<PAGE>
EVERGREEN
STATE TAX-FREE
FUNDS
(Drawing of the state of Florida with a + beside it)
(Drawing of the state of Florida)
(Drawing of the state of Georgia)
(Drawing of the state of New Jersey)
(Drawing of the state of North Carolina)
(Drawing of the state of South Carolina)
(Drawing of the state of Virginia)
(Picture of mountain scene)
1996 ANNUAL REPORT
(Evergreen logo)
Evergreen(sm)
Funds
<PAGE>
EVERGREEN STATE TAX-FREE FUNDS
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
A Review of the Past Year and Prospects for the Future.................... 1
A Report From Your Portfolio Manager -- Florida High Income
Municipal Bond Fund....................................................... 3
A Report From Your Portfolio Manager -- New Jersey Tax-Free
Income Fund............................................................... 4
A Report From Your Portfolio Managers..................................... 5
(Drawing of the FLORIDA Results to Date........................................................... 7
state of Florida HIGH INCOME Statement of Investments.................................................. 8
with a + beside it) MUNICIPAL BOND FUND Statement of Assets and Liabilities....................................... 11
Statement of Operations................................................... 12
Statement of Changes in Net Assets........................................ 13
Financial Highlights...................................................... 14
(Drawing of the FLORIDA MUNICIPAL Results to Date........................................................... 16
state of Florida) BOND FUND Statement of Investments.................................................. 17
Statement of Assets and Liabilities....................................... 20
Statement of Operations................................................... 21
Statement of Changes in Net Assets........................................ 22
Financial Highlights...................................................... 23
(Drawing of the GEORGIA Results to Date........................................................... 25
state of Georgia) MUNICIPAL BOND Statement of Investments.................................................. 26
FUND Statement of Assets and Liabilities....................................... 27
Statement of Operations................................................... 28
Statement of Changes in Net Assets........................................ 29
Financial Highlights...................................................... 30
(Drawing of the NEW JERSEY Results to Date........................................................... 33
state of New Jersey) TAX FREE Statement of Investments.................................................. 34
INCOME FUND Statement of Assets and Liabilities....................................... 37
Statement of Operations................................................... 38
Statement of Changes in Net Assets........................................ 39
Financial Highlights...................................................... 40
(Drawing of the NORTH CAROLINA Results to Date........................................................... 42
state of North Carolina) MUNICIPAL BOND Statement of Investments.................................................. 43
FUND
Statement of Assets and Liabilities....................................... 45
Statement of Operations................................................... 46
Statement of Changes in Net Assets........................................ 47
Financial Highlights...................................................... 48
(Drawing of the SOUTH CAROLINA Results to Date........................................................... 50
state of South Carolina) MUNICIPAL BOND Statement of Investments.................................................. 51
FUND Statement of Assets and Liabilities....................................... 53
Statement of Operations................................................... 54
Statement of Changes in Net Assets........................................ 55
Financial Highlights...................................................... 56
(Drawing of the VIRGINIA Results to Date........................................................... 58
state of Virginia) MUNICIPAL BOND Statement of Investments.................................................. 59
FUND
Statement of Assets and Liabilities....................................... 61
Statement of Operations................................................... 62
Statement of Changes in Net Assets........................................ 63
Financial Highlights...................................................... 64
Combined Notes to Financial Statements.................................... 67
Report of Independent Accountants -- Price Waterhouse LLP................. 76
Independent Auditors' Report -- KPMG Peat Marwick LLP..................... 77
Trustees and Officers..........................................Inside Back Cover
</TABLE>
EVERGREEN(SM) is a Service Mark of Evergreen Asset Management Corp.
Copyright 1995, Evergreen Asset Management Corp.
<PAGE>
EVERGREEN STATE TAX-FREE FUNDS
A REVIEW OF THE PAST YEAR
AND PROSPECTS FOR THE FUTURE
BY STEPHEN A. LIEBER
The continued expansion of the United States (Picture of Stephen
economy and the persistence of inflation at 3% or A. Lieber appears
less, has evidently sent mixed signals to the here)
investment markets. The
equity market this year has gone from new high to new high. The willingness of
American savers to put money into the hands of equity mutual funds to buy stocks
in the United States and abroad is unprecedented. Even foreign investors, who
have long been skeptical of the rising prices of U.S. equities and the recent
relatively higher valuations than in many other industrial countries, have begun
to move heavily into U.S. equities. Only the bond market has suffered negative
trends this year. But, it showed no further losses when measured from the end of
the second calendar quarter to the end of the third.
In contrast, it yielded modest gains early in the third quarter. Evidence of
slowed final demand in many sectors of the economy has begun to reduce the fears
of many investors over inflationary pressures. While confidence increases that
both producer and consumer price indexes will remain in a narrow range, around
3%, apprehensions of possibly renewed inflation are now focused on the trend of
hourly wages. Hourly wages have moved up slightly in the last two months.
The apparent consensus among business economists currently is to expect a 2%
growth rate for the U.S. economy in the second half of 1996, with a similar
level to continue into 1997. These views are, in part, based on historical
trends, in which the late cycle characteristics of the U.S. economy typically
show economic deceleration. Such a deceleration is not widely feared, in view of
the fact that real income growth is likely to be sustained by a 2% to 2 1/2%
employment growth, plus a 3% to 3 1/2% earnings growth, before a 3% inflation.
The appearance of such decelerating trends and their continuation would likely
bring bond yields down, as the inflation premium would be removed from bond
market expectations. Many who dissent from the consensus view that the economy
will slow, argue that the European economies and Japan's economy are likely to
revive in 1997, which will create more export demand for U.S. products and,
therefore, increase our growth rate. More pessimistic observers of the American
economy believe that the American consumer has overspent, as evidenced by the
rising rate of credit card delinquencies, and by the "wealth effect" of a stock
market achieving record highs.
For the bond market, we expect that fairly stable, rather than rising,
inflation, and a somewhat declining overall business rate of growth, together
with a narrow range currency market, should enable a gradual decline in interest
rates.
Tax-exempt fixed income investment in 1996 has had comparatively better
returns than taxable bond investment. Much of this difference is due to the fact
that the flat tax, or sharply
1
<PAGE>
EVERGREEN STATE TAX-FREE FUNDS
A REVIEW OF THE PAST YEAR AND
PROSPECTS FOR THE FUTURE -- (CONTINUED)
reduced income tax, advocacies of presidential candidates earlier in the year,
were eliminated as concerns for tax-exempt investors. Therefore, tax-exempt
bonds have risen to a normal level of relationship to taxable bonds. Further
improving valuations has been the lack of major concerns over credit quality
issues. Orange County California's default has fallen into memory and its credit
is in the process of restoration. Other credit problems regarding certain public
power facilities and the rental of municipal buildings have also been overcome.
Correspondingly, the supply of new tax-exempt issues declined, especially as
interest rate increases cut down the number of new issues replacing refunded
bonds. The credit quality overall has been enhanced by further record gains for
the use of bond insurance, while the insurers themselves have had their credit
quality improved by record accumulations of earnings. In summary, the tax-exempt
securities market toward the end of 1996 appears to be in a healthy condition.
2
<PAGE>
FLORIDA HIGH INCOME MUNICIPAL BOND FUND
A REPORT FROM YOUR
PORTFOLIO MANAGER
RICHARD K. MARRONE
While interest rate movements have been volatile during the (Photo of
past year, Evergreen Florida High Income Municipal Bond Fund Richard K.
proved rewarding to its investors. The Fund's total return Marrone
(Class A shares) ranked #1 among all 36 other Florida Municipal appears
Debt Funds ranked by Lipper Analytical Services for the 12 here)
months ended August 31, 1996*.
The market for high yielding credits in the state of Florida
has been robust during most of the past year. Florida's economy
continues to remain strong, especially on the construction
front, as population growth continues to outpace the rest of the
nation. This rapid population growth has created a strong demand
for new community development districts (CDDs) throughout the state.
The residential construction part of the economy has become a
large part of the Florida high yield market. Numerous bond issues have come to
market over the past year to finance this growth. These CDDs assist in the
development of infrastructure built around new homes which are typically
centered around golf courses and various other amenities. The Fund has focused
on investing in the higher end developments that are built in affluent areas.
These type of developments are usually more stable and predictable and built by
large, well-known developers.
Spreads have continued to narrow between non-rated and higher rated credits
which has contributed to the favorable performance of our lower and non-rated
bonds. Investors appetite for yield has been one of the primary factors for this
narrowing. The strength of the economy has also contributed to strong
performance of our bonds, as several credits have exhibited improved economic
fundamentals. The outlook for lower and non-rated bonds will fluctuate more with
economic cycles than interest rate movements, versus higher rated bonds.
During a period of declining interest rates, this Fund will not participate as
fully as other funds may. However, in a rising rate environment, the Fund may
well outperform its competition and exhibit better total return numbers while
also providing a relatively high level of tax-exempt income. This philosophy of
limited participation on the upside but giving up less on the down side in an
attempt to preserve principal, while generating good income, is the main reason
we believe investors place their money into the Fund. Our focus has always been,
and will continue to be, to provide higher income than that available from an
investment grade portfolio while also striving to maintain relatively stable net
asset values.
At its fiscal year-end on August 31, 1996, Evergreen Florida High Income
Municipal Bond Fund's total net assets were $97.5 million. The Fund's yields at
that time are illustrated in the table below. (For additional performance
information, please see page 7.)
<TABLE>
<CAPTION>
CLASS Y SHARES CLASS A SHARES CLASS B SHARES
<S> <C> <C> <C>
30-Day SEC Yield 6.50% 5.94% 5.43%
Tax-Equivalent Yield** 10.16% 9.28% 8.48%
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
* SOURCE: LANA -- LIPPER ANALYTICAL NEW APPLICATIONS. LIPPER ANALYTICAL
SERVICES, INC., IS AN INDEPENDENT MUTUAL FUNDS PERFORMANCE MONITOR. LIPPER
RANKINGS DO NOT INCLUDE SALES CHARGES. IF INCLUDED, RANKINGS MAY BE
DIFFERENT.
FUND'S INCEPTION DATES: CLASS Y SHARES: 9/20/95, CLASS A SHARES: 6/17/92,
CLASS B SHARES: 7/10/95
INVESTMENT RETURN, PRINCIPAL VALUE AND YIELDS WILL FLUCTUATE. INVESTORS'
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
THE FUND'S CLASS A SHARES ARE SUBJECT TO A MAXIMUM FRONT END SALES CHARGE OF
4.75% AND CLASS B SHARES ARE SUBJECT TO A MAXIMUM CONTINGENT DEFERRED SALES
CHARGE OF 5%.
**TAX-EQUIVALENT YIELDS ASSUMES A 36% FEDERAL TAX BRACKET. FLORIDA INTANGIBLES
TAX (WHICH IS NOT REFLECTED IN TAX-EQUIVALENT YIELDS ABOVE) ON PERSONAL
PROPERTY AFTER EXEMPTIONS OF $2 PER $1,000 IS GENERALLY IMPOSED ON THE VALUE
OF STOCKS, BONDS, OTHER EVIDENCES OF INDEBTEDNESS AND MUTUAL FUND SHARES.
DURING THE PERIOD UNDER REVIEW, THE ADVISER CONTINUED ITS POLICY OF WAIVING A
PORTION OF ITS ADVISORY FEE. HAD FEE NOT BEEN WAIVED, YIELDS WOULD HAVE BEEN
LOWER. FEE WAIVER MAY BE REVISED AT ANY TIME.
3
<PAGE>
EVERGREEN NEW JERSEY TAX FREE INCOME FUND
A REPORT FROM YOUR
PORTFOLIO MANAGER
JOCELYN TURNER
Fixed income markets took a roller coaster ride during the
period as economic reports continually surprised the consensus (Photo of
view. Bond prices took sharp drops after strong Gross Domestic Jocelyn
Product (GDP) and initial jobless claims numbers were released. Turner
Increases in durable goods orders and rebounds in retail demand appears
seemed to confirm that the economy was still growing at a here)
healthy pace. Commodity prices started to show some signs of
incipient inflation, but continued wage pressures kept it at
bay. Investors prepared for Fed intervention to raise rates at
any time, possibly at the upcoming November Federal Open Market
Committee Meeting. With elections approaching, the Fed seems in no
hurry to change course, believing that despite the upticks in economic reports,
underlying inflation is still in check and the economy is not yet overheating.
The market has taken some of the onus from the Fed by pricing a 25- to 50-basis
point rate increase into the yield curve in response to the economic data.
While bond prices dropped across the fixed income markets, municipals
continued their first quarter trend of relative outperformance to Treasuries,
though at the low end of the ranges. Long-term municipal bonds, as measured by
the Bond Buyer 20-Year Index*, were yielding approximately 88% of Treasuries at
the beginning of the Fund's fiscal year, at 5.57%. By July and August, the yield
had risen to 5.86%, and 82% of Treasuries thanks to the continued low new
issuance and large bond call redemptions that reduced the total outstanding
supply of municipals.
Municipals outperformed Treasuries due to a change in investor sentiment. Tax
reform fears subsided and rising rates led individual investors to chase
increased yields. This was in contrast to 1995 when investors suffered rate
shock from the low absolute levels. Investors re-focused asset allocations into
fixed income securities after the stock market became increasingly volatile and
sold off. Municipals, especially, became attractive to individual investors and
property and casualty insurance companies.
Supply of municipal bonds to satisfy the increased demand continued to be a
severe problem in the market. With interest rates rising, issuers were reluctant
to issue refunding bonds and many other interest rate sensitive deals that had
been in the pipeline. Specialty state funds, like this one, were especially
hard-pressed to find new issues. Of those issues, most were priced rich and few
were sizable enough for proper liquidity and diversification in mutual funds. As
a result, the Fund selectively sought higher coupon bonds with defensive call
protection to capture increased yields, maintain stable income, and reduce price
volatility. As always, the Fund is managed to maximize total return and
tax-exempt income while seeking to avoid unnecessary risk.
At its fiscal year-end on August 31, 1996, Evergreen New Jersey Tax-Free
Income Fund's total net assets were $44.2 million. The Fund's yields at that
time are illustrated in the table below. (For additional performance
information, please see page 33.)
<TABLE>
<CAPTION>
CLASS Y SHARES CLASS A SHARES CLASS B SHARES
<S> <C> <C> <C>
30-Day SEC Yield 5.17% 4.87% 4.17%
Tax-Equivalent Yield* 8.65% 8.15% 6.98%
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
* UNMANAGED INDEXES OF SELECTED SECURITIES. AN INVESTMENT CAN NOT BE MADE IN AN
INDEX.
THE FUNDS' INVESTMENT RETURN, PRINCIPAL VALUE AND YIELDS WILL FLUCTUATE.
INVESTORS' SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
THE FUND'S CLASS A SHARES ARE SUBJECT TO A MAXIMUM FRONT END SALES CHARGE OF
4.75% AND CLASS B SHARES ARE SUBJECT TO A MAXIMUM CONTINGENT DEFERRED SALES
CHARGE OF 5%.
** TAX-EQUIVALENT YIELD ASSUMES A 36% FEDERAL TAX BRACKET AND A 6.65% NEW JERSEY
STATE TAX BRACKET. DURING THE PERIOD UNDER REVIEW, THE ADVISER CONTINUED ITS
POLICY OF WAIVING A PORTION OF ITS ADVISORY FEE. HAD FEE NOT BEEN WAIVED,
YIELD WOULD HAVE BEEN LOWER. FEE WAIVER MAY BE REVISED AT ANY TIME.
SOME OF THE FUND'S INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM
TAX FOR CERTAIN INVESTORS.
4
<PAGE>
EVERGREEN STATE MUNICIPAL BOND FUNDS
A REPORT FROM YOUR
PORTFOLIO MANAGERS
ROBERT EVANS
RICHARD MARRONE
ROBERT S. DRYE
CHARLES JEANNE
As the Funds' fiscal year began, municipal bonds were in the (Photo of
midst of the bond rally of 1995. The yield on the Bond Buyer 20 Robert Evans
Year Government Obligation (GO) Index* dropped 54 basis points, appears
from 5.98% at the end of August, 1995, to 5.44% at 1995 here)
year-end. The new year brought no January effect to municipals
due to historically high levels of new issuance. Prices were
cheap but demand remained tepid with individual investors
suffering rate shock. Municipal yields continued their drop but
not as severely as with Treasuries because of an unusually flat
yield curve. There was little advantage to extending out into
longer maturities since 20-year bonds at 5.46% traded only 10 basis
points higher than 11-year bonds at 5.36% as measured by the
Bond Buyer 20-Year GO* and 11-Year GO* Index, respectively.
Investors demanded short-term paper or discount bonds that
provided good structure (i.e. call protection).
Fixed income markets reversed direction in the second quarter (Photo of
of 1996 as economic reports continually surprised consensus. Richard Marrone
Bond prices dropped after strong Gross Domestic Product (GDP) appears here)
and initial jobless claims numbers were released. Increases in
durable goods orders and rebounds in retail demand seemed to
confirm that the economy was still growing at a healthy pace.
Commodity prices started to show some signs of incipient
inflation, but continued wage pressures kept it at bay.
Investors remain prepared for Federal Reserve intervention to
raise rates at any time, possibly even at the upcoming November (Photo of
Federal Open Market Committee Meeting. With elections Robert S. Drye
approaching, the Fed seems in no hurry to change course, appears here)
believing that despite the upticks in economic reports,
underlying inflation is still in check and the economy is not
yet overheating. The market has taken some of the onus from the
Fed by pricing a 25- to 50-basis point rate increase into the
yield curve in response to the economic data.
While bond prices dropped across the fixed income markets, (Photo of
municipals continued their first quarter trend of relative Charles Jeanne
outperformance to Treasuries, though at the low end of the appears here)
ranges. Long-term municipals, as measured by the Bond Buyer
20-Year Index*, were yielding approximately 88% of Treasuries at
the beginning of the Fund's fiscal year, at 5.57%. By July and August,
the yield had risen to 5.86%, and 82% of Treasuries thanks to the continued
low new issuance, regular interest payments, and large bond call
redemptions that reduced the total outstanding supply of
municipals.
* UNMANAGED INDEXES OF SELECTED SECURITIES. AN INVESTMENT CAN NOT BE MADE IN AN
INDEX.
THE FUNDS' INVESTMENT RETURNS, PRINCIPAL VALUES AND YIELDS WILL FLUCTUATE.
INVESTORS' SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
SOME OF THE FUNDS' INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM
TAX FOR CERTAIN INVESTORS.
5
<PAGE>
EVERGREEN STATE MUNICIPAL BOND FUNDS
A REPORT FROM YOUR
PORTFOLIO MANAGERS -- (CONTINUED)
Municipals' outperformance of Treasuries was due to a change in investor
sentiment. Tax reform fears subsided and rising rates led individual investors
to chase increased yields. This was in contrast to 1995 when investors suffered
rate shock from the low absolute levels. Investors re-focused asset allocations
into fixed income securities after the stock market became increasingly volatile
and sold off. Municipals, especially, became attractive to individual investors
as well as property and casualty insurance companies.
Supply of municipal bonds to satisfy the increased demand continued to be a
severe problem in the market. With interest rates rising, issuers were reluctant
to issue refunding bonds and many other interest rate sensitive deals that had
been in the pipeline. Specialty state funds were particularly hard-pressed to
find new issues. Of those issues, most were priced rich and few were sizable
enough for proper liquidity and diversification in mutual funds. As a result,
the Funds selectively sought higher coupon bonds with defensive call protection
to capture increased yields, maintain stable income, and reduce price
volatility. As always, the Funds are managed to maximize total return and
tax-exempt income while seeking to avoid unnecessary risk. (For fund-specific
performance information, please see the pages entitled "Results To Date".)
6
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
(Drawing of the state of Florida with a + beside it)
RESULTS TO DATE
PERFORMANCE OF $10,000 INVESTED IN THE
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
The graphs below compare a $10,000 investment in the Evergreen Florida High
Income Municipal Bond Fund (Class A, Class B and Class Y Shares) with a similar
investment in the Lehman Brothers Municipal Bond Index ("Index").
CLASS A
ONE YEAR TOTAL RETURN = 1.4%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 6.5%
(Class A chart appears here. Plot points are below.)
6/17/92* 8/31/92 8/31/93 8/31/94 8/31/95 8/31/96
(Customers to fill in plot points.)
CLASS B
ONE YEAR TOTAL RETURN = 0.6%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 3.2%
(Class B chart appears here. Plot points are below.)
7/10/95* 8/31/95 2/28/96 8/31/96
(Customers to fill in plot points.)
CLASS Y
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 6.3%
(Class Y chart appears here. Plot points are below.)
9/20/95* 2/28/96 8/31/96
(Customers to fill in plot points.)
- - - EVERGREEN HIGH INCOME MUNICIPAL BOND FUND
______ LEHMAN BROTHERS MUNICIPAL BOND INDEX
* Commencement of class operations.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE RESULTS. MUTUAL FUNDS
ARE NOT OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK AND ARE NOT FEDERALLY
INSURED.
For the purposes of the graphs and the accompanying tables, it has been
assumed that (a) the maximum sales charge of 4.75% was deducted from the initial
$10,000 investment in Class A Shares; (b) the maximum applicable contingent
deferred sales charge was deducted from the value of the investment in Class B
Shares, assuming full redemption on August 31, 1996; (c) all recurring fees
(including investment advisory fees) were deducted; and (d) all dividends and
distributions were reinvested.
The investment adviser is currently waiving a portion of the Fund's
expenses. Had expenses not been waived, returns would have been lower.
The Index is an unmanaged index and includes the reinvestment of income,
but does not reflect the payment of transaction costs and advisory fees
associated with an investment in the Fund.
7
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
AUGUST 31, 1996
(Drawing of the state of Florida with a + beside it)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES -- 98.4%
FLORIDA -- 93.7%
$ 785 Alachua Cnty. Hlth. Facs. RB,
Beverly Enterprises Proj.,
10.125%, 4/1/10....................... $ 858,468
3,000 Alliance Arpt. Auth. Inc.
Federal Express Corp. Proj.,
6.375%, 4/1/21........................ 2,945,040
1,000 Bay Cnty. Hosp. Sys. RB,
Bay Med. Ctr. Proj.,
8.00%, 10/1/12........................ 1,094,620
200 Baytree Cmnty. Dev. Dist.
Spl. Assmt. RB,
8.75%, 5/1/12......................... 211,630
750 Boynton Beach Hsg. Mtg.
Clipper Cove Apts.,
6.35%, 7/1/16......................... 748,245
990 Brevard Cnty.
Hlth. Facs. Auth. RB,
Courtenay Springs Vlg.,
7.375%, 11/15/04...................... 1,000,019
1,875 Brevard Cnty.
Hlth. Facs. Auth. RB,
Courtenay Springs Vlg.,
7.50%, 11/15/12....................... 1,887,019
1,000 Brevard Cnty. Tourist Dev.
Tax RB, Marlins Spring,
6.875%, 3/1/13........................ 1,046,240
1,000 Broward Cnty. Hsg. Fin.
Auth. RB, (Ser. A),
7.35%, 3/1/23, (GNMA)................. 1,041,280
1,125 Crossings At Fleming Is.
Cmnty. Dev. Dist. Util. RB,
7.375%, 10/1/19....................... 1,107,743
2,310 Duval Cnty. Hsg. Fin. Auth.
RB, St. Augustine Apts. Proj.,
6.00%, 3/1/21......................... 2,246,498
1,500 Eastlake Oaks Cmnty. Dev. Dist.,
7.75%, 5/1/17......................... 1,516,500
505 Escambia Cnty. Hlth. Facs.
Auth. RB, Azalea Trace Inc.,
8.50%, 1/1/19......................... 518,074
535 Escambia Cnty. Hlth. Facs.
Auth. RB, Azalea Trace Inc.,
9.25%, 1/1/06......................... 566,383
235 Escambia Cnty. Hlth. Facs.
Auth. RB, Azalea Trace Inc.,
9.25%, 1/1/12......................... 248,785
1,500 Escambia Cnty. Hlth. Facs.
