10.46%++
Net investment income (loss).................. 1.93%++ (.31%)++ (4.54%)++
</TABLE>
See accompanying notes to financial statements.
42
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Virginia)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- 93.7%
VIRGINIA -- 84.4%
$ 100 Albemarle Cnty. Res. Care Fac. IDA,
6.45%, 7/1/15......................... $ 100,748
145 Albemarle Cnty. Res. Care Fac. IDA,
6.625%, 7/1/21........................ 146,132
475 Alexandria, IDA, PCR, Potomac Elec.
Proj.,
5.375%, 2/15/24 (MBIA)................ 456,736
100 Arlington Cnty., Hosp. Fac. IDA,
5.30%, 9/1/15......................... 94,988
250 Charlottesville Albermarle, Arpt.
Auth. RB,
6.125%, 12/1/13....................... 252,095
250 Fairfax Cnty. Inova Health Sys. Proj.
IDA,
5.25%, 8/15/19........................ 232,485
200 Fairfax Cnty. Redev. & Hsg. Auth. RB,
Multi-Family Hsg.
6.625%, 9/20/20, (GNMA)............... 208,182
700 Fairfax Cnty. Wtr. Auth. RB,
6.00%, 4/1/22......................... 726,348
500 Hanover Cnty. Mem. Regl. Med. Ctr.
Proj. IDA
6.375%, 8/15/18, (MBIA)............... 556,705
400 Henrico Cnty. Pub. Fac. Lease IDA,
7.00%, 8/1/13......................... 457,684
350 Isle Wright Cnty. Solid Waste Disp.
Facs. IDA,
6.55%, 4/1/24......................... 367,360
250 Prince William Cnty. Park
Auth. RB,
6.875%, 10/15/16...................... 273,935
300 Prince William Cnty. Potomac Hosp.
Corp. IDA,
6.75%, 10/1/15........................ 327,438
400 Riverside, Regl. Jail Auth. Fac. RB,
6.00%, 7/1/25, (MBIA)................. 417,360
500 Upper Occoquan, Swr. Auth.
(Ser. A), RB,
5.15%, 7/1/20, (MBIA)................. 477,930
95 Virginia, Gtd. Student Loan Prog.
(Ser. C), RB,
5.75%, 9/1/10......................... 101,404
175 Virginia Beach, Dev. Auth. Hosp. Fac.
RB,
6.00%, 2/15/09, (AMBAC)............... 191,366
100 Virginia Beach, Dev. Auth. Hosp. Fac.
RB,
6.00%, 2/15/12, (AMBAC)............... 107,923
PRINCIPAL
AMOUNT
(000) VALUE
$ 200 Virginia Beach, (Ser. C), GO,
6.6%, 8/1/08.......................... $ 224,834
200 Virginia Beach, GO,
5.45%, 7/15/10........................ 206,894
100 Virginia College, Bldg. Auth. Edl.
Facs. RB,
5.75%, 1/1/14......................... 101,872
200 Virginia College, Bldg. Auth. Edl.
Facs. RB,
5.75%, 4/1/14......................... 200,690
100 Virginia State, Hsg. Dev. Auth.
Commonwealth Mtg. (Ser. A), RB,
6.95%, 1/1/10......................... 104,013
100 Virginia State, Hsg. Dev. Auth.
Commonwealth Mtg. (Ser. A), RB,
7.10%, Due 1/1/17..................... 105,955
300 Virginia State, Hsg. Dev. Auth. (Ser.
D), RB,
6.10%, 1/1/19......................... 302,658
300 Virginia State, Hsg. Dev. Auth. (Ser.
F), RB,
6.25%, 7/1/12......................... 305,880
255 Virginia State, Hsg. Dev. Auth. (Ser.
K), RB, Multi-Family Hsg.
