<PAGE> 1
[NATIONS FUNDS LOGO]
Investments For A Lifetime (SM)
[GRAPHIC]
Municipal
Bond
Funds
ANNUAL REPORT FOR THE YEAR ENDED MARCH 31, 1997
<PAGE> 2
<TABLE>
<S> <C>
NOT MAY LOSE VALUE
FDIC-
INSURED NO BANK GUARANTEE
</TABLE>
NATIONS FUNDS DISTRIBUTOR: STEPHENS INC. STEPHENS INC., WHICH IS NOT AFFILIATED
WITH NATIONSBANK, N.A., IS NOT A BANK AND SECURITIES OFFERED BY IT ARE NOT
GUARANTEED BY ANY BANK OR INSURED BY THE FDIC. STEPHENS INC., MEMBER NYSE-SIPC.
NATIONS FUNDS INVESTMENT ADVISER: NATIONSBANC ADVISORS, INC.
NATIONS FUNDS INVESTMENT SUB-ADVISERS: TRADESTREET INVESTMENT ASSOCIATES, INC.
AND GARTMORE GLOBAL PARTNERS.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SHAREHOLDER LETTER.............................................................................. 1
PERFORMANCE AND COMMENTARY:
Short-Term Municipal Income Fund........................................................... 6
Intermediate Municipal Bond Fund........................................................... 10
Municipal Income Fund...................................................................... 14
Florida Intermediate Municipal Bond Fund................................................... 18
Florida Municipal Bond Fund................................................................ 18
Georgia Intermediate Municipal Bond Fund................................................... 24
Georgia Municipal Bond Fund................................................................ 24
Maryland Intermediate Municipal Bond Fund.................................................. 30
Maryland Municipal Bond Fund............................................................... 30
North Carolina Intermediate Municipal Bond Fund............................................ 36
North Carolina Municipal Bond Fund......................................................... 36
South Carolina Intermediate Municipal Bond Fund............................................ 42
South Carolina Municipal Bond Fund......................................................... 42
Tennessee Intermediate Municipal Bond Fund................................................. 48
Tennessee Municipal Bond Fund.............................................................. 48
Texas Intermediate Municipal Bond Fund..................................................... 54
Texas Municipal Bond Fund.................................................................. 54
Virginia Intermediate Municipal Bond Fund.................................................. 60
Virginia Municipal Bond Fund............................................................... 60
FINANCIAL STATEMENTS:
SCHEDULE OF INVESTMENTS:
Short-Term Municipal Income Fund........................................................... 66
Intermediate Municipal Bond Fund........................................................... 69
Municipal Income Fund...................................................................... 73
Florida Intermediate Municipal Bond Fund................................................... 78
Florida Municipal Bond Fund................................................................ 81
Georgia Intermediate Municipal Bond Fund................................................... 84
Georgia Municipal Bond Fund................................................................ 87
Maryland Intermediate Municipal Bond Fund.................................................. 89
Maryland Municipal Bond Fund............................................................... 92
North Carolina Intermediate Municipal Bond Fund............................................ 95
North Carolina Municipal Bond Fund......................................................... 97
South Carolina Intermediate Municipal Bond Fund............................................ 99
South Carolina Municipal Bond Fund......................................................... 102
Tennessee Intermediate Municipal Bond Fund................................................. 104
Tennessee Municipal Bond Fund.............................................................. 106
Texas Intermediate Municipal Bond Fund..................................................... 108
Texas Municipal Bond Fund.................................................................. 110
Virginia Intermediate Municipal Bond Fund.................................................. 112
Virginia Municipal Bond Fund............................................................... 117
STATEMENTS OF ASSETS AND LIABILITIES.......................................................... 120
STATEMENTS OF OPERATIONS...................................................................... 128
STATEMENTS OF CHANGES IN NET ASSETS........................................................... 132
SCHEDULE OF CAPITAL STOCK ACTIVITY............................................................ 140
</TABLE>
i
<PAGE> 4
TABLE OF CONTENTS (CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FINANCIAL HIGHLIGHTS:
Short-Term Municipal Income Fund........................................................... 148
Intermediate Municipal Bond Fund........................................................... 148
Municipal Income Fund...................................................................... 150
Florida Intermediate Municipal Bond Fund................................................... 150
Florida Municipal Bond Fund................................................................ 152
Georgia Intermediate Municipal Bond Fund................................................... 152
Georgia Municipal Bond Fund................................................................ 154
Maryland Intermediate Municipal Bond Fund.................................................. 154
Maryland Municipal Bond Fund............................................................... 156
North Carolina Intermediate Municipal Bond Fund............................................ 156
North Carolina Municipal Bond Fund......................................................... 158
South Carolina Intermediate Municipal Bond Fund............................................ 158
South Carolina Municipal Bond Fund......................................................... 160
Tennessee Intermediate Municipal Bond Fund................................................. 160
Tennessee Municipal Bond Fund.............................................................. 162
Texas Intermediate Municipal Bond Fund..................................................... 162
Texas Municipal Bond Fund.................................................................. 164
Virginia Intermediate Municipal Bond Fund.................................................. 164
Virginia Municipal Bond Fund............................................................... 166
NOTES TO FINANCIAL STATEMENTS................................................................. 168
REPORT OF INDEPENDENT ACCOUNTANTS............................................................. 177
TAX INFORMATION (UNAUDITED)................................................................... 178
</TABLE>
ii
<PAGE> 5
NATIONS FUNDS
DEAR SHAREHOLDER:
We are pleased to present the Nations Funds annual report for the fiscal year
ended March 31, 1997. Overall, domestic equity markets rewarded investors with
strong returns. In fact, during this period the U.S stock market reached record
levels. More recently, the markets have experienced increasing volatility as
concerns have surfaced about strong economic growth leading to inflation. When
markets experience fluctuations like this, it is often unsettling. Investors
should be cautioned, however, not to confuse short-term volatility with
long-term trends.
The last two years marked a period that most investors (particularly equity
investors) will look back upon with great satisfaction. Domestic equity returns
averaged better than 18% during 1996; and for the last two years, have exceeded
50%(1). Several factors contributed to 1996's favorable market results: 1) The
continued strength in the U.S. economy; 2) No real evidence of inflationary
pressures; 3) U.S. corporations experiencing continued profit growth; and 4)
Record cash inflow into equity mutual funds. Investors should note that returns
on stocks have been exceptional and well above the historical average of
10.7%.(2)
Looking out into 1997, the investment environment continues to read as if it
were being scripted to enhance financial assets -- moderate but persistent
economic growth, low inflation and strong earnings. Although the duration of
this economic expansion is six years and counting, there does not appear to be
anything on the horizon that would move the economy off its current track.
Importantly, after a long period of outperformance by stocks, investors should
pay particular attention to their current allocation relative to their
objectives and risk tolerance. We are expecting that future advances in the
markets will be accompanied by increased volatility and periodic corrections as
the market adjusts to factors such as recent changes in monetary policy. While
we believe that markets will reach significant new highs before the end of the
millennium, markets do not go straight up and there will be periods of decline
along the way.
Thank you for your continued confidence in the Nations Funds family of funds.
Sincerely,
/s/ A. Max Walker
A. Max Walker
President and Chairman of the Board
/s/ Mark H. Williamson
Mark H. Williamson
President, NationsBanc Advisors, Inc.
March 31, 1997
(1) AS MEASURED BY THE S&P 500 INDEX.
(2) IBBOTSON ASSOCIATES, STOCKS, BONDS, BILLS AND INFLATION 1997 YEARBOOK
1
<PAGE> 6
THE NATIONS FUNDS ADVANTAGE
A family of mutual funds provides investors with a number of advantages,
including the ability to shift investment assets among funds as their financial
objectives or market conditions change. The Nations Funds family of mutual
funds includes a broad array of professionally managed domestic and
international stock, bond and money market funds advised by NationsBanc
Advisors, Inc. The family was designed to accommodate a wide variety of
investment objectives across the risk/reward spectrum.
Potential Return
<TABLE>
<CAPTION>
LONGER TERM
MONEY SHORTER INTERMEDIATE DOMESTIC EQUITY
MARKET MATURITY MATURITY AND GLOBAL BALANCED INCOME
FUNDS BOND FUNDS BOND FUNDS BOND FUNDS FUNDS FUNDS
<S> <C> <C> <C> <C> <C>
- -Nations -Nations Short- -Nations -Nations Global -Nations -Nations
Prime Fund Intermediate Strategic Fixed Government Balanced Equity Income
Government Income Fund Income Fund Assets Fund Fund
- -Nations Fund
Government -Nations -Nations
Money Market -Nations Intermediate Diversified
Fund Short-Term Municipal Income Fund
Income Fund Bond Fund
- -Nations -Nations
Treasury Fund -Nations Short- -Nations Government
Term Municipal State-Specific Securities Fund
- -Nations Tax Income Fund Intermediate
Exempt Fund Municipal -Nations
Bond Funds Municipal
Income Fund
-Nations State-
Specific Long-
Term Municipal
Bond Funds ------GROWTH & INCOME-------->
- ------------------------CURRENT INCOME----------------------------------------------->
<-------STABILITY--------- Risk (Variability)->
</TABLE>
For specific information on developing an investment portfolio that
will more closely target your investment objectives, contact your investment
representative or Nations Fund for fund brochures and prospectuses at (800)
982-2271.
The Nations Funds family also includes Nations Equity Index Fund, which
seeks to match the performance of the S&P 500 before fees and expenses.
2
<PAGE> 7
GROWTH LARGE SMALLER REGION-SPECIFIC
AND INCOME CAPITALIZATION CAPITALIZATION INTERNATIONAL INTERNATIONAL
FUNDS GROWTH FUNDS GROWTH FUNDS EQUITY FUNDS FUNDS
- -Nations -Nations -Nations -Nations -Nations
Value Fund Disciplined Emerging International Emerging
Equity Fund Growth Fund Equity Fund Markets Fund
-Nations -Nations
Capital Pacific Growth
Growth Fund Fund
-------------AGGRESSIVE GROWTH---------------->
- ---------GROWTH-------------->
SPECIALTY FUNDS
MANAGED INDEX FUNDS
Nations Managed SmallCap Index Fund
Nations Managed Index Fund
3
<PAGE> 8
TIME AND DIVERSIFICATION
CAN SMOOTH OUT
MARKET VOLATILITY
During the past two years, many investors have enjoyed some of the most
rewarding stock market gains in history. So if you're relatively new to the
financial markets, the market fluctuations over recent months may be an
unsettling experience.
We can't say with certainty when this period of market volatility may end. But
we can say that it's an entirely normal occurrence. In fact, the history of the
market shows both periods of growth and periods of downturns. The good news is
that downturns are often short-lived, and have historically been followed by
renewed growth.
So instead of focusing on the market's daily ups and downs, keep focused on your
long-term goals. By staying invested, you won't miss out on the potential for
later gains from a market rebound. You may also want to take advantage of these
helpful strategies:
- - PUT DIVERSIFICATION ON YOUR SIDE. You may lessen the effect of market
fluctuations when you maintain a diversified portfolio of stocks, bonds, and
cash investments such as money market funds. In addition, mutual funds make it
easy to diversify within each asset class. For example, you can add an
international fund if your portfolio is largely domestic equities. Or you can
spread your fixed-income component across multiple bond funds that emphasize
different maturities and credit qualities.
- - REBALANCE YOUR ASSETS. Your original investment allocation among stocks, bonds
and money market funds may have shifted over time -- for example, with recent
gains, you may have a larger percentage of your investments in stocks than you
expect. If needed, you should rebalance your allocations in line with your
long-term strategy.
- - CONSIDER DOWNTURNS A BUYING OPPORTUNITY. By investing regular amounts in a
Nations Funds account on a set interval, regardless of the market's direction,
you wind up purchasing more shares when the price is low and fewer when the
price is high. This strategy, called dollar-cost averaging, may help lessen
the impact of market swings by averaging the cost of your shares over time.
And, with a systematic investment plan (SIP), you can have a set amount
automatically withdrawn from your bank checking or savings account and
invested directly into your Nations Funds account on a monthly or quarterly
basis.
Please note that dollar-cost averaging does not assure a profit or protect
against loss in declining markets. Since such a plan involves continuous
investment in securities, regardless of fluctuating price levels, you should
carefully consider your financial ability to continue your purchases through
periods of fluctuating price levels.
So remember, if you have a sound long-term investment program, and your
short-term needs are being met, your original decisions should still serve you
well. Simply by staying patient, you may increase your likelihood of reaching
your investment goals. For more information, please call Nations Funds at
1-800-321-7854.
4
<PAGE> 9
The following are general municipal bond market comments from Michele Poirier,
Mathew Kiselak and John Kohl, portfolio managers for Nations Funds Municipal
Bond Portfolios.
DEAR SHAREHOLDER:
Over the last twelve months, the municipal bond market enjoyed relative
outperformance as the level of general interest rates increased. The yield on
the ten-year U.S. Treasury bond rose from 6.30% to 6.90%. Over this same time
period, ten-year municipal bond yields were unchanged on a year-over-year basis.
Against this interest rate backdrop, the municipal bond market, as measured by
the Lehman 10-year Municipal Bond Index, produced a total return of 5.21%,
outperforming the Lehman 10-year U.S. Treasury Index return of 2.12%.
The strong relative performance by municipal bonds during this period of time is
largely due to a level of new issue supply that was well matched by strong
demand from property and casualty insurance companies and individuals. In
addition, the fear among investors associated with the implications of a "flat
tax" or the effects of "tax reform" ended with the 1996 Presidential primaries.
The municipal bond market also continued to experience strong fundamentals, as
credit quality improved for most state and local government entities.
Going forward, supply and demand dynamics appear to be positive for the market.
New issue supply is likely to increase over the next twelve months as state and
local governments increase spending on infrastructure. Demand for municipal
bonds should support the increasing supply levels. Property and casualty
insurance companies will continue to be buyers, as their positive financial
positions seek the tax-advantaged benefits of municipal bonds. Support should
also continue from individuals overweighted in equities, as they seek to
rebalance their personal holdings. Any substantial selloff in the equity markets
should further increase the demand for municipal bonds.
While the municipal bond market has enjoyed a period of strong relative
performance and improving credit quality, participants should remain watchful of
several growing risks. These risks include structural changes in the U.S.
welfare system and the changing competitive environment for utilities and
hospitals. These risks, while complex, are likely to be resolved over an
extended period of time.
5
<PAGE> 10
NATIONS SHORT-TERM MUNICIPAL INCOME FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Mathew M. Kiselak is Senior Portfolio Manager of Nations Short-Term
Municipal Income Fund and Product Manager Municipal Fixed Income Management for
TradeStreet Investment Associates, Inc., investment sub-adviser to the Fund.
INVESTMENT OBJECTIVE
The Fund seeks high current income exempt from federal income tax
consistent with minimal fluctuation of principal. The Fund invests in investment
grade, short-term municipal securities.
PERFORMANCE REVIEW*
For the one-year period ended March 31, 1997, Nations Short-Term Municipal
Income Fund Investor A Shares provided shareholders with a total return of
3.96%. The Fund outperformed its peer group, the Lipper Short Municipal Debt
Funds Average, which produced a total return of 3.76%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Kiselak shares his views on financial
market conditions and Fund performance for the one-year period ended March 31,
1997.
BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH
OF THE FUND.
Our investment philosophy strives to achieve total return to the extent
consistent with the Fund's investment objective by maintaining a focus on income
exempt from federal income taxes. Additionally, care is taken to limit the
distribution of capital gains when consistent with the prudent management of the
Fund. We use a combination of strategies among which are duration management
(managing the Fund's sensitivity to interest rates), market sector selection and
review of individual credits. By maintaining a well-diversified portfolio, we
limit the Fund's vulnerability to significant difficulties in any single credit
or market sector.
Nations Short-Term Municipal Income Fund focuses on investment grade
municipal bonds exempt from federal income taxes. The portfolio is managed to
maintain an average maturity of between one and three years.
The Fund balances investments between high quality investment grade issues
for reduced credit risk and liquidity, and lower quality investment grade issues
(BBB) for the additional yield potential they provide.
In periods of falling interest rates, we will extend the average portfolio
maturity toward the maximum limit to benefit from the greater capital
appreciation potential of longer-term bonds. When interest rates are rising,
we'll shorten the average maturity to protect the Fund's net asset value from
the price erosion that comes with higher interest rates.
HOW DID MARKET CONDITIONS AFFECT THE FUND'S PERFORMANCE?
The reporting period was a volatile time for interest rates. Interest rate
volatility was lessened in the municipal market due to strong supply and demand
dynamics -- modest supply conditions and strong demand from property and
casualty insurance companies. Due to these conditions, municipal bonds
outperformed their U.S. Treasury counterparts during the year. (For additional
information, please refer to the "general municipal bond market comments" on
page 5.)
Over the reporting period, the key factor influencing Fund performance was
duration management. We focused on positioning the Fund appropriately in a
changing interest rate environment and the Fund's return reflects this
positioning. Owing to our belief that interest rates would increase, the Fund
was slightly short duration during the first four months of the fiscal year and
then moved to a neutral to slightly long position until January, when duration
was shortened again in anticipation of rising interest rates. Additionally,
security selection played a role in performance as structural aspects of an
individual security become more significant in periods of interest rate
volatility. Sector rotation had little impact on Fund performance because credit
spreads between sectors universally remain compressed.
- ---------------
* The performance shown includes the effect of fee waivers by the investment
adviser, the administrator and the custodian. Such fee waivers have the effect
of increasing total return.
6
<PAGE> 11
WHAT ARE THE FUND'S CURRENT PORTFOLIO CHARACTERISTICS?**
As of March 31, 1997, the average portfolio maturity of Nations Short-Term
Municipal Income Fund was 2.03 years, while the duration of the Fund was 1.79
years. The Fund held 57 issues with an average credit rating of "Aa" by Moody's
Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 10.55% of the Fund.
WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN 1997?
State and local government finances continue to benefit from the economy's
expansion, providing support for the market from a credit standpoint. Modest new
issue supply should help the municipal bond market outperform taxable
counterparts. However, the market will be facing challenges as structural
changes in our welfare system begin to have an impact on state and local
government finances. As the competitive environment for utilities and healthcare
changes, these market segments will bear monitoring over the next few years.
- ---------------
** Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook. Also, the outlook of this Fund's portfolio manager may differ from that
of other Nations Funds' portfolio managers.
7
<PAGE> 12
NATIONS FUNDS
Nations Short-Term Municipal Income Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Power/Utilities Revenue 5.1%
Pre-Refunded 7.5%
Transportation 8.8%
Education 5.6%
Pollution Control Revenue/Industrial
Development Revenue 2.8%
Housing Revenue 2.2%
Water Revenue 5.6%
Hospital 4.1%
Other 3.7%
Cash and Cash Equivalents 4.0%
General Obligation 32.7%
Insured 17.9%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Detroit, Michigan, GO, Refunding, 5.800%
05/01/97 3.7%
2. Washington State Public Power Supply System,
Pre-refunded, Series A, (Nuclear Project No.
1), 7.500% 07/01/15 3.4
3. Memphis, Tennessee, Capital Outlay Notes, GO,
5.000% 07/01/98 3.1
4. Houston, Texas, Water and Sewer System
Revenue Refunding, Prior Lien, Series B,
5.250% 12/01/99 3.1
5. McMinn County, Tennessee, Industrial
Development Board, PCR, Refunding, (Bowater
Inc. Project), 6.850% 04/01/01 2.8
6. North Slope Borough, Alaska, GO, Series B,
(CGIC Insured), 6.100% 06/30/99 2.5
7. Arizona State Transportation Board, Highway
Revenue, Sub-Series A, 5.900% 07/01/99 2.5
8. Commonwealth of Puerto Rico, Refunding, GO,
5.500% 07/01/00 2.5
9. Washoe County, Nevada, Airport Authority,
Airport System Improvement Revenue, Series A,
AMT, 5.100% 07/01/99 2.5
10. Arizona State Transportation Board, Excise
Tax Revenue, (Maricopa County Regional Area
Road Fund), 7.200% 07/01/97 2.5
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 3.96%
Since Inception (11/02/93)
through 03/31/97 4.00%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Short-Term Municipal Income Fund on
November 2, 1993 (inception date).The Lehman 3-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade bonds
with maturities of 2 to 3 years. Funds included in the Lipper Short Municipal
Debt Funds Average invest in municipal debt issues with dollar-weighted
maturities of less than 3 years.
<TABLE>
<CAPTION>
GROWTH OF INVESTMENT
MEASUREMENT PERIOD LIPPER SHORT MUNICIPAL LEHMAN 3-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Nov. 2, 1993 10000 10000 10000
Nov. 30, 1993 10082 10092 10106
9992 9957 10010
10066 10066 10068
10143 10160 10153
Nov. 30, 1994 10116 10161 10133
10360 10445 10423
10543 10667 10640
10683 10895 10771
Nov. 30, 1995 10844 11062 10949
Mar. 31, 1996 10907 11124 10997
10980 11213 11068
11108 11361 11219
11257 11553 11383
Mar. 31, 1997 11313 11599 11432
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
8
<PAGE> 13
NATIONS FUNDS
Nations Short-Term Municipal Income Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- -----------------------------------------------
<S> <C>
Year Ended 03/31/97 3.29%*
Year Ended 03/31/97 3.79%
Since Inception (05/19/94) through
03/31/97 4.52%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
INVESTOR N SHARES
- -----------------------------------------------
Year Ended 03/31/97 3.78%
Since Inception (10/12/93) through
03/31/97 3.75%
PRIMARY A SHARES
- -----------------------------------------------
Year Ended 03/31/97 4.15%
Since Inception (10/07/93) through
03/31/97 4.10%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Short-Term Municipal Income Fund from the date each class of shares was
first offered. The Lehman 3-Year Municipal Bond Index, is a broad based,
unmanaged, total return index composed of investment grade bonds with
maturities of 2 to 3 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED, LEHMAN 3-YEAR
MUNICIPAL BOND INDEX
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
3-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
MAY 19, 1994 10000 10000
10003 10017
10097 10101
NOV. 30, 1994 10097 10082
10380 10373
10601 10588
10827 10717
NOV. 30, 1995 10993 10892
MAR. 31, 1996 11055 10936
11144 11003
11291 11149
11481 11308
MAR. 31, 1997 11527 11350
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
3-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
OCT. 12, 1993 10000 10000
NOV. 30, 1993 10113 10095
9978 9995
10087 10049
10181 10130
NOV. 30, 1994 10182 10106
10468 10391
10690 10603
10918 10730
NOV. 30, 1995 11085 10903
MAR. 31, 1996 11147 10947
11237 11014
11385 11160
11577 11319
MAR. 31, 1997 11624 11361
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
LEHMAN GROWTH OF
3-YEAR INVESTMENT
MUNICIPAL WITH
MEASUREMENT PERIOD BOND DISTRIBUTIONS
(QUARTERLY) INDEX REINVESTED
<S> <C> <C>
OCT. 7, 1993 10000 10000
NOV. 30, 1993 10113 10107
9978 10014
10087 10078
10181 10168
NOV. 30, 1994 10182 10153
10468 10448
10690 10671
10918 10808
NOV. 30, 1995 11085 10991
MAR. 31, 1996 11147 11045
11237 11122
11385 11280
11577 11451
MAR. 31, 1997 11624 11503
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
9
<PAGE> 14
NATIONS INTERMEDIATE MUNICIPAL BOND FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
John C. Kohl is Senior Portfolio Manager of Nations Intermediate Municipal
Bond Fund and Managing Director, Fixed Income for TradeStreet Investment
Associates, Inc., investment sub-adviser to the Fund.
INVESTMENT OBJECTIVE
The Fund seeks high current income exempt from federal income tax
consistent with moderate fluctuation of principal. The Fund invests in
investment grade, intermediate-term municipal securities.
PERFORMANCE REVIEW*
For the one-year period ended March 31, 1997, Nations Intermediate
Municipal Bond Fund Investor A Shares provided a total return of 4.42%,
outperforming the Lipper Intermediate Municipal Debt Funds Average return of
4.24%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Kohl shares his views on financial market
conditions and Fund performance for the one-year period ended March 31, 1997.
BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH
OF THE FUND.
Our investment philosophy strives to achieve total return to the extent
consistent with the Fund's investment objective by maintaining a focus on income
exempt from federal income taxes. Additionally, care is taken to limit the
distribution of capital gains when consistent with the prudent management of the
Fund. We use a combination of strategies among which are duration management
(managing the Fund's sensitivity to interest rates), market sector selection and
review of individual credits. By maintaining a well-diversified portfolio, we
limit the Fund's vulnerability to significant difficulties in any single credit
or market sector.
Nations Intermediate Municipal Bond Fund focuses on investment grade
municipal bonds exempt from federal income taxes. The portfolio is managed to
maintain an average maturity of between three and ten years.
The Fund balances investments between high quality investment grade issues
for reduced credit risk and liquidity, and lower quality investment grade issues
(BBB) for the additional yield potential they provide.