Auth. RB, Baptist Hosp. Inc.,
(Ser. B),
6.00%, 10/1/14........................ 1,418,205
PRINCIPAL
AMOUNT
(000) VALUE
$ 2,000 Escambia Cnty. PCR,
Champion Intl. Corp. Proj.,
6.90%, 8/1/22......................... $ 2,073,500
1,000 Florida Hsg. Fin. Agy. RB,
The Vinyards Proj., (Ser. H),
6.50%, 11/1/25........................ 998,580
2,580 Hernando Cnty. IDR,
Florida Crushed Stone Co.,
8.50%, 12/1/14........................ 2,811,890
1,545 Hialeah Gardens, IDR,
Waterford Convalscent-A,
7.875%, 12/1/07....................... 1,594,100
600 Hillsborough Cnty. Aviation
Auth. RB, US Air Proj. (Ser. 2),
8.60%, 1/15/22........................ 649,764
3,430 Homestead IDR, Cmnty.
Rehab. Providers Prog.-A,
7.95%, 11/1/18........................ 3,456,651
2,500 Indian Trace Cmnty. GO Wtr.
Mgmt. Spl. Benefit Sub-B,
8.25%, 5/1/11 (a)..................... 2,662,400
1,000 Jacksonville, Hlth. Facs.
Auth. IDR, Cypress Vlg. Proj.,
7.00%, 12/1/22........................ 1,017,560
750 Jacksonville, Hlth. Facs.
Auth. RB, Cypress Vlg. Proj.,
7.00%, 12/1/14........................ 765,548
2,500 Lake Bernadette Cmnty. Dev.
Dist. Florida Special (Ser. A),
8.00%, 5/1/17......................... 2,478,375
2,000 Lee Cnty. Hsg. Fin. Auth.
Multi-Cnty. Prog. (Ser. A),
7.50%, 9/1/27......................... 2,163,860
1,000 Lee Cnty. Hsg. Fin Auth.
Single Family Mtg. RB,
Multi-Cnty. Prog. (Ser. A),
7.45%, 9/1/27 -- WI................... 1,092,960
850 Lee Cnty. IDA, Encore
Nursing Center Partner,
8.125%, 12/1/07....................... 906,610
2,860 Leon Cnty. Ed. Facs.
Auth. RB, (Ser. A),
8.25%, 5/1/14......................... 2,862,660
1,000 Manatee Cnty. Hsg. Fin.
Auth. Mtg. RB,
7.45%, 5/1/27......................... 1,090,620
1,175 Martin Cnty. IDR, Indiantown
Cogeneration PJ-A,
7.875%, 12/15/25...................... 1,313,638
</TABLE>
8
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
(Drawing of the state of Florida with a + beside it)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
FLORIDA -- CONTINUED
<S> <C> <C>
$ 1,245 Meadow Point II, Cmnty. Dev.
Dist. Cap. Impt. RB,
7.75%, 5/1/18 (a)..................... $ 1,266,526
1,000 Miami Beach City Center
Historic Convention,
6.25%, 12/1/16........................ 976,340
500 Miami Beach City Center
Historic Convention,
6.35%, 12/1/22........................ 486,870
1,300 North Springs, Impt. Dist.
Wtr. Mgmt. Spl. Assmt. (Ser. A),
8.20%, 5/1/24......................... 1,366,235
2,500 Northern Palm Beach Cnty.
Wtr. Ctl. & Impt. Unit Dev.,
7.20%, 8/1/16 -- WI................... 2,500,000
500 Northern Palm Beach Cnty.
Wtr. Ctl. Dist. Spl. Assmt.,
6.875%, 11/1/13....................... 526,495
500 Northern Palm Beach Cnty.
Wtr. Ctl. Dist. Spl. Assmt.,
7.00%, 8/1/15......................... 529,160
1,500 Northwood Cmnty. Dev. Dist.,
7.60%, 5/1/17......................... 1,499,955
1,040 Orange Cnty. Hlth Facs.
Auth. RB, Lakeside Alts. Inc.,
6.50%, 7/1/13......................... 1,027,634
395 Orange Cnty.
Hlth. Facs. Auth. RB,
Orlando Lutheran Tower,
8.40%, 7/1/14......................... 387,183
2,000 Osceola Cnty. IDA, Cmnty.
Provider Pooled Ln. Proj. A,
7.75%, 7/1/17......................... 2,017,840
565 Overoaks Cmnty. Dev. Dist.
Cap. Impt. RB,
8.25%, 5/1/17......................... 566,571
1,500 Palm Beach Cnty. IDR,
Geriatric Care Inc. Proj.,
6.55%, 12/1/16........................ 1,514,910
685 Pinellas Cnty. Edl. Facs.
Auth. RB, Eckerd College,
7.75%, 7/1/14......................... 731,005
5,000 Polk Cnty. IDA,
7.525%, 1/1/15........................ 5,237,000
1,000 Port Everglades, RB, (Ser. A),
7.50%, 9/1/12......................... 1,053,460
1,710 Quantum Cmnty. Dev. Dist.
Spl. Assmt.
7.75%, 3/1/14......................... 1,727,699
PRINCIPAL
AMOUNT
(000) VALUE
$ 2,100 Riverwood Cmnty. Sys. RB,
7.75%, 10/1/14........................ $ 2,134,251
1,000 Sarasota Cnty. Hlth. Fac. Auth.
RB, Jewish Housing Council,
7.375%, 7/1/16........................ 980,890
1,500 Sarasota Cnty. Hlth. Fac.
Auth. RB, Manatee Jewish
Housing Council,
6.70%, 7/1/25......................... 1,387,560
1,000 Sarosota Cnty. Hlth. Fac.
Auth. RB, Sunnyside Pptys.,
6.00%, 5/15/10........................ 935,190
1,500 South Indian River,
Wtr. Ctl. Dist. RB,
Egret Landing Phase I,
7.50%, 11/1/18........................ 1,538,805
2,500 St. Johns Ctny. IDA, Vicars
Landing Proj. (Ser. A),
6.75%, 2/15/12........................ 2,432,925
3,000 Tampa, RB, Aquarium Inc. Proj.,
7.75%, 5/1/27......................... 3,213,990
1,000 Tarpon Springs, Hlth. Facs.
Auth. RB, Helen Ellis Mem.
Hosp. Proj.,
7.50%, 5/1/11......................... 1,031,130
500 Volusia Cnty.
Edl. Facs. Auth. RB,
6.125%,10/15/16....................... 492,855
4,000 Volusia Cnty.
Edl. Facs. Auth. RB,
6.125%, 10/15/26...................... 3,945,520
1,775 Westchase East Cmnty. Dev.
Dist. Cap. Impt. RB,
7.50%, 5/1/17......................... 1,759,096
1,000 Winter Garden, IDR,
Beverly Enterprises,
8.75%, 7/1/12......................... 1,093,650
250 Winter Haven Hsg. Auth.
Abbey Lane Apts. (Ser. C),
7.00%, 7/1/12, (FNMA)................. 262,870
250 Winter Haven Hsg. Auth.
Abbey Lane Apts. (Ser. C),
7.00%, 7/1/24, (FNMA)................. 259,412
91,276,492
PUERTO RICO -- 2.5%
1,475 Puerto Rico Ports. Auth. RB,
American Airlines Proj.,
(Ser. A),
6.25%, 6/1/26......................... 1,463,392
</TABLE>
9
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
(Drawing of the state of Florida with a + beside it)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
PUERTO RICO -- CONTINUED
<S> <C> <C>
$ 1,000 Puerto Rico Indl. Tourist
Edl. Med. & Envir. Ctl. Facs.
RB, Mennonite Gen. Hosp.
Proj. (Ser. A),
6.50%, 7/1/12......................... $ 995,290
2,458,682
VIRGIN ISLANDS -- 2.2%
2,000 Virgin Islands, Wtr. & Pwr.
Auth. RB, (Ser. B),
7.60%, 1/1/12......................... 2,143,800
TOTAL LONG-TERM MUNICIPAL SECURITIES
(COST $94,915,484).................... 95,878,974
SHARES VALUE
MUTUAL FUND SHARES -- 1.9%
1,863,000 Lehman Municipal Money
Market Fund
(COST $1,863,000).................... $ 1,863,000
TOTAL INVESTMENTS --
(COST $96,778,484)............. 100.3% 97,741,974
OTHER ASSETS AND
LIABILITIES -- NET............. (.3) (286,813)
NET ASSETS --.................. 100.0% $97,455,161
</TABLE>
Summary of Abbreviations:
FNMA -- Insured by Federal National Mortgage Association
GNMA -- Insured by Government National Mortgage
Association
GO -- General Obligation Bond
IDA -- Industrial Development Authority
IDR -- Industrial Development Revenue Bond
PCR -- Pollution Control Revenue Bond
RB -- Revenue Bond
WI -- When Issued
(a) Security which was segregated as collateral for When Issued securities.
See accompanying notes to financial statements.
10
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996
(Drawing of the state of Florida with a + beside it)
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost $96,778,484)............................................................ $ 97,741,974
Cash.......................................................................................................... 97
Interest receivable........................................................................................... 1,963,955
Receivable for Fund shares sold............................................................................... 1,850,767
Deferred organization expenses and other assets............................................................... 17,987
Total assets............................................................................................ 101,574,780
LIABILITIES:
Payable for securities purchased.............................................................................. 3,616,400
Dividends payable............................................................................................. 271,014
Payable for Fund shares redeemed.............................................................................. 101,964
Accrued expenses.............................................................................................. 58,548
Distribution fee payable...................................................................................... 46,039
Accrued advisory fee.......................................................................................... 25,654
Total liabilities....................................................................................... 4,119,619
NET ASSETS....................................................................................................... $ 97,455,161
NET ASSETS CONSIST OF:
Paid-in capital............................................................................................... $ 97,923,777
Distributions in excess of net investment income.............................................................. (7,223)
Accumulated net realized loss on investment transactions...................................................... (1,424,883)
Net unrealized appreciation of investments.................................................................... 963,490
Net assets.............................................................................................. $ 97,455,161
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($76,266,753 (division sign) 7,318,419 shares of beneficial interest outstanding).............. $ 10.42
Sales charge -- 4.75% of offering price....................................................................... .52
Maximum offering price.................................................................................. $ 10.94
Class B Shares ($19,218,795 (division sign) 1,844,017 shares of beneficial interest outstanding).............. $ 10.42
Class Y Shares ($1,969,613 (division sign) 189,005 shares of beneficial interest outstanding)................. $ 10.42
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1996
(Drawing of the state of Florida with a + beside it)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest........................................................................................... $5,460,025
EXPENSES:
Advisory fee....................................................................................... $477,128
Administrative personnel and service fees.......................................................... 40,295
Distribution fee -- Class A Shares................................................................. 169,651
Distribution fee -- Class B Shares................................................................. 80,050
Shareholder services fee -- Class B Shares......................................................... 26,683
Custodian fee...................................................................................... 57,131
Transfer agent fee................................................................................. 55,460
Registration and filing fees....................................................................... 30,624
Reports and notices to shareholders................................................................ 23,722
Professional fees.................................................................................. 18,493
Amortization of organizational expense............................................................. 3,543
Trustees' fees and expenses........................................................................ 2,763
Insurance.......................................................................................... 1,958
Miscellaneous...................................................................................... 2,950
990,451
Less: Fee waivers..................................................................................... (238,564)
Net Expenses....................................................................................... 751,887
Net investment income................................................................................. 4,708,138
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investment transactions....................................................... (67,136)
Net change in unrealized appreciation of investments............................................... (42,880)
Net loss on investments............................................................................ (110,016)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................................. $4,598,122
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state of Florida with a + beside it)
<TABLE>
<CAPTION>
FOUR MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................................................... $ 4,708,138 $ 1,225,081
Net realized gain (loss) on investment transactions......................................... (67,136) 150,049
Net change in unrealized appreciation (depreciation) of investments......................... (42,880) 1,449,591
Net increase in net assets resulting from operations..................................... 4,598,122 2,824,721
DISTRIBUTIONS TO SHAREHOLDERS:
FROM NET INVESTMENT INCOME:
Class A Shares.............................................................................. (4,083,337) (1,214,190)
Class B Shares.............................................................................. (562,849) (10,891)
Class Y Shares.............................................................................. (61,952) --
Total distributions to shareholders from net investment income.............................. (4,708,138) (1,225,081)
IN EXCESS OF NET INVESTMENT INCOME:
Class A Shares.............................................................................. -- (8,411)
Class B Shares.............................................................................. -- (76)
Total distributions to shareholders in excess of net investment income...................... -- (8,487)
Total distributions to shareholders...................................................... (4,708,138) (1,233,568)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold................................................................... 51,887,683 10,600,090
Proceeds from reinvestment of distributions................................................. 1,815,929 307,200
Payment for shares redeemed................................................................. (18,826,666) (14,853,087)
Net increase (decrease) from Fund share transactions..................................... 34,876,946 (3,945,797)
Net increase (decrease) in net assets.................................................... 34,766,930 (2,354,644)
NET ASSETS:
Beginning of period......................................................................... 62,688,231 65,042,875
End of period (includes distributions in excess of net investment income of $7,223 for the
periods ending August 31, 1996 and August 31, 1995)....................................... $ 97,455,161 $ 62,688,231
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
(Drawing of the state of Florida with a + beside it)
<TABLE>
<CAPTION>
CLASS A SHARES
FOUR MONTHS
ENDED YEAR ENDED
YEAR ENDED AUGUST 31, APRIL 30,
AUGUST 31, 1996 1995# 1995 1994
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............................ $10.40 $10.16 $10.08 $10.36
Income (loss) from investment operations:
Net investment income......................................... .63 .21 .65 .68
Net realized and unrealized gain (loss) on investments........ .02 .24 .08 (.26)
Total from investment operations............................ .65 .45 .73 .42
Less distributions to shareholders from:
Net investment income......................................... (.63) (.21) (.65) (.68)
Net realized gain on investments.............................. -- -- -- (.02)
Total distributions......................................... (.63) (.21) (.65) (.70)
Net asset value, end of period.................................. $10.42 $10.40 $10.16 $10.08
TOTAL RETURN+................................................... 6.4% 4.4% 7.6% 3.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)....................... $76,267 $59,551 $65,043 $72,683
Ratios to average net assets:
Expenses**.................................................... .85% 1.07%++ .60% .14%
Net investment income**....................................... 6.02% 5.92%++ 6.52% 6.16%
Portfolio turnover rate......................................... 42% 14% 28% 31%
<CAPTION>
JUNE 17, 1992*
THROUGH
APRIL 30, 1993
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period............................ $10.00
Income (loss) from investment operations:
Net investment income......................................... .61
Net realized and unrealized gain (loss) on investments........ .39
Total from investment operations............................ 1.00
Less distributions to shareholders from:
Net investment income......................................... (.61)
Net realized gain on investments.............................. (.03)
Total distributions......................................... (.64)
Net asset value, end of period.................................. $10.36
TOTAL RETURN+................................................... 10.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)....................... $33,541
Ratios to average net assets:
Expenses**.................................................... .00%
Net investment income**....................................... 5.92%++
Portfolio turnover rate......................................... 50%
</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 is not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS A SHARES
FOUR MONTHS
ENDED YEAR ENDED
YEAR ENDED AUGUST 31, APRIL 30,
AUGUST 31, 1996 1995# 1995 1994
<S> <C> <C> <C> <C>
Expenses....................................................... 1.15% 1.42% 1.26% 1.12%
Net investment income.......................................... 5.72% 5.57% 5.86% 5.18%
JUNE 17, 1992*
THROUGH
APRIL 30, 1993
Expenses....................................................... 1.12%
Net investment income.......................................... 4.80%
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
EVERGREEN FLORIDA HIGH INCOME
MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state of Florida with a + beside it)
<TABLE>
<CAPTION>
CLASS B SHARES
JULY 10, 1995*
YEAR ENDED THROUGH
AUGUST 31, 1996 AUGUST 31, 1995
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period................................................. $10.40 $10.41
Income (loss) from investment operations:
Net investment income.............................................................. .55 .08
Net realized and unrealized gain (loss) on investments............................. .02 (.01)
Total from investment operations................................................. .57 .07
Less distributions to shareholders from net investment income........................ (.55) (.08)
Net asset value, end of period....................................................... $10.42 $10.40
TOTAL RETURN+........................................................................ 5.6% .6%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................................ $19,219 $3,137
Ratios to average net assets:
Expenses........................................................................... 1.59%** 1.09%++
Net investment income.............................................................. 5.27%** 3.40%++
Portfolio turnover rate.............................................................. 42% 14%
CLASS Y SHARES
SEPTEMBER 20, 1995*
THROUGH
AUGUST 31, 1996
PER SHARE DATA:
Net asset value, beginning of period................................................. $10.48
Income (loss) from investment operations:
Net investment income.............................................................. .63
Net realized and unrealized gain (loss) on investments............................. (.06)
Total from investment operations................................................. .57
Less distributions to shareholders from net investment income........................ (.63)
Net asset value, end of period....................................................... $10.42
TOTAL RETURN+........................................................................ 6.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................................ $1,970
Ratios to average net assets:
Expenses........................................................................... .59%++**
Net investment income.............................................................. 6.27%++**
Portfolio turnover rate.............................................................. 42%
</TABLE>
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Contingent deferred sales charge is not
reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS Y SHARES
CLASS B SHARES SEPTEMBER 20, 1995*
YEAR ENDED THROUGH
AUGUST 31, 1996 AUGUST 31, 1996
<S> <C> <C>
Expenses............................................................................... 1.89% .89%
Net investment income.................................................................. 4.97% 5.97%
</TABLE>
See accompanying notes to financial statements.
15
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
(Drawing of the state of Florida)
RESULTS TO DATE
PERFORMANCE OF $10,000 INVESTED IN THE
EVERGREEN FLORIDA MUNICIPAL BOND FUND
The graphs below compare a $10,000 investment in the Evergreen Florida
Municipal Bond Fund (Class A, Class B and Class Y Shares) with a similar
investment in the Lehman Brothers Municipal Bond Index ("Index").
CLASS A
ONE YEAR TOTAL RETURN = 0.2%
FIVE YEAR TOTAL RETURN = 6.4%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 7.3%
(Class A chart appears here. Plot points are below.)
5/1/88* 8/31/88 8/31/89 8/31/90 8/31/91 8/31/92 8/31/93 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
CLASS B
ONE YEAR TOTAL RETURN = 0.8%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 1.5%
(Class B chart appears here. Plot points are below.)
6/30/95* 8/31/95 2/29/96 8/31/96
(Customer to fill in plot points.)
CLASS Y
ONE YEAR TOTAL RETURN = 5.2%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 5.9%
(Class Y chart appears here. Plot points are below.)
6/30/95* 8/31/95 2/29/96 8/31/96
(Customer to fill in plot points.)
- - - EVERGREEN FLORIDA MUNICIPAL BOND FUND
______ LEHMAN BROTHERS MUNICIPAL BOND INDEX
*Commencement of class operations.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE RESULTS. MUTUAL FUNDS
ARE NOT OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK AND ARE NOT FEDERALLY
INSURED.
For the purposes of the graphs and the accompanying tables, it has been
assumed that (a) the maximum sales charge of 4.75% was deducted from the initial
$10,000 investment in Class A Shares; (b) the maximum applicable contingent
deferred sales charge was deducted from the value of the investment in Class B
Shares, assuming full redemption on August 31, 1996; (c) all recurring fees
(including investment advisory fees) were deducted; and (d) all dividends and
distributions were reinvested.
The investment adviser is currently waving a portion of the Fund's
expenses. Had expenses not been waived, returns would have been lower.
The Index is an unmanaged index and includes the reinvestment of income,
but does not reflect the payment of transaction costs and advisory fees
associated with an investment in the Fund.
16
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
AUGUST 31, 1996
(Drawing of the state of Florida)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES -- 97.0%
FLORIDA -- 97.0%
$ 1,500 Alachua Cnty. Hlth. Fac. RB, Mental
Hlth. Svcs. Proj. A,
7.75%, 7/1/10 (FSA)................... $ 1,664,265
2,000 Altamonte Springs Hlth. Fac. Auth.
Hosp. RB, Adventist Hlth./Sunbelt
(Ser. B),
5.125%, 11/15/18 (AMBAC).............. 1,804,760
750 Brevard Cnty. Hsg. Fin. Auth. RB,
(Ser. B),
7.00%, 3/1/13 (FSA)................... 788,003
2,925 Broward Cnty. Hlth. Care Facs. RB,
North Beach Hosp. Proj.,
7.00%, 8/15/11 (MBIA)................. 3,224,813
1,375 Broward Cnty. Hsg. Fin. Auth. RB, GNMA
Coll Home Mtg. (Ser. B),
7.125%, 3/1/17 (GNMA)................. 1,442,966
200 Broward Cnty. Hsg. Fin. Auth. RB, GNMA
Coll Home Mtg. (Ser. B),
7.55%, 3/1/15 (GNMA).................. 210,632
1,000 Charlotte Cnty. Util. RB, Prefunded @
$102,
7.00%, 10/1/14 (FGIC)................. 1,120,650
105 Charlotte Cnty Spec. Assessment RB,
Peachland mun. Svc. Tax & Ben. Unit,
7.25%, 10/1/10 (MBIA)................. 116,084
500 Collier Cnty. Hlth. Facs. Auth. RB
(The Moorings, Inc. Proj.,)
7.00%, 12/1/19........................ 517,410
1,000 Cooper City Sales Tax RB,
7.25%, 10/1/11........................ 1,095,010
1,000 Dade Cnty.
Spec. Oblig. RB,
Courthouse Ctr. Proj.,
6.25%, 4/1/09......................... 1,043,880
2,070 Dade Cnty. Edl. Facs. Auth. RB,
Florida Intl. Univ. (N. Miami Proj.),
7.10%, 10/1/16 (MBIA)................. 2,329,019
2,000 Dade Cnty. Edl. Facs. Auth. RB,
St. Thomas Univ.,
6.00%, 1/1/14
(LOC: Sun Bank Miami)................. 1,978,580
1,000 Dade Cnty. Edl. Facs. Auth. RB,
St. Thomas Univ.,
6.125%, 1/1/19
(LOC: Sun Bank Miami)................. 1,002,360
5,280 Dade Cnty. Gtd. Entitlement RB, Cap
Apprec. (Ser. A),
Zero Coupon, 2/1/08 (MBIA)............ 2,825,750
PRINCIPAL
AMOUNT
(000) VALUE
$ 240 Dade Cnty. Hlth. Fac. Auth. Hosp. RB,
South Shore Hosp. & Med. Center (Ser.
A) (FHA),
7.60%, 8/1/24......................... $ 259,644
135 Dade Cnty. Hsg. Fin. Auth. Sngl. Fam.
Mtg. RB, (Ser. A),
7.10%, 3/1/17 (GNMA).................. 141,502
255 Dade Cnty. Hsg. Fin. Auth. Sngl. Fam.
Mtg. RB, (Ser. A),
7.50%, 9/1/13 (GNMA).................. 268,750
455 Dade Cnty. Hsg. Fin. Auth. Sngl. Fam.
Mtg. RB, (Ser. D),
6.95%, 12/15/12 (FSA)................. 478,255
4,000 Dade Cnty. Prof. Sports, Franchise
Fac. Tax RB,
Zero Coupon, 10/1/27 (MBIA)........... 636,720
3,815 Dade Cnty. Pub. Fac. RB, Jackson Mem.