5.90%, Due 5/1/11..................... 257,331
300 Virginia State, Multi-Family Hsg.
(Ser. H), RB
6.35%, 11/1/11........................ 305,553
300 Virginia State, Pub. School Auth.
(Ser. A), RB,
6.20%, 8/1/13......................... 321,147
100 Virginia State, Pub. School. Auth.
(Ser. B), GO,
6.50%, 8/1/15......................... 108,850
200 Virginia State, Res. Auth. Wtr. & Swr.
Sys. RB,
5.25%, 10/1/14........................ 194,442
300 West Point Solid Waste Disp. (Ser. B),
IDA,
6.25%, 3/1/19......................... 303,555
8,540,493
PUERTO RICO -- 4.9%
300 Puerto Rico Commonwealth GO, 6.25%,
7/1/13, (MBIA)........................ 334,944
150 Puerto Rico Commonwealth GO, 6.45%,
7/1/17................................ 162,102
497,046
</TABLE>
43
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Virginia)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
LONG-TERM MUNICIPAL SECURITIES -- (CONTINUED)
WASHINGTON, D.C. -- 4.4%
$ 100 Met. Area Tran. Auth. RB, 6.00%,
7/1/07, (FGIC)........................ $ 109,566
300 Met. Arpts. Auth. (Ser. A), RB, 7.60%,
10/1/14............................... 332,871
442,437
TOTAL INVESTMENTS (COST
$9,094,973)............ 93.7% 9,479,976
OTHER ASSETS AND
LIABILITIES -- NET..... 6.3 639,910
NET ASSETS................ 100.0% $10,119,886
</TABLE>
Summary of Abbreviations:
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Federal Guaranty Insurance Corporation
GNMA -- Government National Mortgage Association
GO -- General Obligations Bond
IDA -- Industrial Development Authority
MBIA -- Municipal Bond Investors Assurance
PCR -- Pollution Control Revenue Bond
RB -- Revenue Bond
See accompanying notes to financial statements.
44
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Virginia)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $9,094,973).............................................................. $ 9,479,976
Cash........................................................................................................... 213,652
Receivable for securities sold................................................................................. 370,561
Receivable for Fund shares sold................................................................................ 210,199
Interest receivable............................................................................................ 141,290
Prepaid expenses............................................................................................... 9,241
Total assets............................................................................................. 10,424,919
LIABILITIES:
Payable for securities purchased............................................................................... 226,081
Payable for Fund shares redeemed............................................................................... 32,965
Accrued expenses............................................................................................... 28,837
Dividends payable.............................................................................................. 10,402
Distribution fee payable....................................................................................... 6,748
Total liabilities........................................................................................ 305,033
NET ASSETS........................................................................................................ $10,119,886
NET ASSETS CONSIST OF:
Paid-in capital................................................................................................ $10,004,290
Undistributed net investment income............................................................................ 5,878
Accumulated net realized loss on investment transactions....................................................... (275,285)
Net unrealized appreciation of investments..................................................................... 385,003
Net assets............................................................................................... $10,119,886
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($2,474,679 (division sign) 248,594 shares of beneficial interest outstanding).................. $ 9.95
Sales charge -- 4.75% of offering price........................................................................ .50
Maximum offering price................................................................................... $ 10.45
Class B Shares ($5,954,393 (division sign) 598,188 shares of beneficial interest outstanding).................. $ 9.95
Class Y Shares ($1,690,814 (division sign) 169,864 shares of beneficial interest outstanding).................. $ 9.95
</TABLE>
See accompanying notes to financial statements.
45
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 29, 1996
(UNAUDITED)
(Drawing of the state
of Virginia)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................................................................. $256,383
EXPENSES:
Advisory fee......................................................................................... $ 21,132
Administrative personnel and service fees............................................................ 2,256
Distribution fee -- Class A Shares................................................................... 2,625
Distribution fee -- Class B Shares................................................................... 20,522
Shareholder services fee -- Class B Shares........................................................... 6,841
Registration and filing fees......................................................................... 31,833
Custodian fee........................................................................................ 26,854
Transfer agent fee................................................................................... 26,034
Professional fees.................................................................................... 15,442
Amortization of organization expense................................................................. 10,041
Reports and notices to shareholders.................................................................. 7,622
Insurance expense.................................................................................... 329
Trustees' fees and expenses.......................................................................... 231
Miscellaneous........................................................................................ 2,583
174,345
Less: Fee waivers and expense reimbursements......................................................... (117,217)
Net expenses................................................................................... 57,128
Net investment income................................................................................... 199,255
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions......................................................... 1,715
Net change in unrealized appreciation of investments................................................. 227,489
Net gain on investments................................................................................. 229,204
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................................... $428,459
</TABLE>
See accompanying notes to financial statements.
46
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state
of Virginia)
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS
ENDED EIGHT MONTHS
FEBRUARY 29, ENDED
1996 AUGUST 31,
(UNAUDITED) 1995
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income........................................................................ $ 199,255 $ 218,052
Net realized gain (loss) on investment transactions.......................................... 1,715 (13,951)
Net change in unrealized appreciation of investments......................................... 227,489 567,181
Net increase in net assets resulting from operations...................................... 428,459 771,282
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares............................................................................... (51,978) (64,808)
Class B Shares............................................................................... (114,904) (133,946)
Class Y Shares............................................................................... (30,991) (19,298)
Total distributions to shareholders.......................................................... (197,873) (218,052)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold.................................................................... 1,963,731 2,276,843
Proceeds from reinvestment of distributions.................................................. 148,052 172,095
Payment for shares redeemed.................................................................. (254,490) (737,002)
Net increase resulting from Fund share transactions.................................... 1,857,293 1,711,936
Net increase in net assets............................................................. 2,087,879 2,265,166
NET ASSETS:
Beginning of period.......................................................................... 8,032,007 5,766,841
End of period (includes undistributed net investment income of $5,878 and $4,496,
respectively............................................................................... $ 10,119,886 $ 8,032,007
</TABLE>
See accompanying notes to financial statements.