In periods of falling interest rates, we will extend the average portfolio
maturity toward the maximum limit to benefit from the greater capital
appreciation potential of longer-term bonds. When interest rates are rising,
we'll shorten the average maturity to protect the Fund's net asset value from
the price erosion that comes with higher interest rates.
HOW DID MARKET CONDITIONS AFFECT THE FUND'S PERFORMANCE?
The reporting period was a volatile time for interest rates. Interest rate
volatility was lessened in the municipal market due to strong supply and demand
dynamics -- modest supply conditions and strong demand from property and
casualty insurance companies. Due to these conditions, municipal bonds
outperformed their U.S. Treasury counterparts during the year. (For additional
information, please refer to the "general municipal bond market comments" on
page 5.)
Over the reporting period, the key factor influencing Fund performance was
duration management. We focused on positioning the Fund appropriately in a
changing interest rate environment and the Fund's return reflects this
positioning. Owing to our belief that interest rates would increase, the Fund
was slightly short duration during the first four months of the fiscal year and
then moved to a neutral to slightly long position until January, when duration
was shortened again in anticipation of rising interest rates. Additionally,
security selection played a role in performance as structural aspects of an
individual security become more significant in periods of interest rate
volatility. Sector rotation had little impact on Fund performance because credit
spreads between sectors universally remain compressed.
- ---------------
* The performance shown includes the effect of fee waivers by the investment
adviser and the administrator. Such fee waivers have the effect of increasing
total return.
10
<PAGE> 15
WHAT ARE THE FUND'S CURRENT PORTFOLIO CHARACTERISTICS?**
As of March 31, 1997, the average portfolio maturity of Nations
Intermediate Municipal Bond Fund was 7.82 years, while the duration of the Fund
was 4.98 years. The Fund held 69 issues with an average credit rating of "Aa" by
Moody's Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 13.33% of the Fund.
WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN 1997?
State and local government finances continue to benefit from the economy's
expansion, providing support for the market from a credit standpoint. Modest new
issue supply should help the municipal bond market outperform taxable
counterparts. However, the market will be facing challenges as structural
changes in our welfare system begin to have an impact on state and local
government finances. As the competitive environment for utilities and healthcare
changes, these market segments will bear monitoring over the next few years.
- ---------------
** Portfolio characteristics and outlook were current as of March 31, 1997,
are subject to change and may not be representative of current
characteristics and outlook. Also, the outlook of this Fund's portfolio
manager may differ from that of other Nations Funds' portfolio managers.
11
<PAGE> 16
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Housing Revenue 6.0%
Pollution Control Revenue/Industrial
Development Revenue 8.6%
Education 3.6%
Hospital 7.1%
Insured 34.1%
Pre-Refunded 0.9%
General Obligations 21.1%
Power/Utilities Revenue 5.8%
Other 12.8%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Maryland State, State and Local Facilities
Loan, GO, Second Series, 5.000% 10/15/04 3.3%
2. Alaska State, Student Loan Corporation,
Student Loan Revenue, Series A, AMT, (AMBAC
Insured), 5.250% 07/01/03 2.9
3. Duval County, Florida, Housing Finance
Authority Refunding, (Greentree Place
Project), 6.750% 04/01/25 2.5
4. Chicago, Illinois, Gas Supply Revenue, 6.875%
03/01/15 2.4
5. Philadelphia, Pennsylvania, Industrial
Development Authority, Industrial Development
Revenue Refunding, (Ashland Oil Inc.
Project), 5.700% 06/01/05 2.3
6. Detroit, Michigan, Convention Facilities
Revenue Refunding, (Cobo Hall Expansion
Project), (FSA Insured), 5.100% 09/30/04 2.2
7. Washington County, Maryland, Suburban
Sanitation District Authority, Water Supply
Revenue, GO, 4.900% 12/01/05 2.2
8. Harris County, Texas, Health Facilities
Development Authority, Hospital Revenue
Refunding, (Texas Childrens Hospital
Project), (MBIA Insured), 6.000% 10/01/05 2.2
9. Maine State, Municipal Board Refunding,
Series A, 4.900% 11/01/02 2.1
10. Hawaii State, GO, Series CN, (FGIC Insured),
6.250% 03/01/04 1.9
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 4.42%
Since Inception (08/17/93)
through 03/31/97 4.36%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Intermediate Municipal Bond Fund on
August 17, 1993 (inception date). The Lehman 7-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade bonds
with maturities of 7 to 8 years. Funds included in the Lipper Intermediate
Municipal Debt Funds Average invest in municipal debt issues with
dollar-weighted maturities of 5 to 10 years.
<TABLE>
<CAPTION>
Lipper Intermediate Growth of Investment
Measurement Period Municipal Debt Funds Lehman 7-Year Municipal with Distributions
(Quarter) Average Bond Index Reinvested
<S> <C> <C> <C>
Aug. 17, 1993 10000 10000 10000
10113 10109 10188
Nov. 30, 1993 10237 10231 10314
9834 9845 9892
9929 9949 9943
9993 10044 9982
Nov. 30, 1994 9878 9947 9821
10390 10470 10406
10616 10767 10658
10879 11075 10925
Nov. 30, 1995 11180 11355 11250
Mar. 31, 1996 11115 11314 11178
11164 11363 11237
11364 11567 11447
11610 11850 11681
Mar. 31, 1997 11602 11836 11672
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
12
<PAGE> 17
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON -INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 3.61%*
Year Ended 03/31/97 4.11%
Since Inception (11/03/94) through
03/31/97 7.39%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.12%
Since Inception (12/02/93) through
03/31/97 3.96%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.63%
Since Inception (07/30/93) through
03/31/97 4.83%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Intermediate Municipal Bond Fund from the date each class of shares was
first offered. The Lehman 7-Year Municipal Bond Index is a broad based,
unmanaged, total return index composed of investment grade bonds with
maturities of 7 to 8 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED,
LEHMAN 7-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
NOV. 3, 1994 10000 10000
NOV. 30, 1994 10004 10063
10529 10655
10828 10903
11138 11162
NOV. 30, 1995 11419 11485
MAR. 31, 1996 11378 11403
11428 11455
11633 11660
11917 11890
MAR. 31, 1997 11904 11872
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
DEC. 2, 1993 10000 10000
NOV. 30, 1993 10184 10150
9799 9730
9903 9776
9998 9806
NOV. 30, 1994 9901 9641
10421 10207
10717 10447
11024 10700
NOV. 30, 1995 11302 11010
MAR. 31, 1996 11262 10930
11311 10981
11513 11177
11795 11398
MAR. 31, 1997 11782 11380
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JULY 30, 1993 10000 10000
10289 10304
NOV. 30, 1993 10413 10435
10020 10015
10125 10076
10223 10119
NOV. 30, 1994 10124 9961
10656 10559
10958 10821
11272 11097
NOV. 30, 1995 11556 11432
MAR. 31, 1996 11515 11364
11565 11430
11772 11649
12060 11894
MAR. 31, 1997 12047 11890
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
13
<PAGE> 18
NATIONS MUNICIPAL INCOME FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Michele M. Poirier is Senior Portfolio Manager of Nations Municipal Income
Fund and Director, Municipal Fixed Income Management for TradeStreet Investment
Associates, Inc., investment sub-adviser to the Fund.
INVESTMENT OBJECTIVE
The Fund seeks high current income exempt from federal income tax
consistent with the potential for principal fluctuation associated with
investments in long-term municipal securities. The Fund invests in investment
grade, long-term municipal securities.
PERFORMANCE REVIEW*
For the one-year period ended March 31, 1997, Nations Municipal Income Fund
Investor A Shares provided a total return of 5.82%, significantly outperforming
the Lipper General Municipal Debt Funds Average return of 4.81%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Ms. Poirier shares her views on financial
market conditions and Fund performance for the one-year period ended March 31,
1997.
BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH
OF THE FUND.
Our investment philosophy strives to achieve total return to the extent
consistent with the Fund's investment objective by maintaining a focus on income
exempt from federal income taxes. Additionally, care is taken to limit the
distribution of capital gains when consistent with the prudent management of the
Fund. We use a combination of strategies among which are duration management
(managing the Fund's sensitivity to interest rates), market sector selection and
review of individual credits. By maintaining a well-diversified portfolio, we
limit the Fund's vulnerability to significant difficulties in any single credit
or market sector.
Nations Municipal Income Fund focuses on investment grade municipal bonds
exempt from federal income taxes. The portfolio is managed to maintain an
average maturity of between ten and twenty years.
The Fund balances investments between high quality investment grade issues
for reduced credit risk and liquidity, and lower quality investment grade issues
(BBB) for the additional yield potential they provide.
In periods of falling interest rates, we will extend the average portfolio
maturity toward the maximum limit to benefit from the greater capital
appreciation potential of longer-term bonds. When interest rates are rising,
we'll shorten the average maturity to protect the Fund's net asset value from
the price erosion that comes with higher interest rates.
HOW DID MARKET CONDITIONS AFFECT THE FUND'S PERFORMANCE?
The reporting period was a volatile time for interest rates. Interest rate
volatility was lessened in the municipal market due to strong supply and demand
dynamics -- modest supply conditions and strong demand from property and
casualty insurance companies. Due to these conditions, municipal bonds
outperformed their U.S. Treasury counterparts during the year. (For additional
information, please refer to the "general municipal bond market comments" on
page 5.)
Over the reporting period, the key factor influencing Fund performance was
duration management. We focused on positioning the Fund appropriately in a
changing interest rate environment and the Fund's return reflects this
positioning. Owing to our belief that interest rates would increase, the Fund
was slightly short duration during the first four months of the fiscal year and
then moved to a neutral to slightly long position until January, when duration
was shortened again in anticipation of rising interest rates. Additionally,
security selection played a role in performance as structural aspects of an
individual security become more significant in periods of interest rate
volatility. Sector rotation had little impact on Fund performance because credit
spreads between sectors universally remain compressed.
- ---------------
* The performance shown includes the effect of fee waivers by the investment
adviser and the administrator. Such fee waivers have the effect of increasing
total return.
14
<PAGE> 19
WHAT ARE THE FUND'S CURRENT PORTFOLIO CHARACTERISTICS?**
As of March 31, 1997, the average portfolio maturity of Nations Municipal
Income Fund was 18.18 years, while the duration of the Fund was 7.52 years. The
Fund held 62 issues with an average credit rating of "Aa" by Moody's Investors
Service, Inc. Issues whose income is subject to the federal Alternative Minimum
Tax made up 16.63% of the Fund.
WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN 1997?
State and local government finances continue to benefit from the economy's
expansion, providing support for the market from a credit standpoint. Modest new
issue supply should help the municipal bond market outperform taxable
counterparts. However, the market will be facing challenges as structural
changes in our welfare system begin to have an impact on state and local
government finances. As the competitive environment for utilities and healthcare
changes, these market segments will bear monitoring over the next few years.
- ---------------
** Portfolio characteristics and outlook were current as of March 31, 1997,
are subject to change and may not be representative of current
characteristics and outlook. Also, the outlook of this Fund's portfolio
manager may differ from that of other Nations Funds' portfolio managers.
15
<PAGE> 20
NATIONS FUNDS
Nations Municipal Income Fund
- ----------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Pollution Control Revenue/Industrial
Development Revenue 35.9%
Housing Revenue 8.1%
Power/Utilities Revenue 3.0%
Other 9.1%
General Obligation 7.2%
Insured 27.2%
Hospital 9.5%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Alliance Airport Authority Inc., Texas,
Special Facilities
Revenue, (American Airlines Inc. Project),
AMT,
7.000% 12/01/11 4.0%
2. Butler County, Alabama, Industrial
Development Board, Solid Waste Disposal
Revenue, (James River Corporation Project),
8.000% 09/01/28 3.0
3. White County, Georgia, Industrial Development
Authority Revenue Refunding, (Clark-Schwebel
Fiber Glass Company Project), 6.850% 06/01/10 2.9
4. Savannah, Georgia, Hospital Authority,
Revenue Refunding and Improvement, (Candler
Hospital Project), 7.000% 01/01/23 2.8
5. Washington State, Public Power Supply System,
Revenue Refunding, Series B, (Systems Nuclear
Project No. 3), (FSA Insured), 5.400%
07/01/05 2.8
6. New Jersey State, Transportation Trust Fund
Authority, (Transportation Systems Project),
Series B, (MBIA Insured), 5.000% 06/15/04 2.8
7. Union County, Georgia, Housing Authority,
Multi-family Housing Revenue Refunding,
(Hidden Lake Apartments), Series A, (FHA/FNMA
Insured), 7.125% 12/01/25 2.6
8. Anchorage, Alaska, Electric Utilities Revenue
Refunding, Senior Lien, (MBIA Insured),
Series B, 5.500% 02/01/26 2.6
9. Franklin, Indiana, Economic Development
Revenue Refunding, (Hoover Universal Inc.
Project Guaranteed), 6.100% 12/01/04 2.4
10. Maury County, Tennessee, Industrial
Development Board, PCR, Multi-Modal,
Refunding, (Saturn Corporation Project),
General Motors Guaranty Agreement, 6.500%
09/01/24 2.4
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 5.82%
Five Years Ended 03/31/97 7.13%
Since Inception (02/01/91)
through 03/31/97 7.48%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Municipal Income Fund on February 1,
1991 (inception date). The Lehman Municipal Bond Index is a broad based,
unmanaged, total return index composed of 8,000 investment grade, long-term
maturity bonds. Funds included in the Lipper General Municipal Debt Funds
Average invest at least 65% of their assets in municipal debt issues in the top
four credit ratings.
<TABLE>
<CAPTION>
GROWTH OF INVESTMENT
MEASUREMENT PERIOD LIPPER GENERAL MUNICIPAL LEHMAN MUNICIPAL BOND WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE INDEX REINVESTED
<S> <C> <C> <C>
Feb. 1, 1991 10000 10000 10000
10079 10090 10081
10289 10306 10229
10707 10707 10657
Nov. 30, 1991 11073 11065 11084
11090 11099 11050
11557 11519 11497
11822 11826 11760
Nov. 30, 1992 12054 12041 11995
12523 12488 12479
12950 12897 12974
13397 13333 13475
Nov. 30, 1993 13554 13520 13596
12775 12778 12692
12852 12918 12798
12905 13007 12806
Nov. 30, 1994 12702 12821 12560
13594 13727 13559
13867 14058 13901
14194 14462 14311
Nov. 30, 1995 14864 15059 14981
Mar. 31, 1996 14598 14878 14739
14681 14992 14877
15025 15335 15272
15394 15726 15655
Mar. 31, 1997 15336 15688 15596
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
16
<PAGE> 21
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- -----------------------------------------------
<S> <C>
Year Ended 03/31/97 5.00%*
Year Ended 03/31/97 5.50%
Since Inception (06/17/92) through
03/31/97 6.22%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed within
one year of purchase
INVESTOR N SHARES
- -----------------------------------------------
Year Ended 03/31/97 5.24%
Since Inception (06/07/93) through
03/31/97 4.77%
PRIMARY A SHARES
- -----------------------------------------------
Year Ended 03/31/97 6.03%
Five Years Ended 03/31/97 7.32%
Since Inception (02/01/91) through
03/31/97 7.63%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Municipal Income Fund from the date each class of shares was first offered.
The Lehman Municipal Bond Index is a broad based, unmanaged, total return
index composed of 8,000 investment grade, long-term maturity bonds.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED,
LEHMAN MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
INVESTMENT
LEHMAN WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 17, 1992 10000 10000
10266 10292
NOV. 30, 1992 10453 10482
10841 10889
11196 11305
11575 11723
NOV. 30, 1993 11737 11809
11093 11009
11215 11085
11292 11076
NOV. 30, 1994 11130 10849
11917 11696
12204 11974
12555 12311
NOV. 30, 1995 13073 12869
MAR. 31, 1996 12916 12651
13015 12761
13313 13089
13652 13408
MAR. 31, 1997 13619 13347
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
INVESTMENT
LEHMAN WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 7, 1993 10000 10000
10511 10522
NOV. 30, 1993 10658 10600
10073 9881
10184 9949
10254 9941
NOV. 30, 1994 10108 9737
10822 10498
11083 10747
11401 11050
NOV. 30, 1995 11872 11551
MAR. 31, 1996 11729 11348
11819 11440
12090 11727
12398 12005
MAR. 31, 1997 12368 11943
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
INVESTMENT
LEHMAN WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
FEB. 1, 1991 10000 10000
10090 10081
10306 10229
10707 10657
NOV. 30, 1991 11065 11084
11099 11050
11519 11500
11826 11766
NOV. 30, 1992 12041 12006
12488 12484
12897 12996
13333 13503
NOV. 30, 1993 13520 13629
12778 12729
12918 12481
13007 12855
NOV. 30, 1994 12821 12615
13727 13625
14058 13975
14462 14395
NOV. 30, 1995 15059 15075
MAR. 31, 1996 14878 14839
14992 14986
15335 15391
15726 15785
MAR. 31, 1997 15688 15733
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
17
<PAGE> 22
NATIONS FLORIDA INTERMEDIATE MUNICIPAL BOND FUND
NATIONS FLORIDA MUNICIPAL BOND FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Michele M. Poirier is Senior Portfolio Manager of Nations Florida
Intermediate Municipal Bond Fund and Nations Florida Municipal Bond Fund and
Director, Municipal Fixed Income Management for TradeStreet Investment
Associates, Inc., investment sub-adviser to the Funds.
INVESTMENT OBJECTIVE
Nations Florida Intermediate Municipal Bond Fund seeks high current income
exempt from federal income and the Florida state intangibles taxes consistent
with moderate fluctuation of principal. The Fund invests in investment grade,
intermediate-term municipal securities.
Nations Florida Municipal Bond Fund seeks high current income exempt from
federal income and the Florida state intangibles taxes with the potential for
principal fluctuation associated with investments in long-term municipal
securities. The Fund invests in investment grade, long-term municipal
securities.
PERFORMANCE REVIEW*
NATIONS FLORIDA INTERMEDIATE MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations Florida Intermediate
Municipal Bond Fund Investor A Shares provided a total return of 4.01%,
outperforming the Lipper Florida Intermediate Municipal Debt Funds Average of
3.72%.
NATIONS FLORIDA MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations Florida Municipal
Bond Fund Investor A Shares provided a total return of 5.09%, outperforming the
Lipper Florida Municipal Debt Funds Average of 4.75%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Ms. Poirier shares her views on financial
market conditions and Fund performance for the one-year period ended March 31,
1997.
BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH
OF THE FUNDS.
Our investment philosophy strives to achieve total return to the extent
consistent with the Funds' investment objective by maintaining a focus on income
exempt from federal income taxes. Additionally, care is taken to limit the
distribution of capital gains when consistent with the prudent management of the
Funds. We use a combination of strategies among which are duration management
(managing the Funds' sensitivity to interest rates), market sector selection and
review of individual credits. By maintaining a well-diversified portfolio, we
limit the Funds' vulnerability to significant difficulties in any single credit
or market sector.
Nations Florida Intermediate Municipal Bond Fund focuses on investment
grade municipal bonds exempt from federal income and Florida state intangibles
taxes. The portfolio is managed to maintain an average maturity of between three
and ten years.
Nations Florida Municipal Bond Fund focuses on investment grade municipal
bonds exempt from federal income and Florida state intangibles taxes. The
portfolio is managed to maintain an average maturity of between ten and twenty
years.
The Funds balance their investments between high quality investment grade
issues for reduced credit risk and liquidity, and lower quality investment grade
issues (BBB) for the additional yield potential they provide.
- ---------------
* The performance shown includes the effect of fee waivers by the investment
adviser, the administrator and/or the custodian. Such fee waivers have the
effect of increasing total return.
18
<PAGE> 23
In periods of falling interest rates, we will extend the average portfolio
maturity toward the maximum limit to benefit from the greater capital
appreciation potential of longer-term bonds. When interest rates are rising,
we'll shorten the average maturity to protect the Funds' net asset value from
the price erosion that comes with higher interest rates.
HOW DID MARKET CONDITIONS AFFECT THE FUNDS' PERFORMANCE?
The reporting period was a volatile time for interest rates. Interest rate
volatility was lessened in the municipal market due to strong supply and demand
dynamics -- modest supply conditions and strong demand from property and
casualty insurance companies. Due to these conditions, municipal bonds
outperformed their U.S. Treasury counterparts during the year. (For additional
information, please refer to the "general municipal bond market comments" on
page 5.)
Over the reporting period, the key factor influencing Fund performance was
duration management. We focused on positioning the Funds appropriately in a
changing interest rate environment and the Funds' returns reflect this
positioning. Owing to our belief that interest rates would increase, the Funds
were slightly short duration during the first four months of the fiscal year and
then moved to a neutral to slightly long position until January, when durations
were shortened again in anticipation of rising interest rates. Additionally,
security selection played a role in performance as structural aspects of an
individual security become more significant in periods of interest rate
volatility. Sector rotation had little impact on Fund performance because credit
spreads between sectors universally remain compressed.
WHAT'S THE ECONOMIC ENVIRONMENT IN FLORIDA?
As one of the fastest growing states in the nation in terms of population,
Florida continues to achieve positive financial results through prudent
financial management and continued economic expansion. This has led to a "Aa2"
rating from Moody's Investors Service, Inc., a "AA" rating from Standard &
Poor's Corporation and a "AA" rating from Fitch Investors Service, Inc.
Florida's proactive attitude towards welfare reform has positioned the state to
meet the challenges created by declining federal support. Florida's Work and
Gain Economic Self Sufficiency (WAGES) program has been approved by the federal
government and contains many of the same mandates contained in the federal
program. Population growth, one of Florida's strengths, also poses one of
Florida's greatest challenges for the future as the state contends with
expanding its debt issuance in order to meet the ever increasing infrastructure
needs of its residents.
WHAT ARE THE FUNDS' CURRENT PORTFOLIO CHARACTERISTICS?**
As of March 31, 1997, the average portfolio maturity of Nations Florida
Intermediate Municipal Bond Fund was 9.26 years, while the duration of the Fund
was 5.53 years. The Fund held 48 issues with an average credit rating of "Aa" by
Moody's Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 6.92% of the Fund.
As of March 31, 1997, the average portfolio maturity of Nations Florida
Municipal Bond Fund was 19.32 years, while the duration of the Fund was 7.52
years. The Fund held 39 issues with an average credit rating of "Aa" by Moody's
Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 16.20% of the Fund.
WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN 1997?
State and local government finances continue to benefit from the economy's
expansion, providing support for the market from a credit standpoint. Modest new
issue supply should help the municipal bond market outperform taxable
counterparts. However, the market will be facing challenges as structural
changes in our welfare system begin to have an impact on state and local
government finances. As the competitive environment for utilities and healthcare
changes, these market segments will bear monitoring over the next few years.
- ---------------
** Portfolio characteristics and outlook were current as of March 31, 1997,
are subject to change and may not be representative of current
characteristics and outlook. Also, the outlook of this Fund's portfolio
manager may differ from that of other Nations Funds' portfolio managers.
19
<PAGE> 24
NATIONS FUNDS
Nations Florida Intermediate Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Insured 47.1%
General Obligation 7.2%
Hospital 10.2%
Education 2.9%
Pollution Control Revenue/Industrial
Development Revenue 4.6%
Housing Revenue 13.1%
Transportation 3.2%
Power/Utilities Revenue 3.7%
Pre-Refunded 3.6%
Other 4.4%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Orange County, Florida, Health Facilities
Authority Revenue Refunding, (Orlando
Regional Medical Center Hospital), (MBIA
Insured), 4.400% 10/01/02 5.1%
2. Hillsborough County, Florida, Environmentally
Sensitive Lands, 6.250% 07/01/06 4.9
3. Orlando and Orange County, Florida,
Expressway Authority Revenue Refunding,
6.500% 07/01/10 3.8
4. Florida State Housing Finance Agency,
Refunding, Multi-family Housing, (Altamonte
Project), Series C, 7.000% 12/01/24 3.7
5. Hillsborough County, Florida, Utility
Refunding Revenue, Capital Appreciation,
Series A, (MBIA-IBC Insured), Zero coupon
08/01/99 3.1
6. Dade County, Florida, School District Revenue
Refunding, (AMBAC Insured), 5.000% 07/15/01 2.9
7. Florida State Board of Education, GO, Capital
Outlay, Public Education, Series A,
Unrefunded Balance, 7.250% 06/01/23 2.8
8. Puerto Rico Industrial, Medical and
Environmental Agency, Pollution Control
Facilities, Finance Authority Revenue, Higher
Education, (Catholic University Project),
Series A, 5.600% 12/01/07 2.8
9. Dunes, Florida, Community Development
District Revenue, (Intercoastal Water Way
Bridge), 5.300% 10/01/03 2.7
10. Indian River County, Florida, School
District, (FSA Insured), 5.000% 04/01/03 2.6
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
<TABLE>
<CAPTION>
AVERAGE
ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<S> <C>
Year Ended 03/31/97 4.01%
Since Inception (12/14/92)
through 03/31/97 5.47%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Florida Intermediate Municipal Bond
Fund on December 14, 1992 (inception date). The Lehman 7-Year Municipal Bond
Index is a broad based, unmanaged, total return index composed of investment
grade bonds with maturities of 7 to 8 years. Funds included in the Lipper
Florida Intermediate Municipal Debt Funds Average invest at least 65% of assets
in municipal debt issues which are exempt from taxation in Florida, with
dollar-weighted average maturities of 5 to 10 years.