Hosp. Proj. (Ser. A),
4.875%, 6/1/15 (MBIA)................. 3,354,949
4,000 Dade Cnty. Seaport, Fitch Light Rtg.,
5.125%, 10/1/21 (MBIA)................ 3,620,760
840 Duval Cnty. Hsg. Fin. Auth. Sngl. Fam.
Mtg. RB,
7.35%, 7/1/24 (GNMA).................. 884,528
215 Duval Cnty. Hsg. Fin. Auth. Sngl. Fam.
Mtg. RB,
7.50%, 6/1/15 (FGIC).................. 226,563
1,000 Escambia Cnty. Hlth. Facs. Auth. RB,
Baptist Hosp. Inc. (Ser. B),
6.00%, 10/1/14........................ 945,470
5,230 Escambia Cnty. PCR
Champion Intl. Corp. Proj.,
5.875%, 6/1/22........................ 4,882,571
3,000 Escambia Cnty. PCR,
Gulf Pwr. Co. Proj.,
8.25%, 6/1/17......................... 3,131,460
1,925 Florida Hsg. Fin. Agcy. RB,
Multi. Fam. Hsg.
6.35%, 5/1/26......................... 1,924,788
3,260 Florida Hsg. Fin. Agcy. RB,
8.00%, 12/1/20 (GNMA)................. 3,448,069
1,895 Florida Hsg. Fin. Agcy. RB, (Ser. A),
6.875%, 10/1/12....................... 1,959,923
2,000 Florida St. Muni. Pwr. Agcy. RB,
Stanton II Proj.,
4.50%, 10/1/27 (AMBAC)................ 1,577,160
2,000 Florida St. Brd. of Ed. Cap. Outlay,
(Ser. E),
5.25%, 6/1/23......................... 1,806,140
</TABLE>
17
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
(Drawing of the state of Florida)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
FLORIDA -- CONTINUED
<S> <C> <C>
$ 2,500 Florida St. Brd. of Regt. Univ.
Sys. RB,
6.70%, 7/1/12 (AMBAC)................. $ 2,715,225
2,000 Florida St. Div. Bd. Fin. Dept. RB,
6.75%, 7/1/13 (AMBAC)................. 2,185,460
2,000 FSU Finl. Assist., Inc. Edl. &
Athletic Facs. RB, (Ser. A),
6.75%, 10/1/16
(LOC: Sun Bank Orlando)............... 2,214,080
1,235 Hialeah, Cap. Impt. RB,
5.50%, 10/1/13........................ 1,149,538
1,000 Hillsborough Cnty. Aviation Auth. RB,
Tampa Intl. Airport, (Ser. A),
6.90%, 10/1/11 (FGIC)................. 1,073,510
3,250 Hillsborough Cnty. Indl. Dev. Auth.
IDR, Univ. Cmnty. Hosp.
(Ser. 1994),
6.50%, 8/15/19 (MBIA)................. 3,532,230
1,000 Homestead Excise Tax RB,
7.15%, 10/1/11 (MBIA)................. 1,101,110
1,500 Jacksonville Hlth. Facs. Auth. Hosp.
RB, St. Lukes Hosp. Assn. Proj.,
6.75%, 11/15/13....................... 1,601,445
1,500 Jacksonville Hlth. Facs. Auth. Hosp.
RB, St. Lukes Hosp. Assn. Proj.,
7.125%, 11/15/20...................... 1,623,015
2,000 Jacksonville Hlth. Facs. Auth. RB,
7.50%, 11/1/15........................ 2,252,320
4,370 Lee Cnty. Hsg. Fin. Auth. Multi-Cnty.
Prog., (Ser. A),
7.50%, 9/1/27......................... 4,728,034
1,700 Lee Cnty. Hsg. Fin. Auth. Sngl. Fam.
Mtg. RB, Multi-Cnty. Prog. (Ser. A),
7.45%, 9/1/27......................... 1,858,032
1,025 Leon Cnty. Hsg. Fin. Auth. Sngl. Fam.
Mtg. RB, Multi-Cnty. Prog. (Ser. B),
6.25%, 7/1/19 (GNMA).................. 1,021,187
1,000 Manatee Cnty. Cmnty. Redev. RB, Admin.
Center Proj.,
7.00%, 4/1/08 (MBIA).................. 1,088,500
1,510 Manatee Cnty. GO,
4.75%, 10/1/13 (FGIC)................. 1,321,628
1,500 Manatee Cnty. Hsg. Fin. Auth. Mtg. RB,
7.45%, 5/1/27......................... 1,635,930
3,500 Manatee Cnty. Pub. Utils. RB,
(Ser. 1991A),
6.75%, 10/1/13 (MBIA)................. 3,883,075
PRINCIPAL
AMOUNT
(000) VALUE
$ 1,500 Martin Cnty. Hlth. Fac. Auth. Hosp.
RB, Martin Mem. Hosp. South Proj.
(Ser. B),
7.10%, 11/15/20 (MBIA)................ $ 1,637,040
2,000 Miami Beach Redev. Agcy. Tax Increment
RB, City Center-Historic Convention
Vlg.,
5.625%, 12/1/09....................... 1,928,360
3,000 Miami Beach Redev. Agcy. Tax Increment
RB, City Center-Historic Convention
Vlg.,
5.80%, 12/1/13........................ 2,837,190
2,000 Miami Beach Redev. Agcy., Tax
Increment, RB, City Center-Historic
Convention Vlg.,
5.875%, 12/1/22....................... 1,862,300
1,500 North Miami Hlth. Fac. Auth. RB,
Catholic Hlth. Svc. Oblig. Group,
6.00%, 8/15/16
(LOC: Suntrust Bank).................. 1,469,220
1,000 North Tampa Hsg. Dev. Corp. RB, Cnty
Oaks Apts. (Ser. A),
6.90%, 1/1/24 (FNMA).................. 1,034,480
1,300 Northern Palm Beach Cnty. Impt. RB,
Wtr. Ctl. &
Impt. Unit Dev. 9A-A,
7.20%, 8/1/16......................... 1,300,000
1,000 Okaloosa Cnty. Wtr. & Swr. RB,
6.00%, 7/1/11 (AMBAC)................. 1,054,340
3,000 Orange Cnty. Hlth. Facs. Auth. RB,
Lakeside Alts. Inc.,
6.50%, 7/1/13......................... 2,964,330
3,000 Palm Beach Cnty.
Criminal Justice Facs. RB,
7.20%, 6/1/15 (FGIC).................. 3,521,580
3,695 Palm Beach Cnty. Hlth. Facs. Auth. RB,
Good Samaritan Hlth. Sys.,
6.20%, 10/1/11........................ 3,740,781
6,000 Palm Beach Cnty. Hlth. Facs. Auth.
Sngl. Fam. Mtg. RB, Good Samaritan
Hlth. Sys.,
6.30%, 10/1/22........................ 6,086,520
1,000 Palm Beach Cnty. Hsg. Fin. Auth. Sngl.
Fam. Mtg. RB, (Ser. A),
6.50%, 10/1/21 (GNMA)................. 1,018,910
4,440 Palm Beach Cnty. Hsg. Fin. Auth.
RB, (Ser. B),
7.60%, 3/1/23 (GNMA).................. 4,678,162
</TABLE>
18
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
(Drawing of the state of Florida)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
FLORIDA -- CONTINUED
<S> <C> <C>
$ 2,000 Palm Beach Cnty. IDR, Geriatric Care
Inc. Proj.,
6.55%, 12/1/16
(LOC: Allied Irish Banks)............. $ 2,019,880
5,000 Pensacola Hlth. Facs. Auth. RB,
Daughters Charity Natl. Hlth.,
5.25%, 1/1/11......................... 4,771,800
860 Polk Cnty Hsg. Fin. Auth. Sngl. Fam.
Mtg. RB,
(Ser. A),
7.00%, 9/1/15......................... 887,554
1,500 Reedy Creek Impt. Dist. Util., RB,
(Ser. 1),
5.00%, 10/1/19 (MBIA)................. 1,336,065
1,955 Sanford Wtr. & Swr. RB,
4.50%, 10/1/21 (AMBAC)................ 1,592,308
1,740 Sanford Wtr. & Swr. RB,
4.75%, 10/1/18 (AMBAC)................ 1,488,918
1,800 Sarasota Cnty. Hlth. Fac. Auth. RB,
Sunnyside Pptys.,
6.00%, 5/15/10........................ 1,683,342
1,000 Sarasota Cnty. Util. Sys. RB,
6.50%, 10/1/14 (FGIC)................. 1,121,380
3,590 Seacoast Util. Auth. Wtr. & Swr. RB,
(Ser. A),
5.50%, 3/1/18 (FGIC).................. 3,488,654
750 St. Johns Cnty. Solid
Waste Disp. RB,
7.25%, 11/1/10 (FGIC)................. 829,725
1,000 St. Petersburg Hlth. Facs. Auth. RB,
St. Mary's Allegheny Hlth. Sys.,
7.00%, 12/1/21 (MBIA)................. 1,088,780
750 Tampa Gtd. Entitlement RB,,
7.05%, 10/1/07 (AMBAC)................ 830,640
1,500 Tampa Sports Auth. RB, Sales
Tax Tampa Bay Arena Proj.,
5.75%, 10/1/25 (MBIA)................. 1,499,910
3,500 Volusia Cnty. Edl. Facs. Auth. RB,
Embry-Riddle Aero-A
6.125%, 10/15/16...................... 3,449,985
2,600 Volusia Cnty. Edl. Facs. Auth. RB,
Embry-Riddle Aero-A
6.125%, 10/15/26...................... 2,564,588
PRINCIPAL
AMOUNT
(000) VALUE
$ 850 Winter Haven Hsg. Auth.
Multi-Fam. Mtg. RB,
Abbey Lane Apts. (Ser. C),
7.00%, 7/1/12 (FNMA).................. $ 893,758
1,750 Winter Haven Hsg. Auth. Multi-Fam.
Mtg. RB, Abbey Lane Apts. (Ser. C),
7.00%, 7/1/24 (FNMA).................. 1,815,887
TOTAL LONG-TERM MUNICIPAL SECURITIES
(COST $145,336,387).............. 152,192,140
</TABLE>
<TABLE>
<CAPTION>
SHARES
<C> <S> <C> <C>
MUTUAL FUND SHARES -- 2.7%
4,249,000 Lehman Municipal Money
Market Fund
(cost $4,249,000)........... 4,249,000
TOTAL INVESTMENTS --
(COST $149,585,387).... 99.7% 156,441,140
OTHER ASSETS AND
LIABILITIES -- NET..... .3 389,582
NET ASSETS --............. 100.0% $156,830,722
</TABLE>
Summary of Abbreviations:
AMBAC -- Insured by American Municipal Bond Assurance Corporation
FGIC -- Insured by Financial Guaranty Insurance Company
FNMA -- Insured by Federal National Mortgage Association
FHA -- Insured by Federal Housing Authority
FSA -- Insured by Financial Security Assurance
GNMA -- Insured by Government National Mortgage
Association
GO -- General Obligation Bond
IDR -- Industrial Development Revenue Bond
LOC -- Letter of Credit
MBIA -- Insured by Municipal Bond Investors Assurance
PCR -- Pollution Control Revenue Bond
RB -- Revenue Bond
See accompanying notes to financial statements.
19
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996
(Drawing of the state of Florida)
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost $149,585,387)........................................................... $156,441,140
Cash.......................................................................................................... 709
Interest receivable........................................................................................... 2,801,347
Receivable for securities sold................................................................................ 1,611,060
Receivable for Fund shares sold............................................................................... 70,289
Prepaid expenses.............................................................................................. 5,237
Total assets............................................................................................ 160,929,782
LIABILITIES:
Payable for securities purchased.............................................................................. 3,170,740
Dividends payable............................................................................................. 483,495
Payable for Fund shares redeemed.............................................................................. 279,924
Accrued advisory fee.......................................................................................... 95,440
Distribution fee payable...................................................................................... 42,042
Accrued expenses.............................................................................................. 27,419
Total liabilities....................................................................................... 4,099,060
NET ASSETS....................................................................................................... $156,830,722
NET ASSETS CONSIST OF:
Paid-in capital............................................................................................... $149,709,292
Undistributed net investment income........................................................................... 98,832
Accumulated net realized gain on investment transactions...................................................... 166,845
Net unrealized appreciation of investments.................................................................... 6,855,753
Net assets.............................................................................................. $156,830,722
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($115,723,258 (division sign) 11,934,283 shares of beneficial interest outstanding)............ $ 9.70
Sales charge -- 4.75% of offering price....................................................................... .48
Maximum offering price.................................................................................. $ 10.18
Class B Shares ($28,848,699 (division sign) 2,975,000 shares of beneficial interest outstanding).............. $ 9.70
Class Y Shares ($12,258,765 (division sign) 1,264,156 shares of beneficial interest outstanding).............. $ 9.70
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1996
(Drawing of the state of Florida)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest........................................................................................ $9,791,218
EXPENSES:
Advisory fee.................................................................................... $ 803,741
Administrative personnel and service fees....................................................... 81,881
Distribution fee -- Class A Shares.............................................................. 240,978
Distribution fee -- Class B Shares.............................................................. 215,869
Shareholder services fee -- Class B Shares...................................................... 71,956
Transfer agent fee.............................................................................. 78,665
Custodian fee................................................................................... 71,899
Registration and filing fees.................................................................... 68,201
Reports and notices to shareholders............................................................. 56,346
Professional fees............................................................................... 33,347
Insurance expense............................................................................... 5,503
Trustees' fees and expenses..................................................................... 3,941
Miscellaneous................................................................................... 22,740
1,755,067
Less: Fee waivers and expense reimbursements.................................................... (473,830)
Net expenses.............................................................................. 1,281,237
Net investment income.............................................................................. 8,509,981
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions.................................................... 1,550,230
Net change in unrealized appreciation of investments............................................ (2,163,335)
Net loss on investments......................................................................... (613,105)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................... $7,896,876
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state of Florida)
<TABLE>
<CAPTION>
YEAR FOUR MONTHS
ENDED ENDED
AUGUST 31, AUGUST 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income.................................................................... $ 8,509,981 $ 2,976,370
Net realized gain on investment transactions............................................. 1,550,230 865,584
Net change in unrealized appreciation of investments..................................... (2,163,335) 2,620,594
Net increase in net assets resulting from operations.................................. 7,896,876 6,462,548
DISTRIBUTIONS TO SHAREHOLDERS:
FROM NET INVESTMENT INCOME:
Class A Shares........................................................................... (6,726,492) (2,733,700)
Class B Shares........................................................................... (1,290,196) (211,396)
Class Y Shares........................................................................... (417,123) (31,274)
Total distributions from net investment income..................................... (8,433,811) (2,976,370)
IN EXCESS OF NET INVESTMENT INCOME:
Class A Shares........................................................................... -- (210,099)
FROM NET REALIZED GAINS:
Class A Shares........................................................................... -- (820,461)
Total distributions to shareholders................................................... (8,433,811) (4,006,930)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold................................................................ 23,857,675 4,227,591
Proceeds from shares issued in acquisition of First Union
Florida Municipal Bond Portfolio...................................................... -- 38,045,323
Proceeds from reinvestment of distributions.............................................. 2,678,816 1,604,983
Payment for shares redeemed.............................................................. (36,571,005) (47,473,841)
Net decrease resulting from Fund share transactions................................... (10,034,514) (3,595,944)
Net decrease in net assets............................................................ (10,571,449) (1,140,326)
NET ASSETS:
Beginning of period...................................................................... 167,402,171 168,542,497
End of period (includes undistributed net investment income of $98,832 and $22,662,
respectively).......................................................................... $ 156,830,722 $ 167,402,171
</TABLE>
See accompanying notes to financial statements.
22
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
(Drawing of the state of Florida)
<TABLE>
<CAPTION>
CLASS A SHARES
YEAR FOUR MONTHS
ENDED ENDED
AUGUST 31, AUGUST 31, YEAR ENDED APRIL 30,
1996 1995*|| 1995|| 1994||
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period................................. $9.74 $9.61 $9.52 $9.95
Income (loss) from investment operations:
Net investment income.............................................. .54 .19 .54 .56
Net realized and unrealized gain (loss) on investments............. (.04) .22 .11 (.36)
Total from investment operations................................. .50 .41 .65 .20
Less distributions to shareholders from:
Net investment income.............................................. (.54) (.19) (.54) (.56)
In excess of net investment income................................. -- (.03) -- --
Net realized gain on investments................................... -- (.06) (.02) (.07)
Paid-in capital.................................................... -- -- -- --
Total distributions.............................................. (.54) (.28) (.56) (.63)
Net asset value, end of period....................................... $9.70 $9.74 $9.61 $9.52
TOTAL RETURN+........................................................ 5.1% 4.2% 7.1% 1.9%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................ $115,723 $136,449 $168,542 $199,612
Ratios to average net assets:
Expenses........................................................... .63%** .82%++** .61% .56%
Net investment income.............................................. 5.46%** 4.89%++** 5.73% 5.37%
Portfolio turnover rate.............................................. 30% 29% 53% 32%
<CAPTION>
1993||
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period................................. $9.35
Income (loss) from investment operations:
Net investment income.............................................. .56
Net realized and unrealized gain (loss) on investments............. .67
Total from investment operations................................. 1.23
Less distributions to shareholders from:
Net investment income.............................................. (.56)
In excess of net investment income................................. --
Net realized gain on investments................................... (.07)
Paid-in capital.................................................... --
Total distributions.............................................. (.63)
Net asset value, end of period....................................... $9.95
TOTAL RETURN+........................................................ 13.6%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................ $198,286
Ratios to average net assets:
Expenses........................................................... .58%
Net investment income.............................................. 5.66%
Portfolio turnover rate.............................................. 24%
</TABLE>
* The Fund changed its fiscal year end from April 30 to August 31.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sale charge is not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS A SHARES
YEAR FOUR MONTHS
ENDED ENDED
AUGUST 31, AUGUST 31,
1996 1995
<S> <C> <C>
Expenses.......................................................................... .95% 1.05%
Net investment income............................................................. 5.14% 4.66%
</TABLE>
|| On June 30, 1995, ABT Florida Tax-Free Fund sold its net assets to First
Union Florida Municipal Bond Portfolio which was subsequently renamed
Evergreen Florida Municipal Bond Fund. ABT Florida Tax-Free Fund was the
accounting survivor in the combination. Accordingly, the information stated
in the above table prior to the combination reflects the results of ABT
Florida Tax-Free Fund. The net asset values per share and related per share
data have been restated to reflect the conversion of shares.
See accompanying notes to financial statements.
23
<PAGE>
EVERGREEN FLORIDA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state of Florida)
<TABLE>
<CAPTION>
CLASS Y
CLASS B SHARES SHARES
YEAR JUNE 30, 1995* YEAR
ENDED THROUGH ENDED
AUGUST 31, AUGUST 31, AUGUST 31,
1996 1995 1996
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period.................................... $9.74 $9.67 $9.74
Income from investment operations:
Net investment income................................................. .44 .07 .53
Net realized and unrealized gain (loss) on investments................ (.04) .10 (.03)
Total from investment operations.................................... .40 .17 .50
Less distributions to shareholders from:
Net investment income................................................. (.44) (.07) (.54)
In excess of net investment income.................................... -- (.03) --
Total distributions................................................. (.44) (.10) (.54)
Net asset value, end of period.......................................... $9.70 $9.74 $9.70
TOTAL RETURN+........................................................... 4.2% 1.5% 5.2%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................... $28,849 $27,351 $12,259
Ratios to average net assets:
Expenses**............................................................ 1.56% 1.44%++ .57%
Net investment income**............................................... 4.52% 3.22%++ 5.55%
Portfolio turnover rate................................................. 30% 29% 30%
JUNE 30, 1995*
THROUGH
AUGUST 31,
1995
PER SHARE DATA:
Net asset value, beginning of period.................................... $9.67
Income from investment operations:
Net investment income................................................. .09
Net realized and unrealized gain (loss) on investments................ .10
Total from investment operations.................................... .19
Less distributions to shareholders from:
Net investment income................................................. (.09)
In excess of net investment income.................................... (.03)
Total distributions................................................. (.12)
Net asset value, end of period.......................................... $9.74
TOTAL RETURN+........................................................... 1.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................... $3,602
Ratios to average net assets:
Expenses**............................................................ .59%++
Net investment income**............................................... 4.93%++
Portfolio turnover rate................................................. 29%
</TABLE>
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Contingent deferred sales charge is not
reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS B SHARES CLASS Y SHARES
YEAR JUNE 30, 1995* YEAR JUNE 30, 1995*
ENDED THROUGH ENDED THROUGH
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Expenses............................................................. 1.76% 1.64% .77% .79%
Net investment income................................................ 4.32% 3.02% 5.35% 4.73%
</TABLE>
See accompanying notes to financial statements.
24
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
(Drawing of the state of Georgia)
RESULTS TO DATE
PERFORMANCE OF $10,000 INVESTED IN THE
EVERGREEN GEORGIA MUNICIPAL BOND FUND
The graphs below compare a $10,000 investment in the Evergreen Georgia
Municipal Bond Fund (Class A, Class B and Class Y Shares) with a similar
investment in the Lehman Brothers Georgia Municipal Bond Index ("Index").
CLASS A
ONE YEAR TOTAL RETURN = 1.2%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 2.1%
(Class A chart appears here. Plot points are below.)
7/2/93* 8/31/93 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
CLASS B
ONE YEAR TOTAL RETURN = 0.4%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 2.1%
(Class B chart appears here. Plot points are below.)
7/2/93* 8/31/93 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
CLASS Y
ONE YEAR TOTAL RETURN = 6.5%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 4.5%
(Class Y chart appears here. Plot points are below.)
2/28/94* 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
- - EVERGREEN GEORGIA MUNICIPAL BOND FUND
_____ LEHMAN BROTHERS GEORGIA MUNICIPAL BOND INDEX
*Commencement of class operations.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE RESULTS. MUTUAL FUNDS
ARE NOT OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK AND ARE NOT FEDERALLY
INSURED.
For the purposes of the graphs and the accompanying tables, it has been
assumed that (a) the maximum sales charge of 4.75% was deducted from the initial
$10,000 investment in Class A Shares; (b) the maximum applicable contingent
deferred sales charge was deducted from the value of the investment in Class B
Shares, assuming full redemption on August 31, 1996; (c) all recurring fees
(including investment advisory fees) were deducted; and (d) all dividends and
distributions were reinvested.
The investment adviser is currently waiving a portion of the Fund's
expenses. Had expenses not been waived, returns would have been lower.
The Index is an unmanaged index and includes the reinvestment of income,
but does not reflect the payment of transaction costs and advisory fees
associated with an investment in the Fund.
25
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
AUGUST 31, 1996
(Drawing of the state of Georgia)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES -- 98.4%
GEORGIA -- 96.2%
$500 Appling Cnty. Dev. Auth. PCR,
7.15%, 1/1/21, (MBIA)................. $ 557,365
160 Atlanta, Arpt. Facs. RB,
7.25%, 1/1/17, (AMBAC)................ 172,990
500 Burke Cnty. Dev. Auth. PCR,
8.00%, 1/1/22, (MBIA)................. 593,935
300 Butts Cnty. COP,
6.75%, 12/1/14, (MBIA)................ 331,152
350 Cartersville, Dev. Auth. RB,
Wtr. & Waste Facs.,
7.40%, 11/1/10........................ 407,719
120 Cartersville, GO,
6.70%, 1/1/12......................... 133,324
500 Cherokee Cnty. Wtr. & Swr.
Auth. Ref. & Impt. RB,
5.50%, 8/1/18, (MBIA)................. 484,510
500 Clayton Cnty.
Hsg. Auth. Mtg. RB,
7.125%, 12/1/25, (FHA/VA)............. 522,675
500 Columbia Cnty.
Wtr. & Swr. RB,
6.25%, 6/1/12......................... 522,010
500 DeKalb Cnty.
Sch. Dist. (Ser. A),
6.25%, 7/1/11......................... 539,765
500 DeKalb Cnty. Hsg. Auth. RB,
The Lakes at Indian Creek Proj.,
7.15%, 1/1/25, (FSA).................. 519,925
345 Douglasville Cnty.
Wtr. & Swr. Auth. RB,
5.625%, 6/1/15, (AMBAC)............... 342,795
600 Fayette Cnty. Sch. Dist.,
6.125%, 3/1/15........................ 616,296
500 Forsyth Cnty. Sch. Dist. GO,
6.75%, 7/1/16......................... 561,205
400 Fulton Cnty. Wtr. & Swr. RB,
6.375%, 1/1/14, (FGIC)................ 430,368
500 George L. Smith II, World
Congress Ctr. Auth. RB,
Domed Stadium Proj.,
7.875%, 7/1/20........................ 546,090
400 Georgia State, Hsg. & Fin.
Auth. RB, (Ser. A),
6.55%, 12/1/27........................ 406,064
400 Georgia State, Muni. Elec.
Auth. Pwr. RB, (Ser. EE),
7.25%, 1/1/24, (AMBAC)................ 480,884
500 Glynn-Brunswick
Mem. Hosp. Auth. RB
6.00%, 8/1/16, (MBIA)................. 499,970
500 Hall Cnty. Sch. Dist. GO,
6.70%, 12/1/14........................ 548,510
PRINCIPAL
AMOUNT
(000) VALUE
$ 330 Metro Atlanta Rapid Tran.
