EVERGREEN INVESTMENT TRUST, 497, 1996-01-26

EVERGREEN INVESTMENT TRUST
497, 1996-01-26

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<PAGE>
PROSPECTUS January 22, 1996

EVERGREEN(SM) STATE SPECIFIC TAX-FREE FUNDS (Evergreen Tree Logo)

EVERGREEN FLORIDA MUNICIPAL BOND FUND
EVERGREEN GEORGIA MUNICIPAL BOND FUND
EVERGREEN NEW JERSEY TAX-FREE INCOME FUND
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
CLASS A SHARES
CLASS B SHARES
The Evergreen State Specific Tax-Free Funds (the "Funds") are
designed to provide investors with current income exempt from Federal
income tax and certain state income tax. This Prospectus provides
information regarding the Class A and Class B shares offered by the Funds.
Each Fund is, or is a series of, an open-end, non-diversified, management
investment company except for EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND
FUND which is diversified. This Prospectus sets forth concise information
about the Funds that a prospective investor should know before investing.
The address of the Funds is 2500 Westchester Avenue, Purchase, New York
10577.
A "Statement of Additional Information" for the Funds and certain
other funds in the Evergreen group of mutual funds dated January 22, 1996
has been filed with the Securities and Exchange Commission and is
incorporated by reference herein. The Statement of Additional Information
provides information regarding certain matters discussed in this Prospectus
and other matters which may be of interest to investors, and may be
obtained without charge by calling the Funds at (800) 807-2940. There can
be no assurance that the investment objective of any Fund will be achieved.
Investors are advised to read this Prospectus carefully.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND WILL INVEST AT LEAST 65%
OF THE VALUE OF ITS TOTAL ASSETS IN MUNICIPAL SECURITIES CONSISTING OF HIGH
YIELD (I.E., HIGH RISK), MEDIUM, LOWER RATED AND UNRATED BONDS. SUCH
SECURITIES ARE COMMONLY CALLED JUNK BONDS AND ARE SUBJECT TO GREATER MARKET
FLUCTUATIONS AND RISK OF LOSS OF INCOME AND PRINCIPAL THAN HIGHER RATED
SECURITIES. LOWER QUALITY SECURITIES INVOLVE A GREATER RISK OF DEFAULT AND,
CONSEQUENTLY, SHARES OF THE EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND
FUND ARE SPECULATIVE SECURITIES.
KEEP THIS PROSPECTUS FOR FUTURE REFERENCE
EVERGREEN(SM) is a Service Mark of Evergreen Asset Management Corp.
Copyright 1995, Evergreen Asset Management Corp.

<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
OVERVIEW OF THE FUNDS 2
EXPENSE INFORMATION 3
FINANCIAL HIGHLIGHTS 6
DESCRIPTION OF THE FUNDS
Investment Objectives and Policies 13
Investment Practices and Restrictions 16
MANAGEMENT OF THE FUNDS
Investment Adviser 21
Distribution Plans and Agreements 22
PURCHASE AND REDEMPTION OF SHARES
How to Buy Shares 24
How to Redeem Shares 26
Exchange Privilege 27
Shareholder Services 27
Effect of Banking Laws 28
OTHER INFORMATION
Dividends, Distributions and Taxes 28
General Information 30
APPENDIX
Florida Risk Considerations 32
</TABLE>

OVERVIEW OF THE FUNDS
The following summary is qualified in its entirety by the more detailed
information contained elsewhere in this Prospectus. See "Description of the
Funds" and "Management of the Funds".
The Capital Management Group of First Union National Bank of North
Carolina ("CMG") serves as investment adviser to Evergreen State Specific
Tax-Free Funds which include: EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN
GEORGIA MUNICIPAL BOND FUND, EVERGREEN NEW JERSEY TAX-FREE INCOME FUND,
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL
BOND FUND, EVERGREEN VIRGINIA MUNICIPAL BOND FUND and EVERGREEN FLORIDA HIGH
INCOME MUNICIPAL BOND FUND. First Union National Bank of North Carolina ("FUNB")
is a subsidiary of First Union Corporation, the sixth largest bank holding
company in the United States.
EVERGREEN FLORIDA MUNICIPAL BOND FUND (formerly First Union Florida
Municipal Bond Portfolio, successor to ABT Florida Tax-Free Fund) seeks current
income exempt from federal income tax consistent with preservation of capital.
In addition, the Fund intends to qualify as an investment exempt from the
Florida state intangibles tax.
EVERGREEN GEORGIA MUNICIPAL BOND FUND (formerly First Union Georgia
Municipal Bond Portfolio) seeks current income exempt from federal income tax
and Georgia state income tax, consistent with preservation of capital.
EVERGREEN NEW JERSEY TAX-FREE INCOME FUND (formerly FFB New Jersey
Tax-Free Income Fund) seeks a high level of income, exempt from federal and New
Jersey personal income taxes.
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND (formerly First Union North
Carolina Municipal Bond Portfolio) seeks current income exempt from federal
income tax and North Carolina state income tax, consistent with preservation of
capital. In addition, the Fund intends to qualify as an investment substantially
exempt from the North Carolina intangible personal property tax.
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND (formerly First Union South
Carolina Municipal Bond Portfolio seeks current income exempt from federal
income tax and South Carolina state income tax.
EVERGREEN VIRGINIA MUNICIPAL BOND FUND (formerly First Union Virginia
Municipal Bond Portfolio) seeks current income exempt from federal income tax
and Virginia state income tax, consistent with preservation of capital.
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND (successor to ABT
Florida High Income Municipal Bond Fund) seeks to provide a high level of
current income exempt from federal income tax. Under normal circumstances, the
Fund will invest at least 65% of the value of its total assets in municipal
securities consisting of high yield (i.e., high risk), medium, lower rated and
unrated bonds.
THERE IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVE OF ANY FUND WILL BE
ACHIEVED.
2

<PAGE>
EXPENSE INFORMATION
The table set forth below summarizes the shareholder transaction costs
associated with an investment in Class A and Class B Shares of a Fund. For
further information see "Purchase and Redemption of Fund Shares" and "General
Information -- Other Classes of Shares".
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES Class A Shares Class B Shares
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases 4.75% None
(as a % of offering price)
Sales Charge on Dividend Reinvestments None None
Contingent Deferred Sales Charge (as a % of original purchase None 5% during the first year, 4% during the
price or redemption proceeds, whichever is lower) second year, 3% during the third and fourth
years, 2% during the fifth year, 1% during
the sixth and seventh years and 0% after the
seventh year
Redemption Fee None None
Exchange Fee None None
</TABLE>

The following tables show for each Fund the estimated annual operating
expenses (as a percentage of average net assets) attributable to each Class of
Shares, together with examples of the cumulative effect of such expenses on a
hypothetical $1,000 investment in each Class for the periods specified assuming
(i) a 5% annual return and (ii) redemption at the end of each period and,
additionally for Class B shares, no redemption at the end of each period.
In the following examples (i) the expenses for Class A Shares assume
deduction of the maximum 4.75% sales charge at the time of purchase, (ii) the
expenses for Class B Shares assume deduction at the time of redemption (if
applicable) of the maximum contingent deferred sales charge applicable for that
time period, and (iii) the expenses for Class B Shares reflect the conversion to
Class A Shares eight years after purchase (years eight through ten, therefore,
reflect Class A expenses).
<TABLE>
<CAPTION>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
EXAMPLES
Assuming Assuming
ANNUAL OPERATING Redemption no
EXPENSES at End of Period Redemption
Class A Class B Class A Class B Class B
<S> <C> <C> <C> <C> <C> <C>
Management Fees(a) .30% .30%
After 1 Year $ 53 $ 66 $ 16
12b-1 Fees(b) .06% .75%
After 3 Years $ 66 $ 79 $ 49
Shareholder Service Fees -- .25%
After 5 Years $ 80 $ 104 $ 84
Other Expenses .25% .25%
After 10 Years $ 120 $ 147 $147
Total .61% 1.55%
</TABLE>

<TABLE>
<CAPTION>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
EXAMPLES
Assuming Assuming
ANNUAL OPERATING Redemption no
EXPENSES at End of Period Redemption
Class A Class B Class A Class B Class B
<S> <C> <C> <C> <C> <C> <C>
Management Fees .50% .50%
After 1 Year $ 60 $ 70 $ 20
12b-1 Fees(b) .25% .75%
After 3 Years $ 85 $ 93 $ 63
Shareholder Service Fees -- .25%
After 5 Years $ 113 $ 128 $108
Other Expenses(c) .50% .50%
After 10 Years $ 191 $ 204 $204
Total 1.25% 2.00%
</TABLE>

<TABLE>
<CAPTION>
EVERGREEN NEW JERSEY TAX-FREE INCOME FUND
EXAMPLES
Assuming Assuming
ANNUAL OPERATING Redemption no
EXPENSES at End of Period Redemption
Class A Class B Class A Class B Class B
<S> <C> <C> <C> <C> <C> <C>
Management Fees .50% .50%
After 1 Year $ 53 $ 70 $ 20
12b-1 Fees (b) .25% .75%
After 3 Years $ 83 $ 91 $ 61
Shareholder Service Fees -- .25%
After 5 Years $ 110 $ 125 $105
Other Expenses .44% .44%
After 10 Years $ 185 $ 202 $202
Total 1.19% 1.99%
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
EXAMPLES
Assuming Assuming
ANNUAL OPERATING Redemption no
EXPENSES at End of Period Redemption
Class A Class B Class A Class B Class B
<S> <C> <C> <C> <C> <C> <C>
Management Fees .50%
.50% After 1 Year $ 60 $ 70 $ 20
12b-1 Fees(b) .25% .75%
After 3 Years $ 85 $ 93 $ 63
Shareholder Service Fees -- .25%
After 5 Years $ 113 $ 128 $108
Other Expenses .50% .50%
After 10 Years $ 191 $ 204 $204
Total 1.25% 2.00%
</TABLE>

<TABLE>
<CAPTION>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
EXAMPLES
Assuming Assuming
ANNUAL OPERATING Redemption no
EXPENSES at End of Period Redemption
Class A Class B Class A Class B Class B
<S> <C> <C> <C> <C> <C> <C>
Management Fees .50% .50%
After 1 Year $ 60 $ 70 $ 20
12b-1 Fees(b) .25% .75%
After 3 Years $ 85 $ 93 $ 63
Shareholder Service Fees -- .25%
After 5 Years $ 113 $ 128 $108
Other Expenses(c) .50% .50%
After 10 Years $ 191 $ 204 $204
Total 1.25% 2.00%
</TABLE>

<TABLE>
<CAPTION>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
EXAMPLES
Assuming Assuming
ANNUAL OPERATING Redemption no
EXPENSES at End of Period Redemption
Class A Class B Class A Class B Class B
<S> <C> <C> <C> <C> <C> <C>
Management Fees .50% .50%
After 1 Year $ 60 $ 70 $ 20
12b-1 Fees(b) .25% .75%
After 3 Years $ 85 $ 93 $ 63
Shareholder Service Fees -- .25%
After 5 Years $ 113 $ 128 $108
Other Expenses(c) .50% .50%
After 10 Years $ 191 $ 204 $204
Total 1.25% 2.00%
</TABLE>

<TABLE>
<CAPTION>
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
EXAMPLES
Assuming Assuming
ANNUAL OPERATING Redemption no
EXPENSES at End of Period Redemption
Class A Class B Class A Class B Class B
<S> <C> <C> <C> <C> <C> <C>
Management Fees(a) .30% .30%
After 1 Year $ 58 $ 68 $ 18
12b-1 Fees(b) .25% 1.00%
After 3 Years $ 80 $ 87 $ 57
Other Expenses .52% .52%
After 5 Years $ 104 $ 119 $ 99
After 10 Years $ 172 $ 185 $185
Total 1.07% 1.82%
</TABLE>

(a) CMG has agreed to limit the Management Fee charged to EVERGREEN FLORIDA
MUNICIPAL BOND FUND and EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND to
.30 of 1% of average net assets until July 7, 1996.
From time to time each Fund's adviser may, at its discretion, reduce or waive
its fees or reimburse these Funds for certain of their other expenses in order
to reduce their expense ratios. Each Fund's adviser may cease these voluntary
waivers and reimbursements at any time.
(b) Class A Shares can pay up to .75 of 1% of average annual net assets as a
12b-1 Fee. For the forseeable future, the Class A Shares 12b-1 Fees will be
limited to .25 of 1% of average annual net assets. For Class B Shares of
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND, a portion of the 12b-1
Fees equivalent to .25 of 1% of average annual assets will be shareholder
servicing-related. Distribution-related 12b-1 Fees will be limited to .75 of
1% of average annual assets as permitted under the rules of the National
Association of Securities Dealers, Inc.

EVERGREEN FLORIDA MUNICIPAL BOND FUND will not pay 12b-1 Fees to the extent
that the effect of such payment would be to cause the Fund's ratio of
expenses to average net assets for Class A Shares to exceed .61 of 1%
through July 1, 1996.
4

<PAGE>
The estimated annual operating expenses and examples do not reflect fee
waivers and expense reimbursements for the most recent fiscal period. Actual
expenses for Class A and B Shares net of fee waivers and expense reimbursements
for the fiscal period ended August 31, 1995 or February 28, 1995, as applicable
were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
EVERGREEN FLORIDA MUNICIPAL BOND FUND .82% 1.44%
EVERGREEN GEORGIA MUNICIPAL BOND FUND .71% 1.46%
EVERGREEN NEW JERSEY TAX-FREE INCOME FUND .38% N/A
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND .92% 1.67%
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND .53% 1.28%
EVERGREEN VIRGINIA MUNICIPAL BOND FUND .72% 1.47%
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND 1.07% N/A
</TABLE>

(c) Reflects agreements by CMG to limit aggregate operating expenses (including
the investment advisory fees, but excluding interest, taxes, brokerage
commissions, Rule 12b-1 Fees, shareholder servicing fees and extraordinary
expenses) of EVERGREEN GEORGIA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA
MUNICIPAL BOND FUND and EVERGREEN VIRGINIA MUNICIPAL BOND FUND to 1% of
average net assets for the foreseeable future. Absent such agreements, the
estimated annual operating expenses for the Funds would be as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
EVERGREEN GEORGIA MUNICIPAL BOND FUND 2.83% 3.58%
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND 6.50% 7.25%
EVERGREEN VIRGINIA MUNICIPAL BOND FUND 3.83% 4.58%
</TABLE>

The purpose of the foregoing table is to assist an investor in
understanding the various costs and expenses that an investor in each Class of
Shares of the Funds will bear directly or indirectly. The amounts set forth both
in the tables and in the examples are estimated amounts based on the experience
of each Fund for its most recent fiscal period. Such expenses have been restated
to reflect current fee arrangements and in the case of Funds that did not offer
all of the above-referenced Classes of shares during such periods, the amounts
set forth in the tables are based on the expenses incurred by the Classes which
were offered. THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR ANNUAL RETURN. ACTUAL EXPENSES AND ANNUAL RETURN MAY BE
GREATER OR LESS THAN THOSE SHOWN. For a more complete description of the various
costs and expenses borne by the Funds see "Management of the Funds." As a result
of asset-based sales charges, long-term shareholders may pay more than the
economic equivalent of the maximum front-end sales charges permitted under the
rules of the National Association of Securities Dealers, Inc.
5

<PAGE>
FINANCIAL HIGHLIGHTS(stacked plus signs)
The tables on the following pages present, for each Fund, financial
highlights for a share outstanding throughout each period indicated. The
information in the tables for the five most recent fiscal years or the life of
the Fund if shorter for EVERGREEN GEORGIA MUNICIPAL BOND FUND, EVERGREEN NORTH
CAROLINA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND and
EVERGREEN VIRGINIA MUNICIPAL BOND FUND has been audited by KPMG Peat Marwick
LLP, each Fund's independent auditors. The information in the tables for
EVERGREEN FLORIDA MUNICIPAL BOND FUND for the fiscal period ended August 31,
1995 has been audited by KPMG Peat Marwick LLP, the Fund's current independent
auditors. The information in the tables for each of the years in the four-year
period ended April 30, 1995 was audited by Tait, Weller & Baker, the Fund's
prior independent auditors. The information in the tables for EVERGREEN NEW
JERSEY TAX-FREE INCOME FUND for each of the years in the two-year period ended
February 28, 1995 has been audited by KPMG Peat Marwick LLP. The Fund's current
independent auditors. The information in the tables for EVERGREEN NEW JERSEY
TAX-FREE INCOME FUND for each of the periods from July 16, 1991 (commencement of
operations) through February 28, 1993 has been audited by Price Waterhouse LLP,
the Fund's prior independent auditors. The information in the tables for
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND for the fiscal period ended
August 31, 1995 has been audited by Price Waterhouse LLP, the Fund's current
independent auditors. The information in the tables for each of the years in the
two-year period ended April 30, 1995 and for the period June 17, 1992
(commencement of operations) through April 30, 1993 was audited by Tait, Weller
& Baker, the Fund's prior independent auditors. A report of KPMG Peat Marwick
LLP, Price Waterhouse LLP or Tait, Weller & Baker, as the case may be, on the
audited information with respect to each Fund is incorporated by reference in
the Fund's Statement of Additional Information. The following information for
each Fund should be read in conjunction with the financial statements and
related notes which are incorporated by reference in the Fund's Statement of
Additional Information.
Further information about each Fund's performance is contained in the
Fund's annual report to shareholders, which may be obtained without charge.
EVERGREEN FLORIDA MUNICIPAL BOND FUND(stacked plus signs)
<TABLE>
<CAPTION>
CLASS A SHARES
FOUR MAY 11,
MONTHS 1988*
ENDED THROUGH
AUGUST 31, YEAR ENDED APRIL 30, APRIL 30,
1995# 1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period..... $9.61 $9.52 $9.95 $9.35 $9.21 $8.80 $9.09 $8.82
Income (loss) from investment operations:
Net investment income.................... .25 .54 .56 .56 .61 .66 .58 .47
Net realized and unrealized gain (loss)
on investments.......................... .22 .11 (.36) .67 .22 .43 (.24) .22
Total from investment operations........ .47 .65 .20 1.23 .83 1.09 .34 .69
Less distributions to shareholders from:
Net investment income.................... (.25) (.54) (.56) (.56) (.61) (.68) (.59) (.42)
Distributions in excess of net investment
income.................................. (.03) -- -- -- -- -- -- --
Net realized gains....................... (.06) (.02) (.07) (.07) (.04) -- (.04) --
Paid-in capital.......................... -- -- -- -- (.04) -- -- --
Total distributions..................... (.34) (.56) (.63) (.63) (.69) (.68) (.63) (.42)
Net asset value, end of period.......... $9.74 $9.61 $9.52 $9.95 $9.35 $9.21 $8.80 $9.09
TOTAL RETURN+............................ 4.2% 7.1% 1.9% 13.6% 9.3% 12.9% 3.7% 9.2%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted)................................ $136,449 $168,542 $199,612 $198,286 $147,996 $75,791 $7,286 $717
Ratios to average net assets:
Expenses................................ .82%++** .61% .56% .58% .41%** .10%** .10%** .30%**++
Net investment income................... 4.89%++** 5.73% 5.37% 5.66% 6.12%** 6.55%** 6.15%** 5.30%**++
Portfolio turnover rate.................. 29% 53% 32% 24% 24% 66% 82% 2%
<CAPTION>
CLASS B CLASS Y
SHARES SHARES
JUNE 30, JUNE 30,
1995* 1995*
THROUGH THROUGH
AUGUST AUGUST
31, 31,
1995# 1995#
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period..... $9.67 $9.67
Income (loss) from investment operations:
Net investment income.................... .07 .09
Net realized and unrealized gain (loss)
on investments.......................... .10 .10
Total from investment operations........ .17 .19
Less distributions to shareholders from:
Net investment income.................... (.07) (.09)
Distributions in excess of net investment
income.................................. (.03) (.03)
Net realized gains....................... -- --
Paid-in capital.......................... -- --
Total distributions..................... (.10) (.12)
Net asset value, end of period.......... $9.74 $9.74
TOTAL RETURN+............................ 1.5% 1.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted)................................ $27,351 $ 3,602
Ratios to average net assets:
Expenses................................ 1.44%++ .59%++
Net investment income................... 3.22%++ 4.93%++
Portfolio turnover rate.................. 29% 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. Initial sales charge or contingent deferred
sales 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 (loss) to average
net assets, exclusive of any applicable state expense limitations, would
have been the following:
<TABLE>
<CAPTION>
CLASS A SHARES
MAY 11, 1988*
FOUR MONTHS THROUGH
ENDED YEAR ENDED APRIL 30, APRIL 30,
AUGUST 31, 1995# 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Expenses..................................................... 1.05% .68% .88% 5.14% 20.40%
Net investment income (loss)................................. 4.66% 5.85% 5.77% 1.01% (14.80%)
</TABLE>

(stacked plus signs) 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.
6

<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND -- CLASS A, B, AND Y SHARES
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
JULY 2, JULY 2, CLASS Y
1993* 1993* SHARES
EIGHT MONTHS YEAR ENDED THROUGH EIGHT MONTHS YEAR ENDED THROUGH EIGHT MONTHS
ENDED AUGUST DECEMBER 31, DECEMBER 31, ENDED AUGUST DECEMBER 31, DECEMBER 31, ENDED AUGUST
31, 1995# 1994 1993 31, 1995# 1994 1993 31, 1995#
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning
of period.................. $8.74 $10.19 $10.00 $ 8.74 $10.19 $10.00 $ 8.74
Income (loss) from
investment operations:
Net investment income....... .33 .48 .20 .28 .43 .18 .35
Net realized and unrealized
gain (loss) on
investments................ .73 (1.45) .19 .73 (1.45) .19 .73
Total from investment
operations............... 1.06 (.97) .39 1.01 (1.02) .37 1.08
Less distributions to
shareholders from:
Net investment income....... (.33) (.48) (.20) (.28) (.43) (.18) (.35)
Net asset value, end of
period..................... $9.47 $8.74 $10.19 $9.47 $8.74 $10.19 $ 9.47
TOTAL RETURN+............... 12.3% (9.6%) 4.0% 11.7% (10.2%) 3.7% 12.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted).......... $2,098 $1,387 $817 $7,538 $6,912 $3,692 $1,339
Ratios to average net
assets:
Expenses **................ .71%++ .53% .25%++ 1.46%++ 1.13% .75%++ 46%++
Net investment income **... 5.39%++ 5.26% 4.71%++ 4.64%++ 4.66% 4.15%++ 5.64%++
Portfolio turnover rate..... 91% 147% 15% 91% 147% 15% 91%
<CAPTION>

CLASS Y
SHARES
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. Initial sales charge or contingent deferred
sales 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 (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
JULY 2, JULY 2, CLASS Y
1993* 1993* SHARES
EIGHT MONTHS YEAR ENDED THROUGH EIGHT MONTHS YEAR ENDED THROUGH EIGHT MONTHS
ENDED AUGUST DECEMBER 31, DECEMBER 31, ENDED AUGUST DECEMBER 31, DECEMBER 31, ENDED AUGUST
31, 1995# 1994 1993 31, 1995# 1994 1993 31, 1995#
<S> <C> <C> <C> <C> <C> <C> <C>
Expense.................... 2.83% 3.61% 6.82% 3.58% 4.21% 7.32% 2.58%
Net investment income
(loss).................... 3.27% 2.18% (1.86%) 2.52% 1.58% (2.42%) 3.52%
<CAPTION>

CLASS Y
SHARES
FEBRUARY 28,
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
Expense.................... 3.39%
Net investment income
(loss).................... 2.60%
</TABLE>

<PAGE>
EVERGREEN NEW JERSEY TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
CLASS A
SIX MONTHS
ENDED
AUGUST 31, 1995 YEAR ENDED FEBRUARY 28,
(UNAUDITED) 1995 1994 1993
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............................... $10.53 $10.99 $11.01 $10.22
Income (loss) from investment operations:
Net investment income.............................................. .28 .57 .60 .63
Net realized and unrealized gain (loss) on investments............. .22 (.46) (.02) .79
Total from investment operations.................................. .50 .11 .58 1.42
Less distributions to shareholders from net investment income...... (.28) (.57) (.60) (.63)
Net asset value, end of period..................................... $10.75 $10.53 $10.99 $11.01
TOTAL RETURN+...................................................... 4.8% 1.4% 5.3% 14.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).......................... $35,469 $34,852 $42,783 $30,863
Ratios to average net assets:
Expenses **....................................................... .38%++ .25% .14% .00%
Net investment income **.......................................... 5.20%++ 5.52% 5.31% 5.97%
Portfolio turnover rate............................................ 0% 8% 2% 5%
<CAPTION>

CLASS A
JULY 16, 1991*
THROUGH
FEBRUARY 29,
1992
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period............................... $10.00
Income (loss) from investment operations:
Net investment income.............................................. .38
Net realized and unrealized gain (loss) on investments............. .22
Total from investment operations.................................. .60
Less distributions to shareholders from net investment income...... (.38)
Net asset value, end of period..................................... $10.22
TOTAL RETURN+...................................................... 9.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).......................... $13,129
Ratios to average net assets:
Expenses **....................................................... .01%++
Net investment income **.......................................... 5.89%++
Portfolio turnover rate............................................ 5%
</TABLE>

* 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
SIX MONTHS JULY 16, 1991*
ENDED THROUGH
AUGUST 31, 1995 YEAR ENDED FEBRUARY 28, FEBRUARY 29,
(UNAUDITED) 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Expenses................................................ 1.08%++ 1.04% 1.05% 1.16% 1.20%
Net investment income................................... 4.50%++ 4.73% 4.40% 4.81% 4.70%
</TABLE>