47
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
(Drawing of the state
of Virginia)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS JULY 2, SIX MONTHS
ENDED EIGHT MONTHS 1993* ENDED EIGHT MONTHS
FEBRUARY 29, ENDED YEAR ENDED THROUGH FEBRUARY 29, ENDED
1996 AUGUST 31, DECEMBER 31, DECEMBER 31, 1996 AUGUST 31,
(UNAUDITED) 1995# 1994 1993 (UNAUDITED) 1995#
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
period..................... $9.67 $8.85 $10.19 $10.00 $9.67 $8.85
Income (loss) from investment
operations:
Net investment income........ .24 .33 .47 .20 .21 .28
Net realized and unrealized
gain (loss) on
investments................ .28 .82 (1.34 ) .19 .28 .82
Total from investment
operations............... .52 1.15 (.87 ) .39 .49 1.10
Less distributions to
shareholders from net
investment income.......... (.24 ) (.33 ) (.47 ) (.20 ) (.21 ) (.28 )
Net asset value, end of
period..................... $9.95 $9.67 $8.85 $10.19 $9.95 $9.67
TOTAL RETURN+................ 5.5% 13.1% (8.6% ) 3.9% 5.1% 12.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted)............ $2,475 $1,983 $1,606 $1,306 $5,954 $5,083
Ratios to average net assets:
Expenses**................. .87% ++ .72% ++ .53% .25% ++ 1.62% ++ 1.47% ++
Net investment
income**................. 4.98% ++ 5.17% ++ 5.11% 4.64% ++ 4.23% ++ 4.42% ++
Portfolio turnover rate...... 26% 87% 59% 0% 26% 87%
</TABLE>
<TABLE>
<CAPTION>
1993*
YEAR ENDED THROUGH
DECEMBER 31, DECEMBER 31,
1994 1993
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
period..................... $10.19 $10.00
Income (loss) from investment
operations:
Net investment income........ .42 .17
Net realized and unrealized
gain (loss) on
investments................ (1.34 ) .19
Total from investment
operations............... (.92 ) .36
Less distributions to
shareholders from net
investment income.......... (.42 ) (.17 )
Net asset value, end of
period..................... $8.85 $10.19
TOTAL RETURN+................ (9.1% ) 3.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted)............ $3,817 $2,235
Ratios to average net assets:
Expenses**................. 1.12% .75% ++
Net investment
income**................. 4.54% 4.25% ++
Portfolio turnover rate...... 59% 0%
<CAPTION>
JULY 2,
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales charge or contingent deferred
sales charges are not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income (loss) to average net assets,
exclusive of any applicable state expense limitations, would have been the
following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
SIX MONTHS JULY 2, SIX MONTHS JULY 2,
ENDED EIGHT MONTHS 1993* ENDED EIGHT MONTHS 1993*
FEBRUARY 29, ENDED YEAR ENDED THROUGH FEBRUARY 29, ENDED YEAR ENDED THROUGH
1996 AUGUST 31, DECEMBER 31, DECEMBER 31, 1996 AUGUST 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1995# 1994 1993 (UNAUDITED) 1995# 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expenses............. 3.54% 3.83% 5.14% 7.75% 4.29% 4.58% 5.73% 8.25%
Net investment income
(loss)............. 2.31% 2.06% .50% (2.86%) 1.56% 1.31% (.07%) (3.25%)
</TABLE>
See accompanying notes to financial statements.
48
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state
of Virginia)
<TABLE>
<CAPTION>
CLASS Y SHARES
SIX MONTHS
ENDED EIGHT MONTHS
FEBRUARY 29, ENDED
1996 AUGUST 31,
(UNAUDITED) 1995#
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period.......................................................... $ 9.67 $8.85
Income (loss) from investment operations:
Net investment income......................................................................... .26 .34
Net realized and unrealized gain (loss) on investments........................................ .28 .82
Total from investment operations............................................................ .54 1.16
Less distributions to shareholders from net investment income................................. (.26 ) (.34 )
Net asset value, end of period................................................................ $9.95 $9.67
TOTAL RETURN+................................................................................. 5.6% 13.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)..................................................... $1,691 $965
Ratios to average net assets:
Expenses**.................................................................................. .62% ++ .47%++
Net investment income**..................................................................... 5.23% ++ 5.42%++
Portfolio turnover rate....................................................................... 26% 87%
</TABLE>
<TABLE>
<CAPTION>
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period.......................................................... $9.83
Income (loss) from investment operations:
Net investment income......................................................................... .41
Net realized and unrealized gain (loss) on investments........................................ (.98 )
Total from investment operations............................................................ (.57 )
Less distributions to shareholders from net investment income................................. (.41 )
Net asset value, end of period................................................................ $8.85
TOTAL RETURN+................................................................................. (5.8% )
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)..................................................... $344
Ratios to average net assets:
Expenses**.................................................................................. .28% ++
Net investment income**..................................................................... 5.54% ++
Portfolio turnover rate....................................................................... 59%
<CAPTION>
FEBRUARY 28,
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets, exclusive
of any applicable state expense limitations, would have been the following:
<TABLE>
<CAPTION>
CLASS Y SHARES
SIX MONTHS
ENDED EIGHT MONTHS FEBRUARY 28,
FEBRUARY 29, ENDED 1994* THROUGH
1996 AUGUST 31, DECEMBER 31,
(UNAUDITED) 1995# 1994
<S> <C> <C> <C>
Expenses.......................................................................... 3.30% 3.58% 4.89%
Net investment income............................................................. 2.55% 2.31% .93%
</TABLE>
See accompanying notes to financial statements.