Auth. Sales Tax RB,
7.00%, 7/1/11, (FGIC)................. $ 377,190
500 Putnam Cnty. Sch. Dist. GO,
6.90%, 2/1/14 (AMBAC)................. 558,365
800 Savannah, Eco. Dev. Auth. IDR,
Hershey Foods Corp. Proj.,
6.60%, 6/1/12......................... 864,408
500 Savannah, Hosp. Auth. RB,
St. Josephs Hosp. Proj.,
6.125%, 7/1/12........................ 508,300
500 Savannah, Hosp. Auth. RB,
St. Josephs Hosp. Proj.,
6.20%, 7/1/23......................... 488,455
300 Washington Cnty. Sch. Dist. GO,
6.875%, 1/1/14, (AMBAC)............... 334,281
12,348,551
PUERTO RICO -- 2.2%
265 Puerto Rico Commonwealth, GO,
6.25%, 7/1/11, (MBIA)................. 286,356
TOTAL LONG-TERM MUNICIPAL SECURITIES
(COST $12,157,736).................... 12,634,907
</TABLE>
<TABLE>
<CAPTION>
SHARES
<C> <S> <C> <C>
MUTUAL FUND SHARES -- .8%
101,000 Lehman Municipal Money
Market Fund
(COST $101,000)...................... 101,000
TOTAL INVESTMENTS --
(COST $12,258,736)............ 99.2% 12,735,907
OTHER ASSETS AND
LIABILITIES -- NET............ .8 108,481
NET ASSETS --................. 100.0% $12,844,388
</TABLE>
Summary of Abbreviations:
AMBAC -- Insured by American Municipal Bond Assurance Corporation
COP -- Certificate of Participation
FGIC -- Insured by Financial Guaranty Insurance Company
FHA/VA -- Insured by Federal Housing Authority/Veteran Administration
FSA -- Insured by Financial Security Assurance
GO -- General Obligation Bond
IDR -- Industrial Development Revenue Bond
MBIA -- Insured by Municipal Bond Investors Assurance
PCR -- Pollution Control Revenue Bond
RB -- Revenue Bond
See accompanying notes to financial statements.
26
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996
(Drawing of the state of Georgia)
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost $12,258,736)............................................................. $12,735,907
Cash........................................................................................................... 421
Interest receivable............................................................................................ 158,152
Receivable for Fund shares sold................................................................................ 84,959
Prepaid expenses............................................................................................... 4,589
Total assets............................................................................................. 12,984,028
LIABILITIES:
Accrued expenses............................................................................................... 114,556
Dividends payable.............................................................................................. 14,325
Distribution fee payable....................................................................................... 7,059
Payable for Funds shares repurchased........................................................................... 3,700
Total liabilities........................................................................................ 139,640
NET ASSETS........................................................................................................ $12,844,388
NET ASSETS CONSIST OF:
Paid-in capital................................................................................................ $13,049,634
Undistributed net investment income............................................................................ 1,349
Accumulated net realized loss on investment transactions....................................................... (683,766)
Net unrealized appreciation of investments..................................................................... 477,171
Net assets............................................................................................... $12,844,388
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($1,953,549 (division sign) 204,081 shares of beneficial interest outstanding).................. $ 9.57
Sales charge -- 4.75% of offering price........................................................................ .48
Maximum offering price................................................................................... $ 10.05
Class B Shares ($9,271,159 (division sign) 968,330 shares of beneficial interest outstanding).................. $ 9.57
Class Y Shares ($1,619,680 (division sign) 169,158 shares of beneficial interest outstanding).................. $ 9.57
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1996
(Drawing of the state of Georgia)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................................................................ $734,247
EXPENSES:
Advisory fee........................................................................................ $ 63,102
Administrative personnel and services fees.......................................................... 4,159
Distribution fee -- Class A Shares.................................................................. 5,047
Distribution fee -- Class B Shares.................................................................. 63,447
Shareholder services fee -- Class B Shares.......................................................... 21,149
Transfer agent fee.................................................................................. 72,480
Registration and filing fees........................................................................ 64,358
Custodian fee....................................................................................... 56,623
Professional fees................................................................................... 25,128
Reports and notices to shareholders................................................................. 19,578
Insurance expense................................................................................... 3,956
Miscellaneous....................................................................................... 9,632
408,659
Less: Fee waivers and expense reimbursements........................................................ (239,934)
Net expenses.................................................................................. 168,725
Net investment income.................................................................................. 565,522
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions........................................................ 28,904
Net change in unrealized appreciation of investments................................................ 57,035
Net gain on investments................................................................................ 85,939
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................... $651,461
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state of Georgia)
<TABLE>
<CAPTION>
EIGHT MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income........................................................................ $ 565,522 $ 315,309
Net realized gain on investment transactions................................................. 28,904 178,194
Net change in unrealized appreciation of investments......................................... 57,035 571,056
Net increase in net assets resulting from operations...................................... 651,461 1,064,559
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares............................................................................... (100,626) (61,558)
Class B Shares............................................................................... (357,853) (232,039)
Class Y Shares............................................................................... (109,101) (21,712)
Total distributions to shareholders....................................................... (567,580) (315,309)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold.................................................................... 5,651,629 2,941,604
Proceeds from reinvestment of distributions.................................................. 366,974 212,632
Payment for shares redeemed.................................................................. (4,232,687) (1,511,506)
Net increase resulting from Fund share transactions....................................... 1,785,916 1,642,730
Net increase in net assets................................................................ 1,869,797 2,391,980
NET ASSETS:
Beginning of period.......................................................................... 10,974,591 8,582,611
End of period (includes undistributed net investment income of $1,349 and $3,407,
respectively).............................................................................. $12,844,388 $ 10,974,591
</TABLE>
See accompanying notes to financial statements.
29
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
(Drawing of the state of Georgia)
<TABLE>
<CAPTION>
CLASS A SHARES
EIGHT MONTHS YEAR
YEAR ENDED ENDED ENDED
AUGUST 31, AUGUST 31, DECEMBER 31,
1996 1995# 1994
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............................................... $9.47 $8.74 $10.19
Income (loss) from investment operations:
Net investment income............................................................ .48 .33 .48
Net realized and unrealized gain (loss) on investments........................... .10 .73 (1.45)
Total from investment operations............................................... .58 1.06 (.97)
Less distributions to shareholders from net investment income...................... (.48) (.33) (.48)
Net asset value, end of period..................................................... $9.57 $9.47 $8.74
TOTAL RETURN+...................................................................... 6.2% 12.3% (9.6%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).......................................... $1,954 $2,098 $1,387
Ratios to average net assets:
Expenses**....................................................................... .88% .71%++ .53%
Net investment income**.......................................................... 4.96% 5.39%++ 5.26%
Portfolio turnover rate............................................................ 21% 91% 147%
JULY 2,
1993*
THROUGH
DECEMBER 31,
1993
PER SHARE DATA:
Net asset value, beginning of period............................................... $10.00
Income (loss) from investment operations:
Net investment income............................................................ .20
Net realized and unrealized gain (loss) on investments........................... .19
Total from investment operations............................................... .39
Less distributions to shareholders from net investment income...................... (.20)
Net asset value, end of period..................................................... $10.19
TOTAL RETURN+...................................................................... 4.0%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).......................................... $817
Ratios to average net assets:
Expenses**....................................................................... .25%++
Net investment income**.......................................................... 4.71%++
Portfolio turnover rate............................................................ 15%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales charge 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
JULY 2,
EIGHT MONTHS YEAR 1993*
YEAR ENDED ENDED ENDED THROUGH
AUGUST 31, AUGUST 31, DECEMBER 31, DECEMBER 31,
1996 1995# 1994 1993
<S> <C> <C> <C> <C>
Expenses............................................................... 2.82% 2.83% 3.61% 6.82%
Net investment income (loss)........................................... 3.02% 3.27% 2.18% (1.86%)
</TABLE>
See accompanying notes to financial statements.
30
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state of Georgia)
<TABLE>
<CAPTION>
CLASS B SHARES
EIGHT MONTHS YEAR
YEAR ENDED ENDED ENDED
AUGUST 31, AUGUST 31, DECEMBER 31,
1996 1995# 1994
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period........................................ $9.47 $8.74 $10.19
Income (loss) from investment operations:
Net investment income..................................................... .41 .28 .43
Net realized and unrealized gain (loss) on investments.................... .10 .73 (1.45)
Total from investment operations........................................ .51 1.01 (1.02)
Less distributions to shareholders from net investment income............... (.41) (.28) (.43)
Net asset value, end of period.............................................. $9.57 $9.47 $8.74
TOTAL RETURN+............................................................... 5.4% 11.7% (10.2%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................................... $9,271 $7,538 $6,912
Ratios to average net assets:
Expenses**................................................................ 1.63% 1.46%++ 1.13%
Net investment income**................................................... 4.21% 4.64%++ 4.66%
Portfolio turnover rate..................................................... 21% 91% 147%
JULY 2,
1993*
THROUGH
DECEMBER 31,
1993
PER SHARE DATA:
Net asset value, beginning of period........................................ $10.00
Income (loss) from investment operations:
Net investment income..................................................... .18
Net realized and unrealized gain (loss) on investments.................... .19
Total from investment operations........................................ .37
Less distributions to shareholders from net investment income............... (.18)
Net asset value, end of period.............................................. $10.19
TOTAL RETURN+............................................................... 3.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................................... $3,692
Ratios to average net assets:
Expenses**................................................................ .75%++
Net investment income**................................................... 4.15%++
Portfolio turnover rate..................................................... 15%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. 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 B SHARES
JULY 2,
EIGHT MONTHS YEAR 1993*
YEAR ENDED ENDED ENDED THROUGH
AUGUST 31, AUGUST 31, DECEMBER 31, DECEMBER 31,
1996 1995# 1994 1993
<S> <C> <C> <C> <C>
Expenses............................................................... 3.54% 3.58% 4.21% 7.32%
Net investment income (loss)........................................... 2.30% 2.52% 1.58% (2.42%)
</TABLE>
See accompanying notes to financial statements.
31
<PAGE>
EVERGREEN GEORGIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state of Georgia)
<TABLE>
<CAPTION>
CLASS Y SHARES
EIGHT MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31,
1996 1995#
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period.................................................. $9.47 $8.74
Income (loss) from investment operations:
Net investment income............................................................... .50 .35
Net realized and unrealized gain (loss) on investments.............................. .10 .73
Total from investment operations.................................................. .60 1.08
Less distributions to shareholders from net investment income......................... (.50) (.35)
Net asset value, end of period........................................................ $9.57 $9.47
TOTAL RETURN+......................................................................... 6.5% 12.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................................. $1,620 $1,339
Ratios to average net assets:
Expenses**.......................................................................... .63% .46%++
Net investment income**............................................................. 5.21% 5.64%++
Portfolio turnover rate............................................................... 21% 91%
FEBRUARY 28, 1994*
THROUGH
DECEMBER 31, 1994
PER SHARE DATA:
Net asset value, beginning of period.................................................. $9.83
Income (loss) from investment operations:
Net investment income............................................................... .42
Net realized and unrealized gain (loss) on investments.............................. (1.09)
Total from investment operations.................................................. (.67)
Less distributions to shareholders from net investment income......................... (.42)
Net asset value, end of period........................................................ $8.74
TOTAL RETURN+......................................................................... (6.9%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............................................. $284
Ratios to average net assets:
Expenses**.......................................................................... .31%++
Net investment income**............................................................. 5.68%++
Portfolio turnover rate............................................................... 147%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets, exclusive
of any applicable state expense limitations, would have been the following:
<TABLE>
<CAPTION>
CLASS Y SHARES
EIGHT MONTHS FEBRUARY 28, 1994*
YEAR ENDED ENDED THROUGH
AUGUST 31, AUGUST 31, DECEMBER 31,
1996 1995# 1994
<S> <C> <C> <C>
Expenses........................................................................ 2.51% 2.58% 3.39%
Net investment income........................................................... 3.33% 3.52% 2.60%
</TABLE>
See accompanying notes to financial statements.
32
<PAGE>
EVERGREEN NEW JERSEY TAX FREE INCOME FUND
(Drawing of the state of New Jersey)
RESULTS TO DATE
PERFORMANCE OF $10,000 INVESTED IN THE
EVERGREEN NEW JERSEY TAX FREE INCOME FUND
The graphs below compare a $10,000 investment in the Evergreen New Jersey
Tax Free Income Fund (Class A, Class B and Class Y Shares) with a similar
investment in the Lehman Brothers Municipal Bond Index ("Index").
CLASS A
ONE YEAR TOTAL RETURN = 0.2%
FIVE YEAR TOTAL RETURN = 6.0%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 6.2%
(Class A chart appears here. Plot points are below.)
7/16/91* 2/29/92 2/28/93 2/28/94 2/28/95 2/29/96 8/31/96*
(Customer to fill in plot points.)
CLASS B
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 5.2%
(Class B chart appears here. Plot points are below.)
1/30/96* 2/28/96 5/31/96 8/31/96
(Customer to fill in plot points.)
CLASS Y
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 0.2%
(Class Y chart appears here. Plot points are below.)
2/8/96* 2/28/96 5/31/96 8/31/96
(Customer to fill in plot points.)
- - EVERGREEN NEW JERSEY TAX FREE INCOME FUND
____ LEHMAN BROTHERS MUNICIPAL BOND INDEX
*Commencement of class operations.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE RESULTS. MUTUAL FUNDS
ARE NOT OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK AND ARE NOT FEDERALLY
INSURED.
For the purposes of the graphs and the accompanying tables, it has been
assumed that (a) the maximum sales charge of 4.75% was deducted from the initial
$10,000 investment in Class A Shares; (b) the maximum applicable contingent
deferred sales charge was deducted from the value of the investment in Class B
Shares, assuming full redemption on August 31, 1996; (c) all recurring fees
(including investment advisory fees) were deducted; and (d) all dividends and
distributions were reinvested.
The investment adviser is currently waiving a portion of the Fund's
expenses. Had expenses not been waived, returns would have been lower.
The Index is an unmanaged index and includes the reinvestment of income,
but does not reflect the payment of transaction costs and advisory fees
associated with an investment in the Fund.
33
<PAGE>
EVERGREEN NEW JERSEY TAX FREE INCOME
STATEMENT OF INVESTMENTS
AUGUST 31, 1996
(Drawing of the state of New Jersey)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES -- 93.3%
NEW JERSEY -- 86.8%
$250 Bayshore Regional Swr. Auth.
RB, Subordinated Swr.,
5.50%, 4/1/12 (MBIA)................... $ 246,388
1,000 Bergen Cnty. Utils. Auth.
Wtr., (Ser. B),
5.75%, 12/15/05........................ 1,053,590
500 Burlington Cnty. Bridge
Commission Sys. RB,
5.30%, 10/1/13......................... 484,145
750 Burlington Cnty. GO, (Ser. A),
4.40%, 3/15/01......................... 742,688
500 Burlington Cnty. GO,
4.875%, 11/15/09....................... 469,105
1,000 Burlington Cnty. GO,
6.95%, 9/15/97......................... 1,029,620
500 Camden Cnty. Impt.
Auth. Lease RB,
5.625%, 10/1/15 (MBIA)................. 490,515
500 Camden Cnty. Impt.
Auth. Lease RB,
6.00%, 12/1/12......................... 502,950
500 Camden Cnty. Muni. Utils.
Auth. Swr. RB,
5.125%, 7/15/17 (FGIC)................. 461,690
500 Cape May Cnty. Muni. Utils.
Auth. Swr. RB, (Ser. A),
5.75%, 1/1/16 (MBIA)................... 494,780
1,000 Delaware River & Bay Auth. RB,
5.00%, 1/1/17 (MBIA)................... 901,800
475 Delaware River Joint Toll
Bridge Commission RB,
6.25%, 7/1/12.......................... 492,775
500 Delaware River Port
Auth. of PA & NJ, RB,
5.40%, 1/1/15 (FGIC)................... 478,650
200 Edison Township, GO,
6.50%, 6/1/09.......................... 218,522
250 Essex Cnty. Utils. Auth.
Solid Waste,
5.50%, 4/1/11 (FSA).................... 246,050
250 Essex Cnty. Utils. Auth.
Solid Waste,
5.60%, 4/1/16 (FSA).................... 244,178
600 Gloucester Cnty. GO,
6.30%, 2/1/12 (MBIA)................... 626,658
500 Gloucester Cnty. Utils.
Auth. Swr. RB,
6.50%, 1/1/21.......................... 517,490
PRINCIPAL
AMOUNT
(000) VALUE
$200 Hoboken, GO,
6.65%, 8/1/11.......................... $ 217,128
250 Hudson Cnty. GO,
5.125%, 8/1/08, (AMBAC)................ 244,863
685 Jersey City Swr. Auth. GO,
7.00%, 1/1/19.......................... 702,392
400 Lakewood Township,
School District, GO,
6.25%, 2/15/12, (AMBAC)................ 430,520
500 Manalapan Regl. Brd. Ed. GO,
5.00%, 5/1/05.......................... 500,665
305 Mercer Cnty. Imp. Auth. RB,
6.05%, 1/1/11.......................... 304,973
500 Middlesex Cnty. GO,
5.80%, 10/1/10......................... 511,100
150 Millburn Township, GO,
6.00%, 7/15/99......................... 156,819
800 Monmouth Cnty. Impt. Auth. GO,
Correctional Facs. Monmouth Proj.,
6.40%, 8/1/08.......................... 848,568
500 New Jersey Bldg. Auth. RB,
5.00%, 6/15/13......................... 458,905
500 New Jersey Bldg. Auth. RB,
5.00%, 6/15/18......................... 445,730
300 New Jersey Bldg. Auth. RB,
6.25%, 6/15/13......................... 318,984
225 New Jersey Bldg. Auth. RB,
7.20%, 6/15/13......................... 238,862
300 New Jersey Eco. Dev. Auth.
RB, (Ser. A),
6.60%, 8/1/21.......................... 310,911
400 New Jersey Eco. Dev.
Auth. RB, NJ American
Wtr. Co. Proj.-A,
5.35%, 6/1/23, (FGIC).................. 375,136
500 New Jersey Eco. Dev.
Auth. RB, NJ Performing
Arts Ctr. Proj.,
5.50%, 6/15/13, (AMBAC)................ 489,235
1,000 New Jersey Eco. Dev. Auth. RB,
Public Schs. Small Proj. Loan Prog.,
5.40%, 8/15/13......................... 972,500
400 New Jersey Edl. Facs. Auth. RB,
6.375%, 7/1/11, (MBIA)................. 417,724
325 New Jersey Edl. Facs.
Auth. RB, (Ser. A),
5.70%, 7/1/97.......................... 329,927
</TABLE>
34
<PAGE>
EVERGREEN NEW JERSEY TAX FREE INCOME
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
(Drawing of the state of New Jersey)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
NEW JERSEY -- CONTINUED
<S> <C> <C>
$250 New Jersey Edl. Facs. Auth.
RB, (Ser. B),
6.50%, 7/1/11.......................... $ 267,065
500 New Jersey Edl. Facs. Auth.
RB, (Ser. C),
6.375%, 7/1/22......................... 522,005
300 New Jersey Edl. Facs. Auth.
RB, (Ser. C),
6.50%, 7/1/11, (MBIA).................. 328,023
500 New Jersey Edl. Facs. Auth.
RB, (Ser. D),
6.20%, 7/1/17, (AMBAC)................. 517,170
600 New Jersey Edl. Facs. Auth.
RB, Seton Hall Proj., (Ser. A),
6.25%, 7/1/10.......................... 628,428
400 New Jersey Health Care Facs.
Financing Auth. RB,
6.50%, 7/1/12.......................... 425,888
750 New Jersey Health Care Facs.
Financing Auth. Atlantic
City Med. Center RB,
6.80%, 7/1/05.......................... 806,243
750 New Jersey Health Care Facs.
Financing Auth. RB
Hackensack Medical Center,
6.625%, 7/1/17, (FGIC)................. 797,858
300 New Jersey Health Care Facs.
Financing Auth. RB, Mercer
Medical Center, (Ser. E),
6.45%, 7/1/05, (MBIA).................. 322,110
500 New Jersey Health Care Facs.
Financing Auth. RB, Overlook
Hosp. Assn. Robert Wood
Johnson Univ. Hosp., (Ser E),
6.70%, 7/1/13, (MBIA).................. 519,110
185 New Jersey Health Care Facs.
Financing Auth. Robert Wood
Johnson Univ. Hosp.,
6.625%, 7/1/16......................... 196,805
500 New Jersey Health Care Facs.
Financing Auth. Shore Mem.
Hosp. Health Care Sys. RB,
5.00%, 7/1/12, (MBIA).................. 462,790
500 New Jersey Hwy. Auth. RB,
6.25%, 1/1/14.......................... 515,950
1,000 New Jersey Sports & Exposition
RB, (Ser. A),
6.00%, 3/1/21.......................... 1,006,040
190 New Jersey State Turnpike RB,
6.75%, 1/1/09.......................... 213,505
PRINCIPAL
AMOUNT
(000) VALUE
$200 New Jersey Trans.
Trust Fund Auth.,
4.40%, 6/15/99......................... $ 200,040
300 New Jersey Transit Corp. COP,
6.50%, 10/1/16, (FSA).................. 323,247
300 New Jersey Turnpike Auth.
RB, (Ser. A),
6.40%, 1/1/02.......................... 316,989
200 New Jersey St. (Ser. A) GO,
6.80%, 9/15/10......................... 221,218
500 New Jersey St. (Ser. D) GO,
5.25%, 2/15/01......................... 513,360
400 New Jersey St. (Ser. E) GO,
6.00%, 7/15/07......................... 427,328
350 North Jersey Dist. Wtr.
Supply RB, Wanaque North
Proj., (Ser. B),
6.25%, 11/15/17, (MBIA)................ 362,047
500 North Jersey Dist. Wtr.
Supply RB, Wanque South Proj.,
6.00%, 7/1/12, (MBIA).................. 515,150
400 North Jersey Dist. Wtr.
Supply RB, Wanque South Proj.,
6.50%, 7/1/21, (MBIA).................. 433,624
500 Ocean Cnty. GO Utils. Auth. (Ser. A),
5.75%, 1/1/18.......................... 495,710
500 Ocean Cnty. GO,
5.80%, 9/1/10.......................... 510,385
200 Old Bridge Township GO,
6.55%, 7/15/09, (FGIC)................. 217,590
500 Old Bridge Township Muni.
Utils. Auth. RB,
6.25%, 11/1/16, (FGIC)................. 522,695
500 Passaic Valley Sewage
Commissioners RB, (Ser. D),
5.75%, 12/1/13, (AMBAC)................ 501,905
500 Pennsauken Township,
School Dist. GO,
5.00%, 3/1/10.......................... 467,790
500 Port Auth. NY & NJ, RB,
5.00%, 7/15/11, (AMBAC)................ 469,955
500 Port Auth. NY & NJ, RB, (Ser. 102),
5.625%, 10/15/13, (MBIA)............... 493,480
900 Port Auth. NY & NJ, RB, (Ser. 102),
6.75%, 8/1/26.......................... 961,560
500 Rutgers St University RB, (Ser. 1),
5.25%, 5/1/12.......................... 480,350
100 South Plainfield GO,
6.625%, 8/1/12, (AMBAC)................ 107,004
</TABLE>
35
<PAGE>
EVERGREEN NEW JERSEY TAX FREE INCOME
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
(Drawing of the state of New Jersey)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
NEW JERSEY -- CONTINUED
<S> <C> <C>
$500 Stafford Muni. Utils. Auth.