<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND -- CLASS A, B AND Y SHARES
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS Y
JANUARY 11, JANUARY 11, SHARES
EIGHT MONTHS YEAR ENDED 1993* THROUGH EIGHT MONTHS YEAR ENDED 1993* THROUGH EIGHT MONTHS
ENDED AUGUST DECEMBER 31, DECEMBER 31, ENDED AUGUST DECEMBER 31, DECEMBER 31, ENDED AUGUST
31, 1995# 1994 1993 31, 1995# 1994 1993 31, 1995#
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning
of period................. $9.16 $10.61 $10.00 $9.16 $10.61 $10.00 $9.16
Income (loss) from
investment operations:
Net investment income...... .33 .49 .46 .28 .44 .42 .35
Net realized and unrealized
gain (loss) on
investments............... .79 (1.45) .64 .79 (1.45) .64 .79
Total from investment
operations.............. 1.12 (.96) 1.10 1.07 (1.01) 1.06 1.14
Less distributions to
shareholders from:
Net investment income...... (.33) (.49) (.46) (.28) (.44) (.42) (.35)
Net realized gains......... -- -- (.03) -- -- (.03) --
Total distributions....... (.33) (.49) (.49) (.28) (.44) (.45) (.35)
Net asset value, end of
period.................... $9.95 $9.16 $10.61 $9.95 $9.16 $10.61 $9.95
TOTAL RETURN+.............. 12.3% (9.1%) 11.3% 11.8% (9.6%) 10.8% 12.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted)........... $8,279 $7,979 $12,739 $49,040 $ 44,616 $45,168 $1,005
Ratios to average net
assets:
Expenses **............... 92%++ .79% .32%++ 1.67%++ 1.37% .79%++ .67%++
Net investment income **.. 5.09%++ 5.11% 4.91%++ 4.34%++ 4.53% 4.47%++ 5.34%++
Portfolio turnover rate.... 117% 126% 57% 117% 126% 57% 117%
<CAPTION>

CLASS Y
SHARES
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 gains......... --
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. Initial sales charge or contingent deferred
sales 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 (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 CLASS Y
JANUARY 11, JANUARY 11, SHARES
EIGHT MONTHS YEAR ENDED 1993* THROUGH EIGHT MONTHS YEAR ENDED 1993* THROUGH EIGHT MONTHS
ENDED AUGUST DECEMBER 31, DECEMBER 31, ENDED AUGUST DECEMBER 31, DECEMBER 31, ENDED AUGUST
31, 1995# 1994 1993 31, 1995# 1994 1993 31, 1995#
<S> <C> <C> <C> <C> <C> <C> <C>
Expenses................. 1.27% 1.18% 1.25% 2.02% 1.76% 1.74% 1.02%
Net investment income.... 4.74% 4.72% 3.98% 3.99% 4.14% 3.52% 4.99%
<CAPTION>

CLASS Y
SHARES
FEBRUARY 28,
1994* THROUGH
DECEMBER 31,
1994
<S> <C>
Expenses................. .98%
Net investment income.... 5.19%
</TABLE>

<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND -- CLASS A, B AND Y SHARES
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS Y
JANUARY 3, JANUARY 3, SHARES
EIGHT MONTHS 1994* THROUGH EIGHT MONTHS 1994* THROUGH EIGHT MONTHS
ENDED AUGUST DECEMBER 31, ENDED AUGUST DECEMBER 31, ENDED AUGUST
31, 1995# 1994 31, 1995# 1994 31, 1995#
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period... $8.62 $10.00 $8.62 $10.00 $8.62
Income (loss) from investment
operations:
Net investment income.................. .34 .46 .29 .41 .35
Net realized and unrealized gain (loss)
on investments........................ .97 (1.38) .97 (1.38) .97
Total from investment operations...... 1.31 (.92) 1.26 (.97) 1.32
Less distributions to shareholders
from:
Net investment income.................. (.34) (.46) (.29) (.41) (.35)
Net asset value, end of period......... $9.59 $8.62 $9.59 $8.62 $9.59
TOTAL RETURN+.......................... 15.4% (9.3%) 14.8% (9.8%) 15.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted).............................. $610 $312 $3,542 $2,456 $1,673
Ratios to average net assets:
Expenses **........................... .53%++ .25%++ 1.28%++ .87%++ .28%++
Net investment income **.............. 5.41%++ 5.57%++ 4.66%++ 4.88%++ 5.66%++
Portfolio turnover rate................ 66% 23% 66% 23% 66%
<CAPTION>

CLASS Y
SHARES
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. Initial sales charge or contingent deferred
sales 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 (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 CLASS Y
JANUARY 3, JANUARY 3, SHARES
EIGHT MONTHS 1994* EIGHT MONTHS 1994* EIGHT MONTHS
ENDED THROUGH ENDED THROUGH ENDED
AUGUST 31, DECEMBER 31, AUGUST 31, DECEMBER 31, AUGUST 31,
1995# 1994 1995# 1994 1995#
<S> <C> <C> <C> <C> <C>
Expenses............................. 6.50% 10.71% 7.25% 11.33% 6.25%
Net investment loss.................. (.56%) (4.89%) (1.31%) (5.58%) (.31%)
<CAPTION>

CLASS Y SHARES
FEBRUARY 28,
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
Expenses............................. 10.46%
Net investment loss.................. (4.54%)
</TABLE>

10
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND -- CLASS A, B AND Y SHARES
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS Y
JULY 2, JULY 2, SHARES
EIGHT MONTHS 1993* EIGHT MONTHS 1993* EIGHT MONTHS
ENDED YEAR ENDED THROUGH ENDED YEAR ENDED THROUGH ENDED
AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31,
1995# 1994 1993 1995# 1994 1993 1995#
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net asset value,
beginning of period.... $8.85 $10.19 $10.00 $8.85 $10.19 $10.00 $8.85
Income (loss) from
investment operations:
Net investment income... .33 .47 .20 .28 .42 .17 .34
Net realized and
unrealized gain (loss)
on investments......... .82 (1.34) .19 .82 (1.34) .19 .82
Total from investment
operations........... 1.15 (.87) .39 1.10 (.92) .36 1.16
Less distributions to
shareholders from:
Net investment income... (.33) (.47) (.20) (.28) (.42) (.17) (.34)
Net asset value, end of
period................. $9.67 $8.85 $10.19 $9.67 $8.85 $10.19 $9.67
TOTAL RETURN+........... 13.1% (8.6%) 3.9% 12.5% (9.1%) 3.7% 13.3%
RATIOS & SUPPLEMENTAL
DATA
Net assets, end of
period (000's
omitted)............... $ 1,984 $1,606 $1,306 $ 5,803 $3,817 $2,235 $965
Ratios to average net
assets:
Expenses **............ .72%++ .53% .25%++ 1.47%++ 1.12% .75%++ .47%++
Net investment
income **............ 5.17%++ 5.11% 4.64%++ 4.42%++ 4.54% 4.25%++ 5.42%++
Portfolio turnover
rate................... 87% 59% 0% 87% 59% 0% 87%
<CAPTION>

CLASS Y SHARES
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... .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%
</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 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 (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 CLASS Y
JULY 2, JULY 2, SHARES
EIGHT MONTHS 1993* EIGHT MONTHS 1993* EIGHT MONTHS
ENDED YEAR ENDED THROUGH ENDED YEAR ENDED THROUGH ENDED
AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31,
1995# 1994 1993 1995# 1994 1993 1995#
<S> <C> <C> <C> <C> <C> <C> <C>
Expenses................... 3.83% 5.14% 7.75% 4.58% 5.73% 8.25% 3.58%
Net investment income
(loss).................... 2.06% .50% (2.86%) 1.31% (.07%) (3.25%) 2.31%
<CAPTION>

CLASS Y
SHARES
FEBRUARY 28,
1994*
THROUGH
DECEMBER 31,
1994
<S> <C>
Expenses................... 4.89%
Net investment income
(loss).................... .93%
</TABLE>

<PAGE>
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND -- CLASS A AND Y SHARES
<TABLE>
<CAPTION>
CLASS A SHARES #
FOUR MONTHS
ENDED YEAR ENDED JUNE 17,
AUGUST 31, APRIL 30, 1992* THROUGH
1995 1995 1994 APRIL 30, 1993
<S> <C> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning of period.......................... $10.16 $10.08 $10.36 $10.00
Income (loss) from investment operations:
Net investment income......................................... .21 .65 .68 .61
Net realized and unrealized gain (loss) on investments........ .24 .08 (.26) .39
Total from investment operations............................. .45 .73 .42 1.00
Less distributions to shareholders from:
Net investment income......................................... (.21) (.65) (.68) (.61)
Net realized gains............................................ -- -- (.02) (.03)
Total distributions.......................................... (.21) (.65) (.70) (.64)
Net asset value, end of period................................ $10.40 $10.16 $10.08 $10.36
TOTAL RETURN+................................................. 4.4% 7.6% 3.3% 10.3%
RATIOS & SUPPLEMENTAL DATA
Net assets, end of period (000's omitted)..................... $59,551 $65,043 $72,683 $33,541
Ratios to average net assets:
Expenses..................................................... 1.07%++** .60%** .14%** .00++**
Net investment income........................................ 5.92%++** 6.52%** 6.16%** 5.92%++**
Portfolio turnover rate....................................... 14% 28% 31% 50%
<CAPTION>
CLASS B SHARES
JULY 10, 1995*
THROUGH
AUGUST 31,
1995
<S> <C>
PER SHARE DATA
Net asset value, beginning of period.......................... $10.41
Income (loss) from investment operations:
Net investment income......................................... .08
Net realized and unrealized gain (loss) on investments........ (.01)
Total from investment operations............................. .07
Less distributions to shareholders from:
Net investment income......................................... (.08)
Net realized gains............................................ --
Total distributions.......................................... (.08)
Net asset value, end of period................................ $10.40
TOTAL RETURN+................................................. .6%
RATIOS & SUPPLEMENTAL DATA
Net assets, end of period (000's omitted)..................... $3,137
Ratios to average net assets:
Expenses..................................................... 1.09%++
Net investment income........................................ 3.40%++
Portfolio turnover rate....................................... 14%
</TABLE>

# Effective June 30, 1995, Evergreen Florida High Income Municipal Bond Fund, a
new series of the Evergreen Municipal Trust, acquired substantially all of
the net assets of ABT Florida High Income Municipal Bond Fund. ABT Florida
High Income Municipal Bond Fund, which had a fiscal year that ended on April
30, was the accounting survivor in the combination. Accordingly, the
information above includes the results of operations of ABT Florida High
Income Municipal Bond Fund prior to June 30, 1995.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales load and contingent deferred
sales 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 (loss) to average
net assets would have been the following:
<TABLE>
<CAPTION>
CLASS A SHARES
FOUR MONTHS JUNE 17, 1992
ENDED YEAR ENDED THROUGH
AUGUST 31, APRIL 30, APRIL 30,
1995# 1995 1994 1993
<S> <C> <C> <C> <C>
Expenses.................................................. 1.42% 1.26% 1.12% 1.12%
Net investment income..................................... 5.72% 5.86% 5.18% 4.80%
</TABLE>

<PAGE>
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVES AND POLICIES

EVERGREEN FLORIDA MUNICIPAL BOND FUND
EVERGREEN GEORGIA MUNICIPAL BOND FUND
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
The Funds seek current income exempt from federal regular income tax and,
where applicable, state income taxes, consistent with preservation of capital.
In addition, the EVERGREEN FLORIDA MUNICIPAL BOND FUND intends to qualify as an
investment exempt from the Florida state intangibles tax. Florida does not
currently tax personal income.
Each Fund's investment objective is fundamental and cannot be changed
without shareholder approval. While there is no assurance that each objective
will be achieved, the Funds will endeavor to do so by following the investment
policies detailed below. Unless otherwise indicated, the investment policies of
a Fund may be changed by the Board of Trustees ("Trustees") without the approval
of shareholders. Shareholders will be notified before any material change in
these policies becomes effective.
As a matter of fundamental investment policy, which may not be changed
without shareholder approval, each Fund will normally invest its assets so that
at least 80% of its annual interest income is, or at least 80% of its net assets
are, invested in obligations which provide interest income which is exempt from
federal regular income taxes. The interest retains its tax-free status when
distributed to the Funds' shareholders. In addition, at least 65% of the value
of each Fund's total assets will be invested in municipal bonds of the
particular state after which the Fund is named. To qualify as an investment
exempt from the Florida state intangibles tax, the Evergreen Florida Municipal
Bond Fund's portfolio must consist entirely of investments exempt from the
Florida state intangibles tax on the last business day of the calendar year.
Each Fund seeks to achieve its investment objective by investing
principally in municipal bonds, including industrial development bonds, of its
designated state. In addition, the Funds may invest in obligations issued by or
on behalf of any state, territory, or possession of the United States, including
the District of Columbia, or their political subdivisions or agencies and
instrumentalities, the interest from which is exempt from federal (regular, if
applicable) income tax. It is likely that shareholders who are subject to the
alternative minimum tax will be required to include interest from a portion of
the municipal securities owned by a Fund in calculating the federal individual
alternative minimum tax or the federal alternative minimum tax for corporations.
Municipal bonds are debt obligations issued by the state or local
entities to support a government's general financial needs or special projects,
such as housing projects or sewer works. Municipal bonds include industrial
development bonds issued by or on behalf of public authorities to provide
financing aid to acquire sites or construct or equip facilities for privately or
publicly owned corporations.
The two principal classifications of municipal bonds are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Revenue bonds are paid off only with the revenue
generated by the project financed by the bond or other specified sources of
revenue. For example, in the case of a bridge project, proceeds from the tolls
would go directly to retiring the bond issue. Thus, unlike general obligation
bonds, revenue bonds do not represent a pledge of credit or create any debt of
or charge against the general revenues of a municipality or public authority.
The municipal bonds in which the Funds will invest are subject to one or
more of the following quality standards: rated Baa or better by Moody's
Investors Service, Inc. ("Moody's") or BBB or better by Standard & Poor's
Ratings Group ("S&P") or, if unrated, are determined by the Fund's investment
adviser to be of comparable quality to such ratings; insured by a municipal bond
insurance company which is rated Aa by Moody's or AA by S&P; guaranteed at the
time of purchase by the U.S. government as to the payment of principal and
interest; or fully collateralized by an escrow of U.S. government securities.
Bonds rated BBB by S&P or Baa by Moody's have speculative characteristics.
Changes in economic conditions or other circumstances are more likely to lead to
weakened capacity to make principal and interest payments than higher rated
bonds. However, like the higher
13

<PAGE>
rated bonds, these securities are considered to be investment grade. If any
security owned by a Fund loses its rating or has its rating reduced after the
Fund has purchased it, the Fund is not required to sell or otherwise dispose of
the security, but may consider doing so. If ratings made by Moody's or S&P
change because of changes in those organizations or their ratings systems, the
Funds will try to use comparable ratings as standards in accordance with the
Funds' investment objectives. A description of the rating categories is
contained in an Appendix to the Statement of Additional Information.
The Funds may also invest in:
participation interests in any of the above obligations.
(Participation interests may be purchased from financial institutions such
as commercial banks, savings and loan associations and insurance companies,
and give a Fund an undivided interest in particular municipal securities.);
variable rate municipal securities. (Variable rate securities
offer interest rates which are tied to a money market rate, usually a
published interest rate or interest rate index or the 91-day U.S. Treasury
bill rate. Many of these securities are subject to prepayment of principal
on demand by the Fund, usually in seven days or less.); and
municipal leases as described in "Investment Practices and
Restrictions", below.
During periods when, in the opinion of the Funds investment adviser, a
temporary defensive position in the market is appropriate, a Fund may
temporarily invest in short-term tax-exempt or taxable investments. These
temporary investments include: notes issued by or on behalf of municipal or
corporate issuers; obligations issued or guaranteed by the U.S. government, its
agencies, or instrumentalities; other debt securities; commercial paper; bank
certificates of deposit; shares of other investment companies; and repurchase
agreements. There are no rating requirements applicable to temporary
investments. However, the Funds investment adviser will limit temporary
investments to those it considers to be of comparable quality to the Funds'
primary investments.
Although the Funds are permitted to make taxable, temporary investments,
there is no current intention of generating income subject to federal regular
income tax, where applicable. However, certain temporary investments will
generate income which is subject to state taxes. The Funds may employ certain
additional investment strategies which are discussed in "Investment Practices
and Restrictions", below.
EVERGREEN NEW JERSEY TAX-FREE INCOME FUND
The objective of the EVERGREEN NEW JERSEY TAX-FREE INCOME FUND is to seek
a high level of income, exempt from federal and New Jersey personal income
taxes. The Fund is available only to investors who reside in New Jersey. There
is no assurance that the Fund will achieve its stated objective. The investment
objective of the Fund is fundamental and so may not be changed without the
approval of a majority of the Fund's shareholders.
To attain its objective, the EVERGREEN NEW JERSEY TAX-FREE INCOME FUND
invests at least 80% of its net assets in municipal securities issued by the
State of New Jersey or its counties, municipalities, authorities or other
political subdivisions and municipal securities issued by territories or
possessions of the United States, such as Puerto Rico, the interests on which,
in the opinion of bond counsel, is exempt from federal and New Jersey personal
income taxes. The Fund normally invests in intermediate and long-term municipal
securities. Intermediate-term municipal securities generally mature in three to
ten years. Long-term municipal securities generally mature in ten to thirty
years. The Fund has no maximum or minimum maturity for any individual municipal
securities, however, it will maintain a dollar-weighted average portfolio
maturity of twenty years or less. If its investment adviser determines that
market conditions warrant a shorter average maturity, the Fund's investments
will be adjusted accordingly.
The Fund will only purchase securities rated within the three highest
rating categories by Moody's or by S&P and unrated securities of equivalent
quality as determined by the investment adviser pursuant to guidelines
established by the Trustees. See the Statement of Additional Information for
further information in regard to ratings.
The Fund will seek to invest substantially all of its assets in
intermediate and long-term municipal securities. However, under certain
circumstances, such as a temporary decline in the issuance of New Jersey
obligations, the Fund may invest up to 20% of its assets in the following:
short-term municipal securities issued outside of New Jersey (the income from
which may be subject to New Jersey income taxes) or certain taxable fixed income
securities (the income from which may be subject to federal and New Jersey
personal income taxes).
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<PAGE>
In addition, under unusual circumstances the Fund reserves the right to
invest more than 20% of its assets in securities other than New Jersey municipal
securities such as taxable fixed income securities, the interest from which may
be subject to Federal and New Jersey personal income taxes. In most instances,
however, the Fund will seek to avoid holdings in an effort to provide income
that is fully exempt from federal and New Jersey personal income taxes.
The Fund may also invest in municipal securities issued to finance
private activities, whose interest is a preference item for purposes of the
Federal alternative minimum tax. Such "private activity bonds" might include
industrial development bonds and securities issued to finance project such as
solid waste disposal facilities, student loans or water and sewage projects. The
Fund currently intends to treat "private activity bonds" as not federally
tax-exempt and accordingly to limit income from "private activity bonds" to no
more than 20%. See "Other Information-Dividends, Distributions and Taxes" for
further information. The Fund may invest in other municipal securities and may
employ additional investment strategies which are discussed in "Investment
Practices and Restrictions" below.
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND seeks to provide a high
level of current income which is exempt from federal income taxes. This
objective is fundamental and may not be changed without shareholder approval.
The term "high-level" indicates that the Fund seeks to achieve an income level
that exceeds that which an investor would expect from an investment grade
portfolio with similar maturity characteristics. EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND invests primarily in high yield, medium and lower rated (Baa
through C by Moody's and BBB through C1 by S&P) and unrated municipal
securities. To varying degrees, medium and lower rated municipal securities, as
well as unrated municipal securities, are considered to have speculative
characteristics and are subject to greater market fluctuations and risk of loss
of income and principal than higher rated securities. To the extent that an
investor realizes a yield in excess of that which could be expected from a fund
which invests primarily in investment grade securities, the investor should
expect to bear increased risk due to the fact that the risk of principal and/or
interest not being repaid with respect to the high yield securities described
above is significantly greater than that which exists in connection with
investment grade securities. In assessing the risk involved in purchasing medium
and lower rated and unrated securities, the Fund's investment adviser will use
nationally recognized statistical rating organizations such as Moody's and S&P,
and will also rely heavily on credit analysis it develops internally. Under
normal circumstances, the Fund's dollar-weighted average maturity generally will
be fifteen years or more. However, the Fund may invest in securities of any
maturity, and if the Fund's investment adviser determines that market conditions
warrant a shorter average maturity, the Fund's investments will be adjusted
accordingly. In pursuit of its investment objective, EVERGREEN FLORIDA HIGH
INCOME MUNICIPAL BOND FUND will, under normal market conditions, invest at least
65% of its total assets in such medium and lower rated municipal securities or
unrated municipal securities of comparable quality to such rated municipal
bonds. Investors should note that such a policy is not a fundamental policy of
the Fund and shareholder approval is not necessary to change such policy. There
is no assurance that EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND can
achieve its investment objective.
The Fund will not invest in municipal securities which are in default,
i.e., securities rated D by S&P. Investments may also be made by EVERGREEN
FLORIDA HIGH INCOME MUNICIPAL BOND FUND in higher quality municipal bonds and,
for temporary defensive purposes, the Fund may invest less than 65% of its total
assets in the medium and lower quality municipal securities described above. The
Fund may assume a defensive position if, for example, yield spreads between
lower grade and investment grade municipal bonds are narrow and the yields
available on lower quality municipal securities do not justify the increased
risk associated with an investment in such securities or when there is a lack of
medium and lower quality issues in which to invest. EVERGREEN FLORIDA HIGH
INCOME MUNICIPAL BOND FUND may also invest primarily in higher quality municipal
obligations if its net assets are at a level that would not permit the Fund to
invest in medium and lower rated municipal bonds and at the same time maintain
adequate diversification and liquidity. Investing in this manner may result in
yields lower than those normally associated with a fund that invests primarily
in medium and lower quality municipal securities.
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<PAGE>
During the fiscal year ended August 31, 1995 EVERGREEN FLORIDA HIGH
INCOME MUNICIPAL BOND FUND'S holdings had the following average credit quality
characteristics:
<TABLE>
<CAPTION>
Percent of
Rating Net Assets
<S> <C> <C>
Aaa or AAA 5.4%
Aa or AA --
A 1.9
Baa or BBB 18.3
Ba or BB 8.0
Non-rated 61.5
Total 95.1%
</TABLE>

The Fund may purchase industrial development bonds only if the interest
on such bonds is, in the opinion of bond counsel, exempt from federal income
taxes. It is anticipated that the annual portfolio turnover rate for the Fund
may exceed 100%. The Fund may invest in other municipal securities and may
employ certain additional investment strategies which are discussed in
"Investment Practices and Restrictions", below. Also, see the Statement of
Additional Information for further information in regard to ratings.

INVESTMENT PRACTICES AND RESTRICTIONS

Risk Factors. Bond yields are dependent on several factors including market
conditions, the size of an offering, the maturity of the bond, ratings of the
bond and the ability of issuers to meet their obligations. There is no limit on
the maturity of the bonds purchased by the Funds. Because the prices of bonds
fluctuate inversely in relation to the direction of interest rates, the prices
of longer term bonds fluctuate more widely in response to market interest rate
changes. A Fund's concentration in securities issued by its designated state and
that state's political subdivisions provides a greater level of risk than a fund
which is diversified across numerous states and municipal entities.
Although the Funds, other than EVERGREEN FLORIDA HIGH INCOME MUNICIPAL
BOND FUND, will not purchase securities rated below BBB by S&P or Baa by Moody's
(i.e., junk bonds), the Funds are not required to dispose of securities that
have been downgraded subsequent to their purchase. If the municipal obligations
held by a Fund (because of adverse economic conditions in a particular state,
for example) are downgraded, the Fund's concentration in securities of that
state may cause the Fund to be subject to the risks inherent in holding material
amounts of low-rated debt securities in its portfolio. As stated above,
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND invests primarily in high
yield, medium and lower rated (Baa through C by Moody's and BBB through C1 by
S&P) and unrated securities. Additional risk factors relating to the investment
by EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND in high yield, medium and
lower rated (Baa through C by Moody's and BBB through C1 by S&P) and unrated
securities are discussed below.

Portfolio Turnover. A portfolio turnover rate of 100% would occur if all of a
Fund's portfolio securities were replaced in one year. The portfolio turnover
rate experienced by a Fund directly affects the transaction costs relating to
the purchase and sale of securities which a Fund bears directly. A high rate of
portfolio turnover will increase such costs. See the Statement of Additional
Information for further information regarding the practices of the Funds
affecting portfolio turnover.

Non-Diversification. Each of EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN
GEORGIA MUNICIPAL BOND FUND, EVERGREEN NEW JERSEY TAX-FREE INCOME FUND,
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL
BOND FUND and EVERGREEN VIRGINIA MUNICIPAL BOND FUND is a non-diversified
portfolio of an investment company and, as such, there is no limit on the
percentage of assets which can be invested in any single issuer. An investment
in a Fund, therefore, will entail greater risk than would exist in a diversified
investment company because the higher percentage of investments among fewer
issuers may result in greater fluctuation in the total market value of the
Fund's portfolio. Each of the Funds intends to comply with Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code") which requires that at
the end of each quarter of each taxable year, with regard to at least 50% of the
Fund's total assets, no more than 5% of the total assets may be invested in the
securities of a single issuer and that with respect to the remainder of the
Fund's total assets, no more than 25% of its total assets are invested in the
securities of a single issuer.
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<PAGE>
Repurchase Agreements. The Funds may invest in repurchase agreements. Repurchase
agreements are agreements by which a Fund purchases a security (usually U.S.
government securities) for cash and obtains a simultaneous commitment from the
seller (usually a bank or broker/dealer) to repurchase the security at an
agreed-upon price and specified future date. The repurchase price reflects an
agreed-upon interest rate for the time period of the agreement. The Funds' risk
is the inability of the seller to pay the agreed-upon price on the delivery
date. However, this risk is tempered by the ability of the Funds to sell the
security in the open market in the case of a default. In such a case, the Funds
may incur costs in disposing of the security which would increase Fund expenses.
The Funds Investment adviser will monitor the creditworthiness of the firms with
which the Funds enter into repurchase agreements.

When-Issued And Delayed Delivery Transactions. The Funds may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Funds purchase securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Funds to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
Accordingly, the Funds may pay more or less than the market value of the
securities on the settlement date. The Funds may dispose of a commitment prior
to settlement if the Funds investment adviser deems it appropriate to do so. In
addition, the Funds may enter into transactions to sell their purchase
commitments to third parties at current market values and simultaneously acquire
other commitments to purchase similar securities at later dates. The Funds may
realize short-term profits or losses upon the sale of such commitments.