<TABLE>
<CAPTION>
LIPPER FLORIDA GROWTH OF INVESTMENT
MEASUREMENT PERIOD INTERMEDIATE MUNICIPAL LEHMAN 7-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Dec. 14, 1992 10000 10000 10000
10097 10082 10038
10431 10404 10379
10746 10692 10687
11093 11002 11014
Nov. 30, 1993 11246 11134 11156
10730 10714 10678
10840 10827 10759
10922 10931 10811
Nov. 30, 1994 10741 10825 10676
11290 11394 11295
11527 11718 11566
11792 12053 11830
Nov. 30, 1995 12067 12357 12179
Mar. 31, 1996 11937 12313 12084
11939 12367 12128
12136 12588 12337
12366 12896 12609
Mar. 31, 1997 12282 12882 12569
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
20
<PAGE> 25
NATIONS FUNDS
Nations Florida Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 3.21%*
Year Ended 03/31/97 3.71%
Since Inception (12/17/92) through
03/31/97 5.07%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 3.70%
Since Inception (06/07/93) through
03/31/97 4.37%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.22%
Since Inception (12/11/92) through
03/31/97 5.63%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Florida Intermediate Municipal Bond Fund from the date each class of
shares was first offered. The Lehman 7-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade
bonds with maturities of 7 to 8 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED,
LEHMAN 7-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
DEC. 17, 1992 10000 10000
10319 10360
10605 10652
10913 10961
NOV. 30, 1993 11044 11085
10627 10594
10739 10667
10843 10711
NOV. 30, 1994 10738 10568
11302 11173
11623 11433
11955 11685
NOV. 30, 1995 12257 12021
MAR. 31, 1996 12213 11919
12266 11952
12486 12150
12792 12408
MAR. 31, 1997 12777 12360
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 7, 1993 10000 10000
10479 10425
NOV. 30, 1993 10605 10550
10205 10089
10312 10158
10411 10200
NOV. 30, 1994 10310 10065
10852 10640
11160 10888
11480 11128
NOV. 30, 1995 11769 11448
MAR. 31, 1996 11727 11350
11778 11383
11990 11570
12283 11817
MAR. 31, 1997 12269 11771
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
DEC. 11, 1992 10000 10000
10082 10030
10404 10374
10692 10686
11002 11017
NOV. 30, 1993 11134 11163
10714 10688
10827 10775
10931 10833
NOV. 30, 1994 10825 10703
11394 11329
11718 11607
12053 11877
NOV. 30, 1995 12357 12235
MAR. 31, 1996 12313 12145
12367 12195
12588 12412
12896 12692
MAR. 31, 1997 12882 12658
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
21
<PAGE> 26
NATIONS FUNDS
Nations Florida Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Hospital 4.1%
General Obligation 5.1%
Insured 40.0%
Other 2.8%
Pre-Refunded 11.0%
Power/Utilities Revenue 3.6%
Transportation 2.5%
Housing Revenue 10.2%
Pollution Control Revenue/
Industrial Development
Revenue 13.1%
Education 8.2%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. South Broward, Florida, Hospital District
Revenue Refunding, (FSA Insured), 5.500%
05/01/28 4.9%
2. Palm Beach County, Florida, Health Facilities
Authority Revenue, (Good Samaritans Health
System), 6.200% 10/01/11 4.0
3. Dade County, Florida, Water and Sewer System
Revenue Refunding, (FGIC Insured), 5.000%
10/01/13 3.6
4. Hillsborough County, Florida, Industrial
Development Authority, PCR, (Tampa Electric
Company Project), 8.000% 05/01/22 3.0
5. Martin County, Florida, Industrial
Development Authority Revenue, (Indiantown
Cogeneration Project), Series A, AMT, 7.875%
12/15/25 3.0
6. Florida State Municipal Power Agency Revenue,
(Stanton II Project), Pre-refunded, (AMBAC
Insured), 6.500% 10/01/20 2.9
7. Florida State Board of Education, GO, Capital
Outlay, Public Education, Unrefunded Balance,
Series A, 7.250% 06/01/23 2.8
8. North Broward, Florida, Hospital Revenue,
(MBIA Insured), 6.250% 01/01/06 2.8
9. Florida State Housing Finance Agency,
Refunding, Multi-family Housing, (Altamonte
Project), Series C, 7.000% 12/01/24 2.8
10. Escambia County, Florida, PCR, (Champion
International Corporation Project), AMT,
6.900% 08/01/22 2.8
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 5.09%
Since Inception (12/10/93)
through 03/31/97 3.62%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Florida Municipal Bond Fund on
December 10, 1993 (inception date). The Lehman 20-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade bonds
with maturities of 18 to 22 years. Funds included in the Lipper Florida
Municipal Debt Funds Average limit their assets to those securities which are
exempt from taxation in Florida.
<TABLE>
<CAPTION>
GROWTH OF INVESTMENT
MEASUREMENT PERIOD LIPPER FLORIDA MUNICIPAL LEHMAN 20-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Dec. 10, 1993 10000 10000 10000
10230 10241 9997
9535 9531 9198
9606 9626 9269
9630 9676 9280
Nov. 30, 1994 9471 9489 9174
10183 10335 9923
10390 10558 10183
10644 10844 10436
Nov. 30, 1995 11181 11479 10977
Mar. 31, 1996 10947 11224 10703
11013 11352 10801
11268 11677 11050
11528 11991 11302
Mar. 31, 1997 11462 11916 11247
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
22
<PAGE> 27
NATIONS FUNDS
Nations Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON -INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 4.28%*
Year Ended 03/31/97 4.78%
Since Inception (11/03/94) through
03/31/97 9.76%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed within
one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.52%
Since Inception (10/22/93) through
03/31/97 3.04%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 5.29%
Since Inception (12/13/93) through
03/31/97 4.01%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Florida Municipal Bond Fund from the date each class of shares was first
offered. The Lehman 20-Year Municipal Bond Index is a broad based,
unmanaged, total return index composed of investment grade bonds with
maturities of 18 to 22 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED,
LEHMAN 20-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
NOV. 3, 1994 10000 10000
10072 10300
10970 11126
11207 11403
11511 11670
NOV. 30, 1995 12185 12259
MAR. 31, 1996 11914 11943
12049 12043
12049 12043
12394 12312
12728 12584
MAR. 31, 1997 12649 12514
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
OCT. 22, 1993 10000 10000
NOV. 30, 1993 10129 10034
9427 9213
9520 9274
9570 9273
NOV. 30, 1994 9385 9154
10222 9888
10442 10133
10725 10371
NOV. 30, 1995 11353 10894
MAR. 31, 1996 11101 10607
11227 10690
11548 10921
11860 11156
MAR. 31, 1997 11786 11086
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
DEC. 13, 1993 10000 10000
10241 10056
9531 9251
9626 9330
9676 9346
NOV. 30, 1994 9489 9244
10558 10270
10844 10531
NOV. 30, 1995 11479 11082
MAR. 31, 1996 11224 10811
11352 10915
11677 11172
11991 11433
MAR. 31, 1997 11916 11383
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
23
<PAGE> 28
NATIONS GEORGIA INTERMEDIATE MUNICIPAL BOND FUND
NATIONS GEORGIA MUNICIPAL BOND FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Michele M. Poirier is Senior Portfolio Manager of Nations Georgia
Intermediate Municipal Bond Fund and Nations Georgia Municipal Bond Fund and
Director, Municipal Fixed Income Management for TradeStreet Investment
Associates, Inc., investment sub-adviser to the Funds.
INVESTMENT OBJECTIVE
Nations Georgia Intermediate Municipal Bond Fund seeks high current income
exempt from federal and Georgia state income taxes consistent with moderate
fluctuation of principal. The Fund invests in investment grade, intermediate-
term municipal securities.
Nations Georgia Municipal Bond Fund seeks high current income exempt from
federal and Georgia state income taxes with the potential for principal
fluctuation associated with investments in long-term municipal securities. The
Fund invests in investment grade, long-term municipal securities.
PERFORMANCE REVIEW*
NATIONS GEORGIA INTERMEDIATE MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations Georgia Intermediate
Municipal Bond Fund Investor A Shares provided a total return of 4.12%,
outperforming the Lipper Other States Intermediate Municipal Debt Funds Average
return of 3.93%.
NATIONS GEORGIA MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations Georgia Municipal
Bond Fund Investor A Shares provided a total return of 5.05%, outperforming the
Lipper Georgia Municipal Debt Funds Average return of 4.89%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Ms. Poirier shares her views on financial
market conditions and Fund performance for the one-year period ended March 31,
1997.
BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH
OF THE FUNDS.
Our investment philosophy strives to achieve total return to the extent
consistent with the Funds' investment objective by maintaining a focus on income
exempt from federal and state income taxes. Additionally, care is taken to limit
the distribution of capital gains when consistent with the prudent management of
the Funds. We use a combination of strategies among which are duration
management (managing the Funds' sensitivity to interest rates), market sector
selection and review of individual credits. By maintaining a well-diversified
portfolio, we limit the Funds' vulnerability to significant difficulties in any
single credit or market sector.
Nations Georgia Intermediate Municipal Bond Fund focuses on investment
grade municipal bonds exempt from federal and state taxes. The portfolio is
managed to maintain an average maturity of between three and ten years.
Nations Georgia Municipal Bond Fund focuses on investment grade municipal
bonds exempt from federal and state taxes. The portfolio is managed to maintain
an average maturity of between ten and twenty years.
The Funds balance their investments between high quality investment grade
issues for reduced credit risk and liquidity, and lower quality investment grade
issues (BBB) for the additional yield potential they provide.
- ---------------
* The performance shown includes the effect of fee waivers by the investment
adviser, the administrator and/or the custodian. Such fee waivers have the
effect of increasing total return.
24
<PAGE> 29
In periods of falling interest rates, we will extend the average portfolio
maturity toward the maximum limit to benefit from the greater capital
appreciation potential of longer-term bonds. When interest rates are rising,
we'll shorten the average maturity to protect the Funds' net asset value from
the price erosion that comes with higher interest rates.
HOW DID MARKET CONDITIONS AFFECT THE FUNDS' PERFORMANCE?
The reporting period was a volatile time for interest rates. Interest rate
volatility was lessened in the municipal market due to strong supply and demand
dynamics -- modest supply conditions and strong demand from property and
casualty insurance companies. Due to these conditions, municipal bonds
outperformed their U.S. Treasury counterparts during the year. (For additional
information, please refer to the "general municipal bond market comments" on
page 5.)
Over the reporting period, the key factor influencing Fund performance was
duration management. We focused on positioning the Funds appropriately in a
changing interest rate environment and the Funds' returns reflect this
positioning. Owing to our belief that interest rates would increase, the Funds
were slightly short duration during the first four months of the fiscal year and
then moved to a neutral to slightly long position until January, when durations
were shortened again in anticipation of rising interest rates. Additionally,
security selection played a role in performance as structural aspects of an
individual security become more significant in periods of interest rate
volatility. Sector rotation had little impact on Fund performance because credit
spreads between sectors universally remain compressed.
WHAT'S THE ECONOMIC ENVIRONMENT IN GEORGIA?
The state of Georgia has one of the best debt structures in the country,
hence the "Aaa" rating from Moody's Investors Service, Inc., a "AA+" rating from
Standard & Poor's Corporation and a "AAA" rating from Fitch Investors Service,
Inc. Georgia ranks among the top five states in the nation in population and
employment growth. This is due in part to its competitive manufacturing base and
the diverse service and transportation center of Atlanta. Increasing demand for
schools, highways and essential services are just some of the challenges facing
not only Georgia but all of the southeast. As with most states that have not yet
proposed a program for meeting future federal welfare reform standards, Georgia
is attempting to reduce its number of caseloads so that it may benefit, in the
early years, from federal block grants.
WHAT ARE THE FUNDS' CURRENT PORTFOLIO CHARACTERISTICS?**
As of March 31, 1997, the average portfolio maturity of Nations Georgia
Intermediate Municipal Bond Fund was 7.99 years, while the duration of the Fund
was 5.11 years. The Fund held 59 issues with an average credit rating of "Aa" by
Moody's Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 3.45% of the Fund.
As of March 31, 1997, the average portfolio maturity of Nations Georgia
Municipal Bond Fund was 15.19 years, while the duration of the Fund was 7.61
years. The Fund held 27 issues with an average credit rating of "Aa" by Moody's
Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 15.09% of the Fund.
WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN 1997?
State and local government finances continue to benefit from the economy's
expansion, providing support for the market from a credit standpoint. Modest new
issue supply should help the municipal bond market outperform taxable
counterparts. However, the market will be facing challenges as structural
changes in our welfare system begin to have an impact on state and local
government finances. As the competitive environment for utilities and healthcare
changes, these market segments will bear monitoring over the next few years.
- ---------------
** Portfolio characteristics and outlook were current as of March 31, 1997,
are subject to change and may not be representative of current characteristics
and outlook. Also, the outlook of this Fund's portfolio manager may differ from
that of other Nations Funds' portfolio managers.
25
<PAGE> 30
NATIONS FUNDS
Nations Georgia Intermediate Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
General Obligation 37.0%
Insured 29.4%
Other 7.3%
Power/Utilities Revenue 7.7%
Water 3.7%
Transportation 1.7%
Housing Revenue 1.7%
Pollution Control Revenue/
Industrial Development
Revenue 1.3%
Education 3.2%
Hospital 7.0%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Georgia State, GO, Series C, 6.500% 07/01/05 4.9%
2. Georgia State Tollway Authority Revenue,
(Georgia 400 Project), 6.375% 07/01/02 3.5
3. Dalton, Georgia, Multiple Utility Revenue
Refunding, (MBIA Insured), 4.450% 01/01/03 3.2
4. Georgia State, GO, Series A, 6.250% 03/01/06 2.6
5. Georgia State Municipal Gas Authority, Gas
Tax Revenue, (Southern Storage Gas Project),
6.000% 07/01/04 2.5
6. Private Colleges and Universities Facilities
Authority Revenue, Georgia, (Emory University
Project), Series C, 5.750% 10/01/02 2.4
7. Richmond County, Georgia, Water and Sewer
Revenue Refunding and Improvement, Series A,
(FGIC Insured), 5.250% 10/01/28 2.2
8. Fulton County, Georgia, Water and Sewer
Authority Revenue Refunding, (FGIC Insured),
5.100% 01/01/98 2.1
9. Savannah, Georgia, Hospital Authority Revenue
Refunding and Improvement, (Candler Hospital
Project), 7.000% 01/01/11 2.1
10. Paulding County, Georgia, School District,
GO, Series A, 6.400% 02/01/04 1.9
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 4.12%
Since Inception (05/04/92)
through 03/31/97 6.05%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Georgia Intermediate Municipal Bond
Fund on May 4, 1992 (inception date). The Lehman 7-Year Municipal Bond Index is
a broad based, unmanaged, total return index composed of investment grade bonds
with maturities of 7 to 8 years. Funds included in the Lipper Other States
Intermediate Municipal Debt Funds Average invest in municipal debt issues with
dollar-weighted average maturities of 5 to 10 years and which are exempt from
taxation on a specified city or state basis.
<TABLE>
<CAPTION>
LIPPER OTHER STATES GROWTH OF INVESTMENT
MEASUREMENT PERIOD INTERMEDIATE MUNICIPAL LEHMAN 7-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
May 4, 1992 10000 10000 10000
10251 10264 10285
10498 10546 10541
Nov. 30, 1992 10673 10718 10746
10995 11060 11101
11283 11366 11419
11614 11696 11800
Nov. 30, 1993 11754 11837 11915
11299 11390 11366
11407 11510 11451
11480 11621 11504
Nov. 30, 1994 11360 11509 11345
11925 12113 11972
12188 12457 12270
12477 12814 12551
Nov. 30, 1995 12825 13137 12942
Mar. 31, 1996 12750 13090 12809
12800 13147 12857
13029 13383 13103
13315 13710 13388
Mar. 31, 1997 13307 13694 13337
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
26
<PAGE> 31
NATIONS FUNDS
Nations Georgia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 3.31%*
Year Ended 03/31/97 3.81%
Since Inception (06/17/92) through
03/31/97 5.32%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed within
one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 3.81%
Since Inception (06/07/93) through
03/31/97 4.22%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.33%
Five Years Ended 03/31/97 6.24%
Since Inception (03/01/92) through
03/31/97 6.16%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Georgia Intermediate Municipal Bond Fund from the date each class of
shares was first offered. The Lehman 7-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade
bonds with maturities of 7 to 8 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED,
LEHMAN 7-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUN. 17, 1992 10000 10000
10275 10314
NOV. 30, 1992 10442 10478
10776 10819
11074 11124
11396 11477
NOV. 30, 1993 11533 11572
11098 11022
11214 11097
11322 11139
NOV. 30, 1994 11213 10977
11802 11575
12137 11855
12484 12117
NOV. 30, 1995 12799 12485
MAR. 31, 1996 12753 12348
12809 12385
13039 12612
13358 12877
MAR. 31, 1997 13342 12818
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 7, 1993 10000 10000
10479 10470
NOV. 30, 1993 10605 10563
10205 10067
10312 10135
10411 10174
NOV. 30, 1994 10310 10026
10852 10572
11160 10828
11480 11067
NOV. 30, 1995 11769 11403
MAR. 31, 1996 11727 11278
11778 11312
11890 11520
12283 11761
MAR. 31, 1997 12269 11707
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
MAR. 1, 1992 10000 10000
9966 10014
10319 10361
10603 10623
NOV. 30, 1992 10776 10813
11120 11196
11428 11521
11760 11909
NOV. 30, 1993 11901 12031
11452 11480
11572 11572
11684 11631
NOV. 30, 1994 11571 11476
12179 12116
12525 12424
12883 12715
NOV. 30, 1995 13208 13117
MAR. 31, 1996 13161 12989
13218 13045
13455 13301
13784 13597
MAR. 31, 1997 13769 13551
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
27
<PAGE> 32
NATIONS FUNDS
Nations Georgia Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Power/Utilities Revenue 12.9%
General Obligation 15.8%
Insured 17.0%
Gash and Cash-Equivalents 11.7%
Pollution Control Revenue/
Industrial Development
Revenue 8.8%
Housing Revenue 9.6%
Water Revenue 12.0%
Hospital 12.2%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Georgia L. Smith II, Georgia, World Congress
Center Authority, Recreational Revenue, (Domed
Stadium Project), 7.875% 07/01/20 6.8%
2. Georgia State Municipal Electric Authority
Power Revenue, Special Obligation Bonds, First
Crossover, General Resolution, 6.500% 01/01/12 6.7
3. Roswell, Georgia, GO, 5.600% 02/01/10 6.3
4. Fulco, Georgia, Hospital Authority Revenue,
Revenue Anticipation Certificates, St.
Joseph's Hospital, 5.500% 10/01/14 6.0
5. Coweta County, Georgia, Development Authority,
Industrial Development Revenue, (Sivaco
National Wire Project), AMT, 5.400% 02/01/09 5.0
6. White County, Georgia, Industrial Development
Authority Revenue Refunding, (Clark-Schwebel
Fiber and Glass Company Project), 6.850%
06/01/10 3.7
7. Peach County, Georgia, School District, GO,
(MBIA Insured), 6.500% 02/01/08 3.5
8. Union County, Georgia, Housing Authority,
Multi-family Housing Revenue Refunding,
(Hidden Lake Apartments), Series A, (FHA/FNMA
Insured), 7.125% 12/01/25 3.3
9. Columbia County, Georgia, School District,
Series B, (MBIA Insured), 6.250% 04/01/13 3.3
10. Georgia State, GO, Series E, 5.500% 07/01/07 3.2
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 5.05%
Since Inception (12/30/93)
through 03/31/97 3.60%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Georgia Municipal Bond Fund on
December 30, 1993 (inception date). The Lehman 20-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade bonds
with maturities of 18 to 22 years. Funds included in the Lipper Georgia
Municipal Debt Funds Average limit their assets to those securities which are
exempt from taxation in Georgia.
<TABLE>
<CAPTION>
GROWTH OF INVESTMENT
MEASUREMENT PERIOD LIPPER GEORGIA MUNICIPAL LEHMAN 20-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Dec. 30, 1993 10000 10000 10000
9323 9307 9258
9369 9399 9334
9406 9448 9286
Nov. 30, 1994 9235 9266 9138
9920 10092 9865
10103 10310 10114
10346 10589 10399
Nov. 30, 1995 10864 11209 10915
Mar. 31, 1996 10626 10960 10678
10700 11084 10736
10962 11402 11003
11208 11709 11264
Mar. 31, 1997 11159 11636 11218
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
28
<PAGE> 33
NATIONS FUNDS
Nations Georgia Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON -INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 4.27%*
Year Ended 03/31/97 4.77%
Since Inception (11/03/94) through
03/31/97 9.90%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed within
one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.50%
Since Inception (10/21/93) through
03/31/97 3.10%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 5.29%
Since Inception (01/13/94) through
03/31/97 3.71%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Georgia Municipal Bond Fund from the date each class of shares was first
offered. The Lehman 20-Year Municipal Bond Index is a broad based,
unmanaged, total return index composed of investment grade bonds with
maturities of 18 to 22 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED,
LEHMAN 20-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
LEHMAN GROWTH OF
20-YEAR INVESTMENT
MEASUREMENT PERIOD MUNICIPAL WITH
(QUARTERLY) BOND DISTRIBUTIONS
INDEX REINVESTED
<S> <C> <C>
NOV. 3, 1994 10000 10000
NOV. 30, 1994 10072 10300
10970 11103
11207 11369
11511 11674
NOV. 30, 1995 12185 12236
MAR. 31, 1996 11914 11981
12049 12040
12394 12331
12728 12613
MAR. 31, 1997 12649 12552
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
LEHMAN GROWTH OF
20-YEAR INVESTMENT
MEASUREMENT PERIOD MUNICIPAL WITH
(QUARTERLY) BOND DISTRIBUTIONS
INDEX REINVESTED
<S> <C> <C>
OCT. 21, 1993 10000 10000
NOV. 30, 1993 10129 10072
9427 9302
9520 9365
9570 9304
NOV. 30, 1994 9385 9143
10222 9856
10442 10091
10725 10362
NOV. 30, 1995 11353 10861
MAR. 31, 1996 11101 10628
11227 10674
11548 10925
11860 11168
MAR. 31, 1997 11786 11107
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
LEHMAN GROWTH OF
20-YEAR INVESTMENT
MEASUREMENT PERIOD MUNICIPAL WITH
(QUARTERLY) BOND DISTRIBUTIONS
INDEX REINVESTED
<S> <C> <C>
JAN. 13, 1994 10000 10000
9307 9208
9399 9288
9448 9245
NOV. 30, 1994 9266 9102
10092 9829
10310 10082
10589 10373
NOV. 30,1995 11209 10893
MAR. 31, 1996 10960 10679
11084 10745
11402 11018
11709 11284
MAR. 31, 1997 11636 11244
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
29
<PAGE> 34
NATIONS MARYLAND INTERMEDIATE MUNICIPAL BOND FUND
NATIONS MARYLAND MUNICIPAL BOND FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
John C. Kohl is Senior Portfolio Manager of Nations Maryland Intermediate
Municipal Bond Fund and Nations Maryland Municipal Bond Fund and Managing
Director, Fixed Income for TradeStreet Investment Associates, Inc., investment
sub-adviser to the Funds.
INVESTMENT OBJECTIVE
Nations Maryland Intermediate Municipal Bond Fund seeks high current income
exempt from federal and Maryland state income taxes consistent with moderate
fluctuation of principal. The Fund invests in investment grade, intermediate-
term municipal securities.
Nations Maryland Municipal Bond Fund seeks high current income exempt from
federal and Maryland state income taxes with the potential for principal
fluctuation associated with investments in long-term municipal securities. The
Fund invests in investment grade, long-term municipal securities.
PERFORMANCE REVIEW*
NATIONS MARYLAND INTERMEDIATE MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations Maryland Intermediate
Municipal Bond Fund Investor A Shares provided a total return of 3.62%, slightly
lagging the Lipper Other States Intermediate Municipal Debt Funds Average return
of 3.93%.
NATIONS MARYLAND MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations Maryland Municipal
Bond Fund Investor A Shares provided a total return of 4.99%, outperforming its
peer group, the Lipper Maryland Municipal Debt Funds Average, which returned
4.54%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Kohl shares his views on financial market
conditions and Fund performance for the one-year period ended March 31, 1997.
BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH
OF THE FUNDS.