49
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- ORGANIZATION AND NATURE OF OPERATIONS
The Evergreen State Tax-Free Funds (the "Funds") are separate series of
Evergreen Investment Trust except for Evergreen Florida High Income Municipal
Bond Fund, which is a series of Evergreen Municipal Trust, both open-end
management companies registered under the Investment Company Act of 1940, as
amended (the "Act"). The Evergreen State Tax-Free Funds included herein consist
of Evergreen Florida Municipal Bond Fund ("Florida"), Evergreen Florida High
Income Municipal Bond Fund ("Florida High Income"), Evergreen Georgia Municipal
Bond Fund ("Georgia"), Evergreen North Carolina Municipal Bond Fund ("North
Carolina"), Evergreen South Carolina Municipal Bond Fund ("South Carolina") and
Evergreen Virginia Municipal Bond Fund ("Virginia"), known collectively as the
Funds.
The investment objective of Florida, Georgia, North Carolina, South
Carolina and Virginia is to seek current income exempt from federal income tax
and where applicable, state income taxes, consistent with the preservation of
capital. Florida High Income seeks to provide a high level of current income
which is exempt from federal income tax.
ACQUISITION INFORMATION -- Effective June 30, 1995, Florida acquired
substantially all of the net assets of ABT Florida Tax-Free Fund ("ABT Florida's
net assets") through the issuance of 15,518,259 of its Class A shares in
exchange for ABT Florida's net assets valued at $150,061,560. The aggregate net
assets immediately after the acquisition was $188,106,885. The acquired net
assets, in this non-taxable transaction, consisted primarily of portfolio
securities with unrealized appreciation of $8,245,724. ABT Florida Tax-Free
Fund's fiscal year ended April 30. Since both Florida and ABT Florida Tax-Free
Fund were similar funds, and ABT Florida Tax-Free Fund contributed the majority
of the net assets and shareholders, its basis of accounting for assets and
liabilities and its operating results for prior periods have been carried
forward as the accounting survivor.
Effective June 30, 1995, Florida High Income, a new series of the Evergreen
Municipal Trust formed for the purpose of acquiring substantially all of ABT
Florida High Income Municipal Bond Fund's net assets ("ABT's net assets"),
issued 5,728,125 of its Class A shares at $10.30 per share in exchange for ABT's
net assets valued at $59,053,062. The acquired net assets, in this nontaxable
transaction, primarily consisted of portfolio securities with an identified cost
basis of $58,111,824 and unrealized appreciation of $367,404. ABT Florida High
Income Municipal Bond Fund's fiscal year ended April 30. Because ABT Florida
High Income Municipal Bond Fund contributed substantially all of Florida High
Income's net assets and shareholders, its basis of accounting for assets and
liabilities and its operating results for prior periods are carried forward as
the accounting survivor.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. These policies are
in conformity with generally accepted accounting principles.
SECURITY VALUATIONS -- Municipal bonds are valued by an independent pricing
service taking into consideration yield, liquidity, risk, credit quality,
coupon, maturity, type of issue and any other factors or market data it deems
relevant in determining valuations for normal institutional size trading units
of debt securities which it believes to reflect the current value of securities.
The independent pricing service does not rely exclusively on quoted prices.
Short-term securities purchased with remaining maturities of sixty days or less
are stated at amortized cost which approximates market value.
SECURITY TRANSACTIONS -- Security transactions are accounted for on the
date purchased or sold. Net realized gains or losses are determined on the
identified cost basis.
INVESTMENT INCOME AND EXPENSES -- Interest income and expenses are accrued
daily. Premiums and discounts paid on securities are amortized or accreted into
interest income.