Lending Of Portfolio Securities. In order to generate additional income, the
Funds may lend their portfolio securities on a short-term or long-term basis to
broker/dealers, banks, or other institutional borrowers of securities. The Funds
will only enter into loan arrangements with creditworthy borrowers and will
receive collateral in the form of cash or U.S. government securities equal to at
least 100% of the value of the securities loaned. As a matter of fundamental
investment policy, which cannot be changed without shareholder approval, the
Funds will not lend any of their assets except portfolio securities up to
one-third of the value of their total assets, except for EVERGREEN NEW JERSEY
TAX-FREE INCOME FUND, which will only lend up to 5% of the value of its assets.
There is the risk that when lending portfolio securities, the securities may not
be available to a Fund on a timely basis and the Fund may, therefore, lose the
opportunity to sell the securities at a desirable price. In addition, in the
event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.

Investing In Securities Of Other Investment Companies. Each Fund may invest in
the securities of other investment companies. This is a short-term measure to
invest cash which has not yet been invested in other portfolio instruments and
is subject to the following limitations: (1) no Fund will own more than 3% of
the total outstanding voting stock of any one investment company, (2) no Fund
may invest more than 5% of its total assets in any one investment company and
(3) no Fund may invest more than 10% of its total assets in investment companies
in general. The Funds investment adviser will waive its investment advisory fee
on assets invested in securities of other open end investment companies.

Borrowing. As a matter of fundamental policy, which may not be changed without
shareholder approval, the Funds may not borrow money except as a temporary
measure to facilitate redemption requests which might otherwise require the
untimely disposition of portfolio investments and for extraordinary or emergency
purposes, provided that the aggregate amount of such borrowings shall not exceed
one-third of the value of the total net assets at the time of such borrowing.

Illiquid Securities. The Funds may invest up to 15% of their net assets in
illiquid securities and other securities which are not readily marketable.
Repurchase agreements with maturities longer than seven days will be included
for the purpose of the foregoing 15% limit. Securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933, which have been
determined to be liquid, will not be considered by the Funds investment adviser
to be illiquid or not readily marketable and, therefore, are not subject to the
aforementioned 15% limit. The inability of a Fund to dispose of illiquid or not
readily marketable investments readily or at a reasonable price could impair a
Fund's ability to raise cash for redemptions or other purposes. The liquidity of
securities purchased by a Fund which are eligible for resale pursuant to Rule
144A will be monitored by the Funds investment adviser on an ongoing basis,
subject to the oversight of the Trustees. In the event that such a security is
deemed to be no longer liquid, a Fund's holdings will be reviewed to determine
what action, if any, is required to ensure that the retention of such security
does not result in a Fund having more than 15% of its assets invested in
illiquid or not readily marketable securities.
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<PAGE>
Unseasoned Issuers. The Funds will not invest more than 5% of the value of their
total assets in securities of issuers (or guarantors, where applicable) which
have records of less than three years of continuous operations, including the
operation of any predecessor.

Risk Factors Associated with Medium and Lower Rated and Unrated Municipal
Obligations. EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND will invest in
medium and lower rated or unrated municipal securities. The market for high
yield, high risk debt securities rated in the medium and lower rating
categories, or which are unrated, is relatively new and its growth has
paralleled a long economic expansion. Past experience may not, therefore,
provide an accurate indication of future performance of this market,
particularly during periods of economic recession. An economic downturn or
increase in interest rates is likely to have a greater negative effect on this
market, the value of high yield debt securities in the Fund's portfolio, the
Fund's net asset value and the ability of the bonds' issuers to repay principal
and interest, meet projected business goals and obtain additional financing,
than would be the case if investments by the Fund were limited to higher rated
securities. These circumstances also may result in a higher incidence of
defaults. Yields on medium or lower-rated municipal bonds may not fully reflect
the higher risks of such bonds. Therefore, the risk of a decline in market
value, should interest rates increase or credit quality concerns develop, may be
higher than has historically been experienced with such investments. An
investment in EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND may be
considered more speculative than investment in shares of another fund which
invests primarily in higher rated debt securities.
Prices of high yield debt securities may be more sensitive to adverse
economic changes or corporate developments than higher rated investments. Debt
securities with longer maturities, which may have higher yields, may increase or
decrease in value more than debt securities with shorter maturities. Market
prices of high yield debt securities structured as zero coupon or pay-in-kind
securities are affected to a greater extent by interest rate changes and may be
more volatile than securities which pay interest periodically and in cash. Where
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND deems it appropriate and in
the best interests of its shareholders, it may incur additional expenses to seek
recovery on a debt security on which the issuer has defaulted and to pursue
litigation to protect the interests of security holders of its portfolio
entities.
Because the market for medium or lower rated securities may be thinner
and less active than the market for higher rated securities, there may be market
price volatility for these securities and limited liquidity in the resale
market. Unrated securities are usually not as attractive to as many buyers as
are rated securities, a factor which may make unrated securities less
marketable. These factors may have the effect of limiting the availability of
the securities for purchase by EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
and may also limit the ability of the Fund to sell such securities at their fair
value either to meet redemption requests or in response to changes in the
economy or the financial markets. Adverse publicity and investor perceptions,
whether or not based on fundamental analysis, may decrease the values and
liquidity of medium or lower rated debt securities, especially in a thinly
traded market. To the extent the Fund owns or may acquire illiquid or restricted
high yield securities, these securities may involve special registration
responsibilities, liabilities and costs, and liquidity and valuation
difficulties. Changes in values of debt securities which the Fund owns will
affect the Fund's net asset value per share. If market quotations are not
readily available for the Fund's lower rated or unrated securities, these
securities will be valued by a method that the Trustees believes accurately
reflects fair value. Valuation becomes more difficult and judgment plays a
greater role in valuing high yield debt securities than with respect to
securities for which more external sources of quotations and last sale
information are available.
Special tax considerations are associated with investing in high yield
debt securities structured as zero coupon or pay-in-kind securities. A Fund
investing in such securities accrues income on these securities prior to the
receipt of cash payments. EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND must
distribute substantially all of its income to shareholders to qualify for pass
through treatment under the tax laws and may, therefore, have to dispose of
portfolio securities to satisfy distribution requirements.
While credit ratings are only one factor EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND'S investment adviser relies on in evaluating high yield debt
securities, certain risks are associated with using credit ratings. Credit
ratings evaluate the safety of principal and interest payments, not market value
risk. Credit rating agencies may fail to change in timely manner the credit
ratings to reflect subsequent events; however, the Fund's investment adviser
continuously monitors the issuers of high yield debt securities in the Fund's
portfolio in an attempt to determine if the issuers will have sufficient cash
flow and profits to meet required principal and interest payments. Achievement
of EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND'S investment objective may
be more dependent upon the Fund's investment adviser and the credit analysis
capability of the Fund's investment adviser, than is the case for higher quality
debt securities. Credit ratings for individual securities may change from
18

<PAGE>
time to time and EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND may retain a
portfolio security whose rating has been changed. See the Statement of
Additional Information for a description of bond and note ratings.

Transactions in Options and Futures. The Funds, other than EVERGREEN NEW JERSEY
TAX-FREE INCOME FUND, may engage in options and futures transactions. Options
and futures transactions are intended to enable a Fund to manage market or
interest rate risk, and the Funds do not use these transactions for speculation
or leverage. The Funds, other than EVERGREEN NEW JERSEY TAX-FREE INCOME FUND,
may attempt to hedge all or a portion of their portfolios through the purchase
of both put and call options on their portfolio securities and listed put
options on financial futures contracts for portfolio securities. The Funds may
also write covered call options on their portfolio securities to attempt to
increase their current income. The Funds will maintain their positions in
securities, option rights, and segregated cash subject to puts and calls until
the options are exercised, closed, or have expired. An option position may be
closed out only on an exchange which provides a secondary market for an option
of the same series. The Funds may purchase listed put options on financial
futures contracts. These options will be used only to protect portfolio
securities against decreases in value resulting from market factors such as an
anticipated increase in interest rates.
The Funds, other than EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, may
write (i.e., sell) covered call and put options. By writing a call option, a
Fund becomes obligated during the term of the option to deliver the securities
underlying the option upon payment of the exercise price. By writing a put
option, a Fund becomes obligated during the term of the option to purchase the
securities underlying the option at the exercise price if the option is
exercised. The Funds also may write straddles (combinations of covered puts and
calls on the same underlying security). The Funds may only write "covered"
options. This means that so long as a Fund is obligated as the writer of a call
option, it will own the underlying securities subject to the option or, in the
case of call options on U.S. Treasury bills, the Fund might own substantially
similar U.S. Treasury bills. A Fund will be considered "covered" with respect to
a put option it writes if, so long as it is obligated as the writer of the put
option, it deposits and maintains with its custodian in a segregated account
liquid assets having a value equal to or greater than the exercise price of the
option.
The principal reason for writing call or put options is to obtain,
through a receipt of premiums, a greater current return than would be realized
on the underlying securities alone. The Funds receive a premium from writing a
call or put option which they retain whether or not the option is exercised. By
writing a call option, the Funds might lose the potential for gain on the
underlying security while the option is open, and by writing a put option the
Funds might become obligated to purchase the underlying securities for more than
their current market price upon exercise.
A futures contract is a firm commitment by two parties: the seller, who
agrees to make delivery of the specific type of instrument called for in the
contract ("going short"), and the buyer, who agrees to take delivery of the
instrument ("going long") at a certain time in the future. Financial futures
contracts call for the delivery of particular debt instruments issued or
guaranteed by the U.S. Treasury or by specified agencies or instrumentalities of
the U.S. government. If a Fund would enter into financial futures contracts
directly to hedge its holdings of fixed income securities, it would enter into
contracts to deliver securities at an undetermined price (i.e., "go short") to
protect itself against the possibility that the prices of its fixed income
securities may decline during the Fund's anticipated holding period. A Fund
would "go long" (agree to purchase securities in the future at a predetermined
price) to hedge against a decline in market interest rates.
The Funds, other than EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, may also
enter into financial futures contracts and write options on such contracts. The
Funds intend to enter into such contracts and related options for hedging
purposes. The Funds will enter into futures on securities or index-based futures
contracts in order to hedge against changes in interest rates or securities
prices. A futures contract on securities is an agreement to buy or sell
securities during a designated month at whatever price exists at that time. A
futures contract on a securities index does not involve the actual delivery of
securities, but merely requires the payment of a cash settlement based on
changes in the securities index. The Funds do not make payment or deliver
securities upon entering into a futures contract. Instead, they put down a
margin deposit, which is adjusted to reflect changes in the value of the
contract and which remains in effect until the contract is terminated.
The Funds, other than EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, may sell
or purchase other financial futures contracts. When a futures contract is sold
by a Fund, the profit on the contract will tend to rise when the value of the
underlying securities declines and to fall when the value of such securities
increases. Thus, the Funds sell futures contracts in order to offset a possible
decline in the profit on their securities. If a futures contract is purchased by
a Fund, the value of the contract will tend to rise when the value of the
underlying
19

<PAGE>
securities increases and to fall when the value of such securities declines. The
Funds may enter into closing purchase and sale transactions in order to
terminate a futures contract and may buy or sell put and call options for the
purpose of closing out their options positions. The Funds' ability to enter into
closing transactions depends on the development and maintenance of a liquid
secondary market. There is no assurance that a liquid secondary market will
exist for any particular contract or at any particular time. As a result, there
can be no assurance that the Funds will be able to enter into an offsetting
transaction with respect to a particular contract at a particular time. If the
Funds are not able to enter into an offsetting transaction, the Funds will
continue to be required to maintain the margin deposits on the contract and to
complete the contract according to its terms, in which case it would continue to
bear market risk on the transaction.

Risk Characteristics Of Options And Futures. Although options and futures
transactions are intended to enable the Funds to manage market or interest rate
risks, these investment devices can be highly volatile, and the Funds use of
them can result in poorer performance (i.e., the Funds return may be reduced).
The Funds attempt to use such investment devices for hedging purposes may not be
successful. Successful futures strategies require the ability to predict future
movements in securities prices, interest rates and other economic factors. When
the Funds use financial futures contracts and options on financial futures
contracts as hedging devices, there is a risk that the prices of the securities
subject to the financial futures contracts and options on financial futures
contracts may not correlate perfectly with the prices of the securities in the
Funds' portfolios. This may cause the financial futures contract and any related
options to react to market changes differently than the portfolio securities. In
addition, the Funds investment adviser could be incorrect in its expectations
and forecasts about the direction or extent of market factors, such as interest
rates, securities price movements, and other economic factors. Even if the Funds
investment adviser correctly predicts interest rate movements, a hedge could be
unsuccessful if changes in the value of a Fund's futures position did not
correspond to changes in the value of its investments. In these events, the
Funds may lose money on the financial futures contracts or the options on
financial futures contracts. It is not certain that a secondary market for
positions in financial futures contracts or for options on financial futures
contracts will exist at all times. Although the Funds investment adviser will
consider liquidity before entering into financial futures contracts or options
on financial futures contracts transactions, there is no assurance that a liquid
secondary market on an exchange will exist for any particular financial futures
contract or option on a financial futures contract at any particular time. The
Funds' ability to establish and close out financial futures contracts and
options on financial futures contract positions depends on this secondary
market. If a Fund is unable to close out its position due to disruptions in the
market or lack of liquidity, the Fund may lose money on the futures contract or
option, and the losses to the Fund could be significant.

Municipal lease obligations. Each Fund may purchase municipal leases, which are
issued by state and local governments or authorities to finance the acquisition
of equipment and facilities. The Funds may purchase municipal securities in the
form of participation interests which represent undivided proportional interests
in lease payments by a governmental or non-profit entity. The lease payments and
other rights under the lease provide for and secure the payments on the
certificates. Lease obligations may be limited by municipal charter or the
nature of the appropriation for the lease. In particular, lease obligations may
be subject to periodic appropriation. If the entity does not appropriate funds
for future lease payments, the entity cannot be compelled to make such payments.
Furthermore, a lease may provide that the certificate trustee cannot accelerate
lease obligations upon default. The trustee would only be able to enforce lease
payments as they become due. In the event of a default or failure of
appropriation, it is unlikely that the trustee would be able to obtain an
acceptable substitute source of payment or that the substitute source of payment
would generate tax-exempt income.

Resource recovery bonds. Each Fund may purchase resource recovery bonds, which
may be general obligations of the issuing municipality or supported by corporate
or bank guarantees. The viability of the resource recovery project,
environmental protection regulations and project operator tax incentives may
affect the value and credit quality of resource recovery bonds.

Zero coupon debt securities. The Funds may purchase zero coupon debt securities.
These securities do not make regular interest payments. Instead, they are sold
at a deep discount from their face value. In calculating their daily dividends,
each day the Fund takes into account as income a portion of the difference
between these securities' purchase price and their face value. Because they do
not pay current income, the prices of zero coupon debt securities can be very
volatile when interest rates change.

<PAGE>
issuer or a third party prior to maturity and receive payment within seven days.
Segregated accounts will be maintained by each Fund for all such transactions.
For a detailed description of put transactions, see "Investment
Policies -- Securities with Put Rights" in the Statement of Additional
Information.
The amount payable to a Fund by the seller upon its exercise of a put
will normally be (i) the Funds' acquisition cost of the securities (excluding
any accrued interest which the Funds paid on their acquisition), less any
amortized market premium plus any amortized market or original issue discount
during the period a Fund owned the securities, plus (ii) all interest accrued on
the securities since the last interest payment date during the period the
securities were owned by a Fund. Accordingly, the amount payable by a
broker-dealer or bank during the time a put is exercisable will be substantially
the same as the value of the underlying securities.
A Fund's right to exercise a put is unconditional and unqualified. A put
is not transferable by a Fund, although each Fund may sell the underlying
securities to a third party at any time. The Funds expect that puts will
generally be available without any additional direct or indirect cost. However,
if necessary and advisable, a Fund may pay for certain puts either separately in
cash or by paying a higher price for portfolio securities which are acquired
subject to such a put (thus reducing the yield to maturity otherwise available
to the same securities). Thus, the aggravate price paid for securities with put
rights may be higher than the price that would otherwise be paid.
A Fund may enter into put transactions only with broker-dealers (in
accordance with the rules of the Securities and Exchange Commission) and banks
which, in the opinion of the Funds' Adviser, present minimal credit risks. Each
Fund's investment adviser will monitor periodically the creditworthiness of
issuers of such obligations held by each Fund. A Fund's ability to exercise a
put will depend on the ability of the broker-dealer or bank to pay for the
underlying securities at the time the put is exercised. In the event that a
broker-dealer should default on its obligation to purchase an underlying
security, a Fund might be unable to recover all or a portion of any loss
sustained from having to sell the security elsewhere. The Funds intend to enter
into put transactions solely to maintain portfolio liquidity and do not intend
to exercise their rights thereunder for trading purposes.

SPECIAL RISK FACTORS RELATED TO INVESTING IN MUNICIPAL SECURITIES
It should be noted that municipal securities may be adversely affected by
local political and economic conditions and developments within a state. For
example, adverse conditions in a significant industry within New Jersey may from
time to time have a correspondingly adverse effect on specific issuers within
New Jersey or on anticipated revenue to the State itself; conversely, an
improving economic outlook for a significant industry may have a positive effect
on such issuers or revenues.
The value of municipal securities may also be affected by general
conditions in the money markets or the municipal bond markets, the levels of
federal and state income tax rates, the supply of tax-exempt bonds, the size of
the particular offering, the maturity of the obligation, the credit quality and
rating of the issue, and perceptions with respect to the level of interest
rates. In general, the value of bonds tends to appreciate when interest rates
decline and depreciate when interest rates rise. An expanded discussion of the
risks associated with the purchase of securities issued in certain states is
contained in the Statement of Additional Information.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER
The management of each Fund is supervised by the Trustees of the Trust
under which each Fund has been established. The Capital Management Group of
First Union National Bank of North Carolina ("CMG") serves as investment adviser
to EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN GEORGIA MUNICIPAL BOND FUND,
EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, EVERGREEN NORTH CAROLINA MUNICIPAL
BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND, EVERGREEN VIRGINIA
MUNICIPAL BOND FUND and EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND. First
Union National Bank of North Carolina ("FUNB") is a subsidiary of First Union
Corporation ("First Union"), the sixth largest bank holding company in the
United States. First Union is headquartered in Charlotte, North Carolina, and
had $96.7 billion in consolidated assets as of December 31, 1995. First Union
and its subsidiaries provide a broad range of financial services to individuals
and businesses through offices in 36 states. CMG manages or otherwise oversees
the investment of over $36 billion in assets belonging to a wide range of
clients, including all the series of Evergreen Investment Trust (formerly known
as First Union
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<PAGE>
Funds). First Union Brokerage Services, Inc., a wholly-owned subsidiary of FUNB,
is a registered broker-dealer that is principally engaged in providing retail
brokerage services consistent with its federal banking authorizations. First
Union Capital Markets Corp., a wholly-owned subsidiary of First Union, is a
registered broker-dealer principally engaged in providing, consistent with its
federal banking authorizations, private placement, securities dealing, and
underwriting services.
CMG manages investments and supervises the daily business affairs of
EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN GEORGIA MUNICIPAL BOND FUND,
EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, EVERGREEN NORTH CAROLINA MUNICIPAL
BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND, EVERGREEN VIRGINIA
MUNICIPAL BOND FUND and EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND and,
as compensation therefor, is entitled to receive an annual fee equal to .50 of
1% of the average daily net assets of each Fund, other than EVERGREEN FLORIDA
HIGH INCOME MUNICIPAL BOND FUND, from which it is entitled to receive an annual
fee equal to .60 of 1% of average daily net assets and EVERGREEN NEW JERSEY
TAX-FREE INCOME FUND, from which it is entitled to receive an annual fee based
on the average daily net assets of the Fund calculated as follows: up to $500
million -- .50 of 1%; in excess of $500 million up to $1 billion -- .45 of 1%;
in excess of $1 billion up to $1.5 billion -- .35 of 1%. The total annualized
operating expenses of EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN GEORGIA
MUNICIPAL BOND FUND, EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, EVERGREEN NORTH
CAROLINA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND,
EVERGREEN VIRGINIA MUNICIPAL BOND FUND and EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND for the fiscal year ended August 31, 1995 are set forth in
the section entitled "Financial Highlights". Evergreen Asset Management Corp.
("Evergreen Asset"), a subsidiary of FUNB, serves as administrator to each Fund
and is entitled to receive a fee based on the average daily net assets of each
Fund at a rate based on the total assets of the mutual funds administered by
Evergreen Asset for which CMG or Evergreen Asset also serve as investment
adviser, calculated in accordance with the following schedule: .050% of the
first $7 billion; .035% on the next $3 billion; .030% on the next $5 billion;
.020% on the next $10 billion; .015% on the next $5 billion; and .010% on assets
in excess of $30 billion. Furman Selz Incorporated, an affiliate of Evergreen
Funds Distributor, Inc., distributor for the Evergreen group of mutual funds,
serves as sub-administrator for each Fund and is entitled to receive a fee from
each Fund calculated on the average daily net assets of each Fund at a rate
based on the total assets of the mutual funds administered by Evergreen Asset
for which CMG or Evergreen Asset also serve as investment adviser, calculated in
accordance with the following schedule: .0100% of the first $7 billion; .0075%
on the next $3 billion; .0050% on the next $15 billion; and .0040% on assets in
excess of $25 billion. The total assets of the mutual funds administered by
Evergreen Asset for which CMG or Evergreen Asset serve as investment adviser
were approximately $1 billion as of September 30, 1995. Prior to January 1,
1996, First Fidelity Bank, N.A. ("First Fidelity") served as investment adviser
to EVERGREEN NEW JERSEY TAX-FREE INCOME FUND. CMG succeeded to the mutual funds
advisory business of First Fidelity in connection with the acquisition of First
Fidelity by a subsidiary of First Union.
Robert S. Drye is a Vice President of FUNB, and has been with FUNB since
1968. Since 1989, Mr. Drye has served as a portfolio manager for several of the
series of Evergreen Investment Trust and for certain common trust funds. Prior
to 1989, Mr. Drye was a marketing specialist with First Union Brokerage
Services, Inc. Mr. Drye has managed the EVERGREEN SOUTH CAROLINA MUNICIPAL BOND
FUND since its inception in 1994 and the EVERGREEN FLORIDA MUNICIPAL BOND FUND
since its inception in 1993. Richard K. Marrone is a Vice President of FUNB. Mr.
Marrone joined FUNB in 1993 with eleven years experience managing fixed income
assets at Woodbridge Capital Management, a subsidiary of Comerica Bank, N.A. Mr.
Marrone is responsible for the portfolio management of several series of
Evergreen Investment Trust and certain common trust funds. Mr. Marrone has
served as portfolio manager of the EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
since 1993, the EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND since its
inception in 1995 and EVERGREEN GEORGIA MUNICIPAL BOND FUND since its inception
in 1993. Charles E. Jeanne joined FUNB in 1993. Prior to joining FUNB, Mr.
Jeanne served as a trader/portfolio manager for First American Bank where he was
responsible for individual accounts and common trust funds. Mr. Jeanne has been
the portfolio manager for the EVERGREEN VIRGINIA MUNICIPAL BOND FUND since its
inception in 1993. Jocelyn Turner is a Municipal Bond Portfolio Manager for CMG
and has managed the EVERGREEN NEW JERSEY TAX-FREE INCOME FUND since 1992. Ms.
Turner was previously employed as a Vice President, Municipal Bond Portfolio
Manager at One Federal Asset Management, Boston, MA since 1987.

DISTRIBUTION PLANS AND AGREEMENTS
Rule 12b-1 under the Investment Company Act of 1940 permits an investment
company to pay expenses associated with the distribution of its shares in
accordance with a duly adopted plan. Each Fund has adopted for each of its Class
A and Class B shares a Rule 12b-1 plan (each, a "Plan" or collectively the
"Plans"). Under the
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<PAGE>
Plans, each Fund may incur distribution-related and shareholder
servicing-related expenses which may not exceed an annual rate of .75 of 1% of
the aggregate average daily net assets attributable to the Class A shares of
each Fund other than EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, .35 of 1% of the
aggregate average daily net assets attributable to the Class A shares of
EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, 1.00% of the aggregate average daily
net assets attributable to the Class B shares of EVERGREEN NEW JERSEY TAX-FREE
INCOME FUND and EVERGREEN FLORIDA HIGH INCOME MUNICIPAL FUND, and .75 of 1% of
the aggregate average daily net assets attributable to the Class B shares of
EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN GEORGIA MUNICIPAL BOND FUND,
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL
BOND FUND and EVERGREEN VIRGINIA MUNICIPAL BOND FUND. Payments under the Plans
adopted with respect to Class A shares are currently voluntarily limited to .25
of 1% of each Fund's aggregate average daily net assets attributable to Class A
shares. The Plans provide that a portion of the fee payable thereunder may
constitute a service fee to be used for providing ongoing personal services
and/or the maintenance of shareholder accounts. EVERGREEN FLORIDA MUNICIPAL BOND
FUND, EVERGREEN GEORGIA MUNICIPAL BOND FUND, EVERGREEN NORTH CAROLINA MUNICIPAL
BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND and EVERGREEN VIRGINIA
MUNICIPAL BOND FUND have, in addition to the Plans adopted with respect to their
Class B shares, adopted a shareholder service plan ("Service Plans") relating to
the Class B shares which permit each Fund to incur a fee of up to .25 of 1% of
the aggregate average daily net assets attributable to the Class B shares for
ongoing personal services and/or the maintenance of shareholder accounts. Such
service fee payments to financial intermediaries for such purposes, whether
pursuant to a Plan or Service Plans, will not exceed .25% of the aggregate
average daily net assets attributable to each Class of shares of each Fund.
Each Fund has also entered into a distribution agreement (each a
"Distribution Agreement" or collectively the "Distribution Agreements") with
Evergreen Funds Distributor, Inc. ("EFD"). Pursuant to the Distribution
Agreements, each Fund will compensate EFD for its services as distributor at a
rate which may not exceed an annual rate of .25 of 1% of a Fund's aggregate
average daily net assets attributable to Class A shares, and .75 of 1% of a
Fund's aggregate average daily net assets attributable to the Class B shares.
The Distribution Agreements provide that EFD will use the distribution fee
received from a Fund for payments (i) to compensate broker-dealers or other
persons for distributing shares of the Funds, including interest and principal
payments made in respect of amounts paid to broker-dealers or other persons that
have been financed (EFD may assign its rights to receive compensation under the
Plans to secure such financings), (ii) to otherwise promote the sale of shares
of the Fund, and (iii) to compensate broker-dealers, depository institutions and
other financial intermediaries for providing administrative, accounting and
other services with respect to the Fund's shareholders. The financing of
payments made by EFD to compensate broker-dealers or other persons for
distributing shares of the Funds may be provided by FUNB or its affiliates. The
Funds may also make payments under the Plans (and in the case of EVERGREEN
FLORIDA MUNICIPAL BOND FUND, EVERGREEN GEORGIA MUNICIPAL BOND FUND, EVERGREEN
NORTH CAROLINA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
and EVERGREEN VIRGINIA MUNICIPAL BOND FUND, the Service Plans), in amounts up to
.25 of 1% of a Fund's aggregate average daily net assets on an annual basis
attributable to Class B shares, to compensate organizations, which may include
EFD and each Fund's investment adviser or their affiliates, for personal
services rendered to shareholders and/or the maintenance of shareholder
accounts.
The Funds may not pay any distribution or services fees during any fiscal
period in excess of the amounts set forth above. Since EFD's compensation under
the Distribution Agreements is not directly tied to the expenses incurred by
EFD, the amount of compensation received by it under the Distribution Agreements
during any year may be more or less than its actual expenses and may result in a
profit to EFD. Distribution expenses incurred by EFD in one fiscal year that
exceed the level of compensation paid to EFD for that year may be paid from
distribution fees received from a Fund in subsequent fiscal years.
The Plans and Service Plans are in compliance with rules of the National
Association of Securities Dealers, Inc. which effectively limit the annual
asset-based sales charges and service fees that a mutual fund may pay on a class
of shares to .75 of 1% and .25 of 1%, respectively, of the average annual net
assets attributable to that class. The rules also limit the aggregate of all
front-end, deferred and asset-based sales charges imposed with respect to a
class of shares by a mutual fund that also charges a service fee to 6.25% of
cumulative gross sales of shares of that class, plus interest at the prime rate
plus 1% per annum.
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<PAGE>
PURCHASE AND REDEMPTION OF SHARES
HOW TO BUY SHARES
You can purchase shares of any of the Funds through broker-dealers, banks
or other financial intermediaries, or directly through EFD. The minimum initial
investment is $1,000, which may be waived in certain situations. There is no
minimum for subsequent investments. Investments of $25 or more are allowed under
the systematic investment program. Share certificates are not issued. In states
where EFD is not registered as a broker-dealer shares of a Fund will only be
sold through other broker-dealers or other financial institutions that are
registered. See the Share Purchase Application and Statement of Additional
Information for more information. Only Class A and Class B shares are offered
through this Prospectus (see "General Information" -- "Other Classes of
Shares").