Wtr. & Swr. RB,
6.25%, 6/1/14, (MBIA).................. $ 521,755
500 Stony Brook Regional Sewage
Auth. RB, (Ser. B),
5.45%, 12/1/12......................... 487,644
500 Trenton GO,
6.55%, 8/15/09, (MBIA)................. 543,974
400 University Medicine &
Dentistry RB, (Ser. E),
5.75%, 12/1/21......................... 419,127
500 University Medicine &
Dentistry RB, (Ser. E),
6.50%, 12/1/18......................... 549,494
200 Washington Township Muni.
Utils. Auth. Sys. RB, (Ser. A),
6.70%, 2/1/11, (AMBAC)................. 216,455
1,000 West Windsor, GO,
5.50%, 12/1/10, (FGIC)................. 996,000
500 Winslow Township GO,
6.50%, 10/1/18, (FGIC)................. 537,300
38,318,702
PUERTO RICO -- 6.5%
500 Puerto Rico Commonwealth GO,
5.50%, 7/1/13.......................... 474,195
300 Puerto Rico Commonwealth GO,
6.80%, 7/1/21.......................... 335,727
500 Puerto Rico Commonwealth GO,
(Ser. A),
6.00%, 7/1/14.......................... 497,785
275 Puerto Rico Elec.
Pwr. Auth. RB,
6.50%, 7/1/05, (MBIA).................. 306,020
500 Puerto Rico Elec. Pwr.
Auth. RB, (Ser. P),
7.00%, 7/1/21.......................... 559,485
400 Puerto Rico Pub. Bldgs. Auth.
Gtd. Hlth. Facs. RB, (Ser. J),
7.00%, 7/1/19.......................... 426,000
PRINCIPAL
AMOUNT
(000) VALUE
$250 Puerto Rico Pub. Bldgs. Auth.
Gtd. RB,
6.25%, 7/1/09, (AMBAC)................. $ 271,163
2,870,375
TOTAL LONG-TERM MUNICIPAL SECURITIES
(COST $40,146,982)................ 41,189,077
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
MUTUAL FUND SHARES -- 5.9%
773,051 Dreyfus New Jersey Municipal
Money Market Fund...................... 773,051
1,810,178 Federated New Jersey
Municipal Cash Trust................... 1,810,178
TOTAL MUTUAL FUND SHARES
(COST $2,583,229)......... 2,583,229
TOTAL INVESTMENTS --
(COST $42,730,211)........ 99.1% 43,772,306
OTHER ASSETS AND
LIABILITIES -- NET........ .9 390,065
NET ASSETS --................ 100.0% $44,162,371
</TABLE>
Summary of Abbreviations:
AMBAC -- Insured by American Municipal Bond Assurance
Corporation
COP -- Certificate of Participation
FGIC -- Insured by Federal Guaranty Insurance Corporation
FSA -- Insured by Financial Security Assurance
GO -- General Obligation Bond
MBIA -- Insured by Municipal Bond Investors Assurance
RB -- Revenue Bond
See accompanying notes to financial statements.
36
<PAGE>
EVERGREEN NEW JERSEY TAX FREE INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996
(Drawing of the state of New Jersey)
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost $42,730,211)............................................................. $43,772,306
Interest receivable............................................................................................ 544,652
Receivable for Fund shares sold................................................................................ 11,476
Prepaid expenses............................................................................................... 1,292
Total assets............................................................................................. 44,329,726
LIABILITIES:
Dividends payable.............................................................................................. 93,696
Accrued expenses............................................................................................... 68,070
Distribution fee payable....................................................................................... 5,589
Total liabilities........................................................................................ 167,355
NET ASSETS........................................................................................................ $44,162,371
NET ASSETS CONSIST OF:
Paid-in capital................................................................................................ $43,505,944
Undistributed net investment income............................................................................ 15,515
Accumulated net realized loss on investment transactions....................................................... (401,183)
Net unrealized appreciation of investments..................................................................... 1,042,095
Net assets............................................................................................... $44,162,371
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($32,377,124 (division sign) 3,010,604 shares of beneficial interest outstanding)............... $ 10.75
Sales charge -- 4.75% of offering price........................................................................ .54
Maximum offering price................................................................................... $ 11.29
Class B Shares ($2,709,358 (division sign) 251,931 shares of beneficial interest outstanding).................. $ 10.75
Class Y Shares ($9,075,889 (division sign) 843,932 shares of beneficial interest outstanding).................. $ 10.75
</TABLE>
See accompanying notes to financial statements.
37
<PAGE>
EVERGREEN NEW JERSEY TAX FREE INCOME FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 1996
(Drawing of the state of New Jersey)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.......................................................................................... $1,158,964
EXPENSES:
Advisory fee...................................................................................... $ 107,212
Administrative personnel and service fees......................................................... 9,468
Distribution fee -- Class A Shares................................................................ 42,308
Distribution fee -- Class B Shares................................................................ 5,856
Shareholder services fee -- Class B Shares........................................................ 1,949
Custodian fee..................................................................................... 28,357
Transfer agent fee................................................................................ 12,666
Reports and notices to shareholders............................................................... 9,453
Professional fees................................................................................. 6,238
Insurance expense................................................................................. 5,511
Trustees' fees and expenses....................................................................... 3,592
Miscellaneous..................................................................................... 1,323
233,933
Less: Fee waivers and expense reimbursements...................................................... (154,885)
Net expenses................................................................................... 79,048
Net investment income................................................................................ 1,079,916
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions...................................................... 56
Net change in unrealized appreciation of investments.............................................. (955,855)
Net loss on investments.............................................................................. (955,799)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................. $ 124,117
</TABLE>
See accompanying notes to financial statements.
38
<PAGE>
EVERGREEN NEW JERSEY TAX FREE INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state of New Jersey)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, FEBRUARY 29,
1996 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income........................................................................ $ 1,079,916 $ 1,964,872
Net realized gain on investment transactions................................................. 56 10,000
Net change in unrealized appreciation of investments......................................... (955,855) 1,701,539
Net increase in net assets resulting from operations...................................... 124,117 3,676,411
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares............................................................................... (862,288) (1,964,372)
Class B Shares............................................................................... (32,289) (451)
Class Y Shares............................................................................... (185,339) (56)
Total distributions to shareholders....................................................... (1,079,916) (1,964,879)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold.................................................................... 13,167,830 11,064,767
Proceeds from reinvestment of distributions.................................................. 522,912 959,013
Payment for shares redeemed.................................................................. (10,539,031) (6,620,815)
Net increase resulting from Fund share transactions....................................... 3,151,711 5,402,965
Net increase in net assets................................................................ 2,195,912 7,114,497
NET ASSETS:
Beginning of period.......................................................................... 41,966,459 34,851,962
End of period (includes undistributed net investment income of $15,515 at August 31, 1996 and
February 29, 1996.)........................................................................ $ 44,162,371 $ 41,966,459
</TABLE>
See accompanying notes to financial statements.
39
<PAGE>
EVERGREEN NEW JERSEY TAX FREE INCOME FUND
FINANCIAL HIGHLIGHTS
(Drawing of the state of New Jersey)
<TABLE>
<CAPTION>
CLASS A SHARES
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
1996# 1996 1995 1994
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............................. $11.01 $10.53 $10.99 $11.01
Income (loss) from investment operations:
Net investment income.......................................... .28 .56 .57 .60
Net realized and unrealized gain (loss) on investments......... (.26) .48 (.46) (.02)
Total from investment operations............................. .02 1.04 .11 .58
Less distributions to shareholders from net investment income.... (.28) (.56) (.57) (.60)
Net asset value, end of period................................... $10.75 $11.01 $10.53 $10.99
TOTAL RETURN+.................................................... .2% 10.1% 1.4% 5.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)........................ $32,377 $41,762 $34,852 $42,783
Ratios to average net assets:
Expenses**..................................................... .34%++ .36% .25% .14%
Net investment income**........................................ 5.08%++ 5.15% 5.52% 5.31%
Portfolio turnover rate.......................................... 0% 4% 8% 2%
YEAR ENDED
FEBRUARY 28,
1993
PER SHARE DATA:
Net asset value, beginning of period............................. $10.22
Income (loss) from investment operations:
Net investment income.......................................... .63
Net realized and unrealized gain (loss) on investments......... .79
Total from investment operations............................. 1.42
Less distributions to shareholders from net investment income.... (.63)
Net asset value, end of period................................... $11.01
TOTAL RETURN+.................................................... 14.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)........................ $30,863
Ratios to average net assets:
Expenses**..................................................... .00%
Net investment income**........................................ 5.97%
Portfolio turnover rate.......................................... 5%
</TABLE>
# The Fund changed its fiscal year end from February 28 to August 31.
+ 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 adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS A SHARES
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
1996# 1996 1995 1994
<S> <C> <C> <C> <C>
Expenses......................................................... 1.11% 1.03% 1.04% 1.05%
Net investment income............................................ 4.31% 4.48% 4.73% 4.40%
YEAR ENDED
FEBRUARY 28,
1993
Expenses......................................................... 1.16%
Net investment income............................................ 4.81%
</TABLE>
See accompanying notes to financial statements.
40
<PAGE>
EVERGREEN NEW JERSEY TAX FREE INCOME FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state of New Jersey)
<TABLE>
<CAPTION>
CLASS B SHARES CLASS Y SHARES
JANUARY 30, 1996*
SIX MONTHS ENDED THROUGH SIX MONTHS ENDED
AUGUST 31, 1996# FEBRUARY 29, 1996 AUGUST 31, 1996#
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period........................ $11.01 $11.08 $11.01
Income (loss) from investment operations:
Net investment income..................................... .24 .05 .28
Net realized and unrealized gain (loss) on investments.... (.26) (.07) (.26)
Total from investment operations........................ (.02) (.02) .02
Less distributions to shareholders from net investment
income.................................................... (.24) (.05) (.28)
Net asset value, end of period.............................. $10.75 $11.01 $10.75
TOTAL RETURN+............................................... (.2%) (.2%) .2%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................... $2,709 $186 $9,076
Ratios to average net assets:
Expenses**++.............................................. 1.28% .31% .31%
Net investment income**++................................. 4.14% 5.23% 5.12%
Portfolio turnover rate..................................... 0% 4% 0%
FEBRUARY 8, 1996*
THROUGH
FEBRUARY 29, 1996
PER SHARE DATA:
Net asset value, beginning of period........................ $11.14
Income (loss) from investment operations:
Net investment income..................................... .03
Net realized and unrealized gain (loss) on investments.... (.13)
Total from investment operations........................ (.10)
Less distributions to shareholders from net investment
income.................................................... (.03)
Net asset value, end of period.............................. $11.01
TOTAL RETURN+............................................... (.9%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................... $18
Ratios to average net assets:
Expenses**++.............................................. .31%
Net investment income**++................................. 5.28%
Portfolio turnover rate..................................... 4%
</TABLE>
# The Fund changed its fiscal year end from February 28 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Contingent deferred sales charge is not
reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS B SHARES CLASS Y SHARES
JANUARY 30, 1996*
SIX MONTHS ENDED THROUGH SIX MONTHS ENDED
AUGUST 31, 1996# FEBRUARY 29, 1996 AUGUST 31, 1996#
<S> <C> <C> <C>
Expenses.......................................................... 1.85% 1.66% .87%
Net investment income............................................. 3.57% 3.88% 4.56%
FEBRUARY 8, 1996*
THROUGH
FEBRUARY 29, 1996
Expenses.......................................................... .88%
Net investment income............................................. 4.71%
</TABLE>
See accompanying notes to financial statements.
41
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
(Drawing of the state of North Carolina)
RESULTS TO DATE
PERFORMANCE OF $10,000 INVESTED IN THE
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
The graphs below compare a $10,000 investment in the Evergreen North
Carolina Municipal Bond Fund (Class A, Class B and Class Y Shares) with a
similar investment in the Lehman Brothers State General Obligation Bond Index
("Index").
CLASS A
ONE YEAR TOTAL RETURN = 0.2%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 3.6%
(Class A chart appears here. Plot points are below.)
1/11/93* 8/31/93 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
CLASS B
ONE YEAR TOTAL RETURN = 0.6%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 3.6%
(Class B chart appears here. Plot points are below.)
1/11/93* 8/31/93 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
CLASS Y
ONE YEAR TOTAL RETURN = 5.4%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 4.0%
(Class Y chart appears here. Plot points are below.)
2/28/94* 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
- - - EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
____ LEHMAN BROTHERS STATE GENERAL OBLIGATION BOND INDEX
*Commencement of class operations.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE RESULTS. MUTUAL FUNDS
ARE NOT OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK AND ARE NOT FEDERALLY
INSURED.
For the purposes of the graphs and the accompanying tables, it has been
assumed that (a) the maximum sales charge of 4.75% was deducted from the initial
$10,000 investment in Class A Shares; (b) the maximum applicable contingent
deferred sales charge was deducted from the value of the investment in Class B
Shares, assuming full redemption on August 31, 1996; (c) all recurring fees
(including investment advisory fees) were deducted; and (d) all dividends and
distributions were reinvested.
The investment adviser is currently waiving a portion of the Fund's
expenses. Had expenses not been waived, returns would have been lower.
The Index is an unmanaged index and includes the reinvestment of income,
but does not reflect the payment of transaction costs and advisory fees
associated with an investment in the Fund.
42
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
AUGUST 31, 1996
(Drawing of the state of North Carolina)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES -- 96.0%
NORTH CAROLINA -- 89.0%
$1,380 Burlington Hsg. Auth. Mtg. RB,
Burlington Homes, Sec. 8-A,
6.00%, 8/1/09......................... $ 1,373,914
1,000 Chapel Hill Parking Fac., COP,
6.35%, 12/1/18........................ 1,025,170
1,470 Charlotte Hsg. Dev. Corp. Mtg. RB,
Vantage 78 Apts.,
6.60%, 7/15/21 (FHA).................. 1,490,683
1,000 Coastal Regional Solid Waste Mgmt.
Auth. RB, Disp. Sys.,
6.50%, 6/1/08......................... 1,041,830
2,000 Craven Cnty. Indl. Facs. &
Poll. Ctrl. Fing. Auth. RB,
Weyerhaeuser Co. Proj.,
6.35%, 1/1/10......................... 2,083,780
2,390 Cumberland Cnty., Civic Center Proj.,
COP (Ser. A),
6.40%, 12/1/24 (AMBAC)................ 2,533,519
930 Fremont Hsg. Dev. Corp. First Lien RB,
Torhunta Apts.,
6.75%, 7/15/22 (FHA).................. 951,409
1,000 Gastonia Combined Util. Sys. RB,
6.00%, 5/1/14 (MBIA).................. 1,014,550
1,000 Harnett Cnty., COP,
6.40%, 12/1/14 (AMBAC)................ 1,060,850
1,000 Haywood Cnty. Indl. Facs. &
Poll. Ctrl. Fin. Auth. RB,
Champion Intl. Corp. Proj.,
6.25%, 9/1/25......................... 983,960
4,750 Martin Cnty. Indl. Facs. &
Poll. Ctrl. Fin. Auth. RB,
Solid Waste Disp. Weyerhaeuser Co.,
6.80%, 5/1/24......................... 5,055,710
4,000 North Carolina Eastn. Muni. Pwr. Sys.
Agcy. RB (Ser. A),
5.00%, 1/1/21......................... 3,594,800
3,750 North Carolina Eastn. Muni. Pwr. Sys.
Agcy. RB (Ser. A),
6.50%, 1/1/18 (ETM)................... 3,877,200
2,500 North Carolina Eastn. Muni. Pwr. Sys.
Agcy., RB
6.00%, 1/1/18 (AMBAC)................. 2,569,800
1,300 North Carolina Eastn. Muni. Pwr. Sys.
Agcy. RB (Ser. A),
7.00%, 1/1/24......................... 1,348,152
PRINCIPAL
AMOUNT
(000) VALUE
$ 1,000 North Carolina Hsg. Fin. & Dev. Auth.
RB, Single Family (Ser. HH),
6.20%, 3/1/18......................... $ 996,470
3,950 North Carolina Hsg. Fin. & Dev. Auth.
RB, Single Family (Ser. JJ),
6.15%, 3/1/11 (FHA)................... 4,005,261
1,440 North Carolina Hsg. Fin. & Dev. Auth.
RB, Single Family (Ser. T),
7.05%, 9/1/20 (FHA)................... 1,496,030
500 North Carolina Med. Care Cmnty. Hlth.
Care Fac. RB,
1st Mtg Southminster,
6.875%, 10/1/09....................... 513,285
1,000 North Carolina Med. Care Cmnty. Hosp.
RB, Alamance Health
Svcs. Inc.,
6.375%, 8/15/12 (FSA)................. 1,056,410
2,000 North Carolina Med. Care Cmnty. Hosp.
RB, Rex Hosp. Proj.,
6.25%, 6/1/17......................... 2,013,140
1,500 North Carolina Med. Care Cmnty.
Hosp. RB, Gaston Mem. Hosp. Proj.,
5.50%, 2/15/19........................ 1,397,610
3,000 North Carolina Med. Care Cmnty. Hosp.
RB, Grace Hosp. Inc.,
5.25%, 10/1/13........................ 2,779,530
3,000 North Carolina Muni. Pwr. Agcy. RB,
No. 1 Catawba Elec. (Ser. B),
5.00%, 1/1/20......................... 2,691,420
1,000 North Carolina Stud.
Ed. Assist. Auth. RB,
1st Mtg. Southminster (Ser. A),
6.05%, 7/1/10......................... 998,970
2,000 North Carolina Stud. Ed. Assist. Auth.
RB (Ser. A),
6.30%, 7/1/15......................... 2,001,340
2,375 North Carolina Stud. Ed. Assist. Auth.
RB (Ser. C),
6.35%, 7/1/16......................... 2,388,490
1,000 Onslow Cnty. Combined
Enterprise Sys. RB,
6.00%, 6/1/15 (MBIA).................. 1,010,920
1,000 Rowan Cnty. Justice Center
Proj., COP,
6.25%, 12/1/07 (FSA).................. 1,071,750
54,425,953
</TABLE>
43
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
(Drawing of the state of North Carolina)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
<S> <C> <C>
PUERTO RICO -- 7.0%
$2,000 Puerto Rico Commonwealth GO,
6.25%, 7/1/11 (MBIA).................. $ 2,161,180
1,000 Puerto Rico Ports Auth. RB, American
Airlines Proj. (Ser. A),
6.25%, 6/1/26......................... 992,130
1,000 Puerto Rico Univ. RB (Ser. N),
6.25%, 6/1/06......................... 1,093,850
4,247,160
TOTAL LONG-TERM MUNICIPAL SECURITIES
(COST $57,150,541)............... 58,673,113
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
MUTUAL FUND SHARES -- 6.1%
3,000,000 Lehman Municipal Money
Market Fund......................... $ 3,000,000
755,000 Lehman Tax Free Money
Market Fund......................... 755,000
TOTAL MUTUAL FUND SHARES
(COST $3,755,000).............. 3,755,000
TOTAL INVESTMENTS --
(COST $60,905,541).... 102.1% 62,428,113
OTHER ASSETS AND
LIABILITIES -- NET.... (2.1) (1,285,712)
NET ASSETS --............ 100.0% $61,142,401
</TABLE>
Summary of Abbreviations:
AMBAC -- Insured by American Municipal Bond Assurance Corporation
COP -- Certificates of Participation
ETM -- Escrowed to Maturity
FHA -- Insured by Federal Housing Authority
FSA -- Insured by Financial Security Assurance
GO -- General Obligation Bond
MBIA -- Insured by Municipal Bond Investors Assurance
RB -- Revenue Bond
See accompanying notes to financial statements.
44
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996
(Drawing of the state of North Carolina)
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost $60,905,541)............................................................. $62,428,113
Cash........................................................................................................... 69
Receivable for securities sold................................................................................. 967,861
Interest receivable............................................................................................ 763,574
Receivable for Fund shares sold................................................................................ 98,736
Prepaid expenses............................................................................................... 11,237
Total assets............................................................................................. 64,269,590
LIABILITIES:
Payable for securities purchased............................................................................... 2,842,908
Accrued expenses............................................................................................... 130,904
Dividends payable.............................................................................................. 67,884
Distribution fee payable....................................................................................... 54,187
Payable for Fund shares redeemed............................................................................... 18,663
Accrued advisory fee........................................................................................... 12,643
Total liabilities........................................................................................ 3,127,189
NET ASSETS........................................................................................................ $61,142,401
NET ASSETS CONSIST OF:
Paid-in capital................................................................................................ $63,343,738
Undistributed net investment income............................................................................ 88,212
Accumulated net realized loss on investment transactions....................................................... (3,812,121)
Net unrealized appreciation of investments..................................................................... 1,522,572
Net assets............................................................................................... $61,142,401
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($7,989,384 (division sign) 800,876 shares of beneficial interest outstanding).................. $ 9.98
Sales charge -- 4.75% of offering price........................................................................ .50
Maximum offering price................................................................................... $ 10.48
Class B Shares ($49,382,186 (division sign) 4,950,160 shares of beneficial interest outstanding)............... $ 9.98
Class Y Shares ($3,770,831 (division sign) 377,749 shares of beneficial interest outstanding).................. $ 9.98
</TABLE>
See accompanying notes to financial statements.
45
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1996
(Drawing of the state of North Carolina)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.......................................................................................... $3,613,797
EXPENSES:
Advisory fee...................................................................................... $ 306,892
Administrative personnel and service fees......................................................... 31,447
Distribution fee -- Class A Shares................................................................ 20,833
Distribution fee -- Class B Shares................................................................ 375,352
Shareholder services fee -- Class B Shares........................................................ 125,117
Custodian fee..................................................................................... 75,846
Reports and notices to shareholders............................................................... 63,428
Registration and filing fees...................................................................... 62,826
Transfer agent fee................................................................................ 50,839
Professional fees................................................................................. 35,599
Insurance expense................................................................................. 5,479
Trustees' fees and expenses....................................................................... 2,446
Miscellaneous..................................................................................... 35,952
1,192,056
Less: Fee waivers................................................................................. (164,001)
Net expenses................................................................................... 1,028,055
Net investment income................................................................................ 2,585,742
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions...................................................... 483,051
Net change in unrealized appreciation of investments.............................................. (416,432)
Net gain on investments.............................................................................. 66,619
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................. $2,652,361
</TABLE>
See accompanying notes to financial statements.