50
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES -- continued
WHEN ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Funds record
when-issued or delayed delivery transactions on the trade date and maintain
security positions such that sufficient liquid assets will be available to make
payment for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning interest on
the settlement date.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income
are declared daily and paid monthly. Distributions from net realized capital
gains on investments, if any, will be distributed at least annually. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations which may differ from the amounts available for
distribution under generally accepted accounting principles. To the extent these
differences are permanent in nature, such amounts are reclassified within the
components of net assets.
USE OF ESTIMATES -- The preparation of financial statements is in
accordance with generally accepted accounting principles which requires
management to make estimates and assumptions that affect the reported amounts
and disclosures. Actual results could differ from those estimates.
INCOME TAXES -- It is each Fund's policy to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable and other net income to its
shareholders. Accordingly, no provisions for Federal income or excise taxes are
necessary. To the extent that realized net capital gains can be offset by
capital loss carryforwards, it is each Fund's policy not to distribute such
gains.
At August 31, 1995, the Fund's most recent fiscal year end, the Funds had
capital loss carryforwards as follows:
<TABLE>
<CAPTION>
EXPIRATION
2002 2003
<S> <C> <C>
Florida High Income $ 723,137 $634,610
Florida 1,383,385 --
Georgia 681,269 --
North Carolina 3,831,798 --
South Carolina 5,094 --
Virginia 258,553 --
</TABLE>
Capital losses incurred after October 31, within each Fund's fiscal year,
are deemed to arise on the first business day of the following fiscal year. The
Fund's incurred and have selected to defer the following capital losses at
August 31, 1995:
<TABLE>
<S> <C>
North Carolina $463,374
South Carolina 154
Virginia 18,447
</TABLE>
DEFERRED EXPENSES -- The costs incurred by Florida, Georgia, North
Carolina, South Carolina and Virginia with respect to registration of their
shares in their first fiscal year, excluding the initial expense of registering
the shares, have been deferred and are being amortized using the straight-line
method not to exceed a period of five years from each Fund's commencement.
ALLOCATION OF EXPENSES -- Expenses specifically identifiable to a class of
shares or a specific fund are charged to that class or fund. Expenses common to
a Trust as a whole are allocated to the funds in that Trust. Net investment
income (other than class specific expenses) and realized and unrealized gains
and losses are allocated daily to each class of shares based upon the relative
proportion of net assets of each class.
DEFERRED ORGANIZATION EXPENSES -- The expenses of Florida High Income
incurred in connection with its organization are being deferred and amortized
over a period of benefit not to exceed 60 months from June 30, 1995.
51
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 3 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENTS -- First Union National Bank of North
Carolina ("First Union") is entitled to an annual fee of .50 of 1% of Florida's,
Georgia's, North Carolina's, South Carolina's and Virginia's average daily net
assets pursuant to each Funds investment advisory agreement. First Union is
entitled to an annual fee of .60 of 1% of average daily net assets of Florida
High Income pursuant to its agreement. First Union has agreed to voluntarily
limit its advisory fee for Florida and Florida High Income to an annual fee of
.30 of 1% until June 30, 1996. In addition, First Union voluntarily waived its
advisory fee and reimbursed operating expenses for the six months ended February
29, 1996 as noted below:
<TABLE>
<CAPTION>
ADVISORY FEE EXPENSE
WAIVERS REIMBURSEMENTS
<S> <C> <C>
Florida High Income $106,915 $ --
Florida 162,706 116,116
Georgia 29,470 88,339
North Carolina 127,619 --
South Carolina 17,961 99,277
Virginia 49,311 61,760
</TABLE>
ADMINISTRATION AGREEMENT -- Evergreen Asset Management Corp. ("Evergreen
Asset"), a wholly owned subsidiary of First Union, is the Funds' Administrator
and Furman Selz LLC ("Furman Selz") is the sub-administrator. Officers of Furman
Selz are officers of the Funds. Evergreen Asset's and Furman Selz' fees are
based on the average daily net assets of all the funds administered by Evergreen
Asset for which First Union or Evergreen Asset is also investment adviser. These
fees are calculated at the following annual rates:
<TABLE>
<CAPTION>
ADMINISTRATION FEE AVERAGE DAILY NET ASSETS
<C> <S>
0.050% on the first $7 billion
0.035% on the next $3 billion
0.030% on the next $5 billion
0.020% on the next $10 billion
0.015% on the next $5 billion
0.010% in excess of $30 billion
</TABLE>
<TABLE>
<CAPTION>
SUB-ADMINISTRATION FEE AVERAGE DAILY NET ASSETS
<C> <S>
0.0100% on the first $7 billion
0.0075% on the next $3 billion
0.0050% on the next $15 billion
0.0040% in excess of $25 billion
</TABLE>
At February 29, 1996, assets for which Evergreen Asset was the
administrator for which either Evergreen Asset or First Union was investment
adviser totaled approximately $14.4 billion.