Class A Shares-Front-End Sales Charge Alternative. You can purchase Class A
shares at net asset value plus an initial sales charge on purchases under
$1,000,000. On purchases of $1,000,000 or more, a contingent deferred sales
charge ("CDSC") equal to the lesser of 1% of the purchase price or redemption
value will be imposed on shares redeemed during the first year after purchase.
The schedule of charges for Class A Shares is as follows:
Initial Sales Charge
<TABLE>
<CAPTION>
as a % of the Net as a % of the Commission to Dealer/Agent
Amount of Purchase Amount Invested Offering Price as a % of Offering Price
<S> <C> <C> <C>
Less than $50,000 4.99% 4.75% 4.25%
$50,000 - $99,000 4.71% 4.50% 4.25%
$100,000 - $249,999 3.90% 3.75% 3.25%
$250,000 - $499,999 2.56% 2.50% 2.00%
$500,000 - $999,999 2.04% 2.00% 1.75%
$1,000,000 - $2,999,999 None None 1.00%
$3,000,000 - $4,999,999 None None .50%
Over $5,000,000 None None .25%
</TABLE>

No front-end sales charges are imposed on Class A shares purchased by:
institutional investors, which may include bank trust departments and registered
investment advisers; investment advisers, consultants or financial planners who
place trades for their own accounts or the accounts of their clients and who
charge such clients a management, consulting, advisory or other fee; clients of
investment advisers or financial planners who place trades for their own
accounts if the accounts are linked to the master account of such investment
advisers or financial planners on the books of the broker-dealer through whom
shares are purchased; institutional clients of broker-dealers, including
retirement and deferred compensation plans and the trusts used to fund these
plans, which place trades through an omnibus account maintained with a Fund by
the broker-dealer; shareholders of record on October 12, 1990 in any series of
Evergreen Investment Trust in existence on that date, and the members of their
immediate families; employees of FUNB and its affiliates, EFD and any
broker-dealer with whom EFD has entered into an agreement to sell shares of the
Funds, and members of the immediate families of such employees; and upon the
initial purchase of an Evergreen mutual fund by investors reinvesting the
proceeds from a redemption within the preceding thirty days of shares of other
mutual funds, provided such shares were initially purchased with a front-end
sales charge or subject to a contingent deferred sales charge. Certain
broker-dealers or other financial institutions may impose a fee on transactions
in shares of the Funds.
When Class A shares are sold, EFD will normally retain a portion of the
applicable sales charge and pay the balance to the broker-dealer or other
financial intermediary through whom the sale was made. EFD may also pay fees to
banks from sales charges for services performed on behalf of the bank's
customers in connection with the purchase of shares of the Funds. In addition to
compensation paid at the time of sale, entities whose clients have purchased
Class A shares may receive a trailing commission equal to .25 of 1% of the
aggregate average daily net assets attributable to Class A shares of each Fund
held by their clients. Certain purchases of Class A shares may qualify for
reduced sales charges in accordance with a Fund's Combined Purchase Privilege,
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<PAGE>
Cumulative Quantity Discount, Statement of Intention, Privilege for Certain
Retirement Plans and Reinstatement Privilege. Consult the Share Purchase
Application and Statement of Additional Information for additional information
concerning these reduced sales charges.

Class B Shares-Deferred Sales Charge Alternative. You can purchase Class B
shares at net asset value without an initial sales charge. However, you may pay
a contingent deferred sales charge ("CDSC") if you redeem shares within seven
years after purchase. Shares obtained from dividend or distribution reinvestment
are not subject to the CDSC. The amount of the CDSC (expressed as a percentage
of the lesser of the current net asset value or original cost) will vary
according to the number of years from the purchase of Class B shares as set
forth below.
<TABLE>
<CAPTION>
Year Since Purchase Contingent Deferred Sales Charge
<S> <C> <C>
FIRST 5%
SECOND 4%
THIRD and FOURTH 3%
FIFTH 2%
SIXTH and SEVENTH 1%
</TABLE>

The CDSC is deducted from the amount of the redemption and is paid to
EFD. The CDSC will be waived on redemptions of shares following the death or
disability of a shareholder, to meet distribution requirements for certain
qualified retirement plans or in the case of certain redemptions made under a
Fund's Systematic Cash Withdrawal Plan. Class B shares are subject to higher
distribution and/or shareholder service fees than Class A shares for a period of
seven years (after which they convert to Class A shares). The higher fees mean a
higher expense ratio, so Class B shares pay correspondingly lower dividends and
may have a lower net asset value than Class A shares. See the Statement of
Additional Information for further details.
With respect to Class B shares, no CDSC will be imposed on: (1) the
portion of redemption proceeds attributable to increases in the value of the
account due to increases in the net asset value per share, (2) shares acquired
through reinvestment of dividends and capital gains, (3) shares held for more
than seven years after the end of the calendar month of acquisition, (4)
accounts following the death or disability of a shareholder, or (5) minimum
required distributions to a shareholder over the age of 70 1/2 from an IRA or
other retirement plan.

How the Funds Value Their Shares. The net asset value of each Class of shares of
a Fund is calculated by dividing the value of the amount of the Fund's net
assets attributable to that Class by the outstanding shares of that Class.
Shares are valued each day the New York Stock Exchange (the "Exchange") is open
as of the close of regular trading (currently 4:00 p.m. Eastern time). The
Exchange is closed on New Year's Day, Presidents Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The securities
in a Fund are valued at their current market value determined on the basis of
market quotations or, if such quotations are not readily available, such other
methods as the Trustees believe would accurately reflect fair market value.

General. The decision as to which Class of shares is more beneficial to you
depends on the amount of your investment and the length of time you will hold
it. If you are making a large investment, thus qualifying for a reduced sales
charge, you might consider Class A shares. If you are making a smaller
investment, you might consider Class B shares since 100% of your purchase is
invested immediately and since such shares will convert to Class A shares, which
incur lower ongoing distribution and/or shareholder service fees, after seven
years. The compensation received by dealers and agents may differ depending on
whether they sell Class A or Class B shares. There is no size limit on purchases
of Class A shares.
In addition to the discount or commission paid to dealers, EFD will from
time to time pay to dealers additional cash or other incentives that are
conditioned upon the sale of a specified minimum dollar amount of shares of a
Fund and/or other Evergreen Mutual Funds. Such incentives will take the form of
payment for attendance at seminars, lunches, dinners, sporting events or theater
performances, or payment for travel, lodging and entertainment incurred in
connection with travel by persons associated with a dealer and their immediate
family members to urban or resort locations within or outside the United States.
Such a dealer may elect to receive cash incentives of equivalent amount in lieu
of such payments. EFD may also limit the availability of such incentives to
certain specified dealers. EFD from time to time sponsors promotions involving
First Union Brokerage Services, Inc. ("FUBS"), an affiliate of each Fund's
investment adviser, and select broker-dealers, pursuant to which incentives are
paid, including gift certificates and payments in amounts up to 1% of the dollar
amount of shares of a Fund sold. Awards may also be made based on the opening of
a minimum number of accounts. Such promotions are not being made available to
all dealers.
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<PAGE>
Additional Purchase Information. As a condition of this offering, if a purchase
is canceled due to nonpayment or because an investor's check does not clear, the
investor will be responsible for any loss a Fund or the Fund's investment
adviser incurs. If such investor is an existing shareholder, a Fund may redeem
shares from an investor's account to reimburse the Fund or its investment
adviser for any loss. In addition, such investors may be prohibited or
restricted from making further purchases in any of the Evergreen mutual funds.

HOW TO REDEEM SHARES
You may "redeem", i.e., sell your shares in a Fund to the Fund on any day
the Exchange is open, either directly or through your financial intermediary.
The price you will receive is the net asset value (less any applicable CDSC for
Class B shares) next calculated after the Fund receives your request in proper
form. Proceeds generally will be sent to you within seven days. However, for
shares recently purchased by check, a Fund will not send proceeds until it is
reasonably satisfied that the check has been collected (which may take up to ten
days). Once a redemption request has been telephoned or mailed, it is
irrevocable and may not be modified or canceled.

Redeeming Shares Through Your Financial Intermediary. A Fund must receive
instructions from your financial intermediary before 4:00 p.m. (Eastern time)
for you to receive that day's net asset value (less any applicable CDSC for
Class B shares). Your financial intermediary is responsible for furnishing all
necessary documentation to a Fund and may charge you for this service. Certain
financial intermediaries may require that you give instructions earlier than
4:00 p.m.

Redeeming Shares Directly by Mail or Telephone. Send a signed letter of
instruction or stock power form to State Street Bank and Trust Company ("State
Street") which is the registrar, transfer agent and dividend-disbursing agent
for each Fund. Stock power forms are available from your financial intermediary,
State Street, and many commercial banks. Additional documentation is required
for the sale of shares by corporations, financial intermediaries, fiduciaries
and surviving joint owners. Signature guarantees are required for all redemption
requests for shares with a value of more than $10,000 or where the redemption
proceeds are to be mailed to an address other than that shown in the account
registration. A signature guarantee must be provided by a bank or trust company
(not a Notary Public), a member firm of a domestic stock exchange or by other
financial institutions whose guarantees are acceptable to State Street.
Shareholders may withdraw amounts of $1,000 or more from their accounts
by calling the telephone number on the front page of this Prospectus between the
hours of 8:00 a.m. and 5:30 p.m. (Eastern time) each business day (i.e., any
weekday exclusive of days on which the Exchange or State Street's offices are
closed). The Exchange is closed on New Year's Day, Presidents Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Redemption requests made after 4:00 p.m. (Eastern time) will be processed using
the net asset value determined on the next business day. Such redemption
requests must include the shareholder's account name, as registered with a Fund,
and the account number. During periods of drastic economic or market changes,
shareholders may experience difficulty in effecting telephone redemptions.
Shareholders who are unable to reach a Fund or State Street by telephone should
follow the procedures outlined above for redemption by mail.
The telephone redemption service is not made available to shareholders
automatically. Shareholders wishing to use the telephone redemption service must
indicate this on the Share Purchase Application and choose how the redemption
proceeds are to be paid. Redemption proceeds will either (i) be mailed by check
to the shareholder at the address in which the account is registered or (ii) be
wired to an account with the same registration as the shareholder's account in a
Fund at a designated commercial bank. State Street currently deducts a $5 wire
charge from all redemption proceeds wired. This charge is subject to change
without notice. A shareholder who decides later to use this service, or to
change instructions already given, should fill out a Shareholder Services Form
and send it to State Street Bank and Trust Company, P.O. Box 9021, Boston,
Massachusetts 02205-9827, with such shareholder's signature guaranteed by a bank
or trust company (not a Notary Public), a member firm of a domestic stock
exchange or by other financial institutions whose guarantees are acceptable to
State Street. Shareholders should allow approximately ten days for such form to
be processed. The Funds will employ reasonable procedures to verify that
telephone requests are genuine. These procedures include requiring some form of
personal identification prior to acting upon instructions and tape recording of
conversations. If the Fund fails to follow such procedures, it may be liable for
any losses due to unauthorized or fraudulent instructions. The Fund shall not be
liable for following telephone instructions reasonably believed to be genuine.
Also, the Fund reserves the right to refuse a telephone redemption request, if
it is believed advisable to do
26

<PAGE>
so. Financial intermediaries may charge a fee for handling telephonic requests.
The telephone redemption option may be suspended or terminated at any time
without notice.

General. The sale of shares is a taxable transaction for federal tax purposes.
Under unusual circumstances, a Fund may suspend redemptions or postpone payment
for up to seven days or longer, as permitted by federal securities law. The
Funds reserve the right to close an account that through redemption has remained
below $1,000 for thirty days. Shareholders will receive sixty days' written
notice to increase the account value before the account is closed. The Funds
have elected to be governed by Rule 18f-1 under the Investment Company Act of
1940 pursuant to which each Fund is obligated to redeem shares solely in cash,
up to the lesser of $250,000 or 1% of a Fund's total net assets during any
ninety day period for any one shareholder. See the Statement of Additional
Information for further details.

EXCHANGE PRIVILEGE
How To Exchange Shares. You may exchange some or all of your shares for shares
of the same Class in the other Evergreen mutual funds through your financial
intermediary, or by telephone or mail as described below. An exchange which
represents an initial investment in another Evergreen mutual fund must amount to
at least $1,000. Once an exchange request has been telephoned or mailed, it is
irrevocable and may not be modified or canceled. Exchanges will be made on the
basis of the relative net asset values of the shares exchanged next determined
after an exchange request is received. Exchanges are subject to minimum
investment and suitability requirements.
Each of the Evergreen mutual funds has different investment objectives
and policies. For complete information, a prospectus of the fund into which an
exchange will be made should be read prior to the exchange. An exchange is
treated for federal income tax purposes as a redemption and purchase of shares
and may result in the realization of a capital gain or loss. Shareholders are
limited to five exchanges per calendar year, with a maximum of three per
calendar quarter. This exchange privilege may be modified or discontinued at any
time by the Fund upon sixty days' notice to shareholders and is only available
in states in which shares of the fund being acquired may lawfully be sold.
No CDSC will be imposed in the event Class B shares are exchanged for
Class B shares of other Evergreen mutual funds. If you redeem shares, the CDSC
applicable to the Class B shares of the Evergreen mutual fund originally
purchased for cash is applied. Also, Class B shares will continue to age
following an exchange for purposes of conversion to Class A shares and
determining the amount of the applicable CDSC.

Exchanges Through Your Financial Intermediary. A Fund must receive exchange
instructions from your financial intermediary before 4:00 p.m. (Eastern time)
for you to receive that day's net asset value. Your financial intermediary is
responsible for furnishing all necessary documentation to a Fund and may charge
you for this service.

Exchanges by Telephone and Mail. You may exchange shares by telephone by calling
the telephone number on the front page of this Prospectus. Exchange requests
made after 4:00 p.m. (Eastern time) will be processed using the net asset value
determined on the next business day. During periods of drastic economic or
market changes, shareholders may experience difficulty in effecting telephone
exchanges. You should follow the procedures outlined below for exchanges by mail
if you are unable to reach State Street by telephone. If you wish to use the
telephone exchange service you should indicate this on the Share Purchase
Application. As noted above, each Fund will employ reasonable procedures to
confirm that instructions for the redemption or exchange of shares communicated
by telephone are genuine. A telephone exchange may be refused by a Fund or State
Street if it is believed advisable to do so. Procedures for exchanging Fund
shares by telephone may be modified or terminated at any time. Written requests
for exchanges should follow the same procedures outlined for written redemption
requests in the section entitled "How to Redeem Shares", however, no signature
guarantee is required.

SHAREHOLDER SERVICES
The Funds offer the following shareholder services. For more information
about these services or your account, contact your financial intermediary, EFD
or the toll-free number on the front page of this Prospectus. Some services are
described in more detail in the Share Purchase Application.

Systematic Investment Plan. You may make monthly or quarterly investments into
an existing account automatically in amounts of not less than $25 per month or
$75 per quarter. Each Fund reserves the right to close an account that through
liquidation or termination of the systematic investment plan has not reached a
minimum balance of $1,000 ($250 for retirement accounts) within 24 months of the
initial investment. You can open a
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systematic investment plan in the EVERGREEN FLORIDA MUNICIPAL BOND FUND for a
minimum of only $50 per month with no initial investment required.

Telephone Investment Plan. You may make investments into an existing account
electronically in amounts of not less than $100 or more than $10,000 per
investment. Telephone investment requests received by 3:00 p.m. (Eastern time)
will be credited to a shareholder's account the day the request is received.

Systematic Cash Withdrawal Plan. When an account of $10,000 or more is opened or
when an existing account reaches that size, you may participate in the Funds'
Systematic Cash Withdrawal Plan by filling out the appropriate part of the Share
Purchase Application. Under this plan, you may receive (or designate a third
party to receive) a monthly or quarterly check in a stated amount of not less
than $75. Fund shares will be redeemed as necessary to meet withdrawal payments.
All participants must elect to have their dividends and capital gain
distributions reinvested automatically. Any applicable Class B CDSC will be
waived with respect to redemptions occurring under a Systematic Cash Withdrawal
Plan during a calendar year to the extent that such redemptions do not exceed
10% of (i) the initial value of the account plus (ii) the value, at the time of
purchase, of any subsequent investments.

Automatic Reinvestment Plan. For the convenience of investors, all dividends and
distributions are automatically reinvested in full and fractional shares of a
Fund at the net asset value per share on the last business day of each month,
unless otherwise requested by a shareholder in writing. If the transfer agent
does not receive a written request for subsequent dividends and/or distributions
to be paid in cash at least three full business days prior to a given record
date, the dividends and/or distributions to be paid to a shareholder will be
reinvested. If you elect to receive dividends and distributions in cash and the
U.S. Postal Service cannot deliver the checks, or if the checks remain uncashed
for six months, the checks will be reinvested into your account at the then
current net asset value.

EFFECT OF BANKING LAWS
The Glass-Steagall Act and other banking laws and regulations presently
prohibit member banks of the Federal Reserve System ("Member Banks") or their
non-bank affiliates from sponsoring, organizing, controlling, or distributing
the shares of registered open-end investment companies such as the Funds. Such
laws and regulations also prohibit banks from issuing, underwriting or
distributing securities in general. However, under the Glass-Steagall Act and
such other laws and regulations, a Member Bank or an affiliate thereof may act
as investment adviser, transfer agent or custodian to a registered open-end
investment company and may also act as agent in connection with the purchase of
shares of such an investment company upon the order of its customer. Evergreen
Asset, since it is a subsidiary of FUNB, and CMG are subject to and in
compliance with the aforementioned laws and regulations.
Changes to applicable laws and regulations or future judicial or
administrative decisions could result in CMG being prevented from continuing to
perform the services required under the investment advisory contract or from
acting as agent in connection with the purchase of shares of a Fund by its
customers. If CMG were prevented from continuing to provide the services called
for under the investment advisory agreement, it is expected that the Trustees
would identify, and call upon each Fund's shareholders to approve, a new
investment adviser. If this were to occur, it is not anticipated that the
shareholders of any Fund would suffer any adverse financial consequences.
OTHER INFORMATION
DIVIDENDS, DISTRIBUTIONS AND TAXES
Income dividends are declared daily and paid monthly. Distributions of
any net realized gains of a Fund will be made at least annually. Shareholders
will begin to earn dividends on the first business day after shares are
purchased unless shares were not paid for, in which case dividends are not
earned until the next business day after payment is received. Each Fund has
qualified and intends to continue to qualify to be treated as a regulated
investment company under the Code. While so qualified, so long as each Fund
distributes all of its investment company taxable income and any net realized
gains to shareholders, it is expected that the Funds will not be required to pay
any Federal income taxes. A 4% nondeductible excise tax will be imposed on a
Fund if it does not meet certain distribution requirements by the end of each
calendar year. Each Fund anticipates meeting such distribution requirements.
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The Funds will designate and pay exempt-interest dividends derived from
interest earned on qualifying tax-exempt obligations. Such exempt-interest
dividends may be excluded by shareholders of a Fund from their gross income for
federal income tax purposes, however (1) all or a portion of such
exempt-interest dividends may be a specific preference item for purposes of the
federal individual and corporate alternative minimum taxes to the extent that
they are derived from certain types of private activity bonds issued after
August 7, 1986, and (2) all exempt-interest dividends will be a component of the
"adjusted current earnings" for purposes of the federal corporate alternative
minimum tax.
Dividends paid from taxable income, if any, and distributions of any net
realized short-term capital gains (whether from tax exempt or taxable
obligations) are taxable as ordinary income and long-term capital gain
distributions are taxable as long-term capital gains, even though received in
additional shares of the Fund, and regardless of the investors holding period
relating to the shares with respect to which such gains are distributed. Market
discount recognized on taxable and tax-exempt bonds is taxable as ordinary
income, not as excludable income. Under current law, the highest federal income
tax rate applicable to net long-term gains realized by individuals is 28%. The
rate applicable to corporations is 35%.
Since each Fund's gross income is ordinarily expected to be tax exempt
interest income, it is not expected that the 70% dividends-received deduction
for corporations will be applicable. Specific questions should be addressed to
the investor's own tax adviser.
Each Fund is required by federal law to withhold 31% of reportable
payments (which may include dividends, capital gains distributions (if any) and
redemptions) paid to certain shareholders. In order to avoid this backup
withholding requirement, each investor must certify on the Share Purchase
Application, or on a separate form supplied by State Street, that the investor's
social security or taxpayer identification number is correct and that the
investor is not currently subject to backup withholding or is exempt from backup
withholding.
Set forth below are brief descriptions of the personal income tax status
of an investment in each of the Funds under Florida, Georgia, New Jersey, North
Carolina, South Carolina, and Virginia tax laws currently in effect. Income from
a Fund is not necessarily free from state income taxes in states other than its
designated state. State laws differ on this issue, and shareholders are urged to
consult their own tax advisers regarding the status of their accounts under
state and local laws.
EVERGREEN FLORIDA MUNICIPAL BOND FUND AND EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND. Florida does not currently impose an income tax on
individuals. Thus, individual shareholders of the Funds will not be subject to
any Florida state income tax on distributions received from the Funds. However,
certain distributions will be taxable to corporate shareholders which are
subject to Florida corporate income tax. Florida currently imposes an
intangibles tax at the annual rate of 0.20% on certain securities and other
intangible assets owned by Florida residents. Certain types of tax exempt
securities of Florida issuers, U.S. government securities and tax exempt
securities issued by certain U.S. territories and possessions are exempt from
this intangibles tax. Shares of the Funds will also be exempt from the Florida
intangibles tax if the portfolio consists exclusively of securities exempt from
the intangibles tax on the last business day of the calendar year. If the
portfolio consists of any assets which are not so exempt on the last business
day of the calendar year, however, only the portion of the shares of the Funds
which relate to securities issued by the United States and its possessions and
territories will be exempt from the Florida intangibles tax, and the remaining
portion of such shares will be fully subject to the intangibles tax, even if
they partly relate to Florida tax exempt securities.
EVERGREEN GEORGIA MUNICIPAL BOND FUND. Under existing Georgia law,
shareholders of the Fund will not be subject to individual or corporate Georgia
income taxes on distributions from the Fund to the extent that such
distributions represent exempt-interest dividends for federal income tax
purposes that are attributable to (1) interest-bearing obligations issued by or
on behalf of the State of Georgia or its political subdivisions, or (2) interest
on obligations of the United States or of any other issuer whose obligations are
exempt from state income taxes under federal law. Distributions, if any, derived
from capital gains or other sources generally will be taxable for Georgia income
tax purposes to shareholders of the Fund who are subject to the Georgia income
tax. For purposes of the Georgia intangibles tax, shares of the Fund likely are
taxable (at the rate of 10 cents per $1,000 in value of the shares held on
January 1 of each year) to shareholders who are otherwise subject to such tax.
EVERGREEN NEW JERSEY TAX-FREE INCOME FUND. In any year in which the Fund
satisfies the requirements for treatment as a "qualified investment fund" under
New Jersey law, distributions from the Fund will be exempt from the New Jersey
Gross Income Tax to the extent such distributions are attributable to interest
or gains from (i) obligations issued by or on behalf of the State of New Jersey
or any county, municipality, school or other district,
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<PAGE>
agency, authority, commission, instrumentality, public corporation, body
corporate and politic or political subdivision of New Jersey or (ii) obligations
that are otherwise statutorily exempt from state or local taxation or under the
laws of the United States. Any gains realized on the sale or redemption of
shares held in a qualified investment fund are also exempt from the New Jersey
Gross Income Tax.
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND. Under existing North
Carolina law, shareholders of the Fund will not be subject to individual or
corporate North Carolina income taxes on distributions from the Fund to the
extent that such distributions represent exempt-interest dividends for federal
income tax purposes that are attributable to (1) interest on obligations issued
by North Carolina and political subdivisions thereof or (2) interest on
obligations of the United States or its territories or possessions.
Distributions, if any, derived from capital gains or other sources generally
will be taxable for North Carolina income tax purposes to shareholders of the
Fund who are subject to the North Carolina income tax.
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND. Under existing South
Carolina law, shareholders of the Fund will not be subject to individual or
corporate South Carolina income taxes on Fund distributions to the extent that
such distributions represent exempt-interest dividends for federal income tax
purposes that are attributable to (1) interest on obligations of the State of
South Carolina, or any of its political subdivisions, (2) interest on
obligations of the United States, or (3) interest on obligations of any agency
or instrumentality of the United States that is prohibited by federal law from
being taxed by a state or any political subdivision of a state. Distributions,
if any, derived from capital gains or other sources, generally will be taxable
for South Carolina income tax purposes to shareholders of the Fund who are
subject to South Carolina income tax.
EVERGREEN VIRGINIA MUNICIPAL BOND FUND. Under existing Virginia law,
shareholders of the Fund will not be subject to individual or corporate Virginia
income taxes on distributions received from the Fund to the extent that such
distributions represent exempt-interest dividends for federal income tax
purposes that are attributable to interest earned on (1) obligations issued by
or on behalf of the Commonwealth of Virginia or any political subdivision
thereof, or (2) obligations issued by a territory or possession of the United
States or any subdivision thereof which federal law exempts from state income
taxes. Distributions, if any, derived from capital gains or other sources
generally will be taxable for Virginia income tax purposes to shareholders of
the Fund who are subject to Virginia income tax.
Statements describing the tax status of shareholders' dividends and
distributions will be mailed annually by the Funds. These statements will set
forth the amount of income exempt from federal and if applicable, state
taxation, and the amount, if any, subject to federal and state taxation.
Moreover, to the extent necessary, these statements will indicate the amount of
exempt-interest dividends which are a specific preference item for purposes of
the federal individual and corporate alternative minimum taxes. The exemption of
interest income for federal income tax purposes does not necessarily result in
exemption under the income or other tax law of any state or local taxing
authority. Investors should consult their own tax advisers about the status of
distributions from the Funds in their states and localities. Each Fund notifies
shareholders annually as to the interest exempt from federal taxes earned by the
Fund.
A shareholder who acquires Class A shares of a Fund and sells or otherwise
disposes of such shares within ninety days of acquisition may not be allowed to
include certain sales charges incurred in acquiring such shares for purposes of
calculating gain and loss realized upon a sale or exchange of shares of the
Fund.