Our investment philosophy strives to achieve total return to the extent
consistent with the Funds' investment objective by maintaining a focus on income
exempt from federal and state income taxes. Additionally, care is taken to limit
the distribution of capital gains when consistent with the prudent management of
the Funds. We use a combination of strategies among which are duration
management (managing the Funds' sensitivity to interest rates), market sector
selection and review of individual credits. By maintaining a well-diversified
portfolio, we limit the Funds' vulnerability to significant difficulties in any
single credit or market sector.
Nations Maryland Intermediate Municipal Bond Fund focuses on investment
grade municipal bonds exempt from federal and Maryland state income taxes. The
portfolio is managed to maintain an average maturity of between three and ten
years.
Nations Maryland Municipal Bond Fund focuses on investment grade municipal
bonds exempt from federal and Maryland state income taxes. The portfolio is
managed to maintain an average maturity of between ten and twenty years.
The Funds balance their investments between high quality investment grade
issues for reduced credit risk and liquidity, and lower quality investment grade
issues (BBB) for the additional yield potential they provide.
- ---------------
* The performance shown includes the effect of fee waivers by the investment
adviser, the administrator and/or the custodian. Such fee waivers have the
effect of increasing total return.
30
<PAGE> 35
In periods of falling interest rates, we will extend the average portfolio
maturity toward the maximum limit to benefit from the greater capital
appreciation potential of longer-term bonds. When interest rates are rising,
we'll shorten the average maturity to protect the Funds' net asset value from
the price erosion that comes with higher interest rates.
HOW DID MARKET CONDITIONS AFFECT THE FUNDS' PERFORMANCE?
The reporting period was a volatile time for interest rates. Interest rate
volatility was lessened in the municipal market due to strong supply and demand
dynamics -- modest supply conditions and strong demand from property and
casualty insurance companies. Due to these conditions, municipal bonds
outperformed their U.S. Treasury counterparts during the year. (For additional
information, please refer to the "general municipal bond market comments" on
page 5).
Over the reporting period, the key factor influencing Fund performance was
duration management. We focused on positioning the Funds appropriately in a
changing interest rate environment and the Funds' returns reflect this
positioning. Owing to our belief that interest rates would increase, the Funds
were slightly short duration during the first four months of the fiscal year and
then moved to a neutral to slightly long position until January, when durations
were shortened again in anticipation of rising interest rates. Additionally,
security selection played a role in performance as structural aspects of an
individual security become more significant in periods of interest rate
volatility. Sector rotation had little impact on Fund performance because credit
spreads between sectors universally remain compressed.
WHAT'S THE ECONOMIC ENVIRONMENT IN MARYLAND?
Maryland, ranked fifth in per capita income, is one of the wealthiest
states in the United States. Despite the contraction of government and defense
related industries, Maryland has been able to maintain its "Aaa" rating from
Moody's Investors Service, Inc., and a "AAA" rating from Standard & Poor's
Corporation and Fitch Investors Service, Inc. through prudent, flexible
financial management and strict debt oversight. Maryland's economic base is
highly diversified with a lower than average dependence on manufacturing. As
with many other states, Maryland has experienced a decline in welfare caseloads
which should benefit the state in the early years when federal block grants to
the state are based on historical caseload levels. Slow growth in Maryland is
expected to continue as the state's economic prosperity is more closely tied to
federal spending than most states.
WHAT ARE THE FUNDS' CURRENT PORTFOLIO CHARACTERISTICS?**
As of March 31, 1997, the average portfolio maturity of Nations Maryland
Intermediate Municipal Bond Fund was 7.89 years, while the duration of the Fund
was 5.37 years. The Fund held 69 issues with an average credit rating of "Aa" by
Moody's Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 3.41% of the Fund.
As of March 31, 1997, the average portfolio maturity of Nations Maryland
Municipal Bond Fund was 14.50 years, while the duration of the Fund was 7.84
years. The Fund held 42 issues with an average credit rating of "Aa" by Moody's
Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 12.25% of the Fund.
WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN 1997?
State and local government finances continue to benefit from the economy's
expansion, providing support for the market from a credit standpoint. Modest new
issue supply should help the municipal bond market outperform taxable
counterparts. However, the market will be facing challenges as structural
changes in our welfare system begin to have an impact on state and local
government finances. As the competitive environment for utilities and healthcare
changes, these market segments will bear monitoring over the next few years.
- ---------------
** Portfolio characteristics and outlook were current as of March 31, 1997,
are subject to change and may not be representative of current
characteristics and outlook. Also, the outlook of this Fund's portfolio
manager may differ from that of other Nations Funds' portfolio managers.
31
<PAGE> 36
NATIONS FUNDS
Nations Maryland Intermediate Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Hospital 5.0%
Education 5.1%
Transportation 5.3%
Other 1.9%
Insured 34.3%
General Obligation 34.2%
Water Revenue 2.4%
Pollution Control Revenue/
Industrial Development
Revenue 2.3%
Pre-Refunded 9.5%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Charles County, Maryland, Consolidated Public
Improvement, Revenue Refunding, GO, 4.400%
06/01/03 3.9%
2. Maryland State, Transportation Authority
Revenue, GO, 4.375% 12/15/03 3.7
3. Maryland State, State and Local Facilities
Loan, GO, Third Series, Pre-refunded, 5.000%
10/15/06 3.5
4. Maryland State, Transportation Authority,
Special Obligation Revenue,
(Baltimore-Washington D.C. International
Airport Project), Series A, AMT, (FGIC
Insured), 6.400% 07/01/19 3.4
5. Northeast Maryland, Solid Waste Disposal
Authority Revenue Refunding, (Southwest
Resource Recovery Facility Project), (MBIA
Insured), 6.900% 01/01/00 2.5
6. Frederick County, Maryland, Consolidated
Public Improvement, Revenue Refunding, GO,
(FGIC Insured), 5.750% 12/01/01 2.5
7. Prince Georges County, Maryland, Solid Waste
Management Systems Authority, Revenue
Refunding, (FSA Insured), 5.100% 06/15/05 2.3
8. Cecil County, Maryland, Revenue Refunding,
Consolidated Public Improvement, GO, (FGIC
Insured), 4.800% 12/01/04 2.3
9. Calvert County, Maryland, Consolidated Public
Improvement Revenue Refunding, GO, 4.625%
07/15/05 2.3
10. Baltimore, Maryland, Port Facilities Revenue,
Consolidated Coal Sales, Series 85, 6.500%
12/01/10 2.2
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 3.62%
Five Years Ended 03/31/97 5.59%
Since Inception (09/01/90)
through 03/31/97 6.42%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Maryland Intermediate Municipal Bond
Fund on September 1, 1990 (inception date). The Lehman 7-Year Municipal Bond
Index is a broad based, unmanaged, total return index composed of investment
grade bonds with maturities of 7 to 8 years. Funds included in the Lipper Other
States Intermediate Municipal Debt Funds Average invest in municipal debt issues
with dollar-weighted average maturities of 5 to 10 years and which are exempt
from taxation on a specified city or state basis.
<TABLE>
<CAPTION>
LIPPER OTHER STATES GROWTH OF INVESTMENT
MEASUREMENT PERIOD INTERMEDIATE MUNICIPAL LEHMAN 7-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Sep. 1, 1990 10000 10000 10000
10032 10015 10085
Nov. 30, 1990 10377 10399 10407
10598 10647 10643
10773 10831 10810
11128 11242 11123
Nov. 30, 1991 11473 11612 11465
11485 11503 11477
11870 12015 11837
12155 12345 12090
Nov. 30, 1992 12358 12648 12273
12726 12947 12636
13060 13305 12971
13446 13692 13380
Nov. 30, 1993 13608 13356 13502
13076 13333 12890
13199 13474 12990
13279 13803 13026
Nov. 30, 1994 13136 13472 12867
13791 14179 13583
14099 14582 13946
14436 15000 14261
Nov. 30, 1995 14831 15378 14619
Mar. 31, 1996 14744 15323 14538
14793 15390 14566
15062 15666 14814
15384 16049 15120
Mar. 31, 1997 15369 16031 15064
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
32
<PAGE> 37
NATIONS FUNDS
Nations Maryland Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- -----------------------------------------------
<S> <C>
Year Ended 03/31/97 2.81%*
Year Ended 03/31/97 3.31%
Since Inception (06/17/92) through
03/31/97 4.83%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed within
one year of purchase
INVESTOR N SHARES
- -----------------------------------------------
Year Ended 03/31/97 3.31%
Since Inception (06/08/93) through
03/31/97 4.03%
PRIMARY A SHARES
- -----------------------------------------------
Year Ended 03/31/97 3.83%
Five Years Ended 03/31/97 5.77%
Since Inception (09/01/90) through
03/31/97 6.57%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Maryland Intermediate Municipal Bond Fund from the date each class of
shares was first offered. The Lehman 7-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade
bonds with maturities of 7 to 8 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED, LEHMAN
7-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 17, 1992 10000 10000
10275 10243
NOV. 30, 1992 10442 10382
10776 10673
11074 10939
11396 11267
NOV. 30, 1993 11533 11353
11214 10898
11322 10920
NOV. 30, 1994 11213 10778
11802 11370
12137 11665
12484 11919
NOV. 30, 1995 12799 12209
MAR. 31, 1996 12753 12132
12809 12146
13039 12344
13358 12589
MAR. 31, 1997 13342 12534
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 8, 1993 10000 10000
10183 10129
10479 10440
NOV. 30, 1993 10605 10525
10205 10040
10312 10109
10411 10130
NOV. 30, 1994 10310 9999
10852 10548
11160 10821
11480 11057
NOV. 30, 1995 11769 11326
MAR. 31, 1996 11727 11255
11775 11268
11990 11451
12283 11679
MAR. 31, 1997 12269 11627
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
SEP. 1, 1990 10000 10000
10015 10085
NOV. 30, 1990 10399 10407
10647 10643
10831 10810
11242 11123
NOV. 30, 1991 11612 11465
11503 11477
12015 11840
12345 12097
NOV. 30, 1992 12546 12285
12947 12641
13305 12992
13692 13407
NOV. 30, 1993 13356 13534
13333 12926
13474 13032
13803 13075
NOV. 30, 1994 13472 12922
14179 13648
14582 14019
15000 14343
NOV. 30, 1995 15378 14710
MAR. 31, 1996 15323 14636
15666 14929
16049 15245
MAR. 31, 1997 16031 15196
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
33
<PAGE> 38
NATIONS FUNDS
Nations Maryland Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Insured 23.8%
General Obligation 14.7%
Pollution Control Revenue/Industrial
Development Revenue 11.9%
Hospital 9.0%
Other 8.6%
Education 8.1%
Housing 7.6%
Pre-Refunded 4.1%
Transportation 4.1%
Cash and Cash Equivalents 3.3%
Water Revenue 3.3%
Power/Utility Revenue 1.5%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Bel Air, Maryland, Industrial Development
Revenue,
(May Department Stores Company Project),
6.375% 10/01/99 4.5%
2. Maryland State, Transportation Authority
Revenue, (Transportation Facilities Project),
6.800% 07/01/16 4.0
3. Government of Guam, GO, Series A, 5.200%
11/15/08 4.0
4. Puerto Rico Electric Power Authority, Power
Revenue Refunding, Series Y, (MBIA Insured),
6.500% 07/01/06 3.9
5. Prince Georges County, Maryland, PCR
Refunding, (Potomac Electric Power Project),
5.750% 03/15/10 3.6
6. Dayton, Ohio, Special Facilities Revenue,
(Emery Air Freight Corporation Project),
Series D, AMT,
6.200% 10/01/09 3.6
7. Puerto Rico Housing, Bank and Finance Agency,
Single-family Mortgage Revenue, (Affordable
Housing Mortgage-Portfolio I), AMT,
(GNMA/FNMA/FHLMC Collateral), 6.100% 10/01/15 3.6
8. Prince Georges County, Maryland, Solid Waste
Management Systems Authority, Revenue
Refunding, (FSA Insured), 5.200% 06/15/06 3.5
9. Anne Arundel County, Maryland, Consolidated
Public Improvement Revenue, GO, 5.300%
04/01/10 3.5
10. Anne Arundel County, Maryland, Consolidated
Public Improvement Revenue, GO, 5.250%
07/15/11 3.5
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
<TABLE>
<CAPTION>
AVERAGE
ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<S> <C>
Year Ended 03/31/97 4.99%
Since Inception (11/04/93)
through 03/31/97 3.85%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Maryland Municipal Bond Fund on
November 4, 1993 (inception date). The Lehman 20-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade bonds
with maturities of 18 to 22 years. Funds included in the Lipper Maryland
Municipal Debt Funds Average limit their assets to those securities which are
exempt from taxation in Maryland.
<TABLE>
<CAPTION>
LIPPER MARYLAND GROWTH OF INVESTMENT
MEASUREMENT PERIOD MUNICIPAL DEBT FUNDS LEHMAN 20-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Nov. 4, 1993 10000 10000 10000
Nov. 30, 1993 10074 10129 10254
9460 9427 9441
9524 9520 9484
9550 9570 9464
Nov. 30, 1994 9396 9385 9305
10041 10222 10057
10233 10442 10282
10490 10725 10545
Nov. 30, 1995 10942 11353 11077
Mar. 31, 1996 10767 11101 10834
10829 11227 10902
11067 11548 11149
11302 11860 11411
Mar. 31, 1997 11264 11786 11374
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
34
<PAGE> 39
NATIONS FUNDS
Nations Maryland Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 4.23%*
Year Ended 03/31/97 4.73%
Since Inception (11/03/94) through
03/31/97 9.34%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed within
one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.42%
Since Inception (10/21/93) through
03/31/97 2.65%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 5.20%
Since Inception (09/20/94) through
03/31/97 7.53%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Maryland Municipal Bond Fund from the date each class of shares was first
offered. The Lehman 20-Year Municipal Bond Index is a broad based,
unmanaged, total return index composed of investment grade bonds with
maturities of 18 to 22 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED,
LEHMAN 20-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
NOV. 3, 1994 10000 10000
NOV. 30, 1994 10072 10236
10970 11048
11207 11280
11511 11550
NOV. 30, 1995 12185 12115
MAR. 31, 1996 11914 11840
12049 11907
12394 12169
12728 12448
MAR. 31, 1997 12649 12399
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
OCT. 21, 1993 10000 10000
NOV. 30, 1993 10129 10046
9427 9235
9520 9264
9570 9232
NOV. 30, 1994 9385 9064
10222 9783
10442 9988
10725 10229
NOV. 30, 1995 11353 10731
MAR. 31, 1996 11101 10481
11227 10533
11548 10757
11860 10994
MAR. 31, 1997 11786 10944
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
SEPT. 20, 1994 10000 10000
NOV. 30, 1994 9807 9785
10681 10581
10912 10823
11207 11105
NOV. 30, 1995 11863 11672
MAR. 31, 1996 11600 11421
11732 11499
12068 11765
12393 12048
MAR. 31, 1997 12315 12015
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
35
<PAGE> 40
NATIONS NORTH CAROLINA
INTERMEDIATE MUNICIPAL BOND FUND
NATIONS NORTH CAROLINA MUNICIPAL BOND FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Mathew M. Kiselak is Senior Portfolio Manager of Nations North Carolina
Intermediate Municipal Bond Fund and Nations North Carolina Municipal Bond Fund
and Product Manager, Municipal Fixed Income Management for TradeStreet
Investment Associates, Inc., investment sub-adviser to the Funds.
INVESTMENT OBJECTIVE
Nations North Carolina Intermediate Municipal Bond Fund seeks high current
income exempt from federal and North Carolina state income taxes consistent with
moderate fluctuation of principal. The Fund invests in investment grade,
intermediate-term municipal securities.
Nations North Carolina Municipal Bond Fund seeks high current income exempt
from federal and North Carolina state income taxes with the potential for
principal fluctuation associated with investments in long-term municipal
securities. The Fund invests in investment grade, long-term municipal
securities.
PERFORMANCE REVIEW*
NATIONS NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations North Carolina
Intermediate Municipal Bond Fund Investor A Shares provided a total return of
4.25%, outperforming the Lipper Other States Intermediate Municipal Debt Funds
Average, which returned 3.93%.
NATIONS NORTH CAROLINA MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations North Carolina
Municipal Bond Fund Investor A Shares provided a total return of 4.62%, slightly
lagging the Lipper North Carolina Municipal Debt Funds Average, which returned
4.79%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Kiselak shares his views on financial
market conditions and Fund performance for the one-year period ended March 31,
1997.
BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH
OF THE FUNDS.
Our investment philosophy strives to achieve total return to the extent
consistent with the Funds' investment objective by maintaining a focus on income
exempt from federal and state income taxes. Additionally, care is taken to limit
the distribution of capital gains when consistent with the prudent management of
the Funds. We use a combination of strategies among which are duration
management (managing the Funds' sensitivity to interest rates), market sector
selection and review of individual credits. By maintaining a well-diversified
portfolio, we limit the Funds' vulnerability to significant difficulties in any
single credit or market sector.
Nations North Carolina Intermediate Municipal Bond Fund focuses on
investment grade municipal bonds exempt from federal and North Carolina state
income taxes. The portfolio is managed to maintain an average maturity of
between three and ten years.
- ---------------
* The performance shown includes the effect of fee waivers by the investment
adviser, the administrator and/or the custodian. Such fee waivers have the
effect of increasing total return.
36
<PAGE> 41
Nations North Carolina Municipal Bond Fund focuses on investment grade
municipal bonds exempt from federal and North Carolina state income taxes. The
portfolio is managed to maintain an average maturity of between ten and twenty
years.
The Funds balance their investments between high quality investment grade
issues for reduced credit risk and liquidity, and lower quality investment grade
issues (BBB) for the additional yield potential they provide.
In periods of falling interest rates, we will extend the average portfolio
maturity toward the maximum limit to benefit from the greater capital
appreciation potential of longer-term bonds. When interest rates are rising,
we'll shorten the average maturity to protect the Funds' net asset value from
the price erosion that comes with higher interest rates.
HOW DID MARKET CONDITIONS AFFECT THE FUNDS' PERFORMANCE?
The reporting period was a volatile time for interest rates. Interest rate
volatility was lessened in the municipal market due to strong supply and demand
dynamics -- modest supply conditions and strong demand from property and
casualty insurance companies. Due to these conditions, municipal bonds
outperformed their U.S. Treasury counterparts during the year. (For additional
information, please refer to the "general municipal bond market comments" on
page 5.)
Over the reporting period, the key factor influencing Fund performance was
duration management. We focused on positioning the Funds appropriately in a
changing interest rate environment and the Funds' returns reflect this
positioning. Owing to our belief that interest rates would increase, the Funds
were slightly short duration during the first four months of the fiscal year and
then moved to a neutral to slightly long position until January, when durations
were shortened again in anticipation of rising interest rates. Additionally,
security selection played a role in performance as structural aspects of an
individual security become more significant in periods of interest rate
volatility. Sector rotation had little impact on Fund performance because credit
spreads between sectors universally remain compressed.
WHAT'S THE ECONOMIC ENVIRONMENT IN NORTH CAROLINA?
"Aaa" rated by Moody's Investors Service, Inc. and "AAA" rated by Standard
& Poor's Corporation and Fitch Investors Service, Inc., North Carolina has
benefited from a diverse economy and an inflow of people as well as businesses.
This is due in part to affordable housing, above-average growth in per capita
income and below average cost of doing business. The void left by North
Carolina's declining textile industry continues to be filled by the high-tech
and financial sectors as the state moves toward industries that are less
sensitive to the business cycle. Consequently, high wage job growth and income
levels have been expanding at a pace greater than national averages and are
expected to continue to do so. As welfare reform approaches, paying for the
expanded level of training that will be required by workers to compete in this
increasingly high-tech economy is one of the many educational challenges facing
the state.
WHAT ARE THE FUNDS' CURRENT PORTFOLIO CHARACTERISTICS?**
As of March 31, 1997, the average portfolio maturity of Nations North
Carolina Intermediate Municipal Bond Fund was 8.08 years, while the duration of
the Fund was 5.42 years. The Fund held 38 issues with an average credit rating
of "Aa" by Moody's Investors Service, Inc. Issues whose income is subject to the
federal Alternative Minimum Tax made up 9.58% of the Fund.
As of March 31, 1997, the average portfolio maturity of Nations North
Carolina Municipal Bond Fund was 14.99 years, while the duration of the Fund was
7.76 years. The Fund held 25 issues with an average credit rating of "Aa" by
Moody's Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 14.08% of the Fund.
WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN 1997?
State and local government finances continue to benefit from the economy's
expansion, providing support for the market from a credit standpoint. Modest new
issue supply should help the municipal bond market outperform taxable
counterparts. However, the market will be facing challenges as structural
changes in our welfare system begin to have an impact on state and local
government finances. As the competitive environment for utilities and healthcare
changes, these market segments will bear monitoring over the next few years.
- ---------------
** Portfolio characteristics and outlook were current as of March 31, 1997,
are subject to change and may not be representative of current
characteristics and outlook. Also, the outlook of this Fund's portfolio
manager may differ from that of other Nations Funds' portfolio managers.
37
<PAGE> 42
NATIONS FUNDS
Nations North Carolina Intermediate Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Pre-Refunded 5.6%
Insured 25.7%
Water Revenue 4.6%
Pollution Control Revenue/
Industrial Development
Revenue 13.2%
Housing Revenue 4.5%
Hospital 7.5%
Cash and Cash Equivalents 1.1%
Education 5.2%
General Obligation 32.6%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. North Carolina State, GO, Series A, 6.100%
03/01/01 5.3%
2. Greenville, North Carolina, Combined
Enterprises Revenue, 6.000% 09/01/10 5.2
3. Government of Guam, GO, Series A, 4.900%
09/01/97 3.8
4. Government of Guam, GO, Series A, 5.150%
11/15/07 3.4
5. Pitt County, North Carolina, Revenue
Refunding, (Pitt County Memorial Hospital),
5.375% 12/01/10 3.0
6. Wayne County, North Carolina, GO, 4.900%
04/01/05 3.0
7. Washington State Public Power Supply System,
Revenue Refunding, (Nuclear Project Number
2), Series A, 5.800% 07/01/07 3.0
8. Charlotte, North Carolina, Health Care
Systems Revenue Refunding, Mecklenburg
Hospital Authority, 6.250% 01/01/20 2.9
9. Puerto Rico Electric Power Authority, Power
Revenue Refunding, Series Y, (MBIA Insured),
7.000% 07/01/07 2.9
10. Charlotte, North Carolina, COP, (Convention
Facilities Project), 6.750% 12/01/21 2.8
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 4.25%
Since Inception (12/14/92)
through 03/31/97 5.27%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations North Carolina Intermediate Municipal
Bond Fund on December 14, 1992 (inception date). The Lehman 7-Year Municipal
Bond Index is a broad based, unmanaged, total return index composed of
investment grade bonds with maturities of 7 to 8 years. Funds included in the
Lipper Other States Intermediate Municipal Debt Funds Average invest in
municipal debt issues with dollar-weighted average maturities of 5 to 10 years
and which are exempt from taxation on a specified city or state basis.
<TABLE>
<CAPTION>
LIPPER OTHER STATES GROWTH OF INVESTMENT
MEASUREMENT PERIOD INTERMEDIATE MUNICIPAL LEHMAN 7-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Dec. 14, 1992 10000 10000 10000
10105 10082 10029
10416 10404 10358
10696 10692 10661
11014 11002 10988
Nov. 30, 1993 11153 11134 11061
10719 10714 10611
10822 10827 10667
10893 10931 10717
Nov. 30, 1994 10780 10825 10588
11334 11394 11200
11578 11718 11465
11860 12053 11754
Nov. 30, 1995 12197 12357 12061
Mar. 31, 1996 12127 12313 11960
12179 12367 12019
12400 12588 12246
12671 12896 12501
Mar. 31, 1997 12662 12882 12468
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
38
<PAGE> 43
NATIONS FUNDS
Nations North Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 3.44%*
Year Ended 03/31/97 3.94%
Since Inception (12/16/92) through
03/31/97 4.90%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase.