For the Funds listed below, Evergreen Asset waived the following amounts of
its administration fee for the six months ended February 29, 1996:
<TABLE>
<S> <C>
Georgia $2,677
South Carolina 1,580
Virginia 6,146
</TABLE>
PLANS OF DISTRIBUTION -- The Funds have adopted for their Class A shares
and Class B Shares, Distribution Plans (the "Plans") pursuant to Rule 12b-1
under the Act. Under the terms of the Plans, the Funds may incur
distribution-related and shareholder servicing expenses which may not exceed an
annual fee of .75 of 1% for Class A and Class B Shares. For each of the Funds
except Florida, the payments for Class A were voluntarily limited to an annual
fee of .25 of 1% of average daily net assets. For Florida, Rule 12b-1 fees for
Class A shares were limited to the extent such payment would make Florida's
52
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 3 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH
AFFILIATES -- continued
ratio of expenses to average daily net assets for Class A shares exceed .61 of
1%. For the six-month period ended February 29, 1996, Rule 12b-1 fees, net of
reimbursement, charged to Florida were approximately an annual fee of .07 of 1%
of average daily net assets. Rule 12b-1 fees are accrued daily and paid monthly.
The Funds have entered into distribution agreements with Evergreen Funds
Distributor ("EFD"), a subsidiary of Furman Selz, whereby they will compensate
EFD for its services at a rate which may not exceed an annual fee of .25 of 1%
of Class A average daily net assets and an annual fee of .75 of 1% of Class B
average daily net assets.
The Funds have entered into a Shareholder Services Agreement with First
Union Brokerage Services ("FUBS"), an affiliate of First Union, whereby they
will compensate FUBS up to an annual fee of .25 of 1% for certain services
provided to shareholders and/or maintenance of shareholder accounts relating to
each of the Fund's Class B Shares.
ORGANIZATIONAL EXPENSES -- Organizational expenses of Florida, Georgia,
North Carolina, South Carolina and Virginia were initially borne by the Funds'
prior administrator. These Funds agreed to reimburse such expenses during the
five-year period following each Funds' commencement of operations. As a result
of a change in the administration agreement, First Union purchased the remaining
unreimbursed organizational expenses from the prior administrator. At February
29, 1996, the Funds have a remaining liability to First Union as follows:
<TABLE>
<S> <C>
Florida $24,960
Georgia 22,530
North Carolina 39,446
South Carolina 65,693
Virginia 21,531
</TABLE>
SALES CHARGES -- EFD has advised the Funds that it has retained the
following amounts from front-end sales charges resulting from sales of Class A
Shares during the period ended February 29, 1996:
<TABLE>
<CAPTION>
FRONT-END
SALES
CHARGES
<S> <C>
Florida High Income $24,672
Florida 8,953
Georgia 951
North Carolina 778
South Carolina 552
Virginia 1,912
</TABLE>
NOTE 4 -- SHARES OF BENEFICIAL INTEREST
Each of the Funds has an unlimited number of $0.0001 par shares authorized.
Each of the Funds' shares are divided into classes which are designated Class Y,
Class A and Class B Shares. Class Y Shares are available only to investment
advisory clients of 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. The classes have
identical voting, dividend, liquidation and other rights, except that Class A
and Class B Shares bear distribution expenses (see Note 3) and have exclusive
voting rights with respect to their distribution plans.
53
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 4 -- SHARES OF BENEFICIAL INTEREST -- continued
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
FEBRUARY 29, 1996 FOUR MONTHS
(UNAUDITED) AUGUST 31, 1995
SHARES DOLLARS SHARES DOLLARS
<S> <C> <C> <C> <C>
FLORIDA HIGH INCOME
CLASS A
Shares sold................................................. 1,523,581 $16,083,514 730,828 $ 7,497,799
Shares issued on reinvestment of distributions.............. 61,310 650,718 29,262 301,952
Shares redeemed............................................. (1,107,012) (11,755,380) (1,434,175) (14,852,986)
Net increase (decrease)..................................... 477,879 4,978,852 (674,085) (7,053,235)
CLASS B*
Shares sold................................................. 755,150 8,011,419 301,146 3,102,089
Shares issued on reinvestment of distributions.............. 9,260 98,389 505 5,248
Shares redeemed............................................. (13,375) (141,662) -- --
Net increase................................................ 751,035 7,968,146 301,651 3,107,337
CLASS Y**
Shares sold................................................. 91,833 973,397 10 101
Shares issued on reinvestment of distributions.............. 471 5,024 -- --
Shares redeemed............................................. (5,918) (63,302) -- --
Net increase................................................ 86,386 915,119 10 101
Total net increase (decrease) resulting from Fund share
transactions.............................................. 1,315,300 $13,862,117 (372,424) $ (3,945,797)
</TABLE>
* For Class B shares, the Fund share transaction activity is for the period
July 11, 1995 (commencement of class operation) through February 29, 1996.