GENERAL INFORMATION
Portfolio Transactions. Consistent with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., and subject to seeking best
price and execution, a Fund may consider sales of its shares as a factor in the
selection of dealers to enter into portfolio transactions with the Fund.

Organization. EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND is a separate
investment series of The Evergreen Municipal Trust, a Massachusetts business
trust organized in 1988. EVERGREEN NEW JERSEY TAX-FREE INCOME FUND is a separate
investment series of The Evergreen Tax Free Trust (formerly FFB Funds Trust), a
Massachusetts business trust organized in 1985. EVERGREEN FLORIDA MUNICIPAL BOND
FUND, EVERGREEN GEORGIA MUNICIPAL BOND FUND, EVERGREEN NORTH CAROLINA MUNICIPAL
BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND and EVERGREEN VIRGINIA
MUNICIPAL BOND FUND are each separate investment series of Evergreen Investment
Trust (formerly First Union Funds), a Massachusetts business trust organized in
1984. The Funds do not intend to hold annual shareholder meetings; shareholder
meetings will be held only when required by applicable law. Shareholders have
available certain procedures for the removal of Trustees.
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A shareholder in each class of a Fund will be entitled to his or her
share of all dividends and distributions from a Fund's assets, based upon the
relative value of such shares to those of other Classes of the Fund, and, upon
redeeming shares, will receive the then current net asset value of the Class of
shares of the Fund represented by the redeemed shares less any applicable CDSC.
Each Trust named above is empowered to establish, without shareholder approval,
additional investment series, which may have different investment objectives,
and additional classes of shares for any existing or future series. If an
additional series or class were established in a Fund, each share of the series
or class would normally be entitled to one vote for all purposes. Generally,
shares of each series and class would vote together as a single class on
matters, such as the election of Trustees, that affect each series and class in
substantially the same manner. Class A, B and Y shares have identical voting,
dividend, liquidation and other rights, except that each class bears, to the
extent applicable, its own distribution, shareholder service and transfer agency
expenses as well as any other expenses applicable only to a specific class. Each
class of shares votes separately with respect to Rule 12b-1 distribution plans
and other matters for which separate class voting is appropriate under
applicable law. Shares are entitled to dividends as determined by the Trustees
and, in liquidation of a Fund, are entitled to receive the net assets of the
Fund.

Custodian, Registrar, Transfer Agent and Dividend-Disbursing Agent. State Street
Bank and Trust Company, P.O. Box 9021, Boston, Massachusetts 02205-9827 acts as
each Fund's custodian, registrar, transfer agent and dividend-disbursing agent
for a fee based upon the number of shareholder accounts maintained for the
Funds. The transfer agency fee with respect to the Class B shares will be higher
than the transfer agency fee with respect to the Class A shares.

Principal Underwriter. EFD, an affiliate of Furman Selz LLC located at 230 Park
Avenue, New York, New York 10169, is the principal underwriter of the Funds.
Furman Selz Incorporated also acts as sub-administrator to the Funds.

Other Classes of Shares. Each Fund currently offers three classes of shares,
Class A, Class B and Class Y, and may in the future offer additional classes.
Class Y shares are not offered by this Prospectus and are only available to (i)
persons who at or prior to December 31, 1994, owned shares in a mutual fund
advised by Evergreen Asset (ii) certain institutional investors and (iii)
investment advisory clients of CMG, Evergreen Asset or their affiliates. The
dividends payable with respect to Class A and Class B shares will be less than
those payable with respect to Class Y shares due to the distribution and
distribution related expenses borne by Class A and Class B shares and the fact
that such expenses are not borne by Class Y shares.

Performance Information. A Fund's performance may be quoted in advertising in
terms of yield or total return. Both types of performance are based on
Securities and Exchange Commission ("SEC") formulas and are not intended to
indicate future performance.
Yield is a way of showing the rate of income a Fund earns on its
investments as a percentage of the Fund's share price. A Fund's yield is
calculated according to accounting methods that are standardized by the SEC for
all stock and bond funds. Because yield accounting methods differ from the
method used for other accounting purposes, a Fund's yield may not equal its
distribution rate, the income paid to your account or the income reported in a
Fund's financial statements. To calculate yield, a Fund takes the interest
income it earned from its portfolio of investments (as defined by the SEC
formula) for a 30-day period (net of expenses), divides it by the average number
of shares entitled to receive dividends, and expresses the result as an
annualized percentage rate based on a Fund's share price at the end of the
30-day period. This yield does not reflect gains or losses from selling
securities.
Total returns are based on the overall dollar or percentage change in the
value of a hypothetical investment in a Fund. A Fund's total return shows its
overall change in value including changes in share prices and assumes all a
Fund's distributions are reinvested. A cumulative total return reflects a Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical annually compounded return that would have produced
the same cumulative total return if a Fund's performance had been constant over
the entire period. Because average annual total returns tend to smooth out
variations in a Fund's return, you should recognize that they are not the same
as actual year-by-year results. To illustrate the components of overall
performance, a Fund may separate its cumulative and average annual total returns
into income results and realized and unrealized gain or loss.
Each Fund may also quote tax-equivalent yields, which show the taxable
yields an investor would have to earn before taxes to equal the Fund's tax-free
yields. A tax-equivalent yield is calculated by dividing a Fund's tax-
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exempt yield by the result of one minus a stated federal tax rate. If only a
portion of a Fund's income was tax-exempt, only that portion is adjusted in the
calculation.
Comparative performance information may also be used from time to time in
advertising or marketing a Fund's shares, including data from Lipper Analytical
Services, Inc., Morningstar and other industry publications. The Fund may also
advertise in items of sales literature an "actual distribution rate" which is
computed by dividing the total ordinary income distributed (which may include
the excess of short-term capital gains over losses) to shareholders for the
latest twelve month period by the maximum public offering price per share on the
last day of the period. Investors should be aware that past performance may not
be reflective of future results.
In marketing a Fund's shares, information may be provided that is
designed to help individuals understand their investment goals and explore
various financial strategies. Such information may include publications
describing general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; a questionnaire designed to
help create a personal financial profile; and an action plan offering investment
alternatives. The information provided to investors may also include discussions
of other Evergreen mutual funds, products, and services, which may include:
retirement investing; brokerage products and services; the effects of periodic
investment plans and dollar cost averaging; saving for college; and charitable
giving. In addition, the information provided to investors may quote financial
or business publications and periodicals, including model portfolios or
allocations, as they relate to fund management, investment philosophy, and
investment techniques. The materials may also reprint, and use as advertising
and sales literature, articles from Evergreen Events, a quarterly magazine
provided free of charge to Evergreen Mutual fund shareholders.

Liability Under Massachusetts Law. Under Massachusetts law, trustees and
shareholders of a business trust may, in certain circumstances, be held
personally liable for its obligations. The Declarations of Trust under which
each Fund operates provide that no Trustee or shareholder will be personally
liable for the obligations of the Trust and that every written contract made by
the Trust contain a provision to that effect. If any Trustee or shareholder were
required to pay any liability of the Trust, that person would be entitled to
reimbursement from the general assets of the Trust.

Additional Information. This Prospectus and the Statement of Additional
Information, which have been incorporated by reference herein, do not contain
all the information set forth in the Registration Statements filed by the Trusts
with the SEC under the Securities Act of 1933, as amended. Copies of the
Registration Statements may be obtained at a reasonable charge from the SEC or
may be examined, without charge, at the offices of the SEC in Washington, D.C.
APPENDIX A -- FLORIDA RISK CONSIDERATIONS
The following is a summary of economic factors which may affect the
ability of the municipal issuers of Florida obligations to repay general
obligation and revenue bonds. Such information is derived from sources that are
generally available to investors and is believed by the Funds to be accurate,
but has not been independently verified and may not be complete. Under current
law, the State of Florida is required to maintain a balanced budget such that
current expenses are met from current revenues. Florida does not currently
impose a tax on personal income but does impose taxes on corporate income
derived from activities within the state. In addition, Florida imposes an ad
valorem tax as well as sales and use taxes. These taxes are the principal
sources of funds to meet state expenses, including repayment of, and interest
on, obligations backed solely by the full faith and credit of the state, without
recourse to any specific project or related revenue source.
On November 3, 1992, Florida voters approved an amendment to the state
constitution which limits the annual growth in the assessed valuation of
residential property and which, over time, could constrain the growth in
property taxes, a major revenue source for local governments. The amendment
restricts annual increases in assessed valuation to the lesser of 3% or the
Consumer Price Index. The amendment applies only to residential properties
eligible for the homestead exemption and does not affect the valuation of
rental, commercial, or industrial properties. When sold, residential property
would be reassessed at market value. The amendment became effective January 1,
1993. While no immediate ratings implications are expected, the amendment could
have a negative impact on the financial performance of local governments over
time and lead to ratings revisions which may have a negative impact on the
prices of affected bonds.
Many of the bonds in which the Funds invest were issued by various units
of local government in the State of Florida. In addition, most of these bonds
are revenue bonds where the security interest of the bond holders typically is
limited to the pledge of revenues or special assessments flowing from the
project financed by the bonds. Projects include, but are not limited to, water
and waste water utilities, drainage systems, roadways, and other
development-related infrastructures. Therefore, the capacity of these issuers to
repay their obligations may be affected by variations in the Florida economy.
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Since 1970, Florida has been one of the fastest growing states in the
nation. Average annual population growth over the last 20 years was 320,000.
During this period only California and Texas grew more rapidly. In terms of
total population, Florida moved from the ninth most populous state in 1970 to
fourth today.
This rapid and sustained pace of population growth has given rise to
sharp increases in construction activity and to the need for roads, drainage
systems, and utilities to serve the burgeoning population. In turn this has
driven the growth in the volume of revenue bond debt outstanding.
The pace of growth, however, has not been steady. During economic
expansions, Florida's population growth has exceeded 500,000 people per year,
but in recessions growth has slowed to 120,000 per year. The variations in
construction activity over the course of business cycles is also very large.
Although the amplitude of the swings during business cycles is large, the
duration of downturns in Florida's growth has been short. Historically,
depressed levels of growth have lasted only a year or two at most. Furthermore,
Florida's cycles have not been periods of growth or decline. Instead, what has
occurred are periods of more growth or less growth.
Florida's ability to meet increasing expenses will be dependent in part
upon the state's ability to foster business and economic growth. During the past
decade, Florida has experienced significant increases in the technology-based
and other light industries and in the service sector. This growth has
diversified the state's overall economy, which at one time was dominated by the
citrus and tourism industries. The state's economic and business growth could be
restricted, however, by the natural limitations of environmental resources and
the state's ability to finance adequate public facilities such as roads and
schools.
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INVESTMENT ADVISER
Capital Management Group of First Union National Bank of North Carolina, 201
South College Street, Charlotte, North Carolina 28288
CUSTODIAN & TRANSFER AGENT
State Street Bank and Trust Company, Box 9021, Boston, Massachusetts
02205-9827
LEGAL COUNSEL
Sullivan & Worcester LLP, 1025 Connecticut Avenue, N.W., Washington, D.C.
20036
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, One Mellon Bank Center, Pittsburgh, Pennsylvania 15219
EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN GEORGIA MUNICIPAL BOND
FUND, EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, EVERGREEN NORTH CAROLINA
MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND,
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York 10036
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
DISTRIBUTOR
Evergreen Funds Distributor, Inc., 230 Park Avenue, New York, New York 10169
536118rev02 (10/pkg.) 1/96

********************************************************************************
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PROSPECTUS January 22, 1996

EVERGREEN(SM) STATE SPECIFIC TAX FREE FUNDS (Evergreen Tree Logo)

CLASS Y SHARES
The Evergreen State Specific Tax-Free Funds (the "Funds") are
designed to provide investors with current income exempt from Federal
income tax and certain state income tax. This Prospectus provides
information regarding the Class Y shares offered by the Funds. Each Fund
is, or is a series of, an open-end, non-diversified, management investment
company except for EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND which
is diversified. This Prospectus sets forth concise information about the
Funds that a prospective investor should know before investing. The address
of the Funds is 2500 Westchester Avenue, Purchase, New York 10577.

A "Statement of Additional Information" for the Funds and certain
other funds in the Evergreen group of mutual funds dated January 22, 1996
has been filed with the Securities and Exchange Commission and is
incorporated by reference herein. The Statement of Additional Information
provides information regarding certain matters discussed in this Prospectus
and other matters which may be of interest to investors, and may be
obtained without charge by calling the Funds at (800) 235-0064. There can
be no assurance that the investment objective of any Fund will be achieved.
Investors are advised to read this Prospectus carefully.

THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF
ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, ARE NOT INSURED OR
OTHERWISE PROTECTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY AND
INVOLVE INVESTMENT RISKS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND WILL INVEST AT LEAST 65%
OF THE VALUE OF ITS TOTAL ASSETS IN MUNICIPAL SECURITIES CONSISTING OF HIGH
YIELD (I.E., HIGH RISK), MEDIUM, LOWER RATED AND UNRATED BONDS. SUCH
SECURITIES ARE COMMONLY CALLED JUNK BONDS AND ARE SUBJECT TO GREATER MARKET
FLUCTUATIONS AND RISK OF LOSS OF INCOME AND PRINCIPAL THAN HIGHER RATED
SECURITIES. LOWER QUALITY SECURITIES INVOLVE A GREATER RISK OF DEFAULT AND,
CONSEQUENTLY, SHARES OF THE EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND
FUND ARE SPECULATIVE SECURITIES.
KEEP THIS PROSPECTUS FOR FUTURE REFERENCE
EVERGREEN(SM) is a Service Mark of Evergreen Asset Management Corp.
Copyright 1995, Evergreen Asset Management Corp.

<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
OVERVIEW OF THE FUNDS 2
EXPENSE INFORMATION 3
FINANCIAL HIGHLIGHTS 5
DESCRIPTION OF THE FUNDS
Investment Objectives and Policies 12
Investment Practices and Restrictions 14
MANAGEMENT OF THE FUNDS
Investment Adviser 18
PURCHASE AND REDEMPTION OF SHARES
How to Buy Shares 20
How to Redeem Shares 21
Exchange Privilege 21
Shareholder Services 22
Effect of Banking Laws 22
OTHER INFORMATION
Dividends, Distributions and Taxes 23
Management's Discussion of Fund Performance 25
General Information 25
APPENDIX
Florida Risk Considerations 27
</TABLE>

The Capital Management Group of First Union National Bank of North
Carolina ("CMG") serves as investment adviser to Evergreen State Specific Tax
Free Funds which include: EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN
GEORGIA MUNICIPAL BOND FUND, EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND,
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND, EVERGREEN VIRGINIA MUNICIPAL BOND
FUND AND EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND. First Union National
Bank of North Carolina ("FUNB") is a subsidiary of First Union Corporation, the
sixth largest bank holding company in the United States.

EVERGREEN FLORIDA MUNICIPAL BOND FUND (formerly First Union Florida
Municipal Bond Portfolio, successor to ABT Florida Tax-Free Fund) seeks current
income exempt from federal income tax consistent with preservation of capital.
In addition, the Fund intends to qualify as an investment exempt from the
Florida state intangibles tax.
EVERGREEN GEORGIA MUNICIPAL BOND FUND (formerly First Union Georgia
Municipal Bond Portfolio) seeks current income exempt from federal income tax
and Georgia state income tax, consistent with preservation of capital.

EVERGREEN NEW JERSEY TAX-FREE INCOME FUND (formerly FFB New Jersey
Tax-Free Income Fund) seeks a high level of income, exempt from federal and New
Jersey personal income taxes.

EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND (formerly First Union North
Carolina Municipal Bond Portfolio) seeks current income exempt from federal
income tax and North Carolina state income tax, consistent with preservation of
capital. In addition, the Fund intends to qualify as an investment substantially
exempt from the North Carolina intangible personal property tax.
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND (formerly First Union South
Carolina Municipal Bond Portfolio) seeks current income exempt from federal
income tax and South Carolina state income tax.
EVERGREEN VIRGINIA MUNICIPAL BOND FUND (formerly First Union Virginia
Municipal Bond Fund) seeks current income exempt from federal income tax and
Virginia state income tax, consistent with preservation of capital.
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND (successor to ABT
Florida High Income Municipal Bond Fund) seeks to provide a high level of
current income exempt from federal income taxes. Under normal circumstances, the
Fund will invest at least 65% of the value of its total assets in municipal
securities consisting of high yield (i.e., high risk), medium, lower rated and
unrated bonds.
THERE IS NO ASSURANCE THE INVESTMENT OBJECTIVE OF ANY FUND WILL BE
ACHIEVED.
2

<PAGE>
EXPENSE INFORMATION
The table set forth below summarizes the shareholder transaction costs
associated with an investment in the Class Y Shares of the Fund. For further
information see "Purchase and Redemption of Shares".
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Charge Imposed on Purchases None
Sales Charge on Dividend Reinvestments None
Contingent Deferred Sales Charge None
Redemption Fee None
Exchange Fee (only applies after 4 exchanges per
year) $ 5.00
</TABLE>

The following table shows for the Fund the estimated annual operating
expenses (as a percentage of average net assets) attributable to Class Y Shares,
together with examples of the cumulative effect of such expenses on a
hypothetical $1,000 investment for the periods specified assuming (i) a 5%
annual return and (ii) redemption at the end of each period.
EVERGREEN FLORIDA MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
ANNUAL OPERATING EXAMPLE
EXPENSES Class Y
<S> <C> <C> <C>
Management Fees* .30%
After 1 Year $ 6
12b-1 Fees --
After 3 Years $ 18
Other Expenses .25%
After 5 Years $ 31
After 10 Years $ 69
Total .55%
</TABLE>

EVERGREEN GEORGIA MUNICIPAL BOND FUND

<TABLE>
<CAPTION>
ANNUAL OPERATING EXAMPLE
EXPENSES+ Class Y
<S> <C> <C> <C>
Management Fees .50%
After 1 Year $ 10
12b-1 Fees --
After 3 Years $ 32
Other Expenses** .50%
After 5 Years $ 55
After 10 Years $ 122
Total 1.00%
</TABLE>

EVERGREEN NEW JERSEY TAX-FREE INCOME FUND

<TABLE>
<CAPTION>
ANNUAL OPERATING EXAMPLE
EXPENSES Class Y
<S> <C> <C> <C>
Management Fees .50%
After 1 Year $ 10
12b-1 Fees --
After 3 Years $ 30
Other Expenses** .44%
After 5 Years $ 52
After 10 Years $ 115
Total .94%
</TABLE>

EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND

<TABLE>
<CAPTION>
ANNUAL OPERATING EXAMPLE
EXPENSES+ Class Y
<S> <C> <C> <C>
Management Fees .50%
After 1 Year $ 10
12b-1 Fees --
After 3 Years $ 32
Other Expenses .50%
After 5 Years $ 55
After 10 Years $ 122
Total 1.00%
</TABLE>

<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND

EVERGREEN VIRGINIA MUNICIPAL BOND FUND

EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
ANNUAL OPERATING EXAMPLE
EXPENSES Class Y
<S> <C> <C> <C>
Management Fees* .30%
After 1 Year $ 8
12b-1 Fees --
After 3 Years $ 26
Other Expenses .52%
After 5 Years $ 46
After 10 Years $ 101
Total .82%
</TABLE>

+ The estimated annual operating expenses and examples do not reflect fee
waivers and reimbursements for the most recent fiscal year. Actual expenses
for Class Y Shares, net of fee waivers and expense reimbursements for the
period ended August 31, 1995 were as follows:

<TABLE>
<S> <C>
EVERGREEN GEORGIA MUNICIPAL BOND FUND .46%
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND .67%
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND .28%
EVERGREEN VIRGINIA MUNICIPAL BOND FUND .47%
</TABLE>

* CMG has agreed to limit the Management fee charged to EVERGREEN FLORIDA
MUNICIPAL BOND FUND and EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND to
.30 of 1% of average net assets until July 7, 1996.

** Reflects agreements by CMG to limit aggregate operating expenses (including
the management fees, but excluding interest, taxes, brokerage commissions,
Rule 12b-1 Fees, shareholder servicing fees and extraordinary expenses) of
EVERGREEN GEORGIA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL
BOND FUND and EVERGREEN VIRGINIA MUNICIPAL BOND FUND to 1% of average net
assets for the foreseeable future. Absent such agreements, the estimated
annual operating expenses for the Funds would be as follows:

<TABLE>
<S> <C>
EVERGREEN GEORGIA MUNICIPAL BOND FUND 2.58%
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND 6.25%
EVERGREEN VIRGINIA MUNICIPAL BOND FUND 3.58%
</TABLE>

From time to time, each Fund's investment adviser may, at its discretion,
reduce or waive its fees or reimburse the Funds for certain of their expenses in
order to reduce their expense ratios. Each Fund's investment adviser may cease
these waivers and reimbursements at any time.
The purpose of the foregoing table is to assist an investor in
understanding the various costs and expenses that an investor in each Class of
Shares of the Funds will bear directly or indirectly. The amounts set forth both
in the tables and in the examples are estimated amounts based on the experience
of each Fund for the most recent fiscal period. Such amounts have been restated
to reflect current fee arrangements and in the case of funds that did not offer
all of the above-referenced Classes of shares during such periods, the amounts
set forth in the tables are based on the expenses incurred by the Classes which
were offered. THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR ANNUAL RETURN. ACTUAL EXPENSES AND ANNUAL RETURN MAY BE
GREATER OR LESS THAN THOSE SHOWN. For a more complete description of the various
costs and expenses borne by the Funds see "Management of the Funds".
4

<PAGE>

FINANCIAL HIGHLIGHTS

The tables on the following pages present, for each Fund, financial
highlights for a share outstanding throughout each period indicated. The
information in the tables for the five most recent fiscal years or the life of
the Fund if shorter for EVERGREEN GEORGIA MUNICIPAL BOND FUND, EVERGREEN NORTH
CAROLINA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND and
EVERGREEN VIRGINIA MUNICIPAL BOND FUND has been audited by KPMG Peat Marwick
LLP, each Fund's independent auditors. The information in the tables for
EVERGREEN FLORIDA MUNICIPAL BOND FUND for the fiscal period ended August 31,
1995 has been audited by KPMG Peat Marwick LLP, the Fund's current independent
auditors. The information in the tables for each of the years in the four-year
period ended April 30, 1995 was audited by Tait, Weller & Baker, the Fund's
prior independent auditors. The information in the tables for EVERGREEN NEW
JERSEY TAX-FREE INCOME FUND for each of the years in the two-year period ended
February 28, 1995 has been audited by KPMG Peat Marwick LLP, the Fund's current
independent auditors. The information in the tables for each of the periods from
July 16, 1991 (commencement of operations) through February 28, 1993 has been
audited by Price Waterhouse LLP, the Fund's prior independent auditors. The
information in the tables for EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
for the fiscal period ended August 31, 1995 has been audited by Price Waterhouse
LLP, the Fund's current independent auditors. The information in the tables for
each of the years in the two-year period ended April 30, 1995 and for the period
June 17, 1992 (commencement of operations) through April 30, 1993 was audited by
Tait, Weller & Baker, the Fund's prior independent auditors. A report of KPMG
Peat Marwick LLP, Price Waterhouse LLP or Tait, Weller & Baker, as the case may
be on the audited information with respect to each Fund is incorporated by
reference in the Fund's Statement of Additional Information. The following
information for each Fund should be read in conjunction with the financial
statements and related notes which are incorporated by reference in the Fund's
Statement of Additional Information.