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 3.94%
Since Inception (06/07/93) through
03/31/97 4.24%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.45%
Since Inception (12/11/92) through
03/31/97 5.48%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations North
Carolina Intermediate Municipal Bond Fund from the date each class of
shares was first offered. The Lehman 7-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade
bonds with maturities of 7 to 8 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED,
LEHMAN 7-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
DEC. 16, 1992 10000 10000
10319 10361
10605 10638
10913 10949
NOV. 30, 1993 11044 11005
10627 10542
10739 10590
10843 10631
NOV. 30, 1994 10738 10495
11302 11094
11623 11347
11955 11626
NOV. 30, 1995 12257 11920
MAR. 31, 1996 12213 11811
12266 11861
12486 12076
12792 12318
MAR. 31, 1997 12777 12276
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 7, 1993 10000 10000
10183 10134
10479 10435
NOV. 30, 1993 10605 10495
10205 10060
10312 10106
10411 10145
NOV. 30, 1994 10310 10015
10852 10587
11160 10829
11480 11094
NOV. 30, 1996 11769 11375
MAR. 31, 1996 11727 11271
11778 11319
11990 11524
12283 11755
MAR. 31, 1997 12269 11715
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
DEC. 11, 1992 10000 10000
10062 10041
10404 10374
10692 10681
11002 11013
NOV. 30, 1993 11134 11090
10714 10643
10827 10705
10931 10761
NOV. 30, 1994 10825 10636
11394 11257
11718 11529
12053 11826
NOV. 30, 1995 12357 12141
MAR. 31, 1996 12313 12044
12367 12110
12588 12345
12896 12608
MAR. 31, 1997 12882 12581
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
39
<PAGE> 44
NATIONS FUNDS
Nations North Carolina Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Hospital 14.8%
Pollution Control Revenue/Industrial
Development Revenue 25.1%
Water Revenue 3.7%
Power/Utilities Revenue 3.6%
Pre-Refunded 4.1%
Cash and Cash Equivalents 6.0%
Housing 6.9%
Insured 20.8%
General Obligation 15.0%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Mecklenburg County, North Carolina,
Industrial
Facilities and Pollution Control Finance
Authority Revenue Refunding, (Fluor
Corporation Project), 5.250% 12/01/09 7.1%
2. Martin County, North Carolina, Industrial
Facilities and Pollution Control Financing
Authority Revenue, Solid Waste Disposal, AMT,
(Weyerhaeuser Company), 5.650% 12/01/23 6.8
3. Onslow County, North Carolina, Combined
Enterprise System Revenue, (MBIA Insured),
5.875% 06/01/09 5.7
4. Charlotte, North Carolina, Health Care
Systems Revenue Refunding, Mecklenburg
Hospital Authority, 6.250% 01/01/20 5.5
5. North Carolina Medical Care Commission,
Hospital Revenue Refunding, (AMBAC Insured),
5.250% 02/15/07 4.1
6. Buncombe County, North Carolina, Metropolitan
Sewer District, Sewer System Revenue, Series
B, Pre-refunded, 6.750% 07/01/22 4.0
7. Mecklenburg County, North Carolina,
Refunding, GO, 6.000% 04/01/11 3.9
8. Craven County, North Carolina, Industrial
Facilities and Pollution Control Financing
Authority, PCR, Refunding, (Weyerhaeuser
Company Project), 6.350% 01/01/10 3.8
9. North Carolina Medical Care Commission,
Hospital Revenue Refunding, (Rex Hospital
Project), 6.250% 06/01/17 3.7
10. Mecklenburg County, North Carolina,
Refunding, GO, 5.400% 03/01/00 3.7
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 4.62%
Since Inception (11/01/93)
through 03/31/97 3.63%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations North Carolina Municipal Bond Fund on
November 1, 1993 (inception date). The Lehman 20-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade bonds
with maturities of 18 to 22 years. Funds included in the Lipper North Carolina
Municipal Debt Funds Average limit their assets to those securities which are
exempt from taxation in North Carolina.
<TABLE>
<CAPTION>
Lipper North Carolina Growth of Investment
Measurement Period Municipal Debt Funds Lehman 20-Year Municipal with Distributions
(Quarterly) Average Bond Index Reinvested
<S> <C> <C> <C>
Nov. 1, 1993 10000 10000 10000
Nov. 30, 1993 10084 10129 10155
9435 9427 9365
9472 9520 9377
9495 9570 9368
Nov. 30, 1994 9339 9385 9219
10038 10222 9993
10196 10442 10223
10425 10725 10477
Nov. 30, 1995 10963 11353 11076
Mar. 31, 1996 10708 11101 10795
10781 11227 10844
11030 11548 11103
11273 11860 11353
Mar. 31, 1997 11220 11786 11294
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
40
<PAGE> 45
NATIONS FUNDS
Nations North Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- -----------------------------------------------
<S> <C>
Year Ended 03/31/97 3.82%*
Year Ended 03/31/97 4.32%
Since Inception (11/03/94) through
03/31/97 9.72%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed within
one year of purchase
INVESTOR N SHARES
- -----------------------------------------------
Year Ended 03/31/97 4.06%
Since Inception (10/21/93) through
03/31/97 2.95%
PRIMARY A SHARES
- -----------------------------------------------
Year Ended 03/31/97 4.84%
Since Inception (01/11/94) through
03/31/97 3.45%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations North
Carolina Municipal Bond Fund from the date each class of shares was first
offered. The Lehman 20-Year Municipal Bond Index is a broad based,
unmanaged, total return index composed of investment grade bonds with
maturities of 18 to 22 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED, LEHMAN
20-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
NOV. 3, 1994 10000 10000
NOV. 30, 1994 10072 10300
10970 11150
11207 11390
11511 11656
NOV. 30, 1995 12185 12304
MAR. 31, 1996 11914 11986
12049 12031
12394 12309
12728 12577
MAR. 31, 1997 12649 12503
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
OCT. 21, 1993 10000 10000
NOV. 30, 1993 10129 10119
9427 9317
9520 9316
9570 9295
NOV. 30, 1994 9385 9134
10222 9888
10442 10101
10725 10339
11353 10914
MAR. 31, 1996 11101 10623
11227 10657
11548 10896
11860 11127
MAR. 31, 1997 11786 11054
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
LEHMAN GROWTH OF
20-YEAR INVESTMENT
MEASUREMENT PERIOD MUNICIPAL WITH
(QUARTERLY) BOND DISTRIBUTIONS
INDEX REINVESTED
<S> <C> <C>
JAN. 11, 1994 10000 10000
9307 9192
9399 9209
9448 9205
NOV. 30, 1994 9266 9063
10092 9829
10310 10060
10589 10316
NOV. 30, 1995 11209 10910
MAR. 31, 1996 10960 10639
11064 10693
11402 10953
11709 11206
MAR. 31, 1997 11636 11154
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
41
<PAGE> 46
NATIONS SOUTH CAROLINA
INTERMEDIATE MUNICIPAL BOND FUND
NATIONS SOUTH CAROLINA MUNICIPAL BOND FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Michele M. Poirier is Senior Portfolio Manager of Nations South Carolina
Intermediate Municipal Bond Fund and Nations South Carolina Municipal Bond Fund
and Director, Municipal Fixed Income Management for TradeStreet Investment
Associates, Inc., investment sub-adviser to the Funds.
INVESTMENT OBJECTIVE
Nations South Carolina Intermediate Municipal Bond Fund seeks high current
income exempt from federal and South Carolina state income taxes consistent with
moderate fluctuation of principal. The Fund invests in investment grade,
intermediate-term municipal securities.
Nations South Carolina Municipal Bond Fund seeks high current income exempt
from federal and South Carolina state income taxes with the potential for
principal fluctuation associated with investments in long-term municipal
securities. The Fund invests in investment grade, long-term municipal
securities.
PERFORMANCE REVIEW*
NATIONS SOUTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations South Carolina
Intermediate Municipal Bond Fund Investor A Shares provided a total return of
4.51%, outperforming the Lipper Other States Intermediate Municipal Debt Funds
Average return of 3.93%.
NATIONS SOUTH CAROLINA MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations South Carolina
Municipal Bond Fund Investor A Shares provided a total return of 5.12%, versus a
return of 5.04% for the peer group, the Lipper South Carolina Municipal Debt
Funds Average.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Ms. Poirier shares her views on financial
market conditions and Fund performance for the one-year period ended March 31,
1997.
BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH
OF THE FUNDS.
Our investment philosophy strives to achieve total return to the extent
consistent with the Funds' investment objective by maintaining a focus on income
exempt from federal and state income taxes. Additionally, care is taken to limit
the distribution of capital gains when consistent with the prudent management of
the Funds. We use a combination of strategies among which are duration
management (managing the Funds' sensitivity to interest rates), market sector
selection and review of individual credits. By maintaining a well-diversified
portfolio, we limit the Funds' vulnerability to significant difficulties in any
single credit or market sector.
Nations South Carolina Intermediate Municipal Bond Fund focuses on
investment grade municipal bonds exempt from federal and South Carolina state
income taxes. The portfolio is managed to maintain an average maturity of
between three and ten years.
Nations South Carolina Municipal Bond Fund focuses on investment grade
municipal bonds exempt from federal and South Carolina state income taxes. The
portfolio is managed to maintain an average maturity of between ten and twenty
years.
- ---------------
* The performance shown includes the effect of fee waivers by the investment
adviser, the administrator and/or the custodian. Such fee waivers have the
effect of increasing total return.
42
<PAGE> 47
The Funds balance their investments between high quality investment grade
issues for reduced credit risk and liquidity, and lower quality investment grade
issues (BBB) for the additional yield potential they provide.
In periods of falling interest rates, we will extend the average portfolio
maturity toward the maximum limit to benefit from the greater capital
appreciation potential of longer-term bonds. When interest rates are rising,
we'll shorten the average maturity to protect the Funds' net asset value from
the price erosion that comes with higher interest rates.
HOW DID MARKET CONDITIONS AFFECT THE FUNDS' PERFORMANCE?
The reporting period was a volatile time for interest rates. Interest rate
volatility was lessened in the municipal market due to strong supply and demand
dynamics -- modest supply conditions and strong demand from property and
casualty insurance companies. Due to these conditions, municipal bonds
outperformed their U.S. Treasury counterparts during the year. (For additional
information, please refer to the "general municipal bond market comments" on
page 5.)
Over the reporting period, the key factor influencing Fund performance was
duration management. We focused on positioning the Funds appropriately in a
changing interest rate environment and the Funds' returns reflect this
positioning. Owing to our belief that interest rates would increase, the Funds
were slightly short duration during the first four months of the fiscal year and
then moved to a neutral to slightly long position until January, when durations
were shortened again in anticipation of rising interest rates. Additionally,
security selection played a role in performance as structural aspects of an
individual security become more significant in periods of interest rate
volatility. Sector rotation had little impact on Fund performance because credit
spreads between sectors universally remain compressed.
WHAT'S THE ECONOMIC ENVIRONMENT IN SOUTH CAROLINA?
The dominance of the manufacturing sector has been both a positive and a
negative for South Carolina. On the positive side, the expansion of
manufacturing, specifically autos and related parts, has improved South
Carolina's income levels and provided a much needed infusion of new jobs. On the
negative side, the cyclical nature of the manufacturing economy makes the state
more sensitive than most to nationwide economic downturns. That said, South
Carolina's low debt burden, strong security arrangements and lack of credit
extension led to an upgrade in July of 1996 by Standard & Poor's Corporation to
a "AAA" rating for the state. Moody's Investors Service, Inc. ("Aaa") and Fitch
Investors Service, Inc. ("AAA") also give South Carolina their highest rating.
Combine this with a conservative plan of finance, and South Carolina looks to be
in a very strong financial position despite its reliance on the manufacturing
sector.
WHAT ARE THE FUNDS' CURRENT PORTFOLIO CHARACTERISTICS?**
As of March 31, 1997, the average portfolio maturity of Nations South
Carolina Intermediate Municipal Bond Fund was 8.48 years, while the duration of
the Fund was 5.63 years. The Fund held 58 issues with an average credit rating
of "Aa" by Moody's Investors Service, Inc. Issues whose income is subject to the
federal Alternative Minimum Tax made up 10.17% of the Fund.
As of March 31,1997, the average portfolio maturity of Nations South
Carolina Municipal Bond Fund was 17.58 years, while the duration of the Fund was
8.30 years. The Fund held 28 issues with an average credit rating of "Aa" by
Moody's Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 16.78% of the Fund.
WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN 1997?
State and local government finances continue to benefit from the economy's
expansion, providing support for the market from a credit standpoint. Modest new
issue supply should help the municipal bond market outperform taxable
counterparts. However, the market will be facing challenges as structural
changes in our welfare system begin to have an impact on state and local
government finances. As the competitive environment for utilities and healthcare
changes, these market segments will bear monitoring over the next few years.
- ---------------
** Portfolio characteristics and outlook were current as of March 31, 1997,
are subject to change and may not be representative of current
characteristics and outlook. Also, the outlook of this Fund's portfolio
manager may differ from that of other Nations Funds' portfolio managers.
43
<PAGE> 48
NATIONS FUNDS
Nations South Carolina Intermediate Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Housing Revenue 11.5%
Water Revenue 10.5%
Insured 28.3%
Cash and Cash Equivalents 1.1%
Power/Utilities Revenue 1.5%
Pre-Refunded 4.8%
General Obligation 21.9%
Hospital 9.4%
Pollution Control Revenue/
Industrial Development
Revenue 11.0%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. South Carolina State, Housing Finance and
Development Authority, Multi-family Housing
Revenue, (United Dominion Project), 6.500%
05/01/24 7.3%
2. Medical University of South Carolina,
Hospital Facilities Revenue, Refunding,
Series A, 7.200% 07/01/05 3.4
3. Greenville, South Carolina, Waterworks
Revenue, Water Utility Improvements, 6.000%
02/01/06 3.0
4. Richland County, South Carolina, Revenue
Refunding and Improvement, Series B, 4.850%
03/01/04 3.0
5. Grand Strand Water and Sewer Authority
Revenue Refunding, (MBIA Insured), 6.300%
06/01/05 3.0
6. Richland County, South Carolina, PCR, (Union
Camp Corporation Project), Series C, 5.875%
11/01/02 2.9
7. Columbia, South Carolina, Waterworks and
Sewer System Revenue, Capital Appreciation,
Zero coupon 02/01/03 2.9
8. Rock Hill, South Carolina, School District
No. 3, Refunding, Series B, (FGIC Insured),
5.900% 02/01/02 2.8
9. Greenwood, South Carolina, Combined Public
Utilities, Revenue Refunding and Improvement,
(AMBAC Insured), 5.500% 12/01/06 2.8
10. South Carolina State, Capital Improvement,
GO, Series A, 3.500% 07/01/06 2.7
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 4.51%
Since Inception (05/05/92)
through 03/31/97 5.92%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations South Carolina Intermediate Municipal
Bond Fund on May 5, 1992 (inception date). The Lehman 7-Year Municipal Bond
Index is a broad based, unmanaged, total return index composed of investment
grade bonds with maturities of 7 to 8 years. Funds included in the Lipper Other
States Intermediate Municipal Debt Funds Average invest in municipal debt issues
with dollar-weighted average maturities of 5 to 10 years and which are exempt
from taxation on a specified city or state basis.
<TABLE>
<CAPTION>
LIPPER OTHER STATES GROWTH OF INVESTMENT
MEASUREMENT PERIOD INTERMEDIATE MUNICIPAL LEHMAN 7-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
May 5, 1992 10000 10000 10000
10261 10264 10214
10498 10548 10436
Nov. 30, 1992 10673 10718 10596
10995 11060 10934
11283 11366 11205
11614 11696 11521
Nov. 30, 1993 11754 11837 11639
11299 11390 11231
11407 11510 11296
11480 11621 11374
Nov. 30, 1994 11360 11509 11276
11925 12113 11860
12168 12457 12151
12477 12814 12422
Nov. 30, 1995 12825 13137 12793
Mar. 31, 1996 12750 13090 12687
12800 13147 12738
13029 13383 12998
13315 13710 13273
Mar. 31, 1997 13307 13694 13259
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
44
<PAGE> 49
NATIONS FUNDS
Nations South Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 3.70%*
Year Ended 03/31/97 4.20%
Since Inception (06/17/92) through
03/31/97 5.32%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed within
one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.19%
Since Inception (06/08/93) through
03/31/97 4.48%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.71%
Five Years Ended 03/31/96 6.16%
Since Inception (01/06/92) through
03/31/97 6.00%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations South
Carolina Intermediate Municipal Bond Fund from the date each class of
shares was first offered. The Lehman 7-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade
bonds with maturities of 7 to 8 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED,
LEHMAN 7-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 17, 1992 10000 10000
10275 10271
NOV. 30, 1992 10442 10412
10776 10728
11074 10979
11396 11272
NOV. 30, 1993 11533 11369
11096 10955
11214 11009
11322 11076
NOV. 30, 1994 11213 10973
11802 11532
12137 11806
12484 12061
NOV. 30, 1995 12799 12411
MAR. 31, 1996 12753 12299
12809 12340
13039 12582
13358 12840
MAR. 31, 1997 13342 12816
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 8, 1993 10000 10000
10479 10380
NOV. 30, 1993 10605 10476
10205 10101
10312 10151
10411 10214
NOV. 30, 1994 10310 10118
10852 10634
11160 10887
11480 11122
NOV. 30, 1995 11769 11444
MAR. 31, 1996 11727 11342
11776 11379
11990 11602
12283 11838
MAR. 31, 1997 12269 11817
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JAN. 6, 1992 10000 10000
9993 10060
10347 10361
10631 10591
NOV. 30, 1992 10805 10746
11150 11104
11458 11383
11791 11709
NOV. 30, 1993 11933 11833
11482 11423
11603 11495
11715 11580
NOV. 30, 1994 11602 11486
12211 12087
12558 12390
12917 12672
NOV. 30, 1995 13243 13056
MAR. 31, 1996 13196 12955
13253 13014
13491 13286
13821 13573
MAR. 31, 1997 13805 13565
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
45
<PAGE> 50
NATIONS FUNDS
Nations South Carolina Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Hospital 4.9%
General Obligation 14.6%
Insured 30.4%
Cash and Cash Equivalents 0.8%
Water Revenue 8.3%
Housing Revenue 5.6%
Pollution Control Revenue/
Industrial Development
Revenue 35.4%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Chester County, South Carolina, Industrial
Development Authority Revenue Refunding,
(Springs Industries Inc. Project), 7.350%
02/01/14 5.8%
2. Columbia, South Carolina, Waterworks and
Sewer System Revenue, 5.50% 02/01/09 5.6
3. Puerto Rico, Housing, Bank and Finance
Agency, Single-family Mortgage Revenue,
(Affordable Housing Mortgage -- Portfolio I),
AMT, (GNMA/FNMA/FHLMC Collateral), 6.250%
04/01/29 5.5
4. Darlington County, South Carolina, Industrial
Development Revenue, (Nucor Corporation
Project), Series A, 5.750% 08/01/23 5.4
5. Piedmont Municipal Power Agency, South
Carolina, Electric Revenue Bonds, Series B,
(MBIA Insured), 5.250% 01/01/09 5.4
6. South Carolina, State Educational Facilities
Authority, (Furman University Project),
Series A, (MBIA Insured), 5.500% 10/01/26 5.2
7. York County, South Carolina, PCR Refunding,
(Bowater Inc. Project), Series B, 6.850%
04/01/01 5.2
8. Richland County, South Carolina, School
District No. 1, GO, (State Aid Withholding),
4.625% 03/01/22 4.6
9. Berkeley County, South Carolina, PCR, (South
Carolina Electric and Gas Company), 6.500%
10/01/14 4.4
10. South Carolina State, Capital Improvement,
4.400% 04/01/04 4.0
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 5.12%
Since Inception (11/08/93)
through 03/31/97 4.98%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations South Carolina Municipal Bond Fund on
November 8, 1993 (inception date). The Lehman 20-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade bonds
with maturities of 18 to 22 years. Funds included in the Lipper South Carolina
Municipal Debt Funds Average limit their assets to those securities which are
exempt from taxation in South Carolina.
<TABLE>
<CAPTION>
LIPPER SOUTH CAROLINA GROWTH OF INVESTMENT
MEASUREMENT PERIOD MUNICIPAL DEBT FUNDS LEHMAN 20-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Nov. 8, 1993 10000 10000 10000
Nov. 30, 1993 10084 10129 10239
9486 9427 9658
9560 9520 9702
9596 9570 9705
Nov. 30, 1994 9432 9385 9600
10103 10222 10354
10275 10442 10613
10513 10725 10907
Nov. 30, 1995 11012 11353 11462
Mar. 31, 1996 10787 11101 11220
10865 11084 11310
11113 11402 11577
11349 11709 11836
Mar. 31, 1997 11300 11636 11794
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
46
<PAGE> 51
NATIONS FUNDS
Nations South Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON -INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 4.30%*
Year Ended 03/31/97 4.80%
Since Inception (11/03/94) through
03/31/97 9.78%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.54%
Since Inception (10/21/93) through
03/31/97 3.98%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 5.32%
Since Inception (12/27/93) through
03/31/97 4.68%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations South
Carolina Municipal Bond Fund from the date each class of shares was first
offered. The Lehman 20-Year Municipal Bond Index is a broad based,
unmanaged, total return index composed of investment grade bonds with
maturities of 18 to 22 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED, LEHMAN
20-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
NOV. 3, 1994 10000 10000
NOV. 30, 1994 10072 10291
10970 11084
11207 11343
11511 11640
NOV. 30, 1995 12185 12213
MAR. 31, 1996 11914 11947
12049 12034
12394 12309
12728 12574
MAR. 31, 1997 12649 12520
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
OCT. 21, 1993 10000 10000
NOV. 30, 1993 10129 10110
9427 9522
9520 9552
9570 9542
NOV. 30, 1994 9385 9426
10222 10153
10442 10392
10725 10666
NOV. 30, 1995 11353 11193
MAR. 31, 1996 11101 10942
11084 11014
11402 11260
11709 11495
MAR. 31, 1997 11636 11439
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
DEC. 27, 1993 10000 10000
9307 9451
9399 9499
9448 9507
NOV. 30, 1994 9266 9408
10092 10153
10310 10411
10589 10706
NOV. 30, 1995 11209 11255
MAR. 31, 1996 10960 11023
11084 11117
11402 11386
11709 11646
MAR. 31, 1997 11636 11610
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
47
<PAGE> 52
NATIONS TENNESSEE INTERMEDIATE MUNICIPAL BOND FUND
NATIONS TENNESSEE MUNICIPAL BOND FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Mathew M. Kiselak is Senior Portfolio Manager of Nations Tennessee
Intermediate Municipal Bond Fund and Nations Tennessee Municipal Bond Fund and
Product Manager, Municipal Fixed Income Management for TradeStreet Investment
Associates, Inc., investment sub-adviser to the Funds.
INVESTMENT OBJECTIVE
Nations Tennessee Intermediate Municipal Bond Fund seeks high current
income exempt from federal income tax and the Tennessee Hall Income Tax on
unearned income consistent with moderate fluctuation of principal. The Fund
invests in investment grade, intermediate-term municipal securities.
Nations Tennessee Municipal Bond Fund seeks high current income exempt from
federal income tax and the Tennessee Hall Income Tax on unearned income with the
potential for principal fluctuation associated with investments in long-term
municipal securities. The Fund invests in investment grade, long-term municipal
securities.
PERFORMANCE REVIEW*
NATIONS TENNESSEE INTERMEDIATE MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations Tennessee
Intermediate Municipal Bond Fund Investor A Shares provided a total return of
4.33%, outperforming the Lipper Other States Intermediate Municipal Debt Funds
Average return of 3.93%.
NATIONS TENNESSEE MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations Tennessee Municipal
Bond Fund Investor A Shares provided a total return of 5.02%, outperforming the
Lipper Tennessee Municipal Debt Funds Average return of 4.82%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Kiselak shares his views on financial
market conditions and Fund performance for the one-year period ended March 31,
1997.
BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH
OF THE FUNDS.
Our investment philosophy strives to achieve total return to the extent
consistent with the Funds' investment objective by maintaining a focus on income
exempt from federal income taxes. Additionally, care is taken to limit the
distribution of capital gains when consistent with the prudent management of the
Funds. We use a combination of strategies among which are duration management
(managing the Funds' sensitivity to interest rates), market sector selection and
review of individual credits. By maintaining a well-diversified portfolio, we
limit the Funds' vulnerability to significant difficulties in any single credit
or market sector.
Nations Tennessee Intermediate Municipal Bond Fund focuses on investment
grade municipal bonds exempt from federal income tax and the Tennessee Hall
Income Tax on unearned income. The portfolio is managed to maintain an average
maturity of between three and ten years.
Nations Tennessee Municipal Bond Fund focuses on investment grade municipal
bonds exempt from federal income tax and the Tennessee Hall Income Tax on
unearned income. The portfolio is managed to maintain an average maturity of
between ten and twenty years.
- ---------------
* The performance shown includes the effect of fee waivers and/or
reimbursements by the investment adviser, the administrator and/or the
custodian. Such fee waivers have the effect of increasing total return.
48
<PAGE> 53
The Funds balance their investments between high quality investment grade
issues for reduced credit risk and liquidity, and lower quality investment grade
issues (BBB) for the additional yield potential they provide.
In periods of falling interest rates, we will extend the average portfolio
maturity toward the maximum limit to benefit from the greater capital
appreciation potential of longer-term bonds. When interest rates are rising,
we'll shorten the average maturity to protect the Funds' net asset value from
the price erosion that comes with higher interest rates.
HOW DID MARKET CONDITIONS AFFECT THE FUNDS' PERFORMANCE?