46
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state of North Carolina)
<TABLE>
<CAPTION>
EIGHT MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income........................................................................ $ 2,585,742 $ 1,697,080
Net realized gain on investment transactions................................................. 483,051 668,311
Net change in unrealized appreciation of investments......................................... (416,432) 3,902,872
Net increase in net assets resulting from operations...................................... 2,652,361 6,268,263
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares............................................................................... (396,192) (279,937)
Class B Shares............................................................................... (2,003,550) (1,389,260)
Class Y Shares............................................................................... (147,923) (27,883)
Total distributions to shareholders....................................................... (2,547,665) (1,697,080)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold.................................................................... 10,964,230 6,832,112
Proceeds from reinvestment of distributions.................................................. 1,752,076 1,191,861
Payment for shares redeemed.................................................................. (10,003,099) (7,507,588)
Net increase resulting from Fund share transactions....................................... 2,713,207 516,385
Net increase in net assets................................................................ 2,817,903 5,087,568
NET ASSETS:
Beginning of period.......................................................................... 58,324,498 53,236,930
End of period (includes undistributed net investment income of $88,212 and $50,135,
respectively).............................................................................. $61,142,401 $ 58,324,498
</TABLE>
See accompanying notes to financial statements.
47
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
(Drawing of the state of North Carolina)
<TABLE>
<CAPTION>
CLASS A SHARES
EIGHT MONTHS YEAR
YEAR ENDED ENDED ENDED
AUGUST 31, AUGUST 31, DECEMBER 31,
1996 1995# 1994
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period....................................... $9.95 $9.16 $10.61
Income (loss) from investment operations:
Net investment income.................................................... .49 .33 .49
Net realized and unrealized gain (loss) on investments................... .02 .79 (1.45)
Total from investment operations....................................... .51 1.12 (.96)
Less distributions to shareholders from:
Net investment income.................................................... (.48) (.33) (.49)
Net realized gain on investments......................................... -- -- --
Total distributions.................................................... (.48) (.33) (.49)
Net asset value, end of period............................................. $9.98 $9.95 $9.16
TOTAL RETURN+.............................................................. 5.2% 12.3% (9.1%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).................................. $7,989 $8,279 $7,979
Ratios to average net assets:
Expenses**............................................................... 1.08% .92%++ .79%
Net investment income**.................................................. 4.81% 5.09%++ 5.11%
Portfolio turnover rate.................................................... 86% 117% 126%
JANUARY 11,
1993* THROUGH
DECEMBER 31,
1993
PER SHARE DATA:
Net asset value, beginning of period....................................... $10.00
Income (loss) from investment operations:
Net investment income.................................................... .46
Net realized and unrealized gain (loss) on investments................... .64
Total from investment operations....................................... 1.10
Less distributions to shareholders from:
Net investment income.................................................... (.46)
Net realized gain on investments......................................... (.03)
Total distributions.................................................... (.49)
Net asset value, end of period............................................. $10.61
TOTAL RETURN+.............................................................. 11.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).................................. $12,739
Ratios to average net assets:
Expenses**............................................................... .32%++
Net investment income**.................................................. 4.91%++
Portfolio turnover rate.................................................... 57%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales charge is not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS A SHARES
EIGHT MONTHS YEAR
YEAR ENDED ENDED ENDED
AUGUST 31, AUGUST 31, DECEMBER 31,
1996 1995# 1994
<S> <C> <C> <C>
Expenses................................................................... 1.35% 1.27% 1.18%
Net investment income...................................................... 4.54% 4.74% 4.72%
JANUARY 11,
1993* THROUGH
DECEMBER 31,
1993
Expenses................................................................... 1.25%
Net investment income...................................................... 3.98%
</TABLE>
See accompanying notes to financial statements.
48
<PAGE>
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state of North Carolina)
<TABLE>
<CAPTION>
CLASS B SHARES CLASS Y SHARES
EIGHT MONTHS YEAR JANUARY 11, YEAR EIGHT MONTHS
YEAR ENDED ENDED ENDED 1993* THROUGH ENDED ENDED
AUGUST 31, AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31, AUGUST 31,
1996 1995# 1994 1993 1996 1995#
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period.......... $9.95 $9.16 $10.61 $10.00 $9.95 $9.16
Income (loss) from investment operations:
Net investment income....................... .42 .28 .44 .42 .51 .35
Net realized and unrealized gain (loss) on
investments............................... .02 .79 (1.45) .64 .03 .79
Total from investment operations.......... .44 1.07 (1.01) 1.06 .54 1.14
Less distributions to shareholders from:
Net investment income....................... (.41) (.28) (.44) (.42) (.51) (.35)
Net realized gain on investments............ -- -- -- (.03) -- --
Total distributions....................... (.41) (.28) (.44) (.45) (.51) (.35)
Net asset value, end of period................ $9.98 $9.95 $9.16 $10.61 $9.98 $9.95
TOTAL RETURN+................................. 4.4% 11.8% (9.6%) 10.8% 5.4% 12.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)..... $49,382 $49,040 $44,616 $45,168 $3,771 $1,006
Ratios to average net assets:
Expenses**.................................. 1.83% 1.67%++ 1.37% .79%++ .84% .67%++
Net investment income**..................... 4.06% 4.34%++ 4.53% 4.47%++ 5.05% 5.34%++
Portfolio turnover rate....................... 86% 117% 126% 57% 86% 117%
FEBRUARY 28,
1994* THROUGH
DECEMBER 31,
1994
PER SHARE DATA:
Net asset value, beginning of period.......... $10.31
Income (loss) from investment operations:
Net investment income....................... .43
Net realized and unrealized gain (loss) on
investments............................... (1.15)
Total from investment operations.......... (.72)
Less distributions to shareholders from:
Net investment income....................... (.43)
Net realized gain on investments............ --
Total distributions....................... (.43)
Net asset value, end of period................ $9.16
TOTAL RETURN+................................. (7.0%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)..... $642
Ratios to average net assets:
Expenses**.................................. .59%++
Net investment income**..................... 5.58%++
Portfolio turnover rate....................... 126%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Contingent deferred sales charge is not
reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS B SHARES CLASS Y SHARES
EIGHT MONTHS YEAR JANUARY 11, YEAR EIGHT MONTHS
YEAR ENDED ENDED ENDED 1993* THROUGH ENDED ENDED
AUGUST 31, AUGUST 31, DECEMBER 31, DECEMBER 31, AUGUST 31, AUGUST 31,
1996 1995# 1994 1993 1996 1995#
<S> <C> <C> <C> <C> <C> <C>
Expenses................................... 2.10% 2.02% 1.76% 1.74% 1.07% 1.02%
Net investment income...................... 3.79% 3.99% 4.14% 3.52% 4.82% 4.99%
FEBRUARY 28,
1994* THROUGH
DECEMBER 31,
1994
Expenses................................... .98%
Net investment income...................... 5.19%
</TABLE>
See accompanying notes to financial statements.
49
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
(Drawing of the state of South Carolina)
RESULTS TO DATE
PERFORMANCE OF $10,000 INVESTED IN THE
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
The graphs below compare a $10,000 investment in the Evergreen South
Carolina Municipal Bond Fund (Class A, Class B and Class Y Shares) with a
similar investment in the Lehman Brothers South Carolina Municipal Bond Index
("Index").
CLASS A
ONE YEAR TOTAL RETURN = 1.2%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 2.2%
(Class A chart appears here. Plot points are below.)
1/3/94* 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
CLASS B
ONE YEAR TOTAL RETURN = 0.4%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 2.3%
(Class B chart appears here. Plot points are below.)
1/3/94* 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
CLASS Y
ONE YEAR TOTAL RETURN = 6.5%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 5.5%
(Class Y chart appears here. Plot points are below.)
2/28/94* 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
__ EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
______ LEHMAN BROTHERS SOUTH CAROLINA MUNICIPAL BOND INDEX
*COMMENCEMENT OF CLASS OPERATIONS
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE RESULTS. MUTUAL FUNDS
ARE NOT OBLIGATIONS OF, OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY
INSURED.
For the purposes of the graphs and the accompanying tables, it has been
assumed that: (a) the maximum sales charge of 4.75% was deducted from the
initial $10,000 investment in Class A Shares; (b) the maximum applicable
contingent deferred sales charge was deducted from the value of the investment
in Class B Shares, assuming full redemption on August 31, 1996; (c) all
recurring fees, (including, investment advisory fees) were deducted; and (d) all
dividends and distributions were reinvested.
The investment adviser is currently waiving a portion of the Fund's
expenses. Had expenses not been waived, returns would have been lower.
The Index is an unmanaged index and includes the reinvestment of income,
but does not reflect the payment of transaction costs and advisory fees
associated with an investment in the Fund.
50
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
AUGUST 31, 1996
(Drawing of the state of South Carolina)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES -- 96.7%
SOUTH CAROLINA -- 96.7%
$540 Aiken Cnty. IDR, Beloit Corp. Proj.,
6.00%, 12/1/11......................... $ 537,808
200 Bennettsville Combined.
Util. Sys. RB, (Ser. B),
6.00%, 7/1/09 (MBIA)................... 207,964
400 Calhoun Cnty. Solid Waste
Disp. Facs. RB, Eastman Kodak
Co. Proj.,
6.75%, 5/1/17.......................... 438,740
300 Charleston Cnty. Hlth Facs. RB,
First Mtg. Episcopal Church,
7.125%, 4/1/20......................... 306,243
200 Citadel Military College RB,
Stud. & Fac. Hsg.,
5.50%, 10/1/14......................... 193,758
100 Coastal Carolina Univ. RB,
6.80%, 6/1/19 (MBIA)................... 109,285
100 Colleton Cnty. GO,
5.60%, 3/1/09.......................... 97,029
100 Columbia Wtr. & Swr. Sys. RB,
5.375%, 2/1/12......................... 97,239
500 Darlington Cnty. IDR,
Nucor Corp. Proj. (Ser. A),
5.75%, 8/1/23.......................... 479,970
300 Darlington Cnty. IDR,
Sonoco Products Co. Proj.,
6.00%, 4/1/26.......................... 293,562
200 Georgetown Cnty. Wtr. & Swr.
Dist. RB,
6.50%, 6/1/1........................... 199,748
600 Greenville Hosp. Sys. RB,
Hosp. Facs. (Ser. B),
5.70%, 5/1/12.......................... 590,070
400 Greenville Memorial Auditorium Dist.
GO, Bi Lo Center Proj.,
5.75%, 4/1/18 (AMBAC).................. 394,144
250 Laurens Pub. Util. Sys. RB,
5.00%, 1/1/18 (FGIC)................... 221,213
650 Marion Cnty. RB, Hosp. Dist.,
5.50%, 11/1/15......................... 613,918
100 Medical Univ. Hosp.
Facs. RB (Ser. A),
7.00%, 7/1/01.......................... 108,310
200 Oconee Cnty. Sch. Dist. GO,
5.10%, 9/1/12 (MBIA)................... 187,054
100 Piedmont Muni. Pwr. Agcy.
Elec. RB,
5.50%, 1/1/12 (MBIA)................... 98,366
PRINCIPAL
AMOUNT
(000) VALUE
$350 Piedmont Muni. Pwr. Agcy.
Elec. RB,
6.05%, 1/1/04.......................... $ 355,551
350 Richland Cnty. Solid Waste
Disp. Facs. RB, Union Camp
Corp. Proj. (Ser. A),
6.75%, 5/1/22.......................... 365,911
300 South Carolina Jobs Eco. Dev.
Auth. Hosp. Facs. RB,
Anderson Area Med. Center Inc.,
5.25%, 2/1/15 (MBIA)................... 280,173
200 South Carolina Jobs Eco. Dev.
Auth. Hosp. Facs. RB, Oconee
Mem. Hosp.,
6.15%, 3/1/15.......................... 202,002
200 South Carolina Jobs Eco. Dev.
Auth. Hosp. Facs. RB, Tuomey
Regl. Med. Center (Ser. A),
5.75%, 11/1/15 (MBIA).................. 195,890
250 South Carolina St. Ed. Assist.
Auth. RB, Gtd.
Stud. Ln.-Sub Lien (Ser. C),
5.875%, 9/1/07......................... 249,700
400 South Carolina St. Hsg. Fin.
& Dev. Auth. Mtg. RB, (Ser. A),
6.35%, 7/1/25 (FHA).................... 403,236
100 South Carolina St. Hsg. Fin.
& Dev. Auth. Mtg. RB, (Ser. A),
6.55%, 7/1/15.......................... 102,213
595 South Carolina St. Hsg. Fin.
& Dev. Auth. Mtg. RB,
Heritage Crt. Apt. (Ser. A),
6.15%, 7/1/25 (FHA).................... 594,941
100 South Carolina St. Hsg. Fin.
& Dev. Auth. RB, (Ser. A),
6.80%, 11/15/11........................ 104,304
200 South Carolina St. Hsg. Fin.
& Dev. Auth. RB,
Homeownership Mtg. (Ser. A),
7.55%, 7/1/11.......................... 209,696
265 South Carolina St. Hsg. Fin.
& Dev. Auth. RB, Hunting
Ridge Apts.,
6.75%, 6/1/25.......................... 272,107
300 South Carolina St. Hsg. Fin.
& Dev. Auth. RB, Runaway
Bay Apts. Proj.,
6.125%, 12/1/15........................ 297,789
</TABLE>
51
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
(Drawing of the state of South Carolina)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
SOUTH CAROLINA -- CONTINUED
<S> <C> <C>
$585 York Cnty. IDR, Exempt
Fac. Hoechst Celanese,
5.70%, 1/1/24.......................... $ 552,895
TOTAL LONG-TERM MUNICIPAL SECURITIES
(COST $9,230,684)................. 9,360,829
SHARES
MUTUAL FUND SHARES -- 3.0%
293,000 Lehman Municipal Money
Market Fund
(COST $293,000)........................ 293,000
TOTAL INVESTMENTS --
(COST $9,523,684).......... 99.7% 9,653,829
OTHER ASSETS AND
LIABILITIES -- NET......... .3 23,802
NET ASSETS --................. 100.0% $9,677,631
</TABLE>
Summary of abbreviations:
AMBAC -- Insured by American Municipal Bond Assurance Corporation
FGIC -- Insured by Financial Guaranty Insurance Co.
FHA -- Insured by Federal Housing Authority
GO -- General Obligation Bond
IDR -- Industrial Development Revenue Bond
MBIA -- Insured by Municipal Bond Investors Assurance
RB -- Revenue Bond
See accompanying notes to financial statements.
52
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996
(Drawing of the state of South Carolina)
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost $9,523,684)................................................................ $9,653,829
Cash............................................................................................................. 760
Interest receivable.............................................................................................. 151,840
Receivable for Fund shares sold.................................................................................. 310
Prepaid expenses................................................................................................. 9,491
Total assets............................................................................................... 9,816,230
LIABILITIES:
Accrued expenses................................................................................................. 120,601
Dividends payable................................................................................................ 13,091
Distribution fee payable......................................................................................... 4,907
Total liabilities.......................................................................................... 138,599
NET ASSETS.......................................................................................................... $9,677,631
NET ASSETS CONSIST OF:
Paid-in capital.................................................................................................. $9,541,880
Undistributed net investment income.............................................................................. 477
Accumulated net realized gain on investment transactions......................................................... 5,129
Net unrealized appreciation of investments....................................................................... 130,145
Net assets................................................................................................. $9,677,631
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($840,823 (division sign) 86,817 shares of beneficial interest outstanding)....................... $ 9.69
Sales charge -- 4.75% of offering price.......................................................................... .48
Maximum offering price..................................................................................... $ 10.17
Class B Shares ($4,282,239 (division sign) 442,011 shares of beneficial interest outstanding).................... $ 9.69
Class Y Shares ($4,554,569 (division sign) 470,121 shares of beneficial interest outstanding).................... $ 9.69
</TABLE>
See accompanying notes to financial statements.
53
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1996
(Drawing of the state of South Carolina)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................................................................ $476,083
EXPENSES:
Advisory fee........................................................................................ $ 40,781
Administrative personnel and service fees........................................................... 4,123
Distribution fee -- Class A Shares.................................................................. 1,917
Distribution fee -- Class B Shares.................................................................. 29,922
Shareholder services fee -- Class B Shares.......................................................... 9,974
Custodian fee....................................................................................... 84,241
Transfer agent fee.................................................................................. 64,328
Professional fees................................................................................... 39,767
Registration and filing fees........................................................................ 32,506
Reports and notices to shareholders................................................................. 19,747
Insurance expense................................................................................... 1,735
Trustees' fees and expenses......................................................................... 516
Miscellaneous....................................................................................... 16,672
346,229
Less: Fee waivers and expense reimbursements........................................................ (254,601)
Net expenses.................................................................................. 91,628
Net investment income.................................................................................. 384,455
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions........................................................ 10,377
Net change in unrealized appreciation of investments................................................ 19,665
Net gain on investments................................................................................ 30,042
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................................... $414,497
</TABLE>
See accompanying notes to financial statements.
54
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state of South Carolina)
<TABLE>
<CAPTION>
EIGHT MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income....................................................................... $ 384,455 $ 128,517
Net realized gain on investment transactions................................................ 10,377 29,060
Net change in unrealized appreciation of investments........................................ 19,665 330,261
Net increase in net assets resulting from operations..................................... 414,497 487,838
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares.............................................................................. (38,206) (17,293)
Class B Shares.............................................................................. (168,950) (94,373)
Class Y Shares.............................................................................. (177,721) (16,851)
Total distributions to shareholders...................................................... (384,877) (128,517)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold................................................................... 4,780,175 2,853,928
Proceeds from reinvestment of distributions................................................. 251,384 83,256
Payment for shares redeemed................................................................. (1,208,640) (332,153)
Net increase resulting from Fund share transactions................................... 3,822,919 2,605,031
Net increase in net assets............................................................ 3,852,539 2,964,352
NET ASSETS:
Beginning of period......................................................................... 5,825,092 2,860,740
End of period (includes undistributed net investment income of $477 and $899,
respectively)............................................................................. $9,677,631 $ 5,825,092
</TABLE>
See accompanying notes to financial statements.
55
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
(Drawing of the state of South Carolina)
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
EIGHT MONTHS JANUARY 3, EIGHT MONTHS
YEAR ENDED ENDED 1994* THROUGH YEAR ENDED ENDED
AUGUST 31, AUGUST 31, DECEMBER 31, AUGUST 31, AUGUST 31,
1996 1995# 1994 1996 1995#
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period......................... $9.59 $8.62 $10.00 $9.59 $8.62
Income (loss) from investment operations:
Net investment income...................................... .49 .34 .46 .41 .29
Net realized and unrealized gain (loss) on investments..... .10 .97 (1.38) .10 .97
Total from investment operations......................... .59 1.31 (.92) .51 1.26
Less distributions to shareholders from net investment
income..................................................... (.49) (.34) (.46) (.41) (.29)
Net asset value, end of period............................... $9.69 $9.59 $8.62 $9.69 $9.59
TOTAL RETURN+................................................ 6.2% 15.4% (9.3%) 5.4% 14.8%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).................... $841 $610 $312 $4,282 $3,542
Ratios to average net assets:
Expenses**................................................. .86% .53%++ .25%++ 1.61% 1.28%++
Net investment income**.................................... 4.98% 5.41%++ 5.57%++ 4.23% 4.66%++
Portfolio turnover rate...................................... 37% 66% 23% 37% 66%
JANUARY 3,
1994* THROUGH
DECEMBER 31,
1994
PER SHARE DATA:
Net asset value, beginning of period......................... $10.00
Income (loss) from investment operations:
Net investment income...................................... .41
Net realized and unrealized gain (loss) on investments..... (1.38)
Total from investment operations......................... (.97)
Less distributions to shareholders from net investment
income..................................................... (.41)
Net asset value, end of period............................... $8.62
TOTAL RETURN+................................................ (9.8%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).................... $2,456
Ratios to average net assets:
Expenses**................................................. .87%++
Net investment income**.................................... 4.88%++
Portfolio turnover rate...................................... 23%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales charge or contingent deferred
sales 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
EIGHT MONTHS JANUARY 3, EIGHT MONTHS
YEAR ENDED ENDED 1994* THROUGH YEAR ENDED ENDED
AUGUST 31, AUGUST 31, DECEMBER 31, AUGUST 31, AUGUST 31,
1996 1995# 1994 1996 1995#
<S> <C> <C> <C> <C> <C>
Expenses.................................................. 4.00% 6.50% 10.71% 4.76% 7.25%
Net investment income (loss).............................. 1.84% (.56%) (4.89%) 1.08% (1.31%)
JANUARY 3,
1994* THROUGH
DECEMBER 31,
1994
Expenses.................................................. 11.33%
Net investment income (loss).............................. (5.58%)
</TABLE>
See accompanying notes to financial statements.
56
<PAGE>
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state of South Carolina)
<TABLE>
<CAPTION>
CLASS Y SHARES
YEAR ENDED EIGHT MONTHS
AUGUST 31, ENDED
1996 AUGUST 31, 1995#
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............................................... $9.59 $8.62
Income (loss) from investment operations:
Net investment income............................................................ .51 .35
Net realized and unrealized gain (loss) on investments........................... .10 .97
Total from investment operations............................................... .61 1.32
Less distributions to shareholders from net investment income...................... (.51) (.35)
Net asset value, end of period..................................................... $9.69 $9.59
TOTAL RETURN+...................................................................... 6.5% 15.5%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).......................................... $4,555 $1,673
Ratios to average net assets:
Expenses**....................................................................... .62% .28%++
Net investment income**.......................................................... 5.22% 5.66%++
Portfolio turnover rate............................................................ 37% 66%
FEBRUARY 28,
1994* THROUGH
DECEMBER 31, 1994
PER SHARE DATA:
Net asset value, beginning of period............................................... $9.74
Income (loss) from investment operations:
Net investment income............................................................ .43
Net realized and unrealized gain (loss) on investments........................... (1.12)
Total from investment operations............................................... (.69)
Less distributions to shareholders from net investment income...................... (.43)
Net asset value, end of period..................................................... $8.62
TOTAL RETURN+...................................................................... (7.1%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).......................................... $92
Ratios to average net assets:
Expenses**....................................................................... .00%++
Net investment income**.......................................................... 5.92%++
Portfolio turnover rate............................................................ 23%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income (loss) to average net assets,
exclusive of any applicable state expense limitations, would have been the
following:
<TABLE>
<CAPTION>
CLASS Y SHARES
YEAR ENDED EIGHT MONTHS
AUGUST 31, ENDED
1996 AUGUST 31, 1995#
<S> <C> <C>
Expenses.............................................................................. 3.70% 6.25%
Net investment income (loss).......................................................... 2.14% (.31%)
FEBRUARY 28,
1994* THROUGH
DECEMBER 31, 1994
Expenses.............................................................................. 10.46%
Net investment income (loss).......................................................... (4.54%)
</TABLE>
See accompanying notes to financial statements.
57
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
(Drawing of the state of Virginia)
RESULTS TO DATE
PERFORMANCE OF $10,000 INVESTED IN THE
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
The graphs below compare a $10,000 investment in the Evergreen Virginia
Municipal Bond Fund (Class A, Class B and Class Y Shares) with a similar
investment in the Lehman Brothers Virginia Municipal Bond Index ("Index").
CLASS A
ONE YEAR TOTAL RETURN = 0.1%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 2.3%
(Class A chart appears here. Plot points are below.)
7/2/93* 8/31/93 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
CLASS B
ONE YEAR TOTAL RETURN = 0.7%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 2.4%
(Class B chart appears here. Plot points are below.)
7/2/93* 8/31/93 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
CLASS Y
ONE YEAR TOTAL RETURN = 5.4%
AVERAGE ANNUAL COMPOUND
RETURN SINCE INCEPTION = 4.8%
(Class Y chart appears here. Plot points are below.)
2/28/94* 8/31/94 8/31/95 8/31/96
(Customer to fill in plot points.)
- - - EVERGREEN VIRGINIA MUNICIPAL BOND FUND
_____ LEHMAN BROTHERS VIRGINIA MUNICIPAL BOND INDEX
*Commencement of class operations.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE RESULTS. MUTUAL FUNDS
ARE NOT OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK AND ARE NOT FEDERALLY
INSURED.