Further information about each Fund's performance is contained in the
Fund's annual report to shareholders, which may be obtained without charge.
EVERGREEN FLORIDA MUNICIPAL BOND FUND++
<TABLE>
<CAPTION>
CLASS A SHARES
FOUR MAY 11,
MONTHS 1988*
ENDED THROUGH
AUGUST 31, YEAR ENDED APRIL 30, APRIL 30,
1995# 1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period..... $9.61 $9.52 $9.95 $9.35 $9.21 $8.80 $9.09 $8.82
Income (loss) from investment operations:
Net investment income.................... .25 .54 .56 .56 .61 .66 .58 .47
Net realized and unrealized gain (loss)
on investments.......................... .22 .11 (.36) .67 .22 .43 (.24) .22
Total from investment operations........ .47 .65 .20 1.23 .83 1.09 .34 .69
Less distributions to shareholders from:
Net investment income.................... (.25) (.54) (.56) (.56) (.61) (.68) (.59) (.42)
Distributions in excess of net investment
income.................................. (.03) -- -- -- -- -- -- --
Net realized gains....................... (.06) (.02) (.07) (.07) (.04) -- (.04) --
Paid-in capital.......................... -- -- -- -- (.04) -- -- --
Total distributions..................... (.34) (.56) (.63) (.63) (.69) (.68) (.63) (.42)
Net asset value, end of period.......... $9.74 $9.61 $9.52 $9.95 $9.35 $9.21 $8.80 $9.09
TOTAL RETURN+............................ 4.2% 7.1% 1.9% 13.6% 9.3% 12.9% 3.7% 9.2%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted)................................ $136,449 $168,542 $199,612 $198,286 $147,996 $75,791 $7,286 $717
Ratios to average net assets:
Expenses................................ .82%++** .61% .56% .58% .41%** .10%** .10%** .30%**++
Net investment income................... 4.89%++** 5.73% 5.37% 5.66% 6.12%** 6.55%** 6.15%** 5.30%**++
Portfolio turnover rate.................. 29% 53% 32% 24% 24% 66% 82% 2%
<CAPTION>
CLASS B CLASS Y
SHARES SHARES
JUNE 30, JUNE 30,
1995* 1995*
THROUGH THROUGH
AUGUST AUGUST
31, 31,
1995# 1995#
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period..... $9.67 $9.67
Income (loss) from investment operations:
Net investment income.................... .07 .09
Net realized and unrealized gain (loss)
on investments.......................... .10 .10
Total from investment operations........ .17 .19
Less distributions to shareholders from:
Net investment income.................... (.07) (.09)
Distributions in excess of net investment
income.................................. (.03) (.03)
Net realized gains....................... -- --
Paid-in capital.......................... -- --
Total distributions..................... (.10) (.12)
Net asset value, end of period.......... $9.74 $9.74
TOTAL RETURN+............................ 1.5% 1.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted)................................ $27,351 $ 3,602
Ratios to average net assets:
Expenses................................ 1.44%++ .59%++
Net investment income................... 3.22%++ 4.93%++
Portfolio turnover rate.................. 29% 29%
</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.
5

<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND -- CLASS A, B AND Y SHARES
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS Y
JULY 2, JULY 2, SHARES
EIGHT MONTHS 1993* EIGHT MONTHS 1993* EIGHT MONTHS
ENDED YEAR ENDED THROUGH ENDED YEAR ENDED THROUGH ENDED
AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31,
1995# 1994 1993 1995# 1994 1993 1995#
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning
of period.................. $8.74 $10.19 $10.00 $8.74 $10.19 $10.00 $8.74
Income (loss) from
investment operations......
Net investment income....... .33 .48 .20 .28 .43 .18 .35
Net realized and unrealized
gain (loss) on
investments................ .73 (1.45) .19 .73 (1.45) .19 .73
Total from investment
operations............... 1.06 (.97) .39 1.01 (1.02) .37 1.08
Less distributions to
shareholders from:
Net investment income....... (.33) (.48) (.20) (.28) (.43) (.18) (.35)
Net asset value, end of
period..................... $9.47 $8.74 $10.19 $9.47 $8.74 $10.19 $9.47
TOTAL RETURN+............... 12.3% (9.6%) 4.0% 11.7% (10.2%) 3.7% 12.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted)............ $2,098 $1,387 $817 $7,538 $6,912 $3,692 $1,339
Ratios to average net
assets:
Expenses **................ .71%++ .53% .25%++ 1.46%++ 1.13% .75%++ .46%++
Net investment income **... 5.39%++ 5.26% 4.71%++ 4.64%++ 4.66% 4.15%++ 5.64%++
Portfolio turnover rate..... 91% 147% 15% 91% 147% 15% 91%
<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. Initial sales charge or contingent deferred
sales 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 (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 CLASS Y
JULY 2, JULY 2, SHARES
EIGHT MONTHS 1993* EIGHT MONTHS 1993* EIGHT MONTHS
ENDED YEAR ENDED THROUGH ENDED YEAR ENDED THROUGH ENDED
AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31,
1995# 1994 1993 1995# 1994 1993 1995#
<S> <C> <C> <C> <C> <C> <C> <C>
Expense..................... 2.83% 3.61% 6.82% 3.58% 4.21% 7.32% 2.58%
Net investment income
(loss)..................... 3.27% 2.18% (1.86%) 2.52% 1.58% (2.42%) 3.52%
<CAPTION>

FEBRUARY 28,
1994* THROUGH
DECEMBER 31,
1994
<S> <C>
Expense..................... 3.39%
Net investment income
(loss)..................... 2.60%
</TABLE>

<PAGE>

EVERGREEN NEW JERSEY TAX-FREE INCOME FUND

<TABLE>
<CAPTION>
CLASS A
SIX MONTHS
ENDED
AUGUST 31, 1995 YEAR ENDED FEBRUARY 28,
(UNAUDITED) 1995 1994 1993
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............................... $10.53 $10.99 $11.01 $10.22
Income (loss) from investment operations:
Net investment income.............................................. .28 .57 .60 .63
Net realized and unrealized gain (loss) on investments............. .22 (.46) (.02) .79
Total from investment operations.................................. .50 .11 .58 1.42
Less distributions to shareholders from net investment income...... (.28) (.57) (.60) (.63)
Net asset value, end of period..................................... $10.75 $10.53 $10.99 $11.01
TOTAL RETURN+...................................................... 4.8% 1.4% 5.3% 14.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).......................... $35,469 $34,852 $42,783 $30,863
Ratios to average net assets:
Expenses**........................................................ .38%++ .25% .14% .00%
Net investment income**........................................... 5.20%++ 5.52% 5.31% 5.97%
Portfolio turnover rate............................................ 0% 8% 2% 5%
<CAPTION>

JULY 16, 1991*
THROUGH
FEBRUARY 29,
1992
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period............................... $10.00
Income (loss) from investment operations:
Net investment income.............................................. .38
Net realized and unrealized gain (loss) on investments............. .22
Total from investment operations.................................. .60
Less distributions to shareholders from net investment income...... (.38)
Net asset value, end of period..................................... $10.22
TOTAL RETURN+...................................................... 9.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).......................... $ 13,129
Ratios to average net assets:
Expenses**........................................................ .01%++
Net investment income**........................................... 5.89%++
Portfolio turnover rate............................................ 5%
</TABLE>

* 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 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 advisor, the
annualized ratios of expenses and net investment income to average net
assets would have been the following:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
AUGUST 31, 1995 YEAR ENDED FEBRUARY 28,
(UNAUDITED) 1995 1994 1993
<S> <C> <C> <C> <C>
Expenses.............................................................. 1.08% 1.04% 1.05% 1.16%
Net investment income................................................. 4.50% 4.73% 4.40% 4.81%
<CAPTION>
JULY 16, 1991*
THROUGH
FEBRUARY 29,
1992
<S> <C>
Expenses.............................................................. 1.20%
Net investment income................................................. 4.70%
</TABLE>

<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND -- CLASS A, B AND Y SHARES
<TABLE>
<CAPTION>
CLASS Y
CLASS A SHARES CLASS B SHARES SHARES
EIGHT MONTHS JANUARY 11, EIGHT MONTHS JANUARY 11, EIGHT MONTHS
ENDED YEAR ENDED 1993* THROUGH ENDED YEAR ENDED 1993* THROUGH ENDED
AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31,
1995# 1994 1993 1995# 1994 1993 1995#
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning
of period................. $9.16 $10.61 $10.00 $9.16 $10.61 $10.00 $9.16
Income (loss) from
investment operations:
Net investment income...... .33 .49 .46 .28 .44 .42 .35
Net realized and unrealized
(loss) on investments..... .79 (1.45) .64 .79 (1.45) .64 .79
Total from investment
operations.............. 1.12 (.96) 1.10 1.07 (1.01) 1.06 1.14
Less distributions to
shareholders from:
Net investment income...... (.33) (.49) (.46) (.28) (.44) (.42) (.35)
Net realized gains......... -- -- (.03) -- -- (.03) --
Total distributions........ (.33) (.49) (.49) (.28) (.44) (.45) (.35)
Net asset value, end of
period.................... $9.95 $9.16 $10.61 $9.95 $9.16 $10.61 $9.95
TOTAL RETURN+.............. 12.3% (9.1%) 11.3% 11.8% (9.6%) 10.8% 12.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted)........... $8,279 $7,979 $12,739 $49,040 $ 44,616 $45,168 $1,005
Ratios to average net
assets:
Expenses **............... .92%++ .79% .32%++ 1.67%++ 1.37% .79%++ .67%++
Net investment income
**...................... 5.09%++ 5.11% 4.91%++ 4.34%++ 4.53% 4.47%++ 5.34%++
Portfolio turnover rate.... 117% 126% 57% 117% 126% 57% 117%
<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
(loss) on investments..... (1.15)
Total from investment
operations.............. (.72)
Less distributions to
shareholders from:
Net investment income...... (.43)
Net realized gains......... --
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. Initial sales charge or contingent deferred
sales 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 (loss) to average net assets
would have been the following:
<TABLE>
<CAPTION>
CLASS Y
CLASS A SHARES CLASS B SHARES SHARES
EIGHT MONTHS EIGHT MONTHS EIGHT MONTHS
ENDED YEAR ENDED JANUARY 11, 1993* ENDED YEAR ENDED JANUARY 11, 1993* ENDED
AUGUST 31, DECEMBER 31, THROUGH DECEMBER AUGUST 31, DECEMBER 31, THROUGH DECEMBER AUGUST 31,
1995# 1994 31, 1993 1995# 1994 31, 1993 1995#
<S> <C> <C> <C> <C> <C> <C> <C>
Expenses........ 1.27% 1.18% 1.25% 2.02% 1.76% 1.74% 1.02%
Net investment
income......... 4.74% 4.72% 3.98% 3.99% 4.14% 3.52% 4.99%
<CAPTION>

FEBRUARY 28, 1994*
THROUGH DECEMBER
31, 1994
<S> <C>
Expenses........ .98%
Net investment
income......... 5.19%
</TABLE>

<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND -- CLASS A, B AND Y SHARES
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS Y SHARES
EIGHT MONTHS JANUARY 3, EIGHT MONTHS JANUARY 3, EIGHT MONTHS FEBRUARY 28,
ENDED 1994* THROUGH ENDED 1994* THROUGH ENDED 1994* THROUGH
AUGUST 31, DECEMBER 31, AUGUST 31, DECEMBER 31, AUGUST 31, DECEMBER 31,
1995# 1994 1995# 1994 1995# 1994
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period... $8.62 $10.00 $ 8.62 $10.00 $ 8.62 $9.74
Income (loss) from investment
operations:
Net investment income.................. .34 .46 .29 .41 .35 .43
Net realized and unrealized gain (loss)
on investments....................... .97 (1.38) .97 (1.38) .97 (1.12)
Total from investment operations..... 1.31 (.92) 1.26 (.97) 1.32 (.69)
Less distributions to shareholders
from:
Net investment income.................. (.34) (.46) (.29) (.41) (.35) (.43)
Net asset value, end of period......... $9.59 $8.62 $9.59 $8.62 $9.59 $8.62
TOTAL RETURN+.......................... 15.4% (9.3%) 14.8% (9.8%) 15.5% (7.1%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's
omitted)............................. $610 $312 $3,542 $2,456 $1,673 $92
Ratios to average net assets:
Expenses **.......................... .53%++ .25%++ 1.28%++ .87%++ .28%++ .00%++
Net investment income **............. 5.41%++ 5.57%++ 4.66%++ 4.88%++ 5.66%++ 5.92%++
Portfolio turnover rate................ 66% 23% 66% 23% 66% 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 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 (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 CLASS Y SHARES
EIGHT MONTHS JANUARY 3, EIGHT MONTHS JANUARY 3, EIGHT MONTHS FEBRUARY 28,
ENDED 1994* THROUGH ENDED 1994* THROUGH ENDED 1994* THROUGH
AUGUST 31, DECEMBER 31, AUGUST 31, DECEMBER 31, AUGUST 31, DECEMBER 31,
1995# 1994 1995# 1994 1995# 1994
<S> <C> <C> <C> <C> <C> <C>
Expenses............................... 6.50% 10.71% 7.25% 11.33% 6.25% 10.46%
Net investment loss.................... (.56%) (4.89%) (1.31%) (5.58%) (.31%) (4.54%)
</TABLE>

<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND -- CLASS A, B AND Y SHARES*
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS Y
JULY 2, JULY 2, SHARES
EIGHT MONTHS 1993* EIGHT MONTHS 1993* EIGHT MONTHS
ENDED YEAR ENDED THROUGH ENDED YEAR ENDED THROUGH ENDED
AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31,
1995# 1994 1993 1995# 1994 1993 1995#
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of period.... $ 8.85 $10.19 $10.00 $8.85 $10.19 $10.00 $8.85
Income (loss) from
investment operations:
Net investment income... .33 .47 .20 .28 .42 .17 .34
Net realized and
unrealized gain (loss)
on investments......... .82 (1.34) .19 .82 (1.34) .19 .82
Total from investment
operations........... 1.15 (.87) .39 1.10 (.92) .36 1.16
Less distributions to
shareholders from:
Net investment income... (.33) (.47) (.20) (.28) (.42) (.17) (.34)
Net asset value, end of
period................. $9.67 $8.85 $10.19 $9.67 $8.85 $10.19 $9.67
TOTAL RETURN+........... 13.1% (8.6%) 3.9% 12.5% (9.1%) 3.7% 13.3%
RATIOS & SUPPLEMENTAL
DATA:
Net assets, end of
period (000's
omitted)............... $1,984 $1,606 $1,306 $ 5,803 $3,817 $2,235 $965
Ratios to average net
assets:
Expenses **............ .72%++ .53% .25%++ 1.47%++ 1.12% .75%++ .47%++
Net investment income
**................... 5.17%++ 5.11% 4.64%++ 4.42%++ 4.54% 4.25%++ 5.42%++
Portfolio turnover
rate................... 87% 59% 0% 87% 59% 0% 87%
<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... .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%
</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 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 (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 CLASS Y
JULY 2, JULY 2, SHARES
EIGHT MONTHS 1993* EIGHT MONTHS 1993* EIGHT MONTHS
ENDED YEAR ENDED THROUGH ENDED YEAR ENDED THROUGH ENDED
AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31,
1995# 1994 1993 1995# 1994 1993 1995#
<S> <C> <C> <C> <C> <C> <C> <C>
Expenses................ 3.83% 5.14% 7.75% 4.58% 5.73% 8.25% 3.58%
Net investment income
(loss)................. 2.06% .50% (2.86%) 1.31% (.07%) (3.25%) 2.31%
<CAPTION>

FEBRUARY 28,
1994* THROUGH
DECEMBER 31, 1994
<S> <C>
Expenses................ 4.89%
Net investment income
(loss)................. .93%
</TABLE>

<PAGE>
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND -- CLASS A AND Y SHARES
<TABLE>
<CAPTION>
CLASS A SHARES#
JUNE 17,
FOUR MONTHS 1992*
ENDED YEAR ENDED THROUGH
AUGUST 31, APRIL 30, APRIL
1995 1995 1994 30, 1993
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period................................. $10.16 $10.08 $10.36 $10.00
Income (loss) from investment operations:
Net investment income................................................ .21 .65 .68 .61
Net realized and unrealized gain (loss) on investments............... .24 .08 (.26) .39
Total from investment operations.................................... .45 .73 .42 1.00
Less distributions to shareholders from:
Net investment income................................................ (.21) (.65) (.68) (.61)
Net realized gains................................................... -- -- (.02) (.03)
Total distributions................................................. (.21) (.65) (.70) (.64)
Net asset value at end of period..................................... $10.40 $10.16 $10.08 $10.36
TOTAL RETURN+........................................................ 4.4% 7.6% 3.3% 10.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................ $59,551 $65,043 $72,683 $33,541
Ratios to average net assets:
Expenses............................................................ 1.07%++** .60%** .14%** .00%++**
Net investment income............................................... 5.92%++** 6.52%** 6.16%** 5.92%**++
Portfolio turnover rate.............................................. 14% 28% 31% 50%
<CAPTION>

CLASS B SHARES
JULY 10, 1995*
THROUGH
AUGUST 31,
1995
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period................................. $10.41
Income (loss) from investment operations:
Net investment income................................................ .08
Net realized and unrealized gain (loss) on investments............... (.01)
Total from investment operations.................................... .07
Less distributions to shareholders from:
Net investment income................................................ (.08)
Net realized gains................................................... --
Total distributions................................................. (.08)
Net asset value at end of period..................................... $10.40
TOTAL RETURN+........................................................ .6%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................ $3,137
Ratios to average net assets:
Expenses............................................................ 1.09%++
Net investment income............................................... 3.40%++
Portfolio turnover rate.............................................. 14%
</TABLE>

# Effective June 30, 1995, Evergreen Florida High Income Municipal Bond Fund, a
new series of the Evergreen Municipal Trust, acquired substantially all of
the net assets of ABT Florida High Income Municipal Bond Fund. ABT Florida
High Income Municipal Bond Fund, which had a fiscal year that ended on April
30, was the accounting survivor in the combination. Accordingly, the
information above includes the results of operations of ABT Florida High
Income Municipal Bond Fund prior to June 30, 1995.
* 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 and contingent deferred
sales 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 (loss) to average
net assets would have been the following:
<TABLE>
<CAPTION>
CLASS A SHARES
FOUR MONTHS
ENDED YEAR ENDED
AUGUST 31, APRIL 30,
1995# 1995 1994
<S> <C> <C> <C>
Expenses....................................................................... 1.42% 1.26% 1.12%
Net investment income.......................................................... 5.57% 5.86% 5.18%
<CAPTION>

JUNE 17, 1992*
THROUGH
APRIL 30, 1993
<S> <C>
Expenses....................................................................... 1.12%
Net investment income.......................................................... 4.80%
</TABLE>

<PAGE>

DESCRIPTION OF THE FUNDS

INVESTMENT OBJECTIVES AND POLICIES

The Funds seek current income exempt from federal regular income tax and,
where applicable, state income taxes, consistent with preservation of capital.
In addition, the EVERGREEN FLORIDA MUNICIPAL BOND FUND intends to qualify as an
investment exempt from the Florida state intangibles tax. Florida does not
currently tax personal income.

Each Fund's investment objective is fundamental cannot be changed without
shareholder approval. While there is no assurance that each objective will be
achieved, the Funds will endeavor to do so by following the investment policies
detailed below. Unless otherwise indicated, the investment policies of a Fund
may be changed by the Board of Trustees ("Trustees") without the approval of
shareholders. Shareholders will be notified before any material change in these
policies becomes effective.

As a matter of fundamental investment policy, which may not be changed
without shareholder approval, each Fund will normally invest its assets so that
at least 80% of its annual interest income is, or at least 80% of its net assets
are, invested in obligations which provide interest income which is exempt from
federal regular income taxes. The interest retains its tax-free status when
distributed to the Funds' shareholders. In addition, at least 65% of the value
of each Fund's total assets will be invested in municipal bonds of the
particular state after which the Fund is named. To qualify as an investment
exempt from the Florida state intangibles tax, the EVERGREEN FLORIDA MUNICIPAL
BOND FUND'S portfolio must consist entirely of investments exempt from the
Florida state intangibles tax on the last business day of the calendar year.

Each Fund seeks to achieve its investment objective by investing
principally in municipal bonds, including industrial development bonds, of its
designated state. In addition, the Funds may invest in obligations issued by or
on behalf of any state, territory, or possession of the United States, including
the District of Columbia, or their political subdivisions or agencies and
instrumentalities, the interest from which is exempt from federal (regular, if
applicable) income tax. It is likely that shareholders who are subject to the
alternative minimum tax will be required to include interest from a portion of
the municipal securities owned by a Fund in calculating the federal individual
alternative minimum tax or the federal alternative minimum tax for corporations.

Municipal bonds are debt obligations issued by the state or local
entities to support a government's general financial needs or special projects,
such as housing projects or sewer works. Municipal bonds include industrial
development bonds issued by or on behalf of public authorities to provide
financing aid to acquire sites or construct or equip facilities for privately or
publicly owned corporations.

The two principal classifications of municipal bonds are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Revenue bonds are paid off only with the revenue
generated by the project financed by the bond or other specified sources of
revenue. For example, in the case of a bridge project, proceeds from the tolls
would go directly to retiring the bond issue. Thus, unlike general obligation
bonds, revenue bonds do not represent a pledge of credit or create any debt of
or charge against the general revenues of a municipality or public authority.

The municipal bonds in which the Funds will invest are subject to one or
more of the following quality standards: rated Baa or better by Moody's
Investors Service, Inc. ("Moody's") or BBB or better by Standard & Poor's
Ratings Group ("S&P") or, if unrated, are determined by the Fund's investment
adviser to be of comparable quality to such ratings; insured by a municipal bond
insurance company which is rated Aa by Moody's or AA by S&P; guaranteed at the
time of purchase by the U.S. government as to the payment of principal and
interest; or fully collateralized by an escrow of U.S. government securities.
Bonds rated BBB by S&P or Baa by Moody's have speculative characteristics.
Changes in economic conditions or other circumstances are more likely to lead to
weakened capacity to make principal and interest payments than higher rated
bonds. However, like the higher

<PAGE>

rated bonds, these securities are considered to be investment grade. If any
security owned by a Fund loses its rating or has its rating reduced after the
Fund has purchased it, the Fund is not required to sell or otherwise dispose of
the security, but may consider doing so. If ratings made by Moody's or S&P
change because of changes in those organizations or their ratings systems, the
Funds will try to use comparable ratings as standards in accordance with the
Funds' investment objectives. A description of the rating categories is
contained in an Appendix to the Statement of Additional Information.

The Funds may also invest in:

participation interests in any of the above obligations.
(Participation interests may be purchased from financial institutions
such as commercial banks, savings and loan associations and insurance
companies, and give a Fund an undivided interest in particular municipal
securities.);

variable rate municipal securities. (Variable rate securities
offer interest rates which are tied to a money market rate, usually a
published interest rate or interest rate index or the 91-day U.S.
Treasury bill rate. Many of these securities are subject to prepayment of
principal on demand by the Fund, usually in seven days or less.); and

municipal leases as described in "Investment Practices and
Restrictions", below issued by state and local governments or authorities
to finance the acquisition of equipment and facilities.

During periods when, in the opinion of the Funds investment adviser, a
temporary defensive position in the market is appropriate, a Fund may
temporarily invest in short-term tax-exempt or taxable investments. These
temporary investments include: notes issued by or on behalf of municipal or
corporate issuers; obligations issued or guaranteed by the U.S. government, its
agencies, or instrumentalities; other debt securities; commercial paper; bank
certificates of deposit; shares of other investment companies; and repurchase
agreements. There are no rating requirements applicable to temporary
investments. However, the Funds investment adviser will limit temporary
investments to those it considers to be of comparable quality to the Funds'
primary investments.

Although the Funds are permitted to make taxable, temporary investments,
there is no current intention of generating income subject to federal regular
income tax, where applicable. However, certain temporary investments will
generate income which is subject to state taxes. The Funds may employ certain
additional investment strategies which are discussed in "Investment Practices
and Restrictions", below.

EVERGREEN NEW JERSEY TAX-FREE INCOME FUND

The objective of the EVERGREEN NEW JERSEY TAX FREE INCOME FUND is to seek
a high level of income, exempt from Federal and New Jersey personal income
taxes. The Fund is available only to investors who reside in New Jersey. There
is no assurance that the Fund will achieve its stated objective. The investment
objective of the Fund is fundamental and so may not be changed without the
approval of a majority of the Fund's shareholders.

To attain its objective, the EVERGREEN NEW JERSEY TAX-FREE INCOME FUND
invests at least 80% of its net assets in municipal securities issued by the
State of New Jersey or its counties, municipalities, authorities or other
political subdivisions and municipal obligations issued by territories or
possessions of the United States, such as Puerto Rico, the interests on which,
in the opinion of bond counsel, is exempt from federal and New Jersey personal
income taxes. The Fund normally invests in intermediate and long-term municipal
securities. Intermediate-term municipal securities generally mature in three to
ten years. Long-term municipal securities generally mature in ten to thirty
years. The Fund has no maximum or minimum maturity for any individual municipal
securities, however, it will maintain a dollar-weighted average portfolio
maturity of twenty years or less. If its investment adviser determines that
market conditions warrant a shorter average maturity, the Fund's investments
will be adjusted accordingly.

The Fund will only purchase securities rated within the three highest
rating categories by Moody's or by S&P and unrated securities of equivalent
quality as determined by the investment adviser pursuant to guidelines
established by the Trustees. See the Statement of Additional Information for
further information in regard to ratings.

The Fund will seek to invest substantially all of its assets in
intermediate and long-term Municipal Obligations. However, under certain
circumstances, such as a temporary decline in the issuance of New Jersey
obligations, the Fund may invest up to 20% of its assets in the following:
short-term municipal securities issued

<PAGE>

outside of New Jersey (the income from which may be subject to New Jersey income
taxes) or certain taxable fixed income securities (the income from which may be
subject to federal and New Jersey personal income taxes).

In addition, under unusual circumstances the Fund reserves the right to
invest more than 20% of its assets in securities other than New Jersey Municipal
Obligations such as taxable fixed income securities, the interest from which may
be subject to Federal and New Jersey personal income taxes. In most instances,
however, the Fund will seek to avoid holdings in an effort to provide income
that is fully exempt from federal and New Jersey personal income taxes.