The reporting period was a volatile time for interest rates. Interest rate
volatility was lessened in the municipal market due to strong supply and demand
dynamics -- modest supply conditions and strong demand from property and
casualty insurance companies. Due to these conditions, municipal bonds
outperformed their U.S. Treasury counterparts during the year. (For additional
information, please refer to the "general municipal bond market comments" on
page 5.)
Over the reporting period, the key factor influencing Fund performance was
duration management. We focused on positioning the Funds appropriately in a
changing interest rate environment and the Funds' returns reflect this
positioning. Owing to our belief that interest rates would increase, the Funds
were slightly short duration during the first four months of the fiscal year and
then moved to a neutral to slightly long position until January, when durations
were shortened again in anticipation of rising interest rates. Additionally,
security selection played a role in performance as structural aspects of an
individual security become more significant in periods of interest rate
volatility. Sector rotation had little impact on Fund performance because credit
spreads between sectors universally remain compressed.
WHAT'S THE ECONOMIC ENVIRONMENT IN TENNESSEE?
Tennessee's very low debt burden, nearly exclusive use of general
obligation debt and conservative financial policies all combine to earn the
state a "Aaa" rating by Moody's Investors Service, Inc., a "AA+" from Standard &
Poor's Corporation and a "AAA" from Fitch Investors Service, Inc. Tennessee's
economy remains in a developing mode as the state continues to shift its growth
in manufacturing to autos (Tennessee ranks third in the nation in automobile
production) and related products from textiles. The lack of a state income tax
means that Tennessee must rely on sales tax revenues as a main source of funds.
This could prove to be a limiting factor were it not for Tennessee's strong
pattern of job growth and growing population.
WHAT ARE THE FUNDS' CURRENT PORTFOLIO CHARACTERISTICS?**
As of March 31, 1997, the average portfolio maturity of Nations Tennessee
Intermediate Municipal Bond Fund was 7.43 years, while the duration of the Fund
was 4.94 years. The Fund held 33 issues with an average credit rating of "Aa" by
Moody's Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 8.45% of the Fund.
As of March 31, 1997, the average portfolio maturity of Nations Tennessee
Municipal Bond Fund was 14.34 years, while the duration of the Fund was 7.41
years. The Fund held 32 issues with an average credit rating of "Aa" by Moody's
Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 11.89% of the Fund.
WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN 1997?
State and local government finances continue to benefit from the economy's
expansion, providing support for the market from a credit standpoint. Modest new
issue supply should help the municipal bond market outperform taxable
counterparts. However, the market will be facing challenges as structural
changes in our welfare system begin to have an impact on state and local
government finances. As the competitive environment for utilities and healthcare
changes, these market segments will bear monitoring over the next few years.
- ---------------
** Portfolio characteristics and outlook were current as of March 31, 1997,
are subject to change and may not be representative of current
characteristics and outlook. Also, the outlook of this Fund's portfolio
manager may differ from that of other Nations Funds' portfolio managers.
49
<PAGE> 54
NATIONS FUNDS
Nations Tennessee Intermediate Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Education 2.6%
Pollution Control Revenue/
Industrial Development
Revenue 9.8%
Housing Revenue 5.8%
Water Revenue 8.3%
Cash and Cash Equivalents 6.8%
Other 2.6%
Power/Utilities Revenue 6.1%
General Obligation 23.4%
Pre-Refunded 1.3%
Insured 21.0%
Hospital 12.3%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Memphis, Tennessee, Water Revenue, 5.900%
01/01/04 8.4%
2. Anderson County, Tennessee, Health and
Educational Facilities Board, (Methodist
Medical Center), 5.400% 07/01/04 5.3
3. McMinn County, Tennessee, Industrial
Development Board, PCR, Refunding, (Bowater
Inc. Project), 6.850% 04/01/01 4.5
4. Puerto Rico, Industrial, Tourist,
Educational, Medical and Environmental
Control Facilities Financing Authority,
(Ryder Memorial Hospital Project), Series A,
6.400% 05/01/09 4.2
5. Williamson County, Tennessee, Capital Outlay
Notes,
5.700% 05/01/02 4.1
6. Metropolitan Government, Nashville and
Davidson County, Tennessee, Refunding, GO,
5.250% 05/15/07 4.0
7. Hamilton County, Tennessee, GO, 5.000%
07/01/01 3.5
8. Puerto Rico, Electric Power Authority, Power
Revenue, Series P, 6.750% 07/01/03 3.5
9. Commonwealth of Puerto Rico, Refunding, GO,
5.500% 07/01/01 3.3
10. Puerto Rico, Housing, Bank and Finance
Agency, Single-family Mortgage Revenue,
(Affordable Housing Mortgage-Portfolio I),
AMT, (GNMA/FNMA/FHLMC Collateral), 5.450%
04/01/05 3.2
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 4.33%
Since Inception (04/02/93)
through 03/31/97 4.70%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Tennessee Intermediate Municipal Bond
Fund on April 2, 1993 (inception date). The Lehman 7-Year Municipal Bond Index
is a broad based, unmanaged, total return index composed of investment grade
bonds with maturities of 7 to 8 years. Funds included in the Lipper Other States
Intermediate Municipal Debt Funds Average invest in municipal debt issues with
dollar-weighted average maturities of 5 to 10 years and which are exempt from
taxation on a specified city or state basis.
<TABLE>
<CAPTION>
LIPPER OTHER STATES GROWTH OF INVESTMENT
MEASUREMENT PERIOD INTERMEDIATE MUNICIPAL LEHMAN 7-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Apr. 2, 1993 10000 10000 10000
10264 10277 10233
10567 10575 10547
Nov. 30, 1993 10696 10702 10672
10286 10298 10220
10385 10407 10290
10455 10507 10333
Nov. 30, 1994 10342 10405 10177
10871 10952 10763
11104 11263 11015
11377 11585 11258
Nov. 30, 1995 11694 11878 11594
Mar. 31, 1996 11628 11835 11514
11679 11887 11569
11890 12100 11766
12147 12396 12025
Mar. 31, 1997 12140 12382 12012
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
50
<PAGE> 55
NATIONS FUNDS
Nations Tennessee Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON -INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 3.58%*
Year Ended 03/31/97 4.08%
Since Inception (11/03/94) through
03/31/97 7.36%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.02%
Since Inception (06/10/93) through
03/31/97 4.29%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.54%
Since Inception (04/13/93) through
03/31/97 4.75%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Tennessee Intermediate Municipal Bond Fund from the date each class of
shares was first offered. The Lehman 7-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade
bonds with maturities of 7 to 8 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED,
LEHMAN 7-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
INVESTMENT LEHMAN
WITH 7-YEAR
MEASUREMENT PERIOD DISTRIBUTIONS MUNICIPAL
(QUARTERLY) REINVESTED BOND INDEX
<S> <C> <C>
NOV. 3, 1994 10000 10000
NOV. 30, 1994 10113 10004
10688 10529
10928 10828
11160 11138
NOV. 30, 1995 11485 11419
MAR. 31, 1996 11399 11378
11446 11428
11634 11633
11884 11917
MAR. 31, 1997 11864 11904
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 10, 1993 10000 10000
10479 10416
NOV. 30, 1993 10605 10530
10205 10076
10312 10136
10411 10171
NOV. 30, 1994 10310 10009
10852 10578
11160 10817
11480 11048
NOV. 30, 1995 11769 11369
MAR. 31, 1996 11727 11282
11778 11328
11990 11512
12283 11757
MAR. 31, 1997 12269 11735
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
APR. 13, 1993 10000 10000
10277 10168
10575 10485
NOV. 30, 1993 10702 10613
10298 10168
10407 10242
10507 10290
NOV. 30, 1994 10405 10139
10952 10729
11263 10985
11585 11233
NOV. 30, 1995 11878 11574
MAR. 31, 1996 11835 11499
11887 11560
12100 11763
12396 12028
MAR. 31, 1997 12382 12021
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
51
<PAGE> 56
NATIONS FUNDS
Nations Tennessee Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
General Obligation 29.1%
Insured 26.2%
Other 2.7%
Cash and Cash Equivalents 5.5%
Pre-Refunded 3.1%
Power/Utilities Revenue 6.8%
Water Revenue 2.6%
Pollution Control Revenue/
Industrial Development
Revenue 17.8%
Hospital 6.2%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Humphreys County, Tennessee, Industrial
Development Board, Solid Waste Disposal
Revenue, (du Pont (E.I.) de Nemours & Company
Project), AMT, 6.700% 05/01/24 5.9%
2. Commonwealth of Puerto Rico, Refunding, GO,
5.500% 07/01/01 4.6
3. Knox County, Tennessee, Health, Educational
and Housing Facilities Board, Hospital
Facilities Revenue, Refunding and
Improvement, (Baptist Health System of East
Tennessee, Inc. Project), (CONNIE LEE
Insured), 5.500% 04/15/11 4.3
4. Shelby County, Tennessee, GO, Series A,
5.125% 03/01/18 4.1
5. Metropolitan Government, Nashville and
Davidson County, Tennessee, Electric Revenue,
Series A, 5.625% 05/15/14 3.9
6. Knox County, Tennessee, Health, Educational
and Housing Facilities Board, Hospital
Facilities Revenue, Refunding and
Improvement, (Fort Sanders Alliance Project),
(MBIA Insured), 7.250% 01/01/09 3.9
7. Metropolitan Government, Nashville and
Davidson County, Tennessee, Water and Sewer
Revenue, (FGIC Insured), 6.500% 01/01/10 3.7
8. Rutherford County, Tennessee, Public
Improvement, GO, 6.000% 04/01/06 3.6
9. Metropolitan Government, Nashville and
Davidson County, Tennessee, Health and
Educational Facilities Board Revenue,
Refunding and Improvement, (Meharry Medical
College Project), (AMBAC Insured), 6.000%
12/01/09 3.5
10. Metropolitan Government, Nashville and
Davidson County, Tennessee, Health and
Educational Facilities Board Revenue,
Refunding and Improvement, (Meharry Medical
College Project), (AMBAC Insured), 6.000%
12/01/16 3.4
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 5.02%
Since Inception (11/02/93)
through 03/31/97 4.65%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Tennessee Municipal Bond Fund on
November 2, 1993 (inception date). The Lehman 20-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade bonds
with maturities of 18 to 22 years. Funds included in the Lipper Tennessee
Municipal Debt Funds Average limit their assets to those securities which are
exempt from taxation in Tennessee.
<TABLE>
<CAPTION>
LIPPER TENNESSEE GROWTH OF INVESTMENT
MEASUREMENT PERIOD MUNICIPAL DEBT FUNDS LEHMAN 20-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Nov. 2, 1993 10000 10000 10000
Nov. 30, 1993 10075 10129 10175
9532 9427 9524
9599 9520 9589
9640 9570 9613
Nov. 30, 1994 9476 9385 9496
10095 10222 10249
10273 10442 10474
10493 10725 10756
Nov. 30, 1995 10938 11353 11320
Mar. 31, 1996 10748 11101 11119
10835 11084 11181
11062 11402 11433
11297 11709 11723
Mar. 31, 1997 11278 11636 11678
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
52
<PAGE> 57
NATIONS FUNDS
Nations Tennessee Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON -INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 4.21%*
Year Ended 03/31/97 4.71%
Since Inception (11/03/94) through
03/31/97 9.92%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.45%
Since Inception (10/21/93) through
03/31/97 3.69%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 5.23%
Since Inception (03/02/94) through
03/31/97 5.81%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Tennessee Municipal Bond Fund from the date each class of shares was first
offered. The Lehman 20-Year Municipal Bond Index is a broad based,
unmanaged, total return index composed of investment grade bonds with
maturities of 18 to 22 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED, LEHMAN
20-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
NOV. 3, 1994 10000 10000
NOV. 30, 1994 10072 10306
10970 11109
11207 11337
11511 11627
NOV. 30, 1995 12185 12219
MAR. 31, 1996 11914 11995
12049 12052
12394 12315
12728 12617
MAR. 31, 1997 12649 12559
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20- YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
OCT. 21, 1993 10000 10000
NOV. 30, 1993 10129 10049
9427 9392
9520 9443
9570 9453
NOV. 30, 1994 9385 9326
10222 10052
10442 10258
10725 10520
NOV. 30, 1995 11353 11057
MAR. 31, 1996 11101 10847
11084 10892
11402 11122
11709 11388
MAR. 31, 1997 11636 11329
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
MAR. 2, 1994 10000 10000
9647 9473
9567 9718
9617 9746
NOV. 30, 1994 9431 9633
10272 10402
10493 10635
10778 10927
NOV. 30, 1995 11409 11506
MAR. 31, 1996 11155 11308
11282 11376
11605 11639
11918 11940
MAR. 31, 1997 11843 11900
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
53
<PAGE> 58
NATIONS TEXAS INTERMEDIATE MUNICIPAL BOND FUND
NATIONS TEXAS MUNICIPAL BOND FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Mathew M. Kiselak is Senior Portfolio Manager of Nations Texas Intermediate
Municipal Bond Fund and Nations Texas Municipal Bond Fund and Product Manager,
Municipal Fixed Income Management for TradeStreet Investment Associates, Inc.,
investment sub-adviser to the Funds.
INVESTMENT OBJECTIVE
Nations Texas Intermediate Municipal Bond Fund seeks high current income
exempt from federal income tax consistent with moderate fluctuation of
principal. The Fund invests in investment grade, intermediate-term municipal
securities.
Nations Texas Municipal Bond Fund seeks high current income exempt from
federal income tax with the potential for principal fluctuation associated with
investments in long-term municipal securities. The Fund invests in investment
grade, long-term municipal securities.
PERFORMANCE REVIEW*
NATIONS TEXAS INTERMEDIATE MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations Texas Intermediate
Municipal Bond Fund Investor A Shares provided a total return of 4.17%,
outperforming the Lipper Other States Intermediate Municipal Debt Funds Average
return of 3.93%.
NATIONS TEXAS MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations Texas Municipal Bond
Fund Investor A Shares provided a total return of 4.78%, underperforming the
Lipper Texas Municipal Debt Funds Average return of 5.10%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Kiselak shares her views on financial
market conditions and Fund performance for the one-year period ended March 31,
1997.
BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH
OF THE FUNDS.
Our investment philosophy strives to achieve total return to the extent
consistent with the Funds' investment objective by maintaining a focus on income
exempt from federal income taxes. Additionally, care is taken to limit the
distribution of capital gains when consistent with the prudent management of the
Funds. We use a combination of strategies among which are duration management
(managing the Funds' sensitivity to interest rates), market sector selection and
review of individual credits. By maintaining a well-diversified portfolio, we
limit the Funds' vulnerability to significant difficulties in any single credit
or market sector.
Nations Texas Intermediate Municipal Bond Fund focuses on investment grade
municipal bonds exempt from federal income taxes. The portfolio is managed to
maintain an average maturity of between three and ten years.
Nations Texas Municipal Bond Fund focuses on investment grade municipal
bonds exempt from federal income taxes. The portfolio is managed to maintain an
average maturity of between ten and twenty years.
The Funds balance their investments between high quality investment grade
issues for reduced credit risk and liquidity, and lower quality investment grade
issues (BBB) for the additional yield potential they provide.
- ---------------
* The performance shown includes the effect of fee waivers by the investment
adviser, the administrator and/or the custodian. Such fee waivers have the
effect of increasing total return.
54
<PAGE> 59
In periods of falling interest rates, we will extend the average portfolio
maturity toward the maximum limit to benefit from the greater capital
appreciation potential of longer-term bonds. When interest rates are rising,
we'll shorten the average maturity to protect the Funds' net asset value from
the price erosion that comes with higher interest rates.
HOW DID MARKET CONDITIONS AFFECT THE FUNDS' PERFORMANCE?
The reporting period was a volatile time for interest rates. Interest rate
volatility was lessened in the municipal market due to strong supply and demand
dynamics -- modest supply conditions and strong demand from property and
casualty insurance companies. Due to these conditions, municipal bonds
outperformed their U.S. Treasury counterparts during the year. (For additional
information, please refer to the "general municipal bond market comments" on
page 5.)
Over the reporting period, the key factor influencing Fund performance was
duration management. We focused on positioning the Funds appropriately in a
changing interest rate environment and the Funds' returns reflect this
positioning. Owing to our belief that interest rates would increase, the Funds
were slightly short duration during the first four months of the fiscal year and
then moved to a neutral to slightly long position until January, when durations
were shortened again in anticipation of rising interest rates. Additionally,
security selection played a role in performance as structural aspects of an
individual security become more significant in periods of interest rate
volatility. Sector rotation had little impact on Fund performance because credit
spreads between sectors universally remain compressed.
WHAT'S THE ECONOMIC ENVIRONMENT IN TEXAS?
Texas has proven its ability to adapt and rebound to a changing economic
environment, both within the state and abroad. As the oil and gas industry
continues its decline in the state, construction, manufacturing and services
seem to be compensating for this decline. Despite budget deficits in the
mid-1980's, Texas has historically taken a conservative approach to financial
management as is reflected in the state's "Aa" rating from Moody's Investors
Service, Inc., "AA" from Standard & Poor's Corporation and "AA+" from Fitch
Investors Service, Inc. Although Texas has consistently led the U.S. in
employment growth, unemployment in Texas is above the national average. This is
due, in part, to the heavy migration into the state (In 1994 Texas replaced New
York as the second most populous state). The strong debt position that the state
currently enjoys will be put to the test as welfare reform and growing
infrastructure needs (e.g., schools and prisons) increase the need for further
debt issuance.
WHAT ARE THE FUNDS' CURRENT PORTFOLIO CHARACTERISTICS?**
As of March 31, 1997, the average portfolio maturity of Nations Texas
Intermediate Municipal Bond Fund was 8.02 years, while the duration of the Fund
was 5.53 years. The Fund held 28 issues with an average credit rating of "Aa" by
Moody's Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 17.47% of the Fund.
As of March 31, 1997, the average portfolio maturity of Nations Texas
Municipal Bond Fund was 12.63 years, while the duration of the Fund was 7.44
years. The Fund held 25 issues with an average credit rating of "Aa" by Moody's
Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 15.85% of the Fund.
WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN 1997?
State and local government finances continue to benefit from the economy's
expansion, providing support for the market from a credit standpoint. Modest new
issue supply should help the municipal bond market outperform taxable
counterparts. However, the market will be facing challenges as structural
changes in our welfare system begin to have an impact on state and local
government finances. As the competitive environment for utilities and healthcare
changes, these market segments will bear monitoring over the next few years.
- ---------------
** Portfolio characteristics and outlook were current as of March 31, 1997,
are subject to change and may not be representative of current
characteristics and outlook. Also, the outlook of this Fund's portfolio
manager may differ from that of other Nations Funds' portfolio managers.
55
<PAGE> 60
NATIONS FUNDS
Nations Texas Intermediate Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Hospital 12.5%
Education 12.8%
Pollution Control Revenue/
Industrial Development
Revenue 9.2%
Housing Revenue 10.0%
Cash and Cash Equivalents 1.2%
General Obligations 20.2%
Pre-Refunded 10.8%
Insured 23.3%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Arlington, Texas, Independent School
District, GO, (PSFG Insured), 5.800% 02/15/02 7.3%
2. Alliance Airport Authority Inc., Texas,
Special Facilities Revenue, (American
Airlines Inc. Project), AMT, 7.000% 12/01/11 5.6
3. Travis County, Texas, Limited Tax Revenue
Refunding, Series A, (MBIA Insured), 5.750%
03/01/06 5.4
4. Texas State, Public Finance Authority,
Building Revenue, Series A, (AMBAC Insured),
6.000% 10/01/06 4.5
5. Maricopa County, Arizona, Unified School
District No. 69, (Paradise Valley Refunding
Project), GO, (MBIA Insured), 6.350% 07/01/10 3.8
6. Garland, Texas, Independent School District,
GO, (PSFG Insured), 5.500% 02/15/00 3.8
7. Tarrant County, Texas, GO, 6.750% 07/15/07 3.7
8. Harris County, Texas, Health Facilities
Development Authority, Memorial Hospital,
6.700% 06/01/00 3.7
9. Lower Colorado River Authority, Texas,
Revenue Refunding, Series A, (AMBAC Insured),
6.400% 01/01/01 3.7
10. Texas A&M University, Revenue Financing
System, Refunding, 5.950% 05/15/05 3.7
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 4.17%
Since Inception (02/04/93)
through 03/31/97 4.57%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Texas Intermediate Municipal Bond
Fund on February 4, 1993 (inception date). The Lehman 7-Year Municipal Bond
Index is a broad based, unmanaged, total return index composed of investment
grade bonds with maturities of 7 to 8 years. Funds included in the Lipper Other
States Intermediate Municipal Debt Funds Average invest in municipal debt issues
with dollar-weighted average maturities of 5 to 10 years and which are exempt
from taxation on a specified city or state basis.
<TABLE>
<CAPTION>
LIPPER OTHER STATES GROWTH OF INVESTMENT
MEASUREMENT PERIOD INTERMEDIATE MUNICIPAL LEHMAN 7-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Feb. 4, 1993 10000 10000 10000
10189 10171 10098
10459 10453 10332
10767 10756 10614
Nov. 30, 1993 10902 10885 10713
10482 10475 10282
10583 10585 10390
10654 10687 10459
Nov. 30, 1994 10546 10583 10336
11083 11139 10841
11322 11456 11060
11597 11784 11313
Nov. 30, 1995 11921 12081 11650
Mar. 31, 1996 11854 12038 11560
11905 12090 11594
12118 12307 11814
12381 12608 12050
Mar. 31, 1997 12373 12594 12041
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
56
<PAGE> 61
NATIONS FUNDS
Nations Texas Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 3.37%*
Year Ended 03/31/97 3.87%
Since Inception (11/03/94) through
03/31/97 6.96%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed within
one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 3.87%
Since Inception (06/22/93) through
03/31/97 3.96%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.37%
Since Inception (01/12/93) through
03/31/97 5.15%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares
of Nations Texas Intermediate Municipal Bond Fund from the
date each class of shares was first offered. The Lehman 7-Year Municipal
Bond Index is a broad based, unmanaged, total return index composed of
investment grade bonds with maturities of 7 to 8 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED, LEHMAN
7-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
NOV. 3, 1994 10000 10000
NOV. 30, 1994 10004 10162
10529 10650
10828 10857
11138 11098
NOV. 30, 1995 11419 11419
MAR. 31, 1996 11378 11323
11428 11347
11633 11555
11917 11776
MAR. 31, 1997 11904 11759
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 22, 1993 10000 10000
10290 10315
NOV. 30, 1993 10414 10402
10021 9975
10127 10073
10224 10131
NOV. 30, 1994 10125 10005
10657 10486
10960 10690
11273 10927
NOV. 30, 1995 11558 11243
MAR. 31, 1996 11516 11148
11567 11173
11774 11377
12062 11595
MAR. 31, 1997 12048 11578
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JAN. 12, 1993 10000 10000
10319 10286
10605 10528
10913 10820
NOV. 30, 1993 11044 10925
10627 10490
10739 10605
10843 10681
NOV. 30, 1994 10738 10561
11302 11082
11623 11311
11955 11576
NOV. 30, 1995 12257 11926
MAR. 31, 1996 12213 11840
12266 11881
12486 12113
12792 12361
MAR. 31, 1997 12777 12358
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
57
<PAGE> 62
NATIONS FUNDS
Nations Texas Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
General Obligation 24.9%
Insured 27.2%
Other 2.7%
Transportation 5.7%
Water Revenue 3.9%
Education 6.0%
Pollution Control Revenue/
Industrial Development
Revenue 12.8%
Hospital 6.1%
Pre-Refunded 10.7%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Irving, Texas, Independent School District,
Capital
Appreciation Refunding, GO, (PSFG Insured),
Zero Coupon 02/15/02 7.3%
2. Lucas County, Ohio, Hospital Revenue, (Flower
Hospital Project), 6.125% 12/01/13 6.6
3. Red River Authority, Texas, PCR, (Hoechst
Celanese Corporation Project), AMT, 6.875%
04/01/17 6.6
4. Tarrant County, Texas, Health Facilities
Development Corporation, Health System
Revenue, (Harris Methodist Health System),
6.000% 09/01/10 6.4
5. Trinity River Authority, Texas, PCR, (Texas
Instruments Inc. Project), 6.200% 03/01/20 6.1
6. Arapahoe County, Colorado, Capital
Improvements Highway Revenue, Series E,
6.500% 08/31/05 5.7
7. Dallas-Fort Worth, Texas, Regional Airport
Revenue Refunding, Series A, (MBIA Insured),
6.000% 11/01/09 4.8
8. Sherman, Texas, Independent School District,
GO, (PSFG Insured), 6.500% 02/15/20 4.0
9. Texas State, Water Development Board Revenue,
State Revolving Fund, Senior Lien, 6.400%
07/15/08 3.9
10. Plano, Texas, Independent School District,
GO, (PSFG Insured), 7.250% 02/15/04 3.5
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 4.78%
Since Inception (12/17/93)
through 03/31/97 3.78%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Texas Municipal Bond Fund on December
17, 1993 (inception date). The Lehman 20-Year Municipal Bond Index is a broad
based, unmanaged, total return index composed of investment grade bonds with
maturities of 18 to 22 years. Funds included in the Lipper Texas Municipal Debt
Funds Average limit their assets to those securities which are exempt from
taxation in Texas.