For the purposes of the graphs and the accompanying tables, it has been
assumed that (a) the maximum sales charge of 4.75% was deducted from the initial
$10,000 investment in Class A Shares; (b) the maximum applicable contingent
deferred sales charge was deducted from the value of the investment in Class B
Shares, assuming full redemption on August 31, 1996; (c) all recurring fees
(including investment advisory fees) were deducted; and (d) all dividends and
distributions were reinvested.
The investment adviser is currently waiving a portion of the Fund's
expenses. Had expenses not been waived, returns would have been lower.
The Index is an unmanaged index and includes the reinvestment of income,
but does not reflect the payment of transaction costs and advisory fees
associated with an investment in the Fund.
58
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS
AUGUST 31, 1996
(Drawing of the state of Virginia)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES -- 97.7%
VIRGINIA -- 94.0%
$ 100 Albemarle Cnty. Res. Care
Fac. IDA,
6.45%, 7/1/15....................... $ 97,995
145 Albemarle Cnty. Res. Care
Fac. IDA,
6.625%, 7/1/21...................... 141,840
465 Brunswick Cnty. IDA
5.65%, 7/1/09, (MBIA)............... 466,953
390 Buena Vista,
Wtr. & Swr. Fac. RB
6.25%, 7/15/11...................... 378,230
250 Charlottesville Albemarle,
Arpt. Auth. RB,
6.125%, 12/1/13..................... 242,090
500 Chesapeake Redev. & Hsg.
Auth. Multi-Family Hsg. RB,
7.75%, 6/1/20....................... 498,830
370 Fairfax Cnty. IDA, RB,
Health Care Inova Sys. Proj.,
5.875%, 8/15/16..................... 367,625
250 Fairfax Cnty. Inova Health
Sys. Proj. IDA,
5.25%, 8/15/19...................... 231,175
500 Fairfax Cnty. Redev. & Hsg.
Auth. Mtg. RB,
6.00%, 9/1/16, (FHA)................ 492,565
200 Fairfax Cnty. Redev. & Hsg.
Auth. Multi-Family Hsg. RB,
6.625%, 9/20/20, (GNMA)............. 207,130
700 Fairfax Cnty. Wtr. Auth. RB,
6.00%, 4/1/22....................... 692,734
500 Giles Cnty. IDA, RB,
6.45%, 5/1/26....................... 503,900
500 Hanover Cnty. IDA,
Bon Secours Health Sys. Proj.,
6.00%, 8/15/08, (MBIA).............. 527,520
500 Hanover Cnty, IDA, RB,
Mem. Regl. Med. Center Proj., (Ser.
1995),
6.375%, 8/15/18, (MBIA)............. 534,135
500 Henrico Cnty. IDA, RB,
Solid Waste Browning Ferris Proj.,
5.30%, 12/1/11...................... 494,345
400 Henrico Cnty.
Pub. Fac. Lease IDA,
7.00%, 8/1/13....................... 439,308
350 Isle Wright Cnty.
Solid Waste Disp. Facs. IDA,
6.55%, 4/1/24....................... 362,695
PRINCIPAL
AMOUNT
(000) VALUE
$ 500 King George Cnty. IDA Lease
King George Cnty. School Proj.,
6.40%, 8/1/16....................... $ 485,740
300 Metropolitan Washington D.C.
Arpts. Auth. RB, (Ser. A),
7.60%, 10/1/14...................... 325,494
500 Prince William Cnty. IDA,
6.00%, 2/1/14....................... 496,665
250 Prince William Cnty.
Park Auth. RB,
6.875%, 10/15/16.................... 265,035
300 Prince William Cnty.
6.75%, 10/1/15...................... 310,149
400 Riverside, Regl. Jail
Auth. Fac. RB,
6.00%, 7/1/25, (MBIA)............... 403,768
500 Suffolk Virginia, GO,
5.90%, 6/1/13, (AMBAC).............. 510,925
175 Virginia Beach, Dev.
Auth. Hosp. Fac. RB,
6.00%, 2/15/09, (AMBAC)............. 184,590
100 Virginia Beach, Dev.
Auth. Hosp. Fac. RB,
6.00%, 2/15/12, (AMBAC)............. 104,521
100 Virginia College, Bldg. Auth.
Edl. Facs. RB,
5.75%, 1/1/14....................... 98,057
200 Virginia College, Bldg. Auth.
Edl. Facs. RB,
5.75%, 4/1/14....................... 192,710
100 Virginia St. Hsg. Dev. Auth.
Commonwealth Mtg. RB, (Ser. A),
6.95%, 1/1/10....................... 103,215
100 Virginia St. Hsg. Dev. Auth.
Commonwealth Mtg. RB, (Ser. A),
7.10%, 1/1/17....................... 105,470
300 Virginia St. Hsg. Dev. Auth.
RB, (Ser. D),
6.10%, 1/1/19....................... 299,970
300 Virginia St. Hsg. Dev. Auth.
RB, (Ser. F),
6.25%, 7/1/12....................... 302,877
255 Virginia St. Hsg. Dev. Auth.
RB Multi-Family Hsg. (Ser. K),
5.90%, 5/1/11....................... 254,727
300 Virginia St. Multi-Family
Hsg. RB, (Ser. H),
6.35%, 11/1/11...................... 306,501
</TABLE>
59
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
(Drawing of the state of Virginia)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
LONG-TERM MUNICIPAL SECURITIES -- CONTINUED
VIRGINIA -- CONTINUED
<S> <C> <C>
$ 300 Virginia St. Pub. School
Auth. RB, (Ser. A),
6.20%, 8/1/13....................... $ 312,150
100 Virginia St. Pub. School
Auth. RB, (Ser. B),
6.50%, 8/1/15....................... 105,759
200 Virginia St. Res. Auth. Wtr.
& Swr. Sys. RB
5.25%, 10/1/14...................... 188,622
300 West Point Solid Waste Disp.
IDA, (Ser. B),
6.25%, 3/1/19....................... 298,028
12,334,043
PUERTO RICO -- 3.7%
300 Puerto Rico Commonwealth GO,
6.25%, 7/1/13, (MBIA)............... 322,755
150 Puerto Rico Commonwealth GO,
6.45%, 7/1/17....................... 157,790
480,545
TOTAL LONG-TERM MUNICIPAL SECURITIES
(COST $12,609,510).................. 12,814,588
SHARES VALUE
MUTUAL FUND SHARES -- 4.4%
486,000 Lehman Municipal Money Market
Fund............................... $ 486,000
100,000 Lehman Tax Free Money Market
Fund............................... 100,000
TOTAL MUTUAL FUND SHARES
(COST $586,000).................... 586,000
TOTAL INVESTMENTS
(COST $13,195,510)............. 102.1% 13,400,588
OTHER ASSETS AND
LIABILITIES -- NET............. (2.1) (279,261)
NET ASSETS --.................. 100.0% $13,121,327
</TABLE>
Summary of Abbreviations:
AMBAC -- Insured by American Municipal Bond Assurance Corporation
FHA -- Insured by Federal Housing Authority
GNMA -- Insured by Government National Mortgage
Association
GO -- General Obligations Bond
IDA -- Industrial Development Authority
MBIA -- Insured by Municipal Bond Investors Assurance
RB -- Revenue Bond
See accompanying notes to financial statements.
60
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996
(Drawing of the state of Virginia)
<TABLE>
<S> <C>
ASSETS:
Investments at value (identified cost $13,195,510)............................................................. $13,400,588
Cash........................................................................................................... 553
Interest receivable............................................................................................ 176,701
Receivable for securities sold................................................................................. 149,192
Receivable for Fund shares sold................................................................................ 5,478
Prepaid expenses............................................................................................... 7,291
Total assets............................................................................................. 13,739,803
LIABILITIES:
Payable for securities purchased............................................................................... 448,752
Accrued expenses............................................................................................... 137,942
Dividends payable.............................................................................................. 21,587
Distribution fee payable....................................................................................... 8,482
Payable for Fund shares redeemed............................................................................... 1,713
Total liabilities........................................................................................ 618,476
NET ASSETS........................................................................................................ $13,121,327
NET ASSETS CONSIST OF:
Paid-in capital................................................................................................ $13,290,721
Undistributed net investment income............................................................................ 1,382
Accumulated net realized loss on investment transactions....................................................... (375,854)
Net unrealized appreciation of investments..................................................................... 205,078
Net assets............................................................................................... $13,121,327
CALCULATION OF NET ASSET VALUE AND MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares ($2,892,094 (division sign) 298,718 shares of beneficial interest outstanding).................. $ 9.68
Sales charge -- 4.75% of offering price........................................................................ .48
Maximum offering price................................................................................... $ 10.16
Class B Shares ($5,963,332 (division sign) 615,947 shares of beneficial interest outstanding).................. $ 9.68
Class Y Shares ($4,265,901 (division sign) 440,615 shares of beneficial interest outstanding).................. $ 9.68
</TABLE>
See accompanying notes to financial statements.
61
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1996
(Drawing of the state of Virginia)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................................................................. $592,490
EXPENSES:
Advisory fee......................................................................................... $ 51,952
Administrative personnel and service fees............................................................ 5,136
Distribution fee -- Class A Shares................................................................... 6,048
Distribution fee -- Class B Shares................................................................... 43,430
Shareholder services fee -- Class B Shares........................................................... 14,476
Registration and filing fees......................................................................... 71,759
Transfer agent fee................................................................................... 61,548
Custodian fee........................................................................................ 61,305
Professional fees.................................................................................... 35,558
Reports and notices to shareholders.................................................................. 24,425
Trustees' fees and expenses.......................................................................... 802
Insurance expense.................................................................................... 762
Miscellaneous........................................................................................ 18,628
395,829
Less: Fee waivers and expense reimbursements......................................................... (261,619)
Net expenses................................................................................... 134,210
Net investment income................................................................................... 458,280
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investment transactions......................................................... (98,854)
Net change in unrealized appreciation of investments................................................. 47,564
Net loss on investments................................................................................. (51,290)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................................... $406,990
</TABLE>
See accompanying notes to financial statements.
62
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
(Drawing of the state of Virginia)
<TABLE>
<CAPTION>
EIGHT MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income......................................................................... $ 458,280 $ 218,052
Net realized loss on investment transactions.................................................. (98,854) (13,951)
Net change in unrealized appreciation of investments.......................................... 47,564 567,181
Net increase in net assets resulting from operations....................................... 406,990 771,282
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares................................................................................ (117,625) (64,808)
Class B Shares................................................................................ (238,415) (133,946)
Class Y Shares................................................................................ (105,354) (19,298)
Total distributions to shareholders........................................................ (461,394) (218,052)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold..................................................................... 6,625,000 2,276,843
Proceeds from reinvestment of distributions................................................... 309,870 172,095
Payment for shares redeemed................................................................... (1,791,146) (737,002)
Net increase resulting from Fund share transactions..................................... 5,143,724 1,711,936
Net increase in net assets.............................................................. 5,089,320 2,265,166
NET ASSETS:
Beginning of period........................................................................... 8,032,007 5,766,841
End of period (includes undistributed net investment income of $1,382 and $4,496,
respectively................................................................................ $13,121,327 $8,032,007
</TABLE>
See accompanying notes to financial statements.
63
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
(Drawing of the state of Virginia)
<TABLE>
<CAPTION>
CLASS A SHARES
EIGHT MONTHS
YEAR ENDED ENDED YEAR ENDED
AUGUST 31, AUGUST 31, DECEMBER 31,
1996 1995# 1994
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period.............................................. $9.67 $8.85 $10.19
Income (loss) from investment operations:
Net investment income........................................................... .48 .33 .47
Net realized and unrealized gain (loss) on investments.......................... .01 .82 (1.34)
Total from investment operations.............................................. .49 1.15 (.87)
Less distributions to shareholders from net investment income..................... (.48) (.33) (.47)
Net asset value, end of period.................................................... $9.68 $9.67 $8.85
TOTAL RETURN+..................................................................... 5.1% 13.1% (8.6%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)......................................... $2,892 $1,983 $1,606
Ratios to average net assets:
Expenses**...................................................................... .93% .72%++ .53%
Net investment income**......................................................... 4.83% 5.17%++ 5.11%
Portfolio turnover rate........................................................... 68% 87% 59%
1993*
THROUGH
DECEMBER 31,
1993
PER SHARE DATA:
Net asset value, beginning of period.............................................. $10.00
Income (loss) from investment operations:
Net investment income........................................................... .20
Net realized and unrealized gain (loss) on investments.......................... .19
Total from investment operations.............................................. .39
Less distributions to shareholders from net investment income..................... (.20)
Net asset value, end of period.................................................... $10.19
TOTAL RETURN+..................................................................... 3.9%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)......................................... $1,306
Ratios to average net assets:
Expenses**...................................................................... .25%++
Net investment income**......................................................... 4.64%++
Portfolio turnover rate........................................................... 0%
<CAPTION>
JULY 2,
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Initial sales charge 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
JULY 2,
EIGHT MONTHS 1993*
YEAR ENDED ENDED YEAR ENDED THROUGH
AUGUST 31, AUGUST 31, DECEMBER 31, DECEMBER 31,
1996 1995# 1994 1993
<S> <C> <C> <C> <C>
Expenses................................................................ 3.47% 3.83% 5.14% 7.75%
Net investment income (loss)............................................ 2.29% 2.06% .50% (2.86%)
</TABLE>
See accompanying notes to financial statements.
64
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state of Virginia)
<TABLE>
<CAPTION>
CLASS B SHARES
EIGHT MONTHS YEAR
YEAR ENDED ENDED ENDED
AUGUST 31, AUGUST 31, DECEMBER 31,
1996 1995# 1994
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period.............................................. $9.67 $8.85 $10.19
Income (loss) from investment operations:
Net investment income........................................................... .41 .28 .42
Net realized and unrealized gain (loss) on investments.......................... .01 .82 (1.34)
Total from investment operations.............................................. .42 1.10 (.92)
Less distributions to shareholders from net investment income..................... (.41) (.28) (.42)
Net asset value, end of period.................................................... $9.68 $9.67 $8.85
TOTAL RETURN+..................................................................... 4.3% 12.5% (9.1%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)......................................... $5,963 $5,083 $3,817
Ratios to average net assets:
Expenses**...................................................................... 1.68% 1.47%++ 1.12%
Net investment income**......................................................... 4.09% 4.42%++ 4.54%
Portfolio turnover rate........................................................... 68% 87% 59%
1993*
THROUGH
DECEMBER 31,
1993
PER SHARE DATA:
Net asset value, beginning of period.............................................. $10.00
Income (loss) from investment operations:
Net investment income........................................................... .17
Net realized and unrealized gain (loss) on investments.......................... .19
Total from investment operations.............................................. .36
Less distributions to shareholders from net investment income..................... (.17)
Net asset value, end of period.................................................... $10.19
TOTAL RETURN+..................................................................... 3.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)......................................... $2,235
Ratios to average net assets:
Expenses**...................................................................... .75%++
Net investment income**......................................................... 4.25%++
Portfolio turnover rate........................................................... 0%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized. Contingent deferred sales 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 B SHARES
JULY 2,
EIGHT MONTHS YEAR 1993*
YEAR ENDED ENDED ENDED THROUGH
AUGUST 31, AUGUST 31, DECEMBER 31, DECEMBER 31,
1996 1995# 1994 1993
<S> <C> <C> <C> <C>
Expenses................................................................ 4.23% 4.58% 5.73% 8.25%
Net investment income (loss)............................................ 1.54% 1.31% (.07%) (3.25%)
</TABLE>
See accompanying notes to financial statements.
65
<PAGE>
EVERGREEN VIRGINIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- (CONTINUED)
(Drawing of the state of Virginia)
<TABLE>
<CAPTION>
CLASS Y SHARES
EIGHT MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31,
1996 1995#
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period........................................................... $9.67 $8.85
Income (loss) from investment operations:
Net investment income........................................................................ .50 .34
Net realized and unrealized gain (loss) on investments....................................... .01 .82
Total from investment operations........................................................... .51 1.16
Less distributions to shareholders from net investment income.................................. (.50) (.34)
Net asset value, end of period................................................................. $9.68 $9.67
TOTAL RETURN+.................................................................................. 5.4% 13.3%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)...................................................... $4,266 $965
Ratios to average net assets:
Expenses**................................................................................... .70% .47%++
Net investment income**...................................................................... 5.05% 5.42%++
Portfolio turnover rate........................................................................ 68% 87%
FEBRUARY 28,
1994*
THROUGH
DECEMBER 31,
1994
PER SHARE DATA:
Net asset value, beginning of period........................................................... $9.83
Income (loss) from investment operations:
Net investment income........................................................................ .41
Net realized and unrealized gain (loss) on investments....................................... (.98)
Total from investment operations........................................................... (.57)
Less distributions to shareholders from net investment income.................................. (.41)
Net asset value, end of period................................................................. $8.85
TOTAL RETURN+.................................................................................. (5.8%)
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)...................................................... $344
Ratios to average net assets:
Expenses**................................................................................... .28%++
Net investment income**...................................................................... 5.54%++
Portfolio turnover rate........................................................................ 59%
<CAPTION>
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets, exclusive
of any applicable state expense limitations, would have been the following:
<TABLE>
<CAPTION>
CLASS Y SHARES
FEBRUARY 28,
EIGHT MONTHS 1994*
YEAR ENDED ENDED THROUGH
AUGUST 31, AUGUST 31, DECEMBER 31,
1996 1995# 1994
<S> <C> <C> <C>
Expenses............................................................................ 3.24% 3.58% 4.89%
Net investment income............................................................... 2.51% 2.31% .93%
</TABLE>
See accompanying notes to financial statements.
66
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- ORGANIZATION AND NATURE OF OPERATIONS
The Evergreen State Tax-Free Funds (the "Funds") are separate series of
Evergreen Investment Trust except for Evergreen Florida High Income Municipal
Bond Fund, which is a series of Evergreen Municipal Trust, both open-end
management companies registered under the Investment Company Act of 1940, as
amended (the "Act"). The Evergreen State Tax-Free Funds included herein consist
of Evergreen Florida Municipal Bond Fund ("Florida"), Evergreen Florida High
Income Municipal Bond Fund ("Florida High Income"), Evergreen Georgia Municipal
Bond Fund ("Georgia"), Evergreen New Jersey Tax Free Income Fund ("New Jersey"),
Evergreen North Carolina Municipal Bond Fund ("North Carolina"), Evergreen South
Carolina Municipal Bond Fund ("South Carolina") and Evergreen Virginia Municipal
Bond Fund ("Virginia"), known collectively as the Funds.
The investment objective of Florida, Georgia, New Jersey, North Carolina,
South Carolina and Virginia is to seek current income exempt from federal income
tax and where applicable, state income taxes, consistent with the preservation
of capital. Florida High Income seeks to provide a high level of current income
which is exempt from federal income tax.
Effective January 1, 1996, First Union Corporation, the corporate parent of
First Union National Bank of North Carolina ("First Union"), the Funds' current
investment adviser, consummated a merger (the "Bank Merger") with First Fidelity
Bancorporation, the corporate parent of First Fidelity Bank, N.A. ("FFB"), New
Jersey's prior investment adviser. Effective January 19, 1996, each of the funds
in FFB Funds Trust, an open-end management company registered under the Act,
including the FFB New Jersey Tax-Free Income Fund (the "FFB Fund"), joined the
Evergreen Funds (the "Fund Combinations"). The FFB Fund was renamed Evergreen
New Jersey Tax Free Income Fund. Shares of the FFB Fund were redesignated the
New Jersey's Class A Shares. New Jersey subsequently changed its fiscal year end
to August 31.
ACQUISITION INFORMATION -- Effective June 30, 1995, Florida acquired
substantially all of the net assets of ABT Florida Tax-Free Fund ("ABT Florida's
net assets") through the issuance of 15,518,259 of its Class A shares in
exchange for ABT Florida's net assets valued at $150,061,560. The aggregate net
assets immediately after the acquisition was $188,106,883. The acquired net
assets, in this non-taxable transaction, consisted primarily of portfolio
securities with unrealized appreciation of $8,245,724. ABT Florida Tax-Free
Fund's fiscal year ended April 30. Since both Florida and ABT Florida Tax-Free
Fund were similar funds, and ABT Florida Tax-Free Fund contributed the majority
of the net assets and shareholders, its basis of accounting for assets and
liabilities and its operating results for prior periods have been carried
forward as the accounting survivor.
Effective June 30, 1995, Florida High Income, a new series of the Evergreen
Municipal Trust formed for the purpose of acquiring substantially all of ABT
Florida High Income Municipal Bond Fund's net assets ("ABT's net assets"),
issued 5,728,125 of its Class A shares at $10.30 per share in exchange for ABT's
net assets valued at $59,053,062. The acquired net assets, in this nontaxable
transaction, primarily consisted of portfolio securities with an identified cost
basis of $58,111,824 and unrealized appreciation of $367,404. ABT Florida High
Income Municipal Bond Fund's fiscal year ended April 30. Because ABT Florida
High Income Municipal Bond Fund contributed substantially all of Florida High
Income's net assets and shareholders, its basis of accounting for assets and
liabilities and its operating results for prior periods are carried forward as
the accounting survivor.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. These policies are
in conformity with generally accepted accounting principles.
SECURITY VALUATIONS -- Municipal bonds are valued by an independent pricing
service taking into consideration yield, liquidity, risk, credit quality,
coupon, maturity, type of issue and any other factors or market data it deems
relevant in determining valuations for normal institutional size trading units
of debt securities which it believes to reflect the current
67
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES -- continued
value of securities. The independent pricing service does not rely exclusively
on quoted prices. Short-term securities purchased with remaining maturities of
sixty days or less are stated at amortized cost which approximates market value.
SECURITY TRANSACTIONS -- Security transactions are accounted for on the
date purchased or sold. Net realized gains or losses are determined on the
identified cost basis.
INVESTMENT INCOME AND EXPENSES -- Interest income and expenses are accrued
daily. Premiums and discounts paid on securities are amortized or accreted into
interest income.
WHEN ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Funds record
when-issued or delayed delivery transactions on the trade date and maintain
security positions such that sufficient liquid assets will be available to make
payment for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning interest on
the settlement date.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income
are declared daily and paid monthly. Distributions from net realized capital
gains on investments, if any, will be distributed at least annually. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations which may differ from the amounts available for
distribution under generally accepted accounting principles. To the extent these
differences are permanent in nature, such amounts are reclassified within the
components of net assets.
INCOME TAXES -- It is each Fund's policy to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable and other net income to its
shareholders. Accordingly, no provisions for Federal income or excise taxes are
necessary. To the extent that realized net capital gains can be offset by
capital loss carryforwards, it is each Fund's policy not to distribute such
gains.
At August 31, 1996, the Funds had capital loss carryforwards as follows:
<TABLE>
<CAPTION>
EXPIRATION
2002 2003 2004
<S> <C> <C> <C>
Florida High Income $ 723,137 $634,610 $64,454
Georgia 683,766 -- --
New Jersey 266,381 134,802 --
North Carolina 3,812,121 -- --
Virginia 258,553 -- 30,043
</TABLE>
Capital losses incurred after October 31, within each Fund's fiscal year,
are deemed to arise on the first business day of the following fiscal year. The
Fund's incurred and have selected to defer the following capital losses at
August 31, 1996:
<TABLE>
<S> <C>
Florida High Income $ 2,682
South Carolina 7,144
Virginia 87,258
</TABLE>
ALLOCATION OF EXPENSES -- Expenses specifically identifiable to a class of
shares or a specific fund are charged to that class or fund. Expenses common to
a Trust as a whole are allocated to the funds in that Trust. Net investment
income (other than class specific expenses) and realized and unrealized gains
and losses are allocated daily to each class of shares based upon the relative
proportion of net assets of each class.
DEFERRED ORGANIZATION EXPENSES -- The expenses of Florida High Income
incurred in connection with its organization are being deferred and amortized
over a period of benefit not to exceed 60 months from June 30, 1995.