The Fund may also invest in municipal securities issued to finance
private activities, whose interest is a preference item for purposes of the
Federal alternative minimum tax. Such "private activity bonds" might include
industrial development bonds and securities issued to finance project such as
solid waste disposal facilities, student loans or water and sewage projects. The
Fund currently intends to treat "private activity bonds" as not Federally
tax-exempt and accordingly to limit income from "private activity bonds" to no
more than 20%. See "Other Information-Dividends, Distributions and Taxes" for
further information. The Fund may invest in other municipal securities and may
employ additional investment strategies which are discussed in "Investment
Practices and Restrictions" below.

Municipal lease obligations. The Funds may purchase municipal securities in the
form of participation interests which represent undivided proportional interests
in lease payments by a governmental or non-profit entity. The lease payments and
other rights under the lease provide for and secure the payments on the
certificates. Lease obligations may be limited by municipal charter or the
nature of the appropriation for the lease. In particular, lease obligations may
be subject to periodic appropriation. If the entity does not appropriate funds
for future lease payments, the entity cannot be compelled to make such payments.
Furthermore, a lease may provide that the certificate trustee cannot accelerate
lease obligations upon default. The trustee would only be able to enforce lease
payments as they become due. In the event of a default or failure of
appropriation, it is unlikely that the trustee would be able to obtain an
acceptable substitute source of payment or that the substitute source of payment
would generate tax-exempt income.

Zero coupon debt securities. The Funds may ??? zero coupon debt securities do
not make regular interest payments. Instead, they are sold at a deep discount
from their face value. In calculating their daily dividends, each day the Fund
takes into account as income a portion of the difference between these
securities' purchase price and their face value. Because they do not pay current
income, the prices of zero coupon debt securities can be very volatile when
interest rates change.

Securities with Put or Demand Rights. The Funds have the ability to enter into
put transactions, sometimes referred to as stand-by commitments, with respect to
Municipal Obligations held in their portfolio or to purchase securities which
carry a demand feature or put option which permit a Fund, as holder, to tender
them back to the issuer or a third party prior to maturity and receive payment
within seven days. Segregated accounts will be maintained by each Fund for all
such transactions. For a detailed description of put transactions, see
"Investment Policies -- Securities with Put Rights" in the Statement of
Additional Information.

The amount payable to a Fund by the seller upon its exercise of a put
will normally be (i) the Funds' acquisition cost of the securities (excluding
any accrued interest which the Funds paid on their acquisition), less any
amortized market premium plus any amortized market or original issue discount
during the period a Fund owned the securities, plus (ii) all interest accrued on
the securities since the last interest payment date during the period the
securities were owned by a Fund. Accordingly, the amount payable by a
broker-dealer or bank during the time a put is exercisable will be substantially
the same as the value of the underlying securities.

A Fund's right to exercise a put is unconditional and unqualified. A put
is not transferable by a Fund, although each Fund may sell the underlying
securities to a third party at any time. The Funds expect that puts will
generally be available without any additional direct or indirect cost. However,
if necessary and advisable, a Fund may pay for certain puts either separately in
cash or by paying a higher price for portfolio securities which are acquired
subject to such a put (thus reducing the yield to maturity otherwise available
to the same securities).

<PAGE>

Thus, the aggravate price paid for securities with put rights may be higher than
the price that would otherwise be paid.

A Fund may enter into put transactions only with broker-dealers (in
accordance with the rules of the Securities and Exchange Commission) and banks
which, in the opinion of the Funds' Adviser, present minimal credit risks. The
Funds' Adviser will monitor periodically the creditworthiness of issuers of such
obligations held by the Fund. A Funds' ability to exercise a put will depend on
the ability of the broker-dealer or bank to pay for the underlying securities at
the time the put is exercised. In the event that a broker-dealer should default
on its obligation to purchase an underlying security, a Fund might be unable to
recover all or a portion of any loss sustained from having to sell the security
elsewhere. The Funds intend to enter into put transactions solely to maintain
portfolio liquidity and does not intend to exercise its rights thereunder for
trading purposes.

SPECIAL RISK FACTORS RELATED TO INVESTING IN MUNICIPAL OBLIGATIONS

It should be noted that municipal securities may be adversely affected by
local political and economic conditions and developments within a state. For
example, adverse conditions in a significant industry within New Jersey may from
time to time have a correspondingly adverse effect on specific issuers within
New Jersey or on anticipated revenue to the State itself; conversely, an
improving economic outlook for a significant industry may have a positive effect
on such issuers or revenues.

The value of municipal securities may also be affected by general
conditions in the money markets or the municipal bond markets, the levels of
federal and state income tax rates, the supply of tax-exempt bonds, the size of
the particular offering, the maturity of the obligation, the credit quality and
rating of the issue, and perceptions with respect to the level of interest
rates. In general, the value of bonds tends to appreciate when interest rates
decline and depreciate when interest rates rise. An expanded discussion of the
risks associated with the purchase of securities issued is contained in the
Statement of Additional Information.

EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND

EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND seeks to provide a high
level of current income which is exempt from federal income taxes. The term
"high-level" indicates that the Fund seeks to achieve an income level that
exceeds that which an investor would expect from an investment grade portfolio
with similar maturity characteristics. EVERGREEN FLORIDA HIGH INCOME MUNICIPAL
BOND FUND invests primarily in high yield, medium and lower rated (Baa through C
by Moody's and BBB through C1 by S&P) and unrated municipal securities. To
varying degrees, medium and lower rated municipal securities, as well as unrated
municipal securities, are considered to have speculative characteristics and are
subject to greater market fluctuations and risk of loss of income and principal
than higher rated securities. To the extent that an investor realizes a yield in
excess of that which could be expected from a fund which invests primarily in
investment grade securities, the investor should expect to bear increased risk
due to the fact that the risk of principal and/or interest not being repaid with
respect to the high yield securities described above is significantly greater
than that which exists in connection with investment grade securities. In
assessing the risk involved in purchasing medium and lower rated and unrated
securities, the Fund's investment adviser will use nationally recognized
statistical rating organizations such as Moody's and S&P, and will also rely
heavily on credit analysis it develops internally. Under normal circumstances,
the Fund's dollar-weighted average maturity generally will be fifteen years or
more. However, the Fund may invest in securities of any maturity, and if the
Fund's investment adviser determines that market conditions warrant a shorter
average maturity, the Fund's investments will be adjusted accordingly. In
pursuit of its investment objective, EVERGREEN FLORIDA HIGH INCOME MUNICIPAL
BOND FUND will, under normal market conditions, invest at least 65% of its total
assets in such medium and lower rated municipal securities or unrated municipal
securities of comparable quality to such rated municipal bonds. Investors should
note that such a policy is not a fundamental policy of the Fund and shareholder
approval is not necessary to change such policy. There is no assurance that
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND can achieve its investment
objective.

The Fund will not invest in municipal securities which are in default,
i.e., securities rated D by S&P. Investments may also be made by EVERGREEN
FLORIDA HIGH INCOME MUNICIPAL BOND FUND in higher quality municipal bonds and,
for temporary defensive purposes, the Fund may invest less than 65% of its total
assets in the medium and lower quality municipal securities described above. The
Fund may assume a defensive position if, for example, yield spreads between
lower grade and investment grade municipal bonds are narrow and the yields
available on lower quality municipal securities do not justify the increased
risk associated with an investment in such securities or when there is a lack of
medium and lower quality issues in which to invest. EVERGREEN FLORIDA HIGH
INCOME MUNICIPAL BOND FUND may also invest primarily in higher quality municipal
obligations until its net

<PAGE>

assets reach a level that would permit the Fund to begin investing in medium and
lower rated municipal bonds and at the same time maintain adequate
diversification and liquidity. Investing in this manner may result in yields
lower than those normally associated with a fund that invests primarily in
medium and lower quality municipal securities.

During the fiscal year ended August 31, 1995 EVERGREEN FLORIDA HIGH
INCOME MUNICIPAL BOND FUND'S holdings had the following average credit quality
characteristics:

<TABLE>
<CAPTION>
Percent of
Rating Net Assets
<S> <C>
Aaa or AAA 5.4%
Aa or AA --
A 1.9
Baa or BBB 18.3
Ba or BB 8.0
Non-rated 61.5
Total 95.1%
</TABLE>

The Fund may purchase industrial development bonds only if the interest
on such bonds is, in the opinion of bond counsel, exempt from federal income
taxes. It is anticipated that the annual portfolio turnover rate for the Fund
may exceed 100%. The Fund may employ certain additional investment strategies
which are discussed in "Investment Practices and Restrictions", below. Also, see
the Statement of Additional Information for further information in regard to
ratings.

INVESTMENT PRACTICES AND RESTRICTIONS

Although the Funds, other than EVERGREEN FLORIDA HIGH INCOME MUNICIPAL
BOND FUND, will not purchase securities rated below BBB by S&P or Baa by Moody's
(i.e., junk bonds), the Funds are not required to dispose of securities that
have been downgraded subsequent to their purchase. If the municipal obligations
held by a Fund (because of adverse economic conditions in a particular state,
for example) are downgraded, the Fund's concentration in securities of that
state may cause the Fund to be subject to the risks inherent in holding material
amounts of low-rated debt securities in its portfolio. As stated above,
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND invests primarily in high
yield, medium and lower rated (Baa through C by Moody's and BBB through C1 by
S&P) and unrated securities. Additional risk factors relating to the investment
by EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND in high yield, medium and
lower rated (Baa through C by Moody's and BBB through C1 by S&P) and unrated
securities are discussed below.

Non-Diversification. Each of EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN
GEORGIA MUNICIPAL BOND FUND, EVERGREEN NEW JERSEY TAX-FREE INCOME FUND,
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL
BOND FUND AND EVERGREEN VIRGINIA MUNICIPAL BOND FUND is a non-diversified
portfolio of an investment company and, as such, there is no limit on the
percentage of assets which can be invested in any single issuer. An investment
in a Fund, therefore, will entail greater risk than would exist in a diversified
investment company because the higher percentage of investments among fewer
issuers may result in greater fluctuation in the total market value of the
Fund's portfolio. Each of the Funds intends to comply with Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code") which requires that at
the end of

<PAGE>

each quarter of each taxable year, with regard to at least 50% of the Fund's
total assets, no more than 5% of the total assets may be invested in the
securities of a single issuer and that with respect to the remainder of the
Fund's total assets, no more than 25% of its total assets are invested in the
securities of a single issuer.

Repurchase Agreements. The Funds may invest in repurchase agreements. Repurchase
agreements are agreements by which a Fund purchases a security (usually U.S.
government securities) for cash and obtains a simultaneous commitment from the
seller (usually a bank or broker/dealer) to repurchase the security at an
agreed-upon price and specified future date. The repurchase price reflects an
agreed-upon interest rate for the time period of the agreement. The Funds' risk
is the inability of the seller to pay the agreed-upon price on the delivery
date. However, this risk is tempered by the ability of the Funds to sell the
security in the open market in the case of a default. In such a case, the Funds
may incur costs in disposing of the security which would increase Fund expenses.
The Funds Investment adviser will monitor the creditworthiness of the firms with
which the Funds enter into repurchase agreements.

<PAGE>

liquid, a Fund's holdings will be reviewed to determine what action, if any, is
required to ensure that the retention of such security does not result in a Fund
having more than 15% of its assets invested in illiquid or not readily
marketable securities.

Unseasoned Issuers. The Funds will not invest more than 5% of the value of their
total assets in securities of issuers (or guarantors, where applicable) which
have records of less than three years of continuous operations, including the
operation of any predecessor.

Prices of high yield debt securities may be more sensitive to adverse
economic changes or corporate developments than higher rated investments. Debt
securities with longer maturities, which may have higher yields, may increase or
decrease in value more than debt securities with shorter maturities. Market
prices of high yield debt securities structured as zero coupon or pay-in-kind
securities are affected to a greater extent by interest rate changes and may be
more volatile than securities which pay interest periodically and in cash. Where
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND deems it appropriate and in
the best interests of its shareholders, it may incur additional expenses to seek
recovery on a debt security on which the issuer has defaulted and to pursue
litigation to protect the interests of security holders of its portfolio
entities.

Because the market for medium or lower rated securities may be thinner
and less active than the market for higher rated securities, there may be market
price volatility for these securities and limited liquidity in the resale
market. Unrated securities are usually not as attractive to as many buyers as
are rated securities, a factor which may make unrated securities less
marketable. These factors may have the effect of limiting the availability of
the securities for purchase by EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
and may also limit the ability of the Fund to sell such securities at their fair
value either to meet redemption requests or in response to changes in the
economy or the financial markets. Adverse publicity and investor perceptions,
whether or not based on fundamental analysis, may decrease the values and
liquidity of medium or lower rated debt securities, especially in a thinly
traded market. To the extent the Fund owns or may acquire illiquid or restricted
high yield securities, these securities may involve special registration
responsibilities, liabilities and costs, and liquidity and valuation
difficulties. Changes in values of debt securities which the Fund owns will
affect the Fund's net asset value per share. If market quotations are not
readily available for the Fund's lower rated or unrated securities, these
securities will be valued by a method that the Trustees believes accurately
reflects fair value. Valuation becomes more difficult and judgment plays a
greater role in valuing high yield debt securities than with respect to
securities for which more external sources of quotations and last sale
information are available.

Special tax considerations are associated with investing in high yield
debt securities structured as zero coupon or pay-in-kind securities. A Fund
investing in such securities accrues income on these securities prior to the
receipt of cash payments. EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND must
distribute substantially all of its income to shareholders to qualify for pass
through treatment under the tax laws and may, therefore, have to dispose of
portfolio securities to satisfy distribution requirements.

While credit ratings are only one factor EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND'S investment adviser relies on in evaluating high yield debt
securities, certain risks are associated with using credit ratings. Credit
ratings evaluate the safety of principal and interest payments, not market value
risk. Credit rating agencies may fail to change in timely manner the credit
ratings to reflect subsequent events; however, the Fund's investment adviser
continuously monitors the issuers of high yield debt securities in the Fund's
portfolio in an attempt to determine if the issuers will have sufficient cash
flow and profits to meet required principal and interest

<PAGE>

payments. Achievement of EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND'S
investment objective may be more dependent upon the Fund's investment adviser
and the credit analysis capability of the Fund's investment adviser, than is the
case for higher quality debt securities. Credit ratings for individual
securities may change from time to time and EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND may retain a portfolio security whose rating has been
changed. See the Statement of Additional Information for a description of bond
and note ratings.

The Funds, other than EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, may
write (i.e., sell) covered call and put options. By writing a call option, a
Fund becomes obligated during the term of the option to deliver the securities
underlying the option upon payment of the exercise price. By writing a put
option, a Fund becomes obligated during the term of the option to purchase the
securities underlying the option at the exercise price if the option is
exercised. The Funds also may write straddles (combinations of covered puts and
calls on the same underlying security). The Funds may only write
"covered"options. This means that so long as a Fund is obligated as the writer
of a call option, it will own the underlying securities subject to the option
or, in the case of call options on U.S. Treasury bills, the Fund might own
substantially similar U.S. Treasury bills. A Fund will be considered
"covered"with respect to a put option it writes if, so long as it is obligated
as the writer of the put option, it deposits and maintains with its custodian in
a segregated account liquid assets having a value equal to or greater than the
exercise price of the option.

The principal reason for writing call or put options is to obtain,
through a receipt of premiums, a greater current return than would be realized
on the underlying securities alone. The Funds receive a premium from writing a
call or put option which they retain whether or not the option is exercised. By
writing a call option, the Funds might lose the potential for gain on the
underlying security while the option is open, and by writing a put option the
Funds might become obligated to purchase the underlying securities for more than
their current market price upon exercise.

A futures contract is a firm commitment by two parties: the seller, who
agrees to make delivery of the specific type of instrument called for in the
contract ("going short"), and the buyer, who agrees to take delivery of the
instrument ("going long") at a certain time in the future. Financial futures
contracts call for the delivery of particular debt instruments issued or
guaranteed by the U.S. Treasury or by specified agencies or instrumentalities of
the U.S. government. If a Fund would enter into financial futures contracts
directly to hedge its holdings of fixed income securities, it would enter into
contracts to deliver securities at an undetermined price (i.e., "go short") to
protect itself against the possibility that the prices of its fixed income
securities may decline during the Fund's anticipated holding period. A Fund
would "go long" (agree to purchase securities in the future at a predetermined
price) to hedge against a decline in market interest rates.

The Funds, other than EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, may also
enter into financial futures contracts and write options on such contracts. The
Funds intend to enter into such contracts and related options for hedging
purposes. The Funds will enter into futures on securities or index-based futures
contracts in order to hedge against changes in interest rates or securities
prices. A futures contract on securities is an agreement to buy or sell
securities during a designated month at whatever price exists at that time. A
futures contract on a securities index does not involve the actual delivery of
securities, but merely requires the payment of a cash settlement based on
changes in the securities index. The Funds do not make payment or deliver
securities upon entering into a futures contract. Instead, they put down a
margin deposit, which is adjusted to reflect changes in the value of the
contract and which remains in effect until the contract is terminated.

The Funds, other than EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, may sell
or purchase other financial futures contracts. When a futures contract is sold
by a Fund, the profit on the contract will tend to rise

<PAGE>

when the value of the underlying securities declines and to fall when the value
of such securities increases. Thus, the Funds sell futures contracts in order to
offset a possible decline in the profit on their securities. If a futures
contract is purchased by a Fund, the value of the contract will tend to rise
when the value of the underlying securities increases and to fall when the value
of such securities declines. The Funds may enter into closing purchase and sale
transactions in order to terminate a futures contract and may buy or sell put
and call options for the purpose of closing out their options positions. The
Funds' ability to enter into closing transactions depends on the development and
maintenance of a liquid secondary market. There is no assurance that a liquid
secondary market will exist for any particular contract or at any particular
time. As a result, there can be no assurance that the Funds will be able to
enter into an offsetting transaction with respect to a particular contract at a
particular time. If the Funds are not able to enter into an offsetting
transaction, the Funds will continue to be required to maintain the margin
deposits on the contract and to complete the contract according to its terms, in
which case it would continue to bear market risk on the transaction.

SPECIAL RISK FACTORS RELATED TO INVESTING IN MUNICIPAL OBLIGATIONS

<PAGE>

anticipated revenue to the State itself; conversely, an improving economic
outlook for a significant industry may have a positive effect on such issuers or
revenues.

MANAGEMENT OF THE FUNDS

INVESTMENT ADVISER

The management of each Fund is supervised by the Trustees of the Trust
under which each Fund has been established ("Trustees"). The Capital Management
Group of First Union National Bank of North Carolina ("CMG") serves as
investment adviser to EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN GEORGIA
MUNICIPAL BOND FUND, EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, EVERGREEN NORTH
CAROLINA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND,
EVERGREEN VIRGINIA MUNICIPAL BOND FUND AND EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND. First Union National Bank of North Carolina ("FUNB") is a
subsidiary of First Union Corporation ("First Union"), the sixth largest bank
holding company in the United States. First Union is headquartered in Charlotte,
North Carolina, and had $96.7 billion in consolidated assets as of December 31,
1995. First Union and its subsidiaries provide a broad range of financial
services to individuals and businesses through offices in 36 states. CMG manages
or otherwise oversees the investment of over $36 billion in assets belonging to
a wide range of clients, including all the series of Evergreen Investment Trust
(formerly known as First Union Funds). First Union Brokerage Services, Inc., a
wholly-owned subsidiary of FUNB, is a registered broker-dealer that is
principally engaged in providing retail brokerage services consistent with its
federal banking authorizations. First Union Capital Markets Corp., a
wholly-owned subsidiary of First Union, is a registered broker-dealer
principally engaged in providing, consistent with its federal banking
authorizations, private placement, securities dealing, and underwriting
services.

CMG manages investments and supervises the daily business affairs of
EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN GEORGIA MUNICIPAL BOND FUND,
EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, EVERGREEN NORTH CAROLINA MUNICIPAL
BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND, EVERGREEN VIRGINIA
MUNICIPAL BOND FUND AND EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND and,
as compensation therefor, is entitled to receive an annual fee equal to .50 of
1% of the average daily net assets of each Fund, other than EVERGREEN FLORIDA
HIGH INCOME MUNICIPAL BOND FUND, from which it is entitled to receive an annual
fee equal to .60 of 1% of average daily net assets and EVERGREEN NEW JERSEY
TAX-FREE INCOME FUND, from which it is entitled to receive an annual fee based
on the average daily net assets of the Fund calculated as follows: up to $500
million -- .50 of 1%; in excess of $500 million up to $1 million -- .45 of 1%;
in excess of $1 billion up to $ 1.5 billion -- .35 of 1%. The total annualized
operating expenses of EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN GEORGIA
MUNICIPAL BOND FUND, EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, EVERGREEN NORTH
CAROLINA MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND,
EVERGREEN VIRGINIA MUNICIPAL BOND FUND AND EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND for the fiscal year ended August 31, 1995 are set forth in
the section entitled "Financial Highlights". Evergreen Asset Management Corp.
("Evergreen Asset"), a subsidiary of FUNB, serves as administrator to each Fund
and is entitled to receive a fee based on the average daily net assets of each
Fund at a rate based on the total assets of the mutual funds administered by
Evergreen Asset for which CMG or Evergreen Asset also serve as investment
adviser, calculated in accordance with the following schedule: .050% of the
first $7 billion; .035% on the next $3 billion; .030% on the next $5 billion;
.020% on the next $10 billion; .015% on the next $5 billion; and .010% on assets
in excess of $30 billion. Furman Selz Incorporated, an affiliate of Evergreen
Funds Distributor, Inc., distributor for the Evergreen group of mutual funds,
serves as sub-administrator for each Fund and is entitled to receive a fee from
each Fund calculated on the average daily net assets of each Fund at a rate
based on the total assets of the mutual funds administered by Evergreen Asset
for which CMG or Evergreen Asset also serve as investment adviser, calculated in
accordance with the following schedule: .0100% of the first $7 billion; .0075%
on the next $3 billion; .0050% on the next $15 billion; and .0040% on assets in
excess of $25 billion. The total assets of the mutual funds administered by
Evergreen Asset for which CMG or Evergreen Asset serve as investment

<PAGE>

adviser were approximately $1 billion as of September 30, 1995. Prior to January
1, 1996, First Fidelity Bank, N.A. ("First Fidelity") served as investment
adviser to EVERGREEN NEW JERSEY TAX-FREE INCOME FUND. CMG succeeded to the
mutual funds advisory business of First Fidelity in connection with the
acquisition of First Fidelity by a subsidiary of First Union.

Robert S. Drye is a Vice President of FUNB, and has been with FUNB since
1968. Since 1989, Mr. Drye has served as a portfolio manager for several of the
series of Evergreen Investment Trust and for certain common trust funds. Prior
to 1989, Mr. Drye was a marketing specialist with First Union Brokerage
Services, Inc. Mr. Drye has managed the EVERGREEN SOUTH CAROLINA MUNICIPAL BOND
FUND since its inception in 1994 and the EVERGREEN FLORIDA MUNICIPAL BOND FUND
since its inception in 1993. Richard K. Marrone is a Vice President of FUNB. Mr.
Marrone joined FUNB in 1993 with eleven years experience managing fixed income
assets at Woodbridge Capital Management, a subsidiary of Comerica Bank, N.A. Mr.
Marrone is responsible for the portfolio management of several series of
Evergreen Investment Trust and certain common trust funds. Mr. Marrone has
served as portfolio manager of the EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
since 1993, the EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND since its
inception in 1995 and EVERGREEN GEORGIA MUNICIPAL BOND FUND since its inception
in 1993. Charles E. Jeanne joined FUNB in 1993. Prior to joining FUNB, Mr.
Jeanne served as a trader/portfolio manager for First American Bank where he was
responsible for individual accounts and common trust funds. Mr. Jeanne has been
the portfolio manager for the EVERGREEN VIRGINIA MUNICIPAL BOND FUND since its
inception in 1993. Jocelyn Turner is a Municipal Bond Portfolio Manager for CMG
and has managed the EVERGREEN NEW JERSEY TAX-FREE INCOME FUND since 1992. Ms.
Turner was previously employed as a Vice President, Municipal Bond Portfolio
Manager at One Federal Asset Management, Boston, MA since 1987.

PURCHASE AND REDEMPTION OF SHARES

HOW TO BUY SHARES

Eligible investors may purchase Fund shares at net asset value by mail or
wire as described below. The Funds impose no sales charges on Class Y shares.
Class Y shares are the only class of shares offered by this Prospectus and are
only available to (i) persons who at or prior to December 31, 1994 owned shares
in a mutual fund advised by Evergreen Asset, (ii) certain institutional
investors and (iii) investment advisory clients of CMG Evergreen Asset or their
affiliates. The minimum initial investment is $1,000, which may be waived in
certain situations. There is no minimum for subsequent investments. Investors
may make subsequent investments by establishing a Systematic Investment Plan or
a Telephone Investment Plan.

Purchases by Mail or Wire. Each investor must complete the Share Purchase
Application and mail it, together with a check made payable to the Fund whose
shares are being purchased, to State Street Bank and Trust Company ("State
Street") at P.O. Box 9021, Boston, Massachusetts 02205-9827. Checks not drawn on
U.S. banks will be subject to foreign collection which will delay an investor's
investment date and will be subject to processing fees.

When making subsequent investments, an investor should either enclose the
return remittance portion of the statement, or indicate on the face of the
check, the name of the Fund in which an investment is to be made, the exact
title of the account, the address, and the Fund account number. Purchase
requests should not be sent to a Fund in New York. If they are, the Fund must
forward them to State Street, and the request will not be effective until State
Street receives them.

Initial investments may also be made by wire by (i) calling State Street
at 800-423-2615 for an account number and (ii) instructing your bank, which may
charge a fee, to wire federal funds to State Street, as follows: State Street
Bank and Trust Company, ABA No.0110-0002-8, Attn: Custodian and Shareholder
Services. The wire must include references to the Fund in which an investment is
being made, account registration, and the account number. A completed
Application must also be sent to State Street indicating that the shares have
been purchased by wire, giving the date the wire was sent and referencing the
account number. Subsequent wire investments may be made by existing shareholders
by following the instructions outlined above. It is not necessary, however, for
existing shareholders to call for another account number.

<PAGE>

Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The securities in a Fund are valued at their current market value
determined on the basis of market quotations or, if such quotations are not
readily available, such other methods as the Trustees believe would accurately
reflect fair market value.