** For Class Y shares, the Fund share transaction activity is for the period
September 30, 1995 (commencement of class operations) through February 29,
1996. The Fund share transaction, for the four months ended August 31, 1995,
reflects the initial seed purchase of ten shares.
54
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 4 -- SHARES OF BENEFICIAL INTEREST -- continued
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 29, 1996 FOUR MONTHS ENDED
(UNAUDITED) AUGUST 31, 1995*
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
FLORIDA
CLASS A
Shares sold................................................... 270,045 $ 2,690,322 148,921 $ 1,551,451
Shares issued in acquisition of First Union Florida Municipal
Bond Portfolio.............................................. -- -- 876,413 8,475,749
Shares issued on reinvestment of distributions................ 99,587 993,163 136,011 1,447,315
Shares redeemed............................................... (1,892,525) (18,785,759) (4,679,881) (45,809,078)
Net decrease.................................................. (1,522,893) (15,102,274) (3,518,536) (34,334,563)
CLASS B
Shares sold................................................... 436,250 4,341,815 179,340 1,737,203
Shares issued in acquisition of First Union Florida Municipal
Bond Portfolio.............................................. -- -- 2,722,202 26,328,175
Shares issued on reinvestment of distributions................ 32,948 328,761 15,662 151,941
Shares redeemed............................................... (312,217) (3,102,044) (109,102) (1,054,568)
Net increase.................................................. 156,981 1,568,532 2,808,102 27,162,751
CLASS Y
Shares sold................................................... 361,228 3,598,549 97,604 938,937
Shares issued in acquisition of First Union Florida Municipal
Bond Portfolio.............................................. -- -- 335,151 3,241,399
Shares issued on reinvestment of distributions................ 2,080 20,856 591 5,727
Shares redeemed............................................... (69,772) (699,510) (63,509) (610,195)
Net increase.................................................. 293,536 2,919,895 369,837 3,575,868
Total net decrease resulting from Fund share transactions..... (1,072,376) ($10,613,847) (340,597) ($3,595,944)
</TABLE>
* For Class Y shares and Class B shares, the Fund share transaction activity is
for the period June 30, 1995 (commencement of class operations) through August
31, 1995.
55
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 4 -- SHARES OF BENEFICIAL INTEREST -- continued
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 29, 1996 EIGHT MONTHS ENDED
(UNAUDITED) AUGUST 31, 1995
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
GEORGIA
CLASS A
Shares sold.......................................................... 20,190 $ 196,455 76,707 $ 721,680
Shares issued on reinvestment of distributions....................... 4,007 39,127 4,524 42,316
Shares redeemed...................................................... (33,740) (324,331) (18,364) (172,931)
Net increase (decrease).............................................. (9,543) (88,749) 62,867 591,065
CLASS B
Shares sold.......................................................... 132,376 1,296,756 128,136 1,196,824
Shares issued on reinvestment of distributions....................... 11,994 117,160 17,586 164,250
Shares redeemed...................................................... (73,061) (713,197) (140,930) (1,336,278)
Net increase......................................................... 71,309 700,719 4,792 24,796
CLASS Y
Shares sold.......................................................... 110,158 1,059,200 108,389 1,023,100
Shares issued on reinvestment of distributions....................... 787 7,713 647 6,066
Shares redeemed...................................................... (37,870) (360,172) (244) (2,297)
Net increase......................................................... 73,075 706,741 108,792 1,026,869
Total net increase resulting from Fund share transactions............ 134,841 $ 1,318,711 176,451 $ 1,642,730
NORTH CAROLINA
CLASS A
Shares sold........................................................ 49,992 $ 520,726 125,332 $ 1,232,452
Shares issued on reinvestment of distributions..................... 13,262 136,745 19,270 189,699
Shares redeemed.................................................... (60,880) (624,882) (183,513) (1,800,044)
Net increase (decrease)............................................ 2,374 32,589 (38,911) (377,893)
CLASS B
Shares sold........................................................ 339,320 3,488,139 521,981 5,146,189
Shares issued on reinvestment of distributions..................... 70,263 724,396 101,358 997,747
Shares redeemed.................................................... (395,748) (4,065,593) (565,861) (5,555,413)
Net increase....................................................... 13,835 146,942 57,478 588,523
CLASS Y
Shares sold........................................................ 199,611 2,034,692 45,992 453,471
Shares issued on reinvestment of distributions..................... 339 3,497 448 4,415
Shares redeemed.................................................... (19,778) (205,757) (15,523) (152,131)
Net increase....................................................... 180,172 1,832,432 30,917 305,755
Total net increase resulting from Fund share transactions.......... 196,381 $ 2,011,963 49,484 $ 516,385
</TABLE>
56
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 4 -- SHARES OF BENEFICIAL INTEREST -- continued