<TABLE>
<CAPTION>
GROWTH OF INVESTMENT
MEASUREMENT PERIOD LIPPER TEXAS MUNICIPAL LEHMAN 20-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Dec. 17, 1993 10000 10000 10000
9307 9394 9299
9399 9483 9351
9448 9517 9339
Nov. 30, 1994 9266 9383 9181
10092 10065 9913
10310 10268 10164
10589 10501 10438
Nov. 30, 1995 11209 11019 10980
Mar. 31, 1996 10960 10828 10780
11084 10903 10888
11402 11149 11099
11709 11413 11374
Mar. 31, 1997 11391 11636 11296
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
58
<PAGE> 63
NATIONS FUNDS
Nations Texas Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 3.97%*
Year Ended 03/31/97 4.47%
Since Inception (11/03/94) through
03/31/97 9.74%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.21%
Since Inception (10/21/93) through
03/31/97 3.00%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 5.00%
Since Inception (02/03/94) through
03/31/97 3.63%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations Texas
Municipal Bond Fund from the date each class of shares was first offered.
The Lehman 20-Year Municipal Bond Index is a broad based, unmanaged, total
return index composed of investment grade bonds with maturities of 18 to
22 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED,
LEHMAN 20-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
NOV. 3, 1994 10000 10000
NOV. 30, 1994 10072 10264
10970 11067
11207 11331
11511 11620
NOV. 30, 1995 12185 12205
MAR. 31, 1996 11914 11974
12049 12084
12394 12310
12728 12606
MAR. 31, 1997 12649 12509
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
OCT. 21, 1993 10000 10000
NOV. 30, 1993 10129 10006
9427 9266
9520 9306
9570 9280
NOV. 30, 1994 9385 9110
10222 9823
10442 10059
10725 10316
NOV. 30, 1995 11353 10836
MAR. 31, 1996 11101 10625
11084 10717
11402 10909
11709 11164
MAR. 31, 1997 11636 11072
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
FEB. 3, 1994 10000 10000
9191 9159
9282 9215
9331 9207
NOV. 30, 1994 9151 9056
9967 9783
10182 10036
10457 10312
NOV. 30, 1995 11070 10852
MAR. 31, 1996 10824 10660
10947 10772
11260 10987
11563 11265
MAR. 31, 1997 11491 11193
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
59
<PAGE> 64
NATIONS VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
NATIONS VIRGINIA MUNICIPAL BOND FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
John C. Kohl is Senior Portfolio Manager of Nations Virginia Intermediate
Municipal Bond Fund and Nations Virginia Municipal Bond Fund and Managing
Director, Fixed Income for TradeStreet Investment Associates, Inc., investment
sub-adviser to the Funds.
INVESTMENT OBJECTIVE
Nations Virginia Intermediate Municipal Bond Fund seeks high current income
exempt from federal and Virginia state income taxes consistent with moderate
fluctuation of principal. The Fund invests in investment grade, intermediate-
term municipal securities.
Nations Virginia Municipal Bond Fund seeks high current income exempt from
federal and Virginia state income taxes with the potential for principal
fluctuation associated with investments in long-term municipal securities. The
Fund invests in investment grade, long-term municipal securities.
PERFORMANCE REVIEW*
NATIONS VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations Virginia Intermediate
Municipal Bond Fund Investor A Shares provided a total return of 3.71%,
outperforming the Lipper Virginia Intermediate Municipal Debt Funds Average of
3.55%.
NATIONS VIRGINIA MUNICIPAL BOND FUND
For the one-year period ended March 31, 1997, Nations Virginia Municipal
Bond Fund Investor A Shares provided a total return of 5.23%, outperforming the
Lipper Virginia Municipal Debt Funds Average of 4.92%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Kohl shares his views on financial market
conditions and Fund performance for the one-year period ended March 31, 1997.
BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE INVESTMENT APPROACH
OF THE FUNDS.
Our investment philosophy strives to achieve total return to the extent
consistent with the Funds' investment objective by maintaining a focus on income
exempt from federal and state income taxes. Additionally, care is taken to limit
the distribution of capital gains when consistent with the prudent management of
the Funds. We use a combination of strategies among which are duration
management (managing the Funds' sensitivity to interest rates), market sector
selection and review of individual credits. By maintaining a well-diversified
portfolio, we limit the Funds' vulnerability to significant difficulties in any
single credit or market sector.
Nations Virginia Intermediate Municipal Bond Fund focuses on investment
grade municipal bonds exempt from federal and Virginia state taxes. The
portfolio is managed to maintain an average maturity of between three and ten
years.
Nations Virginia Municipal Bond Fund focuses on investment grade municipal
bonds exempt from federal and Virginia state income taxes. The portfolio is
managed to maintain an average maturity of between ten and twenty years.
The Funds balance their investments between high quality investment grade
issues for reduced credit risk and liquidity, and lower quality investment grade
issues (BBB) for the additional yield potential they provide.
- ---------------
* The performance shown includes the effect of fee waivers by the investment
adviser, the administrator and/or the custodian. Such fee waivers have the
effect of increasing total return.
60
<PAGE> 65
In periods of falling interest rates, we will extend the average portfolio
maturity toward the maximum limit to benefit from the greater capital
appreciation potential of longer-term bonds. When interest rates are rising,
we'll shorten the average maturity to protect the Funds' net asset value from
the price erosion that comes with higher interest rates.
HOW DID MARKET CONDITIONS AFFECT THE FUNDS' PERFORMANCE?
The reporting period was a volatile time for interest rates. Interest rate
volatility was lessened in the municipal market due to strong supply and demand
dynamics -- modest supply conditions and strong demand from property and
casualty insurance companies. Due to these conditions, municipal bonds
outperformed their U.S. Treasury counterparts during the year. (For additional
information, please refer to the "general municipal bond market comments" on
page 5.)
Over the reporting period, the key factor influencing Fund performance was
duration management. We focused on positioning the Funds appropriately in a
changing interest rate environment and the Funds' returns reflect this
positioning. Owing to our belief that interest rates would increase, the Funds
were slightly short duration during the first four months of the fiscal year and
then moved to a neutral to slightly long position until January, when durations
were shortened again in anticipation of rising interest rates. Additionally,
security selection played a role in performance as structural aspects of an
individual security become more significant in periods of interest rate
volatility. Sector rotation had little impact on Fund performance because credit
spreads between sectors universally remain compressed.
WHAT'S THE ECONOMIC ENVIRONMENT IN VIRGINIA?
The state of Virginia has earned its "Aaa" rating from Moody's Investors
Service, Inc. and "AAA" rating from Standard & Poor's Corporation and Fitch
Investors Service, Inc. by having a low relative tax rate, high per capita
income and strong growth in service sector jobs. A very high share of the
state's population is college educated, so it's no surprise that Virginia has
the highest per capita income of any of the southern states. Virginia has also
maintained a low unemployment rate despite strong growth in the labor force and
declining federal investment. Virginia has been the relocation site of choice
for many high-tech companies (such as IBM, Gateway and Motorola) whose presence
has served to strengthen city and county tax bases. Virginia's prudent financial
management and low debt burden should help to insulate it from any government
cutbacks in defense and related areas.
WHAT ARE THE FUNDS' CURRENT PORTFOLIO CHARACTERISTICS?**
As of March 31, 1997, the average portfolio maturity of Nations Virginia
Intermediate Municipal Bond Fund was 8.12 years, while the duration of the Fund
was 5.50 years. The Fund held 114 issues with an average credit rating of "Aa"
by Moody's Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 5.84% of the Fund.
As of March 31, 1997, the average portfolio maturity of Nations Virginia
Municipal Bond Fund was 17.08 years, while the duration of the Fund was 8.05
years. The Fund held 30 issues with an average credit rating of "Aa" by Moody's
Investors Service, Inc. Issues whose income is subject to the federal
Alternative Minimum Tax made up 14.16% of the Fund.
WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN 1997?
State and local government finances continue to benefit from the economy's
expansion, providing support for the market from a credit standpoint. Modest new
issue supply should help the municipal bond market outperform taxable
counterparts. However, the market will be facing challenges as structural
changes in our welfare system begin to have an impact on state and local
government finances. As the competitive environment for utilities and healthcare
changes, these market segments will bear monitoring over the next few years.
- ---------------
** Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook. Also, the outlook of this Fund's portfolio manager may differ from that
of other Nations Funds' portfolio managers.
61
<PAGE> 66
NATIONS FUNDS
Nations Virginia Intermediate Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Transportation 7.4%
Cash and Cash Equivalents 1.3%
Other 2.6%
Power/Utilities Revenue 0.6%
General Obligation 38.6%
Pre-Refunded 9.4%
Insured 14.8%
Hospital 4.2%
Education 7.7%
Pollution Control Revenue/
Industrial Development
Revenue 3.8%
Housing Revenue 2.9%
Water Revenue 6.7%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Chesapeake, Virginia, Revenue Refunding,
5.125% 12/01/05 2.8%
2. Virginia State Transportation Board
Authority, Contract Revenue, Route 58, Series
A, 5.500% 05/15/09 2.4
3. Newport News, Virginia, Public Improvement,
Series B, 5.200% 11/01/04 2.3
4. Southeastern Public Service Authority,
Virginia,
Series A, (MBIA Insured), 5.100% 07/01/08 2.2
5. Hanover County, Virginia, Industrial
Development Authority Revenue, (Memorial
Regional Medical Center Project), (MBIA
Insured), 5.500% 08/15/25 2.1
6. Virginia State, Public School Authority
Revenue,
5.750% 01/01/00 2.0
7. Augusta County, Virginia, Industrial
Development Authority, Pre-refunded, 7.000%
09/01/01 1.7
8. Henrico County, Virginia, Public Improvement
Authority, 4.700% 01/15/02 1.6
9. Fairfax County, Virginia, Public Improvement,
GO, Series A, 4.900% 06/01/04 1.6
10. Henrico County, Virginia, Industrial
Development Authority Revenue, Solid Waste,
(Browning-Ferris Industries Inc. Project),
5.300% 12/01/11 1.6
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 3.71%
Five Years Ended 03/31/97 5.57%
Since Inception (12/05/89)
through 03/31/97 6.16%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Virginia Intermediate Municipal Bond
Fund on December 5, 1989 (inception date). The Lehman 7-Year Municipal Bond
Index is a broad based, unmanaged, total return index composed of investment
grade bonds with maturities of 7 to 8 years. Funds included in the Lipper
Virginia Intermediate Municipal Debt Funds Average invest at least 65% of their
assets in municipal debt issues which are exempt from taxation in Virginia, with
dollar-weighted average maturities of 5 to 10 years. The Lehman 7-year Municipal
Bond Index measures the performance of the municipal bonds comprising the index
for the 7-year period beginning on 12/31/89. Please note, however, that Primary
A Shares and Investor A Shares commenced operations on 9/20/89 and 12/5/89,
respectively. Therefore, the 7-year performance illustrated by the Lehman 7-Year
Municipal Bond Index includes the performance of the Lehman 10-year Municipal
Bond Index for the three-month (for Primary A Shares) and one- month (Investor A
Shares) periods preceding 12/31/89.
<TABLE>
<CAPTION>
LIPPER VIRGINIA GROWTH OF INVESTMENT
MEASUREMENT PERIOD INTERMEDIATE MUNICIPAL LEHMAN 7-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) DEBT FUNDS AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Dec. 5, 1989 10000 10000 10000
10031 10103 10028
10116 10147 10149
10287 10380 10320
10371 10452 10404
Nov. 30, 1990 10751 10852 10785
10965 11110 11000
11121 11302 11157
11428 11732 11465
Nov. 30, 1991 11789 12118 11827
11776 12108 11814
12151 12538 12187
12422 12882 12454
Nov. 30, 1992 12609 13092 12637
12956 13511 12992
13361 13885 13381
13742 14288 13757
Nov. 30, 1993 13884 14459 13890
13316 13914 13320
13412 14060 13410
13447 14196 13434
Nov. 30, 1994 13286 14058 13270
13982 14797 13959
14356 15217 14325
14667 15653 14628
Nov. 30, 1995 15064 16048 15017
Mar. 31, 1996 14989 15990 14935
15056 16060 14994
15297 16348 15226
15640 16748 15560
Mar. 31, 1997 15576 16729 15489
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
62
<PAGE> 67
NATIONS FUNDS
Nations Virginia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 2.90%*
Year Ended 03/31/97 3.40%
Since Inception (06/17/92) through
03/31/97 4.84%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed within
one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 3.40%
Since Inception (06/07/93) through
03/31/97 3.98%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 3.92%
Five Years Ended 03/31/97 5.75%
Since Inception (09/20/89) through
03/31/97 6.31%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Virginia Intermediate Municipal Bond Fund from the date each class of
shares was first offered. The Lehman 7-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade
bonds with maturities of 7 to 8 years. The Lehman 7-Year Municipal Bond
Index measures the performance of the municipal bonds comprising the index
for the 7-year period beginning on 12/31/89. Please note, however, that
Primary A Shares and Investor A Shares commenced operations on 9/20/89 and
12/5/89, respectively. Therefore, the 7-year performance illustrated by
the Lehman 7-Year Municipal Bond Index includes the performance of the
Lehman 10-Year Municipal Bond Index for the three-month (for Primary A
Shares) and one-month (Investor A Shares) periods preceding 12/31/89.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED,
LEHMAN 7-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 17, 1992 10000 10000
10275 10264
NOV. 30, 1992 10442 10399
10776 10666
11074 10978
11396 11270
NOV. 30, 1993 11633 11361
11088 10879
11214 10944
11322 10955
NOV. 30, 1994 11213 10813
11802 11366
12137 11655
12484 11893
NOV. 30, 1995 12788 12200
MAR. 31, 1996 12753 12124
12809 12163
13038 12342
13358 12604
MAR. 31, 1997 13342 12537
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JUNE 7, 1993 10000 10000
10183 10143
10478 10419
NOV. 30, 1993 10806 10509
10208 10069
10312 10130
10411 10140
NOV. 30, 1994 10310 10009
10862 10521
11160 10788
11480 11009
NOV. 30, 1995 11709 11293
MAR. 31, 1996 11727 11222
11778 11259
11880 11424
12283 11666
MAR. 31, 1997 12269 11604
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
7-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
SEPT. 20, 1989 10000 10000
NOV. 30, 1989 10389 10175
10435 10296
10673 10470
10747 10556
NOV. 30, 1990 11159 10942
11425 11160
11622 11319
12063 11632
NOV. 30, 1991 12460 11999
12451 11986
12893 12367
13247 12643
NOV. 30, 1992 13463 12834
13893 13187
14277 13599
14692 13987
NOV. 30, 1993 14868 14127
14307 13553
14458 13651
14597 13681
NOV. 30, 1994 14456 13521
15215 14229
15648 14610
16095 14927
NOV. 30, 1995 16502 15331
MAR. 31, 1996 16442 15255
16514 15323
16810 15567
17222 15917
MAR. 31, 1997 17202 15852
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
63
<PAGE> 68
NATIONS FUNDS
Nations Virginia Municipal Bond Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS A % OF TOTAL
INVESTMENTS AS OF 3/31/97 (UNAUDITED)
<TABLE>
<S> <C>
Hospital 5.0%
Pollution Control Revenue/Industrial
Development Revenue 23.2%
Education 8.2%
Water Revenue 13.5%
Other 4.5%
Cash and Cash Equivalents 3.0%
Insured 32.5%
General Obligation 10.1%
</TABLE>
-------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/97
<TABLE>
<S> <C>
1. Rivanna, Virginia, Regional Water and Sewer
Authority, Regional Water and Sewer Systems
Revenue Refunding, 6.450% 10/01/12 7.1%
2. Prince William County, Virginia, Industrial
Development Authority, Lease Revenue, (ATCC
Project), 6.000% 02/01/14 4.9
3. Staunton, Virginia, Industrial Development
Authority, Educational Facilities Revenue,
(Mary Baldwin College Project), 6.600%
11/01/14 4.8
4. Fairfax County, Virginia, Sewer Revenue
Refunding,
(AMBAC Insured), 5.500% 11/15/13 4.8
5. Puerto Rico, Electric Power Authority, Power
Revenue Refunding, Series Y, (MBIA Insured),
6.500% 07/01/06 4.7
6. Augusta County, Virginia, Industrial
Development Authority, Hospital Revenue
Refunding, (Augusta Hospital Corporation),
(AMBAC Insured), 5.500% 09/01/15 4.7
7. Richmond, Virginia, Metropolitan Expressway
Authority, Revenue Refunding, Series B, (FGIC
Insured),
6.250% 07/15/22 4.0
8. West Point, Virginia, Industrial Development
Authority, Solid Waste Disposal Revenue,
(Chesapeake Corporation Project), Series A,
AMT, 6.375% 03/01/19 4.0
9. Giles County, Virginia, Industrial
Development Authority, Revenue Exempt
Facilities, (Hoechst Celanese Corporation
Project), AMT, 5.950% 12/01/25 3.9
10. Loudoun County, Virginia, Industrial
Development Authority, Hospital Revenue,
(Loudoun Hospital Center), (FSA Insured),
5.600% 06/01/09 3.7
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/97
AVERAGE ANNUAL TOTAL RETURN
INVESTOR A SHARES
- ---------------------------------
<TABLE>
<S> <C>
Year Ended 03/31/97 5.23%
Since Inception (11/08/93)
through 03/31/97 3.89%
</TABLE>
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Virginia Municipal Bond Fund on
November 8, 1993 (inception date). The Lehman 20-Year Municipal Bond Index is a
broad based, unmanaged, total return index composed of investment grade bonds
with maturities of 18 to 22 years. Funds included in the Lipper Virginia
Municipal Debt Funds Average limit their assets to those securities which are
exempt from taxation in Virginia.
<TABLE>
<CAPTION>
LIPPER VIRGINIA GROWTH OF INVESTMENT
MEASUREMENT PERIOD MUNICIPAL DEBT FUNDS LEHMAN 20-YEAR MUNICIPAL WITH DISTRIBUTIONS
(QUARTERLY) AVERAGE BOND INDEX REINVESTED
<S> <C> <C> <C>
Nov. 8, 1993 10000 10000 10000
Nov. 30, 1993 10084 10129 10207
9469 9427 9345
9493 9520 9366
9533 9570 9375
Nov. 30, 1994 9389 9385 9234
10049 10222 9985
10250 10442 10218
10482 10725 10511
Nov. 30, 1995 10985 11353 11040
Mar. 31, 1996 10765 11101 10816
10840 11084 10892
11088 11402 11168
11329 11709 11425
Mar. 31, 1997 11279 11636 11382
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Portfolio characteristics and outlook were current as of March 31, 1997, are
subject to change and may not be representative of current characteristics and
outlook.
64
<PAGE> 69
NATIONS FUNDS
Nations Virginia Municipal Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON -INVESTOR C, INVESTOR N AND PRIMARY A SHARES AS OF
MARCH 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
INVESTOR C SHARES
- ----------------------------------------------
<S> <C>
Year Ended 03/31/97 4.42%*
Year Ended 03/31/97 4.92%
Since Inception (11/03/94) through
03/31/97 9.90%
*adjusted for maximum contingent
deferred sales charge of 0.50% when
Investor C Shares are redeemed
within one year of purchase
INVESTOR N SHARES
- ----------------------------------------------
Year Ended 03/31/97 4.65%
Since Inception (10/21/93) through
03/31/97 2.82%
PRIMARY A SHARES
- ----------------------------------------------
Year Ended 03/31/97 5.44%
Since Inception (01/11/94) through
03/31/97 3.50%
</TABLE>
The charts to the right show the growth in value of a hypothetical $10,000
investment in Investor C, Investor N and Primary A Shares of Nations
Virginia Municipal Bond Fund from the date each class of shares was first
offered. The Lehman 20-Year Municipal Bond Index is a broad based,
unmanaged, total return index composed of investment grade bonds with
maturities of 18 to 22 years.
Each chart assumes the reinvestment of all distributions.
[LEGEND--GROWTH OF INVESTMENT WITH DISTRIBUTIONS REINVESTED, LEHMAN
20-YEAR MUNICIPAL BOND INDEX]
PERFORMANCE COMPARISONS
INVESTOR C SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
NOV. 3, 1994 10000 10000
NOV. 30, 1994 10072 10279
10970 11101
11207 11343
11511 11652
NOV. 30, 1995 12185 12222
MAR. 31, 1996 11914 11966
12049 12041
12394 12336
12728 12611
MAR. 31, 1997 12649 12554
</TABLE>
INVESTOR N SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
OCT. 21, 1993 10000 10000
NOV. 30, 1993 10129 10047
9427 9185
9520 9193
9570 9189
NOV. 30, 1994 9385 9038
10222 9761
10442 9974
10725 10246
NOV. 30, 1995 11353 10747
MAR. 31, 1996 11101 10516
11084 10575
11402 10827
11709 11061
MAR. 31, 1997 11636 11005
</TABLE>
PRIMARY A SHARES AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
GROWTH OF
LEHMAN INVESTMENT
20-YEAR WITH
MEASUREMENT PERIOD MUNICIPAL DISTRIBUTIONS
(QUARTERLY) BOND INDEX REINVESTED
<S> <C> <C>
JAN. 11, 1994 10000 10000
9307 9118
9399 9143
9448 9156
NOV. 30, 1994 9266 9023
10092 9762
10310 9994
10589 10286
NOV. 30, 1995 11209 10809
MAR. 31, 1996 10960 10596
11084 10676
11402 10951
11709 11209
MAR. 31, 1997 11636 11172
</TABLE>
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
65
<PAGE> 70
NATIONS FUNDS
Nations Short-Term Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- 95.4%
ALASKA -- 3.8%
$1,000,000 Alaska State, Student
Loan Corporation,
Student Loan Revenue,
Series A, AMT, (AMBAC
Insured), 4.900%
07/01/00............. Aaa AAA $ 997,250
2,000,000 North Slope Borough,
Alaska, GO, Series B,
(CGIC Insured),
6.100% 06/30/99...... Aaa AAA 2,068,880
-----------
3,066,130
-----------
ARIZONA -- 5.0%
Arizona State
Transportation Board:
2,000,000 Excise Tax Revenue,
(Maricopa County
Regional Area Road
Fund),
7.200% 07/01/97...... Aa AA- 2,016,700
2,000,000 Highway Revenue,
Sub-Series A,
5.900% 07/01/99...... Aa AA- 2,063,440
-----------
4,080,140
-----------
DISTRICT OF COLUMBIA -- 1.3%
1,000,000 District of Columbia,
GO, Series A, (MBIA
Insured),
6.000% 06/01/98...... Aaa AAA 1,020,890
-----------
FLORIDA -- 1.3%
1,000,000 Florida State Turnpike
Authority Revenue,
Department of
Transportation,
7.350% 07/01/98...... A1 NR 1,039,120
-----------
GEORGIA -- 2.5%
1,000,000 Georgia State, GO,
Series E,
4.200% 07/01/99...... Aaa AA+ 997,520
1,000,000 Georgia State,
Municipal Electric
Power Authority
Revenue, Series V,
5.700% 01/01/98...... A A 1,012,510
-----------
2,010,030
-----------
GUAM -- 4.3%
Government of Guam:
500,000 Airport Authority
Revenue, Series A,
5.400% 10/01/99...... NR BBB 504,060
GO, Series A:
1,000,000 4.900% 09/01/97........ NR BBB 1,003,560
2,000,000 5.375% 09/01/00........ NR BBB 2,010,560
-----------
3,518,180
-----------
HAWAII -- 1.3%
1,000,000 Hawaii State, GO,
Series BT,
5.700% 02/01/99...... Aa3 A+ 1,022,180
-----------
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
ILLINOIS -- 4.0%
$1,000,000 Chicago, Illinois,
O'Hare International
Airport, General
Airport Revenue,
Second Lien, Series
A, AMT, (AMBAC
Insured),
5.000% 01/01/02...... Aaa AAA $ 999,090
1,000,000 Illinois State, GO,
5.600% 06/01/98...... A1 AA- 1,017,300
1,285,000 Metropolitan Pier and
Exposition Authority,
Illinois, Dedicated
State Tax Revenue,
Refunding, (McCormick
Place Exposition
Project), Series A,
(AMBAC Insured),
4.700% 12/15/01...... Aaa AAA 1,278,704
-----------
3,295,094
-----------
INDIANA -- 1.6%
1,280,000 Indiana State Health
Facilities Financing
Authority, Hospital
Revenue Refunding,
(Methodist Hospital
Inc. Project),
6.000% 09/15/99...... Aa NR 1,318,438
-----------
MASSACHUSETTS -- 2.8%
Massachusetts State,
Refunding:
1,200,000 Consolidated Loan, GO,
Series A, (FSA
Insured),
7.100% 02/01/98...... Aaa AAA 1,231,584
1,000,000 GO, Series A,
5.500% 07/01/99...... A1 A+ 1,021,530
-----------
2,253,114
-----------
MICHIGAN -- 9.9%
2,000,000 Detroit, Michigan,
Convention Facilities
Revenue Refunding,
(Cobo Hall Expansion
Project),
4.750% 09/30/00...... NR A 1,986,020
Detroit, Michigan, GO:
3,000,000 Refunding,
5.800% 05/01/97...... NR BBB 3,004,350
1,000,000 Series B,
5.100% 04/01/99...... Ba1 BBB 1,004,880
Detroit, Michigan,
Self-Insurance, GO,
Series A:
1,000,000 5.200% 05/01/98........ NR BBB- 1,009,280
1,000,000 5.600% 05/01/01........ NR BBB- 1,012,660
-----------
8,017,190
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
66
<PAGE> 71
NATIONS FUNDS
Nations Short-Term Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
NEVADA -- 3.7%
$1,000,000 Clark County, Nevada,
Sanitation District,
GO, Series A, (AMBAC
Insured),
5.700% 07/01/99...... Aaa AAA $ 1,024,250
2,000,000 Washoe County, Nevada,
Airport Authority,
Airport System
Improvement Revenue,
Series A, AMT,
5.100% 07/01/99...... Aaa AAA 2,021,000
-----------
3,045,250
-----------
NEW JERSEY -- 3.6%
Monmouth County, New
Jersey, GO:
1,400,000 5.000% 10/01/98........ Aaa AA+ 1,421,000
1,500,000 5.000% 10/01/99........ Aaa AA+ 1,523,925
-----------
2,944,925
-----------
NEW MEXICO -- 3.4%
1,710,000 New Mexico Mortgage
Finance Authority,
Single-family
Mortgage Purchase
Refunding, Series
A-1,
5.900% 07/01/99...... Aa AA 1,751,570
1,000,000 New Mexico State
Severance Tax
Revenue, Series A,
5.375% 07/01/99...... Aa AA 1,019,090
-----------
2,770,660
-----------
NEW YORK -- 1.3%
1,000,000 New York State,
Refunding, GO, Series
B,
6.375% 08/15/00...... A A- 1,052,240
-----------
NORTH CAROLINA -- 1.2%
1,000,000 North Carolina Eastern
Municipal Power
Agency, Power System
Revenue, Refunding,
Series A,
5.000% 01/01/99...... Baa1 BBB 1,005,130
-----------
PENNSYLVANIA -- 3.7%
1,000,000 Monroeville,
Pennsylvania,
Hospital Authority
Revenue, Forbes
Health System,
5.125% 10/01/00...... Baa1 BBB+ 996,680
2,000,000 Philadelphia,
Pennsylvania, Water
and Wastewater
Revenue,
4.500% 06/15/97...... Baa BBB 2,002,020
-----------
2,998,700
-----------
PUERTO RICO -- 2.5%
2,000,000 Commonwealth of Puerto
Rico, Refunding, GO,
5.500% 07/01/00...... Baa1 A 2,037,900
-----------
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
SOUTH CAROLINA -- 1.3%
$1,000,000 Medical University of
South Carolina,
Hospital Facilities
Revenue Refunding,
Series A,
6.900% 07/01/98...... A A+ $ 1,032,330
-----------
SOUTH DAKOTA -- 0.9%
715,000 South Dakota Student
Loan Assistance
Corporation, Student
Loan Revenue, Series
A,
7.000% 08/01/98...... NR A+ 730,258
-----------
TENNESSEE -- 5.9%
2,100,000 McMinn County,
Tennessee, Industrial
Development Board,
PCR, Refunding,
(Bowater Inc.