Additional Purchase Information. As a condition of this offering, if a purchase
is canceled due to nonpayment or because an investor's check does not clear, the
investor will be responsible for any loss a Fund or the Fund's investment
adviser incurs. If such investor is an existing shareholder, a Fund may redeem
shares from an investor's account to reimburse the Fund or the Fund's investment
adviser for any loss. In addition, such investors may be prohibited or
restricted from making further purchases in any of the Evergreen mutual funds.

A Fund cannot accept investments specifying a certain price or date and
reserves the right to reject any specific purchase order, including orders in
connection with exchanges from the other Evergreen mutual funds. Although not
currently anticipated, each Fund reserves the right to suspend the offer of
shares for a period of time.

Shares of each Fund are sold at the net asset value per share next
determined after a shareholder's order is received. Investments by federal funds
wire or by check will be effective upon receipt by State Street. Qualified
institutions may telephone orders for the purchase of Fund shares. Investors may
also purchase shares through a broker/dealer, which may charge a fee for the
service.

HOW TO REDEEM SHARES

You may "redeem", i.e., sell your shares in a Fund to the Fund on any day
the Exchange is open, either directly or through your financial intermediary.
The price you will receive is the net asset value next calculated after the Fund
receives your request in proper form. Proceeds generally will be sent to you
within seven days. However, for shares recently purchased by check, a Fund will
not send proceeds until it is reasonably satisfied that the check has been
collected (which may take up to ten days). Once a redemption request has been
telephoned or mailed, it is irrevocable and may not be modified or canceled.
Redeeming Shares Directly by Mail or Telephone. Send a signed letter of
instruction or stock power form to State Street which is the registrar, transfer
agent and dividend-disbursing agent for each Fund. Stock power forms are
available from your financial intermediary, State Street, and many commercial
banks. Additional documentation is required for the sale of shares by
corporations, financial intermediaries, fiduciaries and surviving joint owners.
Signature guarantees are required for all redemption requests for shares with a
value of more than $10,000 or where the redemption proceeds are to be mailed to
an address other than that shown in the account registration. A signature
guarantee must be provided by a bank or trust company (not a Notary Public), a
member firm of a domestic stock exchange or by other financial institutions
whose guarantees are acceptable to State Street.

Shareholders may withdraw amounts of $1,000 or more from their accounts
by calling State Street (800-423-2615) between the hours of 8:00 a.m. and 5:30
p.m. (Eastern time) each business day (i.e., any weekday exclusive of days on
which the Exchange or State Street's offices are closed). The Exchange is closed
on New Year's Day, Presidents Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. Redemption requests made after
4:00 p.m. (Eastern time) will be processed using the net asset value determined
on the next business day. Such redemption requests must include the
shareholder's account name, as registered with a Fund, and the account number.
During periods of drastic economic or market changes, shareholders may
experience difficulty in effecting telephone redemptions. Shareholders who are
unable to reach a Fund or State Street by telephone should follow the procedures
outlined above for redemption by mail.

The telephone redemption service is not made available to shareholders
automatically. Shareholders wishing to use the telephone redemption service must
indicate this on the Share Purchase Application and choose how the redemption
proceeds are to be paid. Redemption proceeds will either (i) be mailed by check
to the shareholder at the address in which the account is registered or (ii) be
wired to an account with the same registration as the shareholder's account in a
Fund at a designated commercial bank. State Street currently deducts a $5 wire
charge from all redemption proceeds wired. This charge is subject to change
without notice. A shareholder who decides later to use this service, or to
change instructions already given, should fill out a Shareholder Services Form
and send it to State Street Bank and Trust Company, P.O. Box 9021, Boston,
Massachusetts 02205-9827, with such shareholder's signature guaranteed by a bank
or trust company (not a Notary Public), a member firm of a domestic stock
exchange or by other financial institutions whose guarantees are acceptable to
State Street. Shareholders should allow approximately ten days for such form to
be processed. The Funds will employ reasonable procedures to verify that
telephone requests are genuine. These procedures include requiring some form of
personal identification prior to acting upon instructions and tape recording of
conversations. If a Fund fails to follow such procedures, it may be liable for
any losses due to unauthorized or

<PAGE>

fraudulent instructions. The Funds shall not be liable for following telephone
instructions reasonably believed to be genuine. Also, the Funds reserve the
right to refuse a telephone redemption request, if it is believed advisable to
do so. Financial intermediaries may charge a fee for handling telephonic
requests. The telephone redemption option may be suspended or terminated at any
time without notice.

General. The sale of shares is a taxable transaction for Federal tax purposes.
Under unusual circumstances, a Fund may suspend redemptions or postpone payment
for up to seven days or longer, as permitted by Federal securities law. The
Funds reserve the right to close an account that through redemption has remained
below $1,000 for thirty days. Shareholders will receive sixty days' written
notice to increase the account value before the account is closed. The Funds
have elected to be governed by Rule 18f-1 under the Investment Company Act of
1940 pursuant to which each Fund is obligated to redeem shares solely in cash,
up to the lesser of $250,000 or 1% of a Fund's total net assets during any
ninety day period for any one shareholder. See the Statement of Additional
Information for further details.

EXCHANGE PRIVILEGE

How To Exchange Shares. You may exchange some or all of your shares for shares
of the same Class in the other Evergreen mutual funds by telephone or mail as
described below. An exchange which represents an initial investment in another
Evergreen mutual fund must amount to at least $1,000. Once an exchange request
has been telephoned or mailed, it is irrevocable and may not be modified or
canceled. Exchanges will be made on the basis of the relative net asset values
of the shares exchanged next determined after an exchange request is received.
Exchanges are subject to minimum investment and suitability requirements.

Each of the Evergreen mutual funds has different investment objectives
and policies. For complete information, a prospectus of the fund into which an
exchange will be made should be read prior to the exchange. An exchange is
treated for Federal income tax purposes as a redemption and purchase of shares
and may result in the realization of a capital gain or loss. Each Fund imposes a
fee of $5 per exchange on shareholders who exchange in excess of four times per
calendar year. This exchange privilege may be modified or discontinued at any
time by the Fund upon sixty days' notice to shareholders and is only available
in states in which shares of the fund being acquired may lawfully be sold.
Exchanges by Telephone and Mail. You may exchange shares with a value of $1,000
or more by telephone by calling State Street (800-423-2615). Exchange requests
made after 4:00 p.m. (Eastern time) will be processed using the net asset value
determined on the next business day. During periods of drastic economic or
market changes, shareholders may experience difficulty in effecting telephone
exchanges. You should follow the procedures outlined below for exchanges by mail
if you are unable to reach State Street by telephone. If you wish to use the
telephone exchange service you should indicate this on the Share Purchase
Application. As noted above, each Fund will employ reasonable procedures to
confirm that instructions for the redemption or exchange of shares communicated
by telephone are genuine. A telephone exchange may be refused by a Fund or State
Street if it is believed advisable to do so. Procedures for exchanging Fund
shares by telephone may be modified or terminated at any time. Written requests
for exchanges should follow the same procedures outlined for written redemption
requests in the section entitled "How to Redeem Shares", however, no signature
guarantee is required.

SHAREHOLDER SERVICES

The Funds offer the following shareholder services. For more information
about these services or your account, contact your financial intermediary,
Evergreen Funds Distributor, Inc. ("EFD"), the distributor of the Funds, or the
toll-free number on the front page of this Prospectus. Some services are
described in more detail in the Share Purchase Application. Systematic
Investment Plan. You may make monthly or quarterly investments into an existing
account automatically in amounts of not less than $25.

<PAGE>

EFFECT OF BANKING LAWS

The Glass-Steagall Act and other banking laws and regulations presently
prohibit member banks of the Federal Reserve System ("Member Banks") or their
non-bank affiliates from sponsoring, organizing, controlling, or distributing
the shares of registered open-end investment companies such as the Funds. Such
laws and regulations also prohibit banks from issuing, underwriting or
distributing securities in general. However, under the Glass-Steagall Act and
such other laws and regulations, a Member Bank or an affiliate thereof may act
as investment adviser, transfer agent or custodian to a registered open-end
investment company and may also act as agent in connection with the purchase of
shares of such an investment company upon the order of its customer. Evergreen
Asset, since it is a subsidiary of FUNB, and CMG are subject to and in
compliance with the aforementioned laws and regulations.

Changes to applicable laws and regulations or future judicial or
administrative decisions could result in CMG being prevented from continuing to
perform the services required under the investment advisory contract or from
acting as agent in connection with the purchase of shares of a Fund by its
customers. If CMG were prevented from continuing to provide the services called
for under the investment advisory agreement, it is expected that the Trustees
would identify, and call upon each Fund's shareholders to approve, a new
investment adviser. If this were to occur, it is not anticipated that the
shareholders of any Fund would suffer any adverse financial consequences.

OTHER INFORMATION

DIVIDENDS, DISTRIBUTIONS AND TAXES

Income dividends are declared daily and paid monthly. Distributions of
any net realized gains of a Fund will be made at least annually. Shareholders
will begin to earn dividends on the first business day after shares are
purchased unless shares were not paid for, in which case dividends are not
earned until the next business day after payment is received. Each Fund has
qualified and intends to continue to qualify to be treated as a regulated
investment company under the Internal Revenue Code (the "Code"). While so
qualified, so long as each Fund distributes all of its investment company
taxable income and any net realized gains to shareholders, it is expected that
the Funds will not be required to pay any Federal income taxes. A 4%
nondeductible excise tax will be imposed on a Fund if it does not meet certain
distribution requirements by the end of each calendar year. Each Fund
anticipates meeting such distribution requirements.

The Funds will designate and pay exempt-interest dividends derived from
interest earned on qualifying tax-exempt obligations. Such exempt-interest
dividends may be excluded by shareholders of a Fund from their gross income for
Federal income tax purposes, however (1) all or a portion of such
exempt-interest dividends may be a specific preference item for purposes of the
Federal individual and corporate alternative minimum taxes to the extent that
they are derived from certain types of private activity bonds issued after
August 7, 1986, and (2) all exempt-interest dividends will be a component of the
"adjusted current earnings" for purposes of the Federal corporate alternative
minimum tax.

Dividends paid from taxable income, if any, and distributions of any net
realized short-term capital gains (whether from tax exempt or taxable
obligations) are taxable as ordinary income and long-term capital gain
distributions are taxable as long-term capital gains, even though received in
additional shares of the Fund, and regardless of the investors holding period
relating to the shares with respect to which such gains are distributed. Market
discount recognized on taxable and tax-exempt bonds is taxable as ordinary
income, not as excludable income. Under current law, the highest Federal income
tax rate applicable to net long-term gains realized by individuals is 28%. The
rate applicable to corporations is 35%.

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Since each Fund's gross income is ordinarily expected to be tax exempt
interest income, it is not expected that the 70% dividends-received deduction
for corporations will be applicable. Specific questions should be addressed to
the investor's own tax adviser.

Each Fund is required by Federal law to withhold 31% of reportable
payments (which may include dividends, capital gains distributions (if any) and
redemptions) paid to certain shareholders. In order to avoid this backup
withholding requirement, each investor must certify on the Share Purchase
Application, or on a separate form supplied by State Street, that the investor's
social security or taxpayer identification number is correct and that the
investor is not currently subject to backup withholding or is exempt from backup
withholding.

EVERGREEN FLORIDA MUNICIPAL BOND FUND AND EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND. Florida does not currently impose tax on individuals. Thus,
individual shareholders of the Funds will not be subject to any Florida state
income tax on distributions received from the Funds. However, certain
distributions will be taxable to corporate shareholders which are subject to
Florida corporate income tax. Florida currently imposes an intangible tax at the
annual rate of 0.20% on certain securities and other intangible assets owned by
Florida residents. Certain types of tax exempt securities of Florida issuers,
U.S. government securities and tax exempt securities issued by certain U.S.
territories and possessions are exempt from this intangible tax. Shares of the
Funds will also be exempt from the Florida intangible tax if the portfolio
consists exclusively of securities which are not so exempt on the last business
day of the calendar year, however, only the portion of the shares of the Funds
which relate to securities issued by the United States and its possessions and
territories will be exempt from the Florida intangible tax, and the remaining
portion of such shares will be fully subject to the intangible tax, even if they
partly relate to Florida tax exempt securities.

EVERGREEN GEORGIA MUNICIPAL BOND FUND. Under existing Georgia law,
shareholders of the Fund will not be subject to individual or corporate Georgia
income taxes on distributions from the Fund to the extent that such
distributions represent exempt-interest dividends for federal income tax
purposes that are attributable to (1) interest-bearing obligations issued by or
on behalf of the State of Georgia or its political subdivisions, or (2) interest
on obligations of the United States or of any other issuer whose obligations are
exempt from state income taxes under federal tax. Distributions, if any, derived
from capital gains or other sources generally will be taxable for Georgia income
tax purposes to shareholders of the Fund who are subject to the Georgia income
tax. For purposes of the Georgia intangible tax, shares of the Fund likely are
taxable (at the rate of 10 cents per $1,000 in value of the shares held on
January 1 of each year) to shareholders who are otherwise subject to such tax.

EVERGREEN NEW JERSEY TAX-FREE INCOME FUND. In any year in which the Fund
satisfies the requirements for treatment as a "qualified investment fund" under
New Jersey law, distribution from the Fund will be exempt from the New Jersey
Gross Income Tax to the extent such distributions are attributable to interest
or gains from (i) obligations issued by or on behalf of the State of New Jersey
or any country, municipality, school or other district, agency, authority,
commission, instrumentality, public corporation, body corporate and politic or
political subdivision of New Jersey or (ii) obligations that are otherwise
statutorily exempt from state or local taxation or under the laws of the United
States. Any gains realized on the sale or redemption of shares held in a
qualified investment fund are also exempt from the New Jersey Gross Income Tax.

EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND. Under existing North
Carolina law, shareholders of the Fund will not be subject to individual or
corporate North Carolina income taxes on distributions from the Fund to the
extend that such distributions represent exempt-interest dividends for federal
income tax purposes that are attributable to (1) interest on obligations issued
by North Carolina and political subdivisions thereof or (2) interest on
obligations of the United States or its territories or possessions.
Distributions, if any, derived from capital gains or other sources generally
will be taxable for North Carolina income tax purposes to shareholders of the
Fund who are subject to the North Carolina income tax.

EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND. Under existing South
Carolina law, shareholders of the Fund will not be subject to individual or
corporate South Carolina income taxes on Fund distributions to the extent that
such distributions represent exempt-interest dividends for federal income tax
purposes that are attributable to (1) interest on obligations of the State of
South Carolina, or any of its political subdivisions, (2) interest on
obligations of the United States, or (3) interest on obligations of any agency
or instrumentality of the United States that is prohibited by federal law from
being taxed by a state or any political subdivision of a state. Distributions,
if any, derived from capital gains or other sources, generally will be taxable
for South Carolina income tax purposes to shareholders of the Fund who are
subject to South Carolina income tax.

<PAGE>

EVERGREEN VIRGINIA MUNICIPAL BOND FUND. Under existing Virginia law,
shareholders of the Fund will not be subject to individual or corporate Virginia
income taxes on distributions received from the Fund to the extent that such
distributions represent exempt-interest dividends for federal income tax
purposes that are attributable to interest earned on (1) obligations issued by a
territory or possession of the United States or any subdivision thereof which
federal law exempts from state income taxes. Distributions, if any, derived from
capital gains or other sources generally will be taxable for Virginia income tax
purposes to shareholders of the Fund who are subject to Virginia income tax.

Statements describing the tax status of shareholders' dividends and
distributions will be mailed annually by the Funds. These statements will set
forth the amount of income exempt from federal and if applicable, state
taxation, and the amount, if any, subject to federal and state taxation.
Moreover, to the extent necessary, these statements will indicate the amount of
exempt-interest dividends which are a specific preference item for purposes of
the federal individual and corporate alternative minimum taxes. The exemption of
interest income for federal income tax purposes does not necessarily result in
exemption under the income or other tax law of any state or local taxing
authority. Investors should consult their own tax advisers about the status of
distributions from the Funds in their states and localities. Each Fund notifies
shareholders annually as to the interest exempt from federal taxes earned by the
Fund.

A shareholder who acquires Class A shares of a Fund and sells or
otherwise disposes of such shares within ninety days of acquisition may not be
allowed to include certain sales charges incurred in acquiring such shares for
purposes of calculating gain and loss realized upon a sale or exchange of shares
of the Fund.

OTHER INFORMATION

GENERAL INFORMATION

Portfolio Transactions. Consistent with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., and subject to seeking best
price and execution, a Fund may consider sales of its shares as a factor in the
selection of dealers to enter into portfolio transactions with the Fund.

Organization. EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND is a separate
investment series of The Evergreen Municipal Trust, a Massachusetts business
trust organized in 1988. EVERGREEN NEW JERSEY TAX-FREE INCOME FUND is a separate
investment series of The Evergreen Tax Free Trust (formerly FFB Funds Trust), a
Massachusetts business trust organized in 1985. EVERGREEN FLORIDA MUNICIPAL BOND
FUND, EVERGREEN GEORGIA MUNICIPAL BOND FUND, EVERGREEN NORTH CAROLINA MUNICIPAL
BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND AND EVERGREEN VIRGINIA
MUNICIPAL BOND FUND are each separate investment series of Evergreen Investment
Trust (formerly First Union Funds), a Massachusetts business trust organized in
1984. The Funds do not intend to hold annual shareholder meetings; shareholder
meetings will be held only when required by applicable law. Shareholders have
available certain procedures for the removal of Trustees.

A shareholder in each class of a Fund will be entitled to his or her
share of all dividends and distributions from a Fund's assets, based upon the
relative value of such shares to those of other Classes of the Fund, and, upon
redeeming shares, will receive the then current net asset value of the Class of
shares of the Fund represented by the redeemed shares less any applicable CDSC.
Each Trust named above is empowered to establish, without shareholder approval,
additional investment series, which may have different investment objectives,
and additional classes of shares for any existing or future series. If an
additional series or class were established in a Fund, each share of the series
or class would normally be entitled to one vote for all purposes. Generally,
shares of each series and class would vote together as a single class on
matters, such as the election of Trustees, that affect each series and class in
substantially the same manner. Class A, B and Y shares have identical voting,
dividend, liquidation and other rights, except that each class bears, to the
extent applicable, its own distribution, shareholder service and transfer agency
expenses as well as any other expenses applicable only to a specific class. Each
class of shares votes separately with respect to Rule 12b-1 distribution plans
and other matters for which separate class voting is appropriate under
applicable law. Shares are entitled to dividends as determined by the Trustees
and, in liquidation of a Fund, are entitled to receive the net assets of the
Fund.

Custodian, Registrar, Transfer Agent and Dividend-Disbursing Agent. State Street
Bank and Trust Company, P.O. Box 9021, Boston, Massachusetts 02205-9827 acts as
each Fund's registrar, transfer agent and dividend-disbursing agent for a fee
based upon the number of shareholder accounts maintained for the Funds. The
transfer

<PAGE>

agency fee with respect to the Class B shares will be higher than the transfer
agency fee with respect to the Class A shares.

Principal Underwriter. EFD, an affiliate of Furman Seiz LLC, located 230 Park
Avenue, New York, New York 10169, is the principal underwriter of the Funds.
Furman Selz LLC also acts as sub-administrator to the Funds.

Other Classes of Shares. Each Fund currently offers three classes of shares,
Class A, Class B and Class Y, and may in the future offer additional classes.
Class Y shares are the only class of shares offered by this Prospectus and are
only available to (i) persons who at or prior to December 31, 1994, owned shares
in a mutual fund advised by Evergreen Asset, (ii) certain institutional
investors and (iii) investment advisory clients of CMG, Evergreen Asset or their
affiliates. The dividends payable with respect to Class A and Class B shares
will be less than those payable with respect to Class Y shares due to the
distribution and distribution related expenses borne by Class A and Class B
shares and the fact that such expenses are not borne by Class Y shares.

Yield is a way of showing the rate of income a Fund earns on its
investments as a percentage of the Fund's share price. A Fund's yield is
calculated according to accounting methods that are standardized by the SEC for
all stock and bond funds. Because yield accounting methods differ from the
method used for other accounting purposes, a Fund's yield may not equal its
distribution rate, the income paid to your account or the income reported in a
Fund's financial statements. To calculate yield, a Fund takes the interest
income it earned from its portfolio of investments (as defined by the SEC
formula) for a 30-day period (net of expenses), divides it by the average number
of shares entitled to receive dividends, and expresses the result as an
annualized percentage rate based on a Fund's share price at the end of the
30-day period. This yield does not reflect gains or losses from selling
securities.

Total returns are based on the overall dollar or percentage change in the
value of a hypothetical investment in a Fund. A Fund's total return shows its
overall change in value including changes in share prices and assumes all a
Fund's distributions are reinvested. A cumulative total return reflects a Fund's
performance over a stated period of time. An average annual total return
reflects the hypothetical annually compounded return that would have produced
the same cumulative total return if a Fund's performance had been constant over
the entire period. Because average annual total returns tend to smooth out
variations in a Fund's return, you should recognize that they are not the same
as actual year-by-year results. To illustrate the components of overall
performance, a Fund may separate its cumulative and average annual total returns
into income results and realized and unrealized gain or loss.

A Fund may also quote tax-equivalent yields, which show the taxable
yields an investor would have to earn before taxes to equal the Fund's tax-free
yields. A tax-equivalent yield is calculated by dividing a Fund's tax-exempt
yield by the result of one minus a stated federal tax rate. If only a portion of
a Fund's income was tax-exempt, only that portion is adjusted in the
calculation.

Comparative performance information may also be used from time to time in
advertising or marketing a Fund's shares, including data from Lipper Analytical
Services, Inc., Morningstar and other industry publications. The Fund may also
advertise in items of sales literature an "actual distribution rate" which is
computed by dividing the total ordinary income distributed (which may include
the excess of short-term capital gains over losses) to shareholders for the
latest twelve month period by the maximum public offering price per share on the
last day of the period. Investors should be aware that past performance may not
be reflective of future results.

<PAGE>

APPENDIX A -- FLORIDA RISK CONSIDERATIONS

The following is a summary of economic factors which may affect the
ability of the municipal issuers of Florida obligations to repay general
obligation and revenue bonds. Such information is derived from sources that are
generally available to investors and is believed by the Funds to be accurate,
but has not been independently verified and may not be complete. Under current
law, the State of Florida is required to maintain a balanced budget such that
current expenses are met from current revenues. Florida does not currently
impose a tax on personal income but does impose taxes on corporate income
derived from activities within the state. In addition, Florida imposes an ad
valorem tax as well as sales and use taxes. These taxes are the principal
sources of funds to meet state expenses, including repayment of, and interest
on, obligations backed solely by the full faith and credit of the state, without
recourse to any specific project or related revenue source.

On November 3, 1992, Florida voters approved an amendment to the state
constitution which limits the annual growth in the assessed valuation of
residential property and which, over time, could constrain the growth in
property taxes, a major revenue source for local governments. The amendment
restricts annual increases in assessed valuation to the lesser of 3% or the
Consumer Price Index. The amendment applies only to residential properties
eligible for the homestead exemption and does not affect the valuation of
rental, commercial, or industrial properties. When sold, residential property
would be reassessed at market value. The amendment became effective January 1,
1993. While no immediate ratings implications are expected, the amendment could
have a negative impact on the financial performance of local governments over
time and lead to ratings revisions which may have a negative impact on the
prices of affected bonds.

Many of the bonds in which the Funds invest were issued by various units
of local government in the State of Florida. In addition, most of these bonds
are revenue bonds where the security interest of the bond holders typically is
limited to the pledge of revenues or special assessments flowing from the
project financed by the bonds. Projects include, but are not limited to, water
and waste water utilities, drainage systems, roadways, and other
development-related infrastructures. Therefore, the capacity of these issuers to
repay their obligations may be affected by variations in the Florida economy.

Since 1970, Florida has been one of the fastest growing states in the
nation. Average annual population growth over the last 20 years was 320,000.
During this period only California and Texas grew more rapidly. In terms of
total population, Florida moved from the ninth most populous state in 1970 to
fourth today.

This rapid and sustained pace of population growth has given rise to
sharp increases in construction activity and to the need for roads, drainage
systems, and utilities to serve the burgeoning population. In turn this has
driven the growth in the volume of revenue bond debt outstanding.

The pace of growth, however, has not been steady. During economic
expansions, Florida's population growth has exceeded 500,000 people per year,
but in recessions growth has slowed to 120,000 per year. The variations in
construction activity over the course of business cycles is also very large.
Although the amplitude of the swings during business cycles is large, the
duration of downturns in Florida's growth has been short. Historically,
depressed levels of growth have lasted only a year or two at most. Furthermore,
Florida's cycles have not been periods of growth or decline. Instead, what has
occurred are periods of more growth or less growth.

Florida's ability to meet increasing expenses will be dependent in part
upon the state's ability to foster business and economic growth. During the past
decade, Florida has experienced significant increases in the technology-based
and other light industries and in the service sector. This growth has
diversified the state's overall economy, which at one time was dominated by the
citrus and tourism industries. The state's economic and business growth could be
restricted, however, by the natural limitations of environmental resources and
the state's ability to finance adequate public facilities such as roads and
schools.

<PAGE>
INVESTMENT ADVISER
Capital Management Group of First Union National Bank of North Carolina, 201
South College Street, Charlotte, North Carolina 28288

CUSTODIAN & TRANSFER AGENT
State Street Bank and Trust Company, Box 9021, Boston, Massachusetts
02205-9827

LEGAL COUNSEL
Sullivan & Worcester LLP, 1025 Connecticut Avenue, N.W., Washington, D.C.
20036

INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, One Mellon Bank Center, Pittsburgh, Pennsylvania 15219
EVERGREEN FLORIDA MUNICIPAL BOND FUND, EVERGREEN GEORGIA MUNICIPAL BOND
FUND, EVERGREEN NEW JERSEY TAX-FREE INCOME FUND, EVERGREEN NORTH CAROLINA
MUNICIPAL BOND FUND, EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND,
EVERGREEN VIRGINIA MUNICIPAL BOND FUND

Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York 10036
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND

DISTRIBUTOR
Evergreen Funds Distributor, Inc., 230 Park Avenue, New York, New York 10169

536126rev02