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 29, 1996 EIGHT MONTHS ENDED
(UNAUDITED) AUGUST 31, 1995
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
SOUTH CAROLINA
CLASS A
Shares sold............................................................. 23,936 $ 235,452 28,494 $ 267,216
Shares issued on reinvestment of distributions.......................... 881 8,669 754 7,119
Shares redeemed......................................................... (4,009) (39,805) (1,851) (17,235)
Net increase............................................................ 20,808 204,316 27,397 257,100
CLASS B
Shares sold............................................................. 48,750 476,800 100,143 941,168
Shares issued on reinvestment of distributions.......................... 6,273 61,704 7,356 69,043
Shares redeemed......................................................... (17,612) (173,187) (22,831) (214,174)
Net increase............................................................ 37,411 365,317 84,668 796,037
CLASS Y
Shares sold............................................................. 228,689 2,244,604 173,778 1,645,544
Shares issued on reinvestment of distributions.......................... 3,807 37,513 745 7,094
Shares redeemed......................................................... (13,753) (135,399) (10,674) (100,744)
Net increase............................................................ 218,743 2,146,718 163,849 1,551,894
Total net increase resulting from Fund share transactions............... 276,962 $2,716,351 275,914 $2,605,031
VIRGINIA
CLASS A
Shares sold............................................................ 42,158 $ 424,622 48,742 $ 465,071
Shares issued on reinvestment of distributions......................... 4,461 44,401 5,890 56,155
Shares redeemed........................................................ (3,206) (31,811) (30,945) (295,864)
Net increase........................................................... 43,413 437,212 23,687 225,362
CLASS B
Shares sold............................................................ 75,534 750,060 105,642 1,013,607
Shares issued on reinvestment of distributions......................... 9,293 92,502 11,096 105,855
Shares redeemed........................................................ (12,480) (124,051) (22,448) (212,617)
Net increase........................................................... 72,347 718,511 94,290 906,845
CLASS Y
Shares sold............................................................ 78,785 789,049 83,741 798,165
Shares issued on reinvestment of distributions......................... 1,125 11,149 1,057 10,084
Shares redeemed........................................................ (9,892) (98,628) (23,858) (228,520)
Net increase........................................................... 70,018 701,570 60,940 579,729
Total net increase resulting from Fund share transactions.............. 185,778 $1,857,293 178,917 $ 1,711,936
</TABLE>
57
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 5 -- INVESTMENT TRANSACTIONS
The cost of purchases and proceeds from sales of investments, excluding
short-term securities for the six-month period ended February 29, 1996 were as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
<S> <C> <C>
Florida High Income...................................... $28,428,711 $14,557,269
Florida.................................................. 8,369,708 28,202,615
Georgia.................................................. 2,279,466 872,055
North Carolina........................................... 31,400,048 29,966,782
South Carolina........................................... 4,186,918 1,725,500
Virginia................................................. 3,783,089 2,287,086
</TABLE>
On February 29, 1996, the aggregate cost of investments for federal tax
purposes was the same as for financial reporting purposes. The composition of
unrealized appreciation and depreciation of investment securities was as
follows:
<TABLE>
<CAPTION>
APPRECIATION DEPRECIATION NET
<S> <C> <C> <C>
Florida High Income............... $ 2,545,917 $162,982 $ 2,382,935
Florida........................... 11,565,456 198,833 11,366,623
Georgia........................... 795,187 7,247 787,940
North Carolina.................... 3,510,099 214,769 3,295,330
South Carolina.................... 295,865 11,642 284,223
Virginia.......................... 418,396 33,393 385,003
</TABLE>
NOTE 6 -- CONCENTRATION OF CREDIT RISK
Since the Funds invest a substantial portion of their assets in issuers
located in a single state, they may be more affected by economic and political
developments in a specific state or region than would be a comparable general
tax-exempt mutual fund. Certain debt obligations held by each of the Funds are
entitled to the benefit of insurance, standby letters of credit or other
guarantees of banks or other financial institutions.
58
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59
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60
<PAGE>
TRUSTEES AND OFFICERS
TRUSTEES:
Laurence B. Ashkin*
Foster Bam*
James S. Howell, Chairman
Robert J. Jeffries*
Gerald M. McDonnell
Thomas L. McVerry
William W. Pettit
Russell A. Salton, III M.D.
Michael S. Scofield
OFFICERS:
John J. Pileggi
President and Treasurer
Joan V. Fiore
Secretary
Sheryl Hirschfeld
Assistant Secretary
Donald E. Brostrom
Assistant Treasurer
Stephen W. St. Clair
Assistant Treasurer
* Trustees for Evergreen Florida High Income
Municipal Bond Fund only.
<PAGE>
NOT May lose value
FDIC No bank guarantee
Insured
Evergreen Funds Distributor, Inc.
538359
42609 4/96
<PAGE>