68
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES -- continued
USE OF ESTIMATES -- The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures.
Actual results could differ from those estimates.
NOTE 3 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
First Union is each Fund's investment adviser and accordingly is entitled
to an annual fee as a percentage of each Fund's average daily net assets.
Florida's, Georgia's, North Carolina's, South Carolina's and Virginia's
investment advisory fee is .50 of 1% of average daily net assets. Florida High
Income's annual fee is .60 of 1% of average daily net assets. New Jersey's
annual fee is based on the following schedule:
<TABLE>
<CAPTION>
ADVISORY FEE AVERAGE DAILY NET ASSETS
<S> <C>
0.500% on the first $500 million
0.450% on the next $500 million
0.400% on the next $500 million
0.350% in excess of $1.5 billion
</TABLE>
First Union voluntarily waived the advisory fee and reimbursed expenses for
the period end August 31, 1996 as described below:
<TABLE>
<CAPTION>
ADVISORY FEE EXPENSE
WAIVERS REIMBURSEMENTS
<S> <C> <C>
Florida High Income $238,564 $ 0
Florida 321,496 152,334
Georgia 63,102 176,832
New Jersey 107,212 47,673
North Carolina 164,001 0
South Carolina 40,781 213,820
Virginia 51,952 209,667
</TABLE>
First Union may discontinue these voluntary waivers and reimbursements at
any time.
ADMINISTRATION AGREEMENT -- Evergreen Asset Management Corp. ("Evergreen
Asset"), a wholly owned subsidiary of First Union, is the Funds' Administrator
and Furman Selz LLC ("Furman Selz") is the sub-administrator. Officers of Furman
Selz are officers of the Funds. Evergreen Asset's and Furman Selz' fees are
based on the average daily net assets of all the funds administered by Evergreen
Asset for which First Union or Evergreen Asset is also investment adviser. These
fees are calculated at the following annual rates:
<TABLE>
<CAPTION>
ADMINISTRATION FEE AVERAGE DAILY NET ASSETS
<S> <C>
0.050% on the first $7 billion
0.035% on the next $3 billion
0.030% on the next $5 billion
0.020% on the next $10 billion
0.015% on the next $5 billion
0.010% in excess of $30 billion
</TABLE>
<TABLE>
<CAPTION>
SUB-ADMINISTRATION FEE AVERAGE DAILY NET ASSETS
<S> <C>
0.0100% on the first $7 billion
0.0075% on the next $3 billion
0.0050% on the next $15 billion
0.0040% in excess of $25 billion
</TABLE>
69
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 3 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH
AFFILIATES -- continued
At August 31, 1996, assets for which Evergreen Asset was the administrator
for which either Evergreen Asset or First Union was investment adviser totaled
approximately $15.7 billion.
For the Funds listed below, Evergreen Asset waived the following amounts of
its administration fee for the period ended August 31, 1996:
<TABLE>
<S> <C>
Georgia $3,139
New Jersey 9,181
South Carolina 3,441
Virginia 4,333
</TABLE>
PLANS OF DISTRIBUTION -- The Funds have adopted for their Class A shares
and Class B Shares, Distribution Plans (the "Plans") pursuant to Rule 12b-1
under the Act. Under the terms of the Plans, the Funds may incur
distribution-related and shareholder servicing expenses which may not exceed an
annual fee of .75 of 1% for Class A and Class B Shares. For each of the Funds
except Florida and New Jersey, the payments for Class A were voluntarily limited
to an annual fee of .25 of 1% of average daily net assets. For the period ended
August 31, 1996, Rule 12b-1 fees, net of reimbursement, charged to Florida and
New Jersey were approximately an annual fee of .07 and .02 of 1%, respectively,
of average daily net assets. The Funds have entered into distribution agreements
with Evergreen Funds Distributor ("EFD"), a subsidiary of Furman Selz, whereby
they will compensate EFD for its services at a rate which may not exceed an
annual fee of .25 of 1% of Class A average daily net assets and an annual fee of
.75 of 1% of Class B average daily net assets.
The Funds have entered into a Shareholder Services Agreement with First
Union Brokerage Services ("FUBS"), an affiliate of First Union, whereby they
will compensate FUBS up to an annual fee of .25 of 1% for certain services
provided to shareholders and/or maintenance of shareholder accounts relating to
each of the Fund's Class B Shares.
ORGANIZATIONAL EXPENSES -- Organizational expenses of Florida, Georgia,
North Carolina, South Carolina and Virginia were initially borne by the Funds'
prior administrator. These Funds agreed to reimburse such expenses during the
five-year period following each Funds' commencement of operations. As a result
of a change in the administration agreement, First Union purchased the remaining
unreimbursed organizational expenses from the prior administrator. As of, and
for the year end August 31, 1996, the Funds paid and have a remaining liability
to First Union as follows:
<TABLE>
<CAPTION>
REMAINING
PAYMENTS LIABILITY
<S> <C> <C>
Florida $ 4,754 $21,394
Georgia 4,291 19,311
North Carolina 16,992 26,702
South Carolina 11,425 57,124
Virginia 4,101 18,455
</TABLE>
SALES CHARGES -- EFD has advised the Funds that it has retained the
following amounts from front-end sales charges resulting from sales of Class A
Shares during the period ended August 31, 1996:
<TABLE>
<CAPTION>
Florida High Income $29,467
<S> <C>
Florida 5,996
Georgia 875
New Jersey 2,316
North Carolina 154
South Carolina 2,228
Virginia 2,033
</TABLE>
70
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 4 -- SHARES OF BENEFICIAL INTEREST
Each of the Funds has an unlimited number of $0.0001 par shares authorized.
Each of the Funds' shares are divided into classes which are designated Class A,
Class B and Class Y Shares. Class Y Shares are available only to investment
advisory clients of First Union and its affiliates, certain institutional
investors or Class Y shareholders of record of certain other funds managed by
First Union and its affiliates as of December 30, 1994. The classes have
identical voting, dividend, liquidation and other rights, except that Class A
and Class B Shares bear distribution expenses (see Note 3) and have exclusive
voting rights with respect to their distribution plans.
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED FOUR MONTHS ENDED
AUGUST 31, 1996 AUGUST 31, 1995
SHARES AMOUNT SHARES DOLLARS
<S> <C> <C> <C> <C>
FLORIDA HIGH INCOME
CLASS A
Shares sold................................................ 3,124,792 $ 32,820,683 730,828 $ 7,497,799
Shares issued on reinvestment of distributions............. 141,897 1,492,720 29,262 301,952
Shares redeemed............................................ (1,673,161) (17,673,622) (1,434,175) (14,852,986)
Net increase (decrease).................................... 1,593,528 16,639,781 (674,085) (7,053,235)
CLASS B*
Shares sold................................................ 1,606,756 16,929,901 301,146 3,102,089
Shares issued on reinvestment of distributions............. 29,466 309,488 505 5,248
Shares redeemed............................................ (93,856) (985,765) -- --
Net increase............................................... 1,542,366 16,253,624 301,651 3,107,337
CLASS Y**
Shares sold................................................ 203,571 2,137,099 10 101
Shares issued on reinvestment of distributions............. 1,303 13,721 -- --
Shares redeemed............................................ (15,879) (167,279) -- --
Net increase............................................... 188,995 1,983,541 10 101
Total net increase (decrease) resulting from Fund share
transactions............................................. 3,324,889 $ 34,876,946 (372,424) ($ 3,945,797)
</TABLE>
*For Class B shares, the Fund share transaction activity is for the period July
10, 1995 (commencement of operations) through August 31, 1995.
**For Class Y shares, the Fund share transaction activity is for the period
September 20, 1995 (commencement of operations) through August 31, 1996. For
the four months ended August 31, 1995, the Fund share transaction activity
reflects the initial purchase of 10 shares.
71
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 4 -- SHARES OF BENEFICIAL INTEREST -- continued
<TABLE>
<CAPTION>
YEAR ENDED FOUR MONTHS ENDED
AUGUST 31, 1996 AUGUST 31, 1995*
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
FLORIDA
CLASS A
Shares sold....................................................... 647,176 $ 6,349,216 148,921 $ 1,551,451
Shares issued in acquisition of First Union Florida Municipal Bond
Portfolio....................................................... -- -- 876,413 8,475,749
Shares issued on reinvestment of distributions.................... 198,575 1,954,093 136,011 1,447,315
Shares redeemed................................................... (2,919,201) (28,758,982) (4,679,881) (45,809,078)
Net decrease...................................................... (2,073,450) (20,455,673) (3,518,536) (34,334,563)
CLASS B
Shares sold....................................................... 720,789 7,109,005 179,340 1,737,203
Shares issued in acquisition of First Union Florida Municipal Bond
Portfolio....................................................... -- -- 2,722,202 26,328,175
Shares issued on reinvestment of distributions.................... 67,958 668,617 15,662 151,941
Shares redeemed................................................... (621,849) (6,110,433) (109,102) (1,054,568)
Net increase...................................................... 166,898 1,667,189 2,808,102 27,162,751
CLASS Y
Shares sold....................................................... 1,061,203 10,399,454 97,604 938,937
Shares issued in acquisition of First Union Florida Municipal Bond
Portfolio....................................................... -- -- 335,151 3,241,399
Shares issued on reinvestment of distributions.................... 5,711 56,106 591 5,727
Shares redeemed................................................... (172,594) (1,701,590) (63,509) (610,195)
Net increase...................................................... 894,320 8,753,970 369,837 3,575,868
Total net decrease resulting from Fund share transactions......... (1,012,232) ($10,034,514) (340,597) ($ 3,595,944)
</TABLE>
*For Class B and Y shares, the Fund share transaction activity is for the period
June 30, 1995 (commencement of class operations) through August 31, 1995.
<TABLE>
<CAPTION>
YEAR ENDED EIGHT MONTHS ENDED
AUGUST 31, 1996 AUGUST 31, 1995
SHARES AMOUNT SHARES DOLLARS
<S> <C> <C> <C> <C>
GEORGIA
CLASS A
Shares sold.......................................................... 37,924 $ 365,163 76,707 $ 721,680
Shares issued on reinvestment of distributions....................... 7,779 75,126 4,524 42,316
Shares redeemed...................................................... (63,160) (605,087) (18,364) (172,931)
Net increase (decrease).............................................. (17,457) (164,798) 62,867 591,065
CLASS B
Shares sold.......................................................... 268,620 2,600,226 128,136 1,196,824
Shares issued on reinvestment of distributions....................... 26,313 253,826 17,586 164,250
Shares redeemed...................................................... (122,257) (1,183,493) (140,930) (1,336,278)
Net increase......................................................... 172,676 1,670,559 4,792 24,796
CLASS Y
Shares sold.......................................................... 280,783 2,686,240 108,389 1,023,100
Shares issued on reinvestment of distributions....................... 3,963 38,022 647 6,066
Shares redeemed...................................................... (256,913) (2,444,107) (244) (2,297)
Net increase......................................................... 27,833 280,155 108,792 1,026,869
Total net increase resulting from Fund share transactions............ 183,052 $ 1,785,916 176,451 $ 1,642,730
</TABLE>
72
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 4 -- SHARES OF BENEFICIAL INTEREST -- continued
<TABLE>
<CAPTION>
SIX-MONTHS ENDED YEAR ENDED
AUGUST 31, 1996 FEBRUARY 29, 1996*
SHARES AMOUNT SHARES DOLLARS
<S> <C> <C> <C> <C>
NEW JERSEY
CLASS A
Shares sold............................................................ 124,249 $ 1,339,667 1,008,145 $ 10,858,775
Shares issued on reinvestment of distributions......................... 42,586 457,685 88,801 958,593
Shares redeemed........................................................ (949,514) (10,244,991) (614,448) (6,620,815)
Net increase (decrease)................................................ (782,679) (8,447,639) 482,498 5,196,553
CLASS B
Shares sold............................................................ 234,035 2,509,436 16,868 187,450
Shares issued on reinvestment of distributions......................... 2,234 24,017 33 364
Shares redeemed........................................................ (1,239) (13,260) -- --
Net increase........................................................... 235,030 2,520,193 16,901 187,814
CLASS Y
Shares sold............................................................ 864,470 9,318,727 1,664 18,542
Shares issued on reinvestment of distributions......................... 3,838 41,210 5 56
Shares redeemed........................................................ (26,045) (280,780) -- --
Net increase........................................................... 842,263 9,079,157 1,669 18,598
Total net increase resulting from Fund share transactions.............. 294,614 $ 3,151,711 501,068 $ 5,402,965
</TABLE>
*For Class B shares, the Fund share transaction is for the period January 30,
1996 (commencement of operations) through February 29, 1996. For Class Y
shares, the Fund share transaction is for the period February 8, 1996
(commencement of operations) through February 29, 1996.
<TABLE>
<CAPTION>
YEAR ENDED EIGHT MONTHS ENDED
AUGUST 31, 1996 AUGUST 31, 1995
SHARES AMOUNT SHARES DOLLARS
<S> <C> <C> <C> <C>
NORTH CAROLINA
CLASS A
Shares sold............................................................ 118,007 $ 1,198,058 125,332 $ 1,232,452
Shares issued on reinvestment of distributions......................... 27,147 275,346 19,270 189,699
Shares redeemed........................................................ (176,511) (1,780,168) (183,513) (1,800,044)
Net increase (decrease)................................................ (31,357) (306,764) (38,911) (377,893)
CLASS B
Shares sold............................................................ 635,229 6,447,862 521,981 5,146,189
Shares issued on reinvestment of distributions......................... 144,603 1,466,473 101,358 997,747
Shares redeemed........................................................ (759,219) (7,700,019) (565,861) (5,555,413)
Net increase........................................................... 20,613 214,316 57,478 588,523
CLASS Y
Shares sold............................................................ 327,111 3,318,310 45,992 453,471
Shares issued on reinvestment of distributions......................... 1,016 10,257 448 4,415
Shares redeemed........................................................ (51,457) (522,912) (15,523) (152,131)
Net increase........................................................... 276,670 2,805,655 30,917 305,755
Total net increase resulting from Fund share transactions.............. 265,926 $ 2,713,207 49,484 $ 516,385
</TABLE>
73
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 4 -- SHARES OF BENEFICIAL INTEREST -- continued
<TABLE>
<CAPTION>
YEAR ENDED EIGHT MONTHS ENDED
AUGUST 31, 1996 AUGUST 31, 1995
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
SOUTH CAROLINA
CLASS A
Shares sold............................................................. 31,170 $ 305,932 28,494 $ 267,216
Shares issued on reinvestment of distributions.......................... 1,829 17,842 754 7,119
Shares redeemed......................................................... (9,800) (95,582) (1,851) (17,235)
Net increase............................................................ 23,199 228,192 27,397 257,100
CLASS B
Shares sold............................................................. 109,335 1,062,828 100,143 941,168
Shares issued on reinvestment of distributions.......................... 12,969 126,461 7,356 69,043
Shares redeemed......................................................... (49,850) (485,446) (22,831) (214,174)
Net increase............................................................ 72,454 703,843 84,668 796,037
CLASS Y
Shares sold............................................................. 349,743 3,411,415 173,778 1,645,544
Shares issued on reinvestment of distributions.......................... 10,998 107,081 745 7,094
Shares redeemed......................................................... (65,167) (627,612) (10,674) (100,744)
Net increase............................................................ 295,574 2,890,884 163,849 1,551,894
Total net increase resulting from Fund share transactions............... 391,227 $3,822,919 275,914 $2,605,031
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED EIGHT MONTHS ENDED
AUGUST 31, 1996 AUGUST 31, 1995
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
VIRGINIA
CLASS A
Shares sold............................................................. 105,025 $1,032,730 48,742 $ 465,071
Shares issued on reinvestment of distributions.......................... 10,186 99,877 5,890 56,155
Shares redeemed......................................................... (21,674) (211,176) (30,945) (295,864)
Net increase............................................................ 93,537 921,431 23,687 225,362
CLASS B
Shares sold............................................................. 145,062 1,427,003 105,642 1,013,607
Shares issued on reinvestment of distributions.......................... 19,108 187,592 11,096 105,855
Shares redeemed......................................................... (74,064) (721,093) (22,448) (212,617)
Net increase............................................................ 90,106 893,502 94,290 906,845
CLASS Y
Shares sold............................................................. 425,577 4,165,267 83,741 798,165
Shares issued on reinvestment of distributions.......................... 2,286 22,401 1,057 10,084
Shares redeemed......................................................... (87,094) (858,877) (23,858) (228,520)
Net increase............................................................ 340,769 3,328,791 60,940 579,729
Total net increase resulting from Fund share transactions............... 524,412 $5,143,724 178,917 $1,711,936
</TABLE>
74
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 5 -- INVESTMENT TRANSACTIONS
The cost of purchases and proceeds from sales of investments, excluding
short-term securities for the period ended August 31, 1996 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
<S> <C> <C>
Florida High Income...................................... $67,704,133 $32,652,951
Florida.................................................. 46,368,105 57,651,332
Georgia.................................................. 4,459,364 2,618,439
New Jersey............................................... 3,582,124 15,000
North Carolina........................................... 53,236,380 51,769,071
South Carolina........................................... 6,660,242 2,935,667
Virginia................................................. 11,224,250 6,105,707
</TABLE>
On August 31, 1996, the aggregate cost of investments for federal tax
purposes was the same as for financial reporting purposes. The composition of
unrealized appreciation and depreciation of investment securities was as
follows:
<TABLE>
<CAPTION>
APPRECIATION DEPRECIATION NET
<S> <C> <C> <C>
Florida High Income................. $1,468,023 $504,533 $ 963,490
Florida............................. 7,337,598 481,845 6,855,753
Georgia............................. 481,737 4,566 477,171
New Jersey.......................... 1,403,155 361,061 1,042,094
North Carolina...................... 1,683,434 160,622 1,522,812
South Carolina...................... 185,255 55,110 130,145
Virginia............................ 236,589 31,511 205,078
</TABLE>
NOTE 6 -- CONCENTRATION OF CREDIT RISK
Since the Funds invest a substantial portion of their assets in issuers
located in a single state, they may be more affected by economic and political
developments in a specific state or region than would be a comparable general
tax-exempt mutual fund. Certain debt obligations held by each of the Funds are
entitled to the benefit of insurance, standby letters of credit or other
guarantees of banks or other financial institutions.
NOTE 7 -- FINANCING AGREEMENT
Effective July 3, 1996, a financing agreement was put in place with all of
the Evergreen Funds and the custodian, State Street Bank and Trust Company (the
"Bank"). Under the agreement, the Bank is providing an unsecured line of credit
facility, in the aggregate amount of $100 million ($50 million committed and $50
million uncommitted), to be accessed by the Funds for temporary or emergency
purposes only and is subject to each participating Fund's borrowing
restrictions. Borrowings under this facility bear interest at .75% per annum
above the Bank's cost of funds as set periodically by the Bank. A commitment fee
of .10% per annum will be incurred on the unused portion of the committed
facility which will be allocated to all participating funds. During the year
ended August 31, 1996, the Funds had no borrowings outstanding.
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REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES AND SHAREHOLDERS OF
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
In our opinion, the accompanying Statement of Assets and Liabilities,
including the Statement of Investments, and the related Statements of Operations
and of Changes in Net Assets and the Financial Highlights present fairly, in all
material respects, the financial position of Evergreen Florida High Income
Municipal Bond Fund (the "Fund"), one of the Evergreen Municipal Trust
Portfolios, at August 31, 1996, the results of its operations for the year
ended, and the changes in its net assets and the financial highlights for the
year then ended and for the four month period ended August 31, 1995, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at August 31, 1996 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above. The financial highlights for each of the two years
in the period ended April 30, 1995 and the financial highlights for the period
June 17, 1992 (commencement of operations) through April 30, 1993 were audited
by other independent accountants, whose opinion thereon, dated June 2, 1995 was
unqualified.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
October 18, 1996
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INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND SHAREHOLDERS 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
We have audited the accompanying statements of assets and liabilities,
including the statements of investments, for the Evergreen State Tax-Free Funds
listed below, as of August 31, 1996 and the related statements of operations,
the changes in net assets, and the financial highlights for each of the periods
listed below:
EVERGREEN FLORIDA MUNICIPAL BOND FUND -- statement of operations for the
year ended August 31, 1996, statements of changes in net assets and the
financial highlights for the year ended August 31, 1996 and the four month
period ended August 31, 1995. The financial highlights for each of the
years or periods in the three-year period ended April 30, 1995 were audited
by other auditors, whose report thereon, dated June 2, 1995 was
unqualified;
EVERGREEN GEORGIA MUNICIPAL BOND FUND -- statement of operations for the
year ended August 31, 1996, statements of changes in net assets for the
year ended August 31, 1996 and the eight-month period ended August 31, 1995
and the financial highlights for each of the years or periods from July 2,
1993 (commencement of operations) through August 31, 1996;
EVERGREEN NEW JERSEY TAX FREE INCOME FUND -- statement of operations for
the six-month period ended August 31, 1996, statements of changes in net
assets for the six-month period ended August 31, 1996 and the year ended
February 29, 1996, and the financial highlights for each of the years or
periods from March 1, 1993 through August 31, 1996. The financial
highlights for the year ended February 28, 1993 were audited by other
auditors whose reports expressed unqualified opinions on those financial
highlights;
EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND -- statement of operations for
the year ended August 31, 1996, statements of changes in net assets for the
year ended August 31, 1996 and the eight-month period ended August 31, 1995
and the financial highlights for each of the years or periods from January
11, 1993 (commencement of operations) through August 31, 1996;
EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND -- statement of operations for
the year ended August 31, 1996, statements of changes in net assets for the
year ended August 31, 1996 and the eight-month period ended August 31, 1995
and the financial highlights for each of the years or periods from January
3, 1994 (commencement of operations) through August 31, 1996;
EVERGREEN VIRGINIA MUNICIPAL BOND FUND -- statement of operations for the
year ended August 31, 1996, statements of changes in net assets for the
year ended August 31, 1996 and the eight-month period ended August 31, 1995
and the financial highlights for each of the years or periods from July 2,
1993 (commencement of operations) through August 31, 1996.
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of August 31, 1996 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position 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 as of August 31, 1996, and the results of their operations,
changes in their net assets and the financial highlights for each of the periods
listed above, in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Pittsburgh, Pennsylvania
October 16, 1996
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80
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TRUSTEES AND OFFICERS
TRUSTEES:
Laurence B. Ashkin*
Foster Bam*
James S. Howell, Chairman
Robert J. Jeffries*+
Gerald M. McDonnell
Thomas L. McVerry
William W. Pettit
Russell A. Salton, III M.D.
Michael S. Scofield
OFFICERS:
John J. Pileggi
President and Treasurer
Joan V. Fiore
Secretary
Sheryl Hirschfeld
Assistant Secretary
Donald E. Brostrom
Assistant Treasurer
Stephen W. St. Clair
Assistant Treasurer
* Trustees for Evergreen Florida High Income
Municipal Bond Fund and Evergreen New Jersey Tax
Free Income Fund only.
+ Trustee Emeritus
FEDERAL INCOME TAX STATUS OF DIVIDENDS (UNAUDITED)
100% of the dividends distributed by Florida, Florida High Income, Georgia, New
Jersey, North Carolina, South Carolina and Virginia for the year ended August
31, 1996 are exempt from federal income tax, other than alternative minimum tax.
At August 31, 1996, Florida had long term capital gains of $166,845. These
capital gains will be paid before August 31, 1997.
<PAGE>
This brochure must be preceeded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees and expenses, and should be read carefully
before investing or sending money.
NOT May lose value
FDIC No bank guarantee
INSURED
Evergreen Funds Distributor, Inc.
Evergreen(sm) is a Service Mark of Evergreen Asset Management Corp.
Copyright 1996, Evergreen Asset Management Corp.
45129 539585
10/96