Project),
6.850% 04/01/01...... Baa1 BBB 2,236,689
2,525,000 Memphis, Tennessee,
Capital Outlay Notes,
GO,
5.000% 07/01/98...... Aa AA 2,556,007
-----------
4,792,696
-----------
TEXAS -- 15.6%
1,000,000 Addison, Texas,
Refunding, GO, (FGIC
Insured),
6.100% 09/01/99...... Aaa AAA 1,022,500
1,000,000 Bexar County, Texas,
Refunding Limited
Tax, GO,
6.100% 06/15/98...... Aa AA 1,004,130
Brazos, Texas, Higher
Education Authority
Inc., Revenue
Refunding, AMT,
(Guaranteed Student
Loans):
Senior Lien, Series
A-2:
1,000,000 5.300% 06/01/97........ Aaa NR 1,002,370
1,000,000 5.850% 06/01/01........ Aaa NR 1,033,810
1,415,000 Series C-1,
6.000% 11/01/99...... Aa NR 1,457,464
1,000,000 Conroe, Texas,
Independent School
District, GO,
Schoolhouse and
Refunding, (MBIA
Insured)
7.000% 02/01/99...... Aaa AAA 1,045,390
1,000,000 Harris County, Texas
Municipal Utilities
District No. 203,
Refunding, GO, (MBIA
Insured),
6.950% 03/01/99...... Aaa AAA 1,047,790
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
67
<PAGE> 72
NATIONS FUNDS
Nations Short-Term Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
TEXAS -- (CONTINUED)
$2,450,000 Houston, Texas, Water
and Sewer System
Revenue Refunding,
Prior Lien, Series B,
5.250% 12/01/99...... A3 A $ 2,489,372
1,000,000 Texas State College,
Texas, Student Loan
Authority Revenue,
GO, AMT,
5.100% 08/01/01...... Aa AA 1,008,040
1,500,000 Texas State, Public
Finance Authority
Revenue, Series A,
ETM,
6.800% 02/01/98...... A NR 1,536,465
-----------
12,647,331
-----------
VIRGINIA -- 2.5%
1,000,000 Ashland, Virginia,
Industrial
Development
Authority,
Educational
Facilities Revenue,
(Randolph-Macon
College Project),
4.375% 11/01/11+..... NR A- 998,160
1,000,000 Virginia Beach,
Virginia, GO, Series
A,
6.800% 06/01/99...... Aa AA 1,049,090
-----------
2,047,250
-----------
WASHINGTON -- 10.2%
1,000,000 Conservation and
Renewable Energy
System Revenue,
Washington,
(Washington
Conservation
Project),
5.050% 10/01/98...... Aa AA 1,011,800
1,570,000 King County,
Washington, GO,
Series A,
9.000% 12/01/98...... Aa1 AA+ 1,690,136
Washington State Public
Power Supply System:
2,535,000 Pre-refunded, Series A,
(Nuclear Project No.
1),
7.500% 07/01/15...... Aaa AAA 2,749,030
Revenue Refunding,
Series C, (Nuclear
Project No. 2):
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
WASHINGTON -- (CONTINUED)
Washington State Public
Power Supply
System --
(continued):
$1,000,000 7.300% 07/01/00........ Aa AA $ 1,069,550
1,675,000 (MBIA-IBC Insured),
7.200% 07/01/99...... Aaa AAA 1,766,103
-----------
8,286,619
-----------
WISCONSIN -- 1.8%
1,480,000 Wisconsin State
Transportation
Revenue, Series A,
4.600% 07/01/98...... A1 AA- 1,488,658
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $77,030,655)............ 77,520,453
==========
<CAPTION>
SHARES
- ---------
<S> <C> <C>
MONEY MARKET FUND -- 4.0%
(Cost $3,237,000)
3,237,000 AIM Tax-Exempt Fund.......... 3,237,000
==========
TOTAL INVESTMENTS
(Cost $80,267,655*)..................... 99.4% 80,757,453
OTHER ASSETS AND
LIABILITIES (NET)....................... 0.6 466,077
----- -----------
NET ASSETS................................ 100.0% $81,223,530
===== ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes was $80,271,771.
+ Variable rate note. The interest rate shown reflects the rate in effect at
March 31, 1997.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
CGIC Capital Guaranty Insurance Corporation
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corporation
FSA Financial Security Assurance
GO General Obligation
IBC Insured Bond Certificate
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
68
<PAGE> 73
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- 93.3%
ALABAMA -- 1.4%
$1,600,000 Jefferson County,
Alabama, Sewer
Revenue Refunding,
Series A, (FGIC
Insured),
5.625% 02/01/18...... Aaa AAA $ 1,547,488
----------
ALASKA -- 4.7%
3,280,000 Alaska State, Student
Loan Corporation,
Student Loan Revenue,
Series A, AMT, (AMBAC
Insured),
5.250% 07/01/03...... Aaa AAA 3,276,261
2,000,000 Anchorage, Alaska, GO,
Series A, (AMBAC
Insured),
5.100% 08/01/07...... Aaa AAA 1,969,900
----------
5,246,161
----------
ARIZONA -- 0.9%
955,000 Arizona State
University, Systems
Revenue, Series A,
6.500% 07/01/01...... A1 AA 1,018,928
----------
CALIFORNIA -- 0.9%
1,000,000 Sacramento, California,
Cogeneration
Authority, (Procter &
Gamble Company
Project),
5.700% 07/01/00...... NR BBB- 1,018,870
----------
COLORADO -- 1.5%
1,500,000 Arapahoe County,
Colorado, School
District No. 5,
(Cherry Creek),
7.000% 12/15/04...... Aa AA 1,631,235
----------
DISTRICT OF COLUMBIA -- 1.9%
Washington, D.C.,
Metropolitan Area
Transportation
Authority Revenue,
Refunding, (FGIC
Insured):
2,000,000 4.400% 01/01/00........ Aaa AAA 1,988,740
100,000 4.900% 01/01/05........ Aaa AAA 98,248
----------
2,086,988
----------
FLORIDA -- 5.2%
2,700,000 Duval County, Florida,
Housing Finance
Authority Refunding,
(Greentree Place
Project),
6.750% 04/01/25...... NR BBB+ 2,764,692
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
FLORIDA -- (CONTINUED)
Florida State Housing
Finance Agency,
Refunding, Multi-
family Housing:
$1,000,000 (Altamonte Project),
Series C,
7.000% 12/01/24...... NR BBB+ $ 1,063,760
2,000,000 (Andover Project),
Series E,
6.350% 05/01/26...... NR BBB+ 2,020,460
----------
5,848,912
----------
GEORGIA -- 3.1%
1,000,000 Burke County, Georgia,
Development
Authority, PCR,
(Oglethorpe Power
Corporation Project),
Series B,
4.700% 01/01/04...... A3 A 971,770
1,500,000 Fulco, Georgia,
Hospital Authority
Revenue Anticipation
Certificates, St.
Joseph's Hospital,
5.100% 10/01/05...... A A 1,477,065
1,000,000 Georgia State, GO,
Series D,
5.900% 11/01/03...... Aaa AAA 1,061,420
----------
3,510,255
----------
GUAM -- 1.2%
1,500,000 Government of Guam, GO,
Series A,
5.200% 11/15/08...... NR BBB 1,400,505
----------
HAWAII -- 1.9%
2,000,000 Hawaii State, GO,
Series CN, (FGIC
Insured),
6.250% 03/01/04...... Aaa AAA 2,137,340
----------
ILLINOIS -- 15.1%
2,500,000 Chicago, Illinois, Gas
Supply Revenue,
6.875% 03/01/15...... Aa3 AA- 2,669,400
2,000,000 Chicago, Illinois,
O'Hare International
Airport Revenue,
Passenger Facility
Charge, Series B,
AMT, (AMBAC Insured),
5.000% 01/01/02...... Aaa AAA 1,998,180
Chicago, Illinois,
School Financing
Authority, GO, (MBIA
Insured):
2,000,000 4.800% 06/01/04........ Aaa AAA 1,954,840
1,160,000 Series A,
4.900% 06/01/05...... Aaa AAA 1,132,032
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
69
<PAGE> 74
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
ILLINOIS -- (CONTINUED)
Illinois State Health
Facilities Authority
Revenue:
$1,100,000 (Edward Hospital
Project), Series A,
5.750% 02/15/09...... A A $ 1,069,530
1,000,000 (Lutheran General
Health Systems
Project), Series C,
5.250% 04/01/02...... A A+ 998,260
1,595,000 Lake County, Illinois,
High School District
No. 125, (Adlai E.
Stevenson High
School),
5.000% 01/01/04...... Aa1 NR 1,593,070
1,050,000 Lansing, Illinois,
Sales Tax Increment
Revenue, Refunding,
6.500% 12/01/02...... NR BBB 1,096,799
1,200,000 Madison Macoupin Etc.
Counties, Illinois,
Community College
District No. 536,
(Lewis and Clark
Community College),
GO, (FGIC Insured),
6.375% 11/01/01...... NR AAA 1,276,368
2,000,000 Metropolitan Pier and
Exposition Authority,
Illinois, Dedicated
Tax Revenue
Refunding, (McCormick
Place Expansion
Project), Series A,
(AMBAC Insured),
6.000% 12/15/06...... Aaa AAA 2,114,300
1,000,000 Regional Transportation
Authority, Illinois,
Series A, (FGIC
Insured),
6.350% 11/01/04...... Aaa AAA 1,067,020
----------
16,969,799
----------
INDIANA -- 2.2%
Indiana State Health
Facilities Financing
Authority, Hospital
Revenue Refunding,
(Methodist Hospital
Inc. Project):
1,280,000 6.200% 09/15/00........ Aa NR 1,332,442
1,040,000 6.500% 09/15/02........ Aa NR 1,109,056
----------
2,441,498
----------
MAINE -- 2.1%
2,325,000 Maine State, Municipal
Board Refunding,
Series A,
4.900% 11/01/02...... Aa A+ 2,330,534
----------
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
MARYLAND -- 8.5%
$1,500,000 Baltimore, Maryland,
Port Facilities
Revenue, Consolidated
Coal Sales, Series 85,
6.500% 12/01/10...... Aa3 AA- $ 1,624,590
3,710,000 Maryland State, State
and Local Facilities
Loan, GO, Second
Series,
5.000% 10/15/04...... Aaa AAA 3,740,051
1,720,000 Maryland State,
Transportation
Authority, Special
Obligation Revenue,
(Baltimore-Washington
D.C. International
Airport Project),
Series A, AMT, (FGIC
Insured),
6.400% 07/01/19...... Aaa AAA 1,764,909
2,500,000 Washington County,
Maryland, Suburban
Sanitation District
Authority, Water
Supply Revenue, GO,
4.900% 12/01/05...... Aa1 AA 2,478,950
----------
9,608,500
----------
MASSACHUSETTS -- 1.8%
2,000,000 New England Education
Loan Marketing
Corporation, Series
A, AMT,
5.700% 07/01/05...... A1 A- 2,008,940
----------
MICHIGAN -- 4.9%
2,500,000 Detroit, Michigan,
Convention Facilities
Revenue Refunding,
(Cobo Hall Expansion
Project), (FSA
Insured),
5.100% 09/30/04...... Aaa AAA 2,498,450
Detroit, Michigan,
Refunding, GO:
2,000,000 5.800% 05/01/97........ NR BBB 2,002,900
1,000,000 Series B,
6.750% 04/01/03...... Ba1 BBB 1,065,780
----------
5,567,130
----------
MISSOURI -- 1.8%
2,000,000 Kansas City, Missouri,
Industrial
Development
Authority, PCR,
(General Motors
Corporation Project),
6.050% 04/01/06...... A3 A- 2,054,000
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
70
<PAGE> 75
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
NEVADA -- 3.8%
Clark County, Nevada:
$1,500,000 Refunding, GO, (FSA
Insured),
6.100% 10/01/02...... Aaa AAA $ 1,585,830
1,500,000 School District GO,
Series A, (MBIA
Insured),
6.700% 03/01/06...... Aaa AAA 1,588,260
1,000,000 Nevada State, Municipal
GO, ETM,
7.000% 01/01/03...... Aaa AAA 1,062,710
----------
4,236,800
----------
NEW JERSEY -- 1.8%
2,030,000 New Jersey State,
Transportation Trust
Fund Authority,
Transportation
System, Series B,
(MBIA Insured),
5.000% 06/15/04...... Aaa AAA 2,035,948
----------
NORTH CAROLINA -- 0.9%
1,000,000 North Carolina State,
GO, Series A,
5.100% 03/01/06...... Aaa AAA 1,005,650
----------
PENNSYLVANIA -- 6.5%
2,000,000 Geisinger Authority,
Pennsylvania, Health
Systems Revenue,
Series A,
6.000% 07/01/01...... Aa AA 2,071,280
1,000,000 Pennsylvania
Intergovernmental
Cooperative
Authority, Special
Tax Revenue,
Philadelphia Funding
Program, (FGIC
Insured),
7.000% 06/15/05...... Aaa AAA 1,133,170
2,500,000 Philadelphia,
Pennsylvania,
Industrial
Development
Authority, Industrial
Development Revenue
Refunding, (Ashland
Oil Inc. Project),
5.700% 06/01/05...... Baa1 NR 2,541,525
1,500,000 Philadelphia,
Pennsylvania, Water
and Wastewater
Systems, (FGIC
Insured),
5.500% 06/15/03...... Aaa AAA 1,543,500
----------
7,289,475
----------
PUERTO RICO -- 3.0%
2,000,000 Commonwealth of Puerto
Rico, Refunding, GO,
5.500% 07/01/00...... Baa1 A 2,037,900
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
PUERTO RICO -- (CONTINUED)
$1,285,000 Commonwealth of Puerto
Rico, Highway and
Transportation
Authority, Highway
Revenue Refunding,
Series V,
6.625% 07/01/12...... Baa1 A $ 1,369,347
----------
3,407,247
----------
SOUTH CAROLINA -- 0.4%
500,000 York County, South
Carolina, Industrial
Development Revenue,
Exempt Facility,
(Hoechst Celanese
Corporation Project),
AMT,
5.700% 01/01/24...... A2 A+ 481,375
----------
TENNESSEE -- 0.9%
1,000,000 Metropolitan
Government, Nashville
and Davidson County,
Tennessee, Health and
Educational
Facilities Board
Revenue, Refunding
and Improvement,
(Meharry Medical
College Project),
(AMBAC Insured),
6.000% 12/01/08...... Aaa AAA 1,062,040
----------
TEXAS -- 7.7%
1,000,000 Brazos, Texas, Higher
Education Authority
Inc., Revenue
Refunding, Senior
Lien, Series A-2,
AMT, (Guaranteed
Student Loans),
6.050% 06/01/03...... Aaa NR 1,047,490
1,000,000 Gulf Coast, Texas,
Industrial
Development
Authority, (Champion
International
Corporation Project),
7.000% 04/01/04...... Baa1 BBB 1,026,200
Harris County, Texas,
Health Facilities
Development
Authority, Hospital
Revenue Refunding:
1,000,000 (Memorial Hospital
Systems Project),
Series A (MBIA
Insured),
4.875% 06/01/05...... Aaa AAA 975,280
2,350,000 (Texas Childrens
Hospital Project),
(MBIA Insured),
6.000% 10/01/05...... Aaa AAA 2,466,325
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
71
<PAGE> 76
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
TEXAS -- (CONTINUED)
$1,500,000 Irving, Texas,
Independent School
District, Capital
Appreciation
Refunding, GO, (PSFG
Insured),
Zero Coupon
02/15/02+............ Aaa AAA $ 1,182,015
1,000,000 Texas State, Revenue
Refunding, Veterans
Housing Assistance,
Series B-4, AMT,
6.100% 12/01/06...... Aa AA 1,028,730
1,000,000 Texas State, Water
Development Board
Revenue, GO,
5.250% 08/01/28...... Aa AA 908,880
----------
8,634,920
----------
VIRGINIA -- 4.6%
1,000,000 Covington-Allegheny
County, Virginia,
Industrial
Development
Authority, PCR,
(Westvaco Corporation
Project),
5.900% 03/01/05...... A1 A 1,056,860
1,500,000 Metropolitan
Washington, D.C.,
Airport Authority of
Virginia, General
Airport Revenue,
Series A, AMT, (MBIA
Insured),
5.600% 10/01/06...... Aaa AAA 1,533,255
1,500,000 Virginia State, Public
Facilities GO,
Series A,
5.400% 06/01/05...... Aaa AAA 1,544,790
1,000,000 Virginia State, Public
School Authority
Revenue, Series B,
6.650% 01/01/98...... Aa AA 1,020,050
----------
5,154,955
----------
WASHINGTON -- 3.5%
1,750,000 Seattle, Washington,
Municipal Light and
Power Revenue,
Refunding,
4.800% 05/01/02...... Aa AA 1,741,355
1,000,000 Washington State, GO,
Series R-92-A,
6.400% 09/01/03...... Aa AA 1,065,470
1,150,000 Washington State Public
Power Supply System,
Revenue Refunding,
(Nuclear Project No.
2), Series A,
5.800% 07/01/07...... Aa AA 1,175,737
----------
3,982,562
----------
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
WISCONSIN -- 1.1%
$1,240,000 Wisconsin State,
Refunding, GO,
Series 3,
4.250% 11/01/99...... Aa AA $ 1,235,163
----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $103,427,952)........... 104,953,218
===========
</TABLE>
<TABLE>
<CAPTION>
SHARES
- ---------
<S> <C> <C>
MONEY MARKET FUNDS -- 7.8%
5,729,000 AIM Tax-Exempt Fund......... 5,729,000
3,059,000 Nuveen Tax-Free Money Market
Fund...................... 3,059,000
------------
TOTAL MONEY MARKET FUNDS
(Cost $8,788,000)......... 8,788,000
============
TOTAL INVESTMENTS
(Cost $112,215,952*)................... 101.1% 113,741,218
OTHER ASSETS AND
LIABILITIES (NET)...................... (1.1) (1,231,961)
----- ------------
NET ASSETS............................... 100.0% $112,509,257
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Yield to maturity is 5.384%.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corporation
FSA Financial Security Assurance
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
PSFG Permanent School Funding Guaranty
</TABLE>
Nations Intermediate Municipal Bond Fund had the following insurance
concentrations greater than 10% at March 31, 1997 (as a percentage of net
assets):
<TABLE>
<S> <C>
FGIC 11.2%
MBIA 10.4%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
72
<PAGE> 77
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- 97.5%
ALABAMA -- 6.8%
$2,000,000 Birmingham, Alabama,
Refunding, GO,
Series B,
6.250% 04/01/12..... A1 AA $ 2,093,260
3,000,000 Butler County,
Alabama, Industrial
Development Board,
Solid Waste Disposal
Revenue, (James
River Corporation
Project),
8.000% 09/01/28..... NR BBB- 3,296,730
1,000,000 Jefferson County,
Alabama, Warrants,
Sewer Revenue
Refunding, Series A,
(FGIC Insured),
5.625% 02/01/22..... Aaa AAA 956,770
1,000,000 Morgan County-Decatur,
Alabama, Healthcare
Authority, Hospital
Revenue Refunding,
(Decatur General
Hospital), (CONNIE
LEE Insured),
6.250% 03/01/13..... NR AAA 1,028,820
----------
7,375,580
----------
ALASKA -- 5.7%
Anchorage, Alaska,
Electric Utilities
Revenue Refunding,
Senior Lien, (MBIA
Insured):
1,000,000 8.000% 12/01/09....... Aaa AAA 1,233,070
3,000,000 Series B,
5.500% 02/01/26..... Aaa AAA 2,834,370
2,250,000 Anchorage, Alaska,
Telephone Utilities
Revenue Refunding,
Series A, (AMBAC
Insured),
4.500% 12/01/02..... Aaa AAA 2,190,600
----------
6,258,040
----------
ARIZONA -- 1.0%
1,000,000 Maricopa County,
Arizona, Unified
School District No.
48, (Scottsdale
Refunding), Series B,
6.300% 07/01/04..... Aa AA 1,081,810
----------
COLORADO -- 1.5%
1,500,000 Arapahoe County,
Colorado, Capital
Improvement,
Transportation,
Federal Highway
Revenue Bonds,
Series E-470,
6.900% 08/31/15..... Baa NR 1,593,735
----------
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
CONNECTICUT -- 3.5%
Connecticut State
Housing Finance
Authority Revenue,
(Housing Mortgage
Finance Program):
$1,845,000 Series A,
6.100% 05/15/13..... Aa AA $ 1,878,413
1,895,000 Series B,
6.700% 11/15/12..... Aa AA 1,985,638
----------
3,864,051
----------
FLORIDA -- 5.4%
1,000,000 Dade County, Florida,
Health Facilities
Authority, Hospital
Revenue Refunding,
(Baptist Hospital,
Miami Project),
Series A, (MBIA
Insured),
5.250% 05/15/21..... Aaa AAA 901,430
1,000,000 Jacksonville, Florida,
PCR, Refunding,
(Anheuser-Busch
Companies Project),
5.700% 08/01/31..... A1 AA- 964,920
1,000,000 Martin County,
Florida, Industrial
Development
Authority Revenue,
(Indiantown
Cogeneration
Project), Series A,
AMT,
7.875% 12/15/25..... Baa3 BBB- 1,135,530
1,000,000 Polk County, Florida,
Industrial
Development
Authority, Solid
Waste Disposal
Facilities Revenue,
(Tampa Electric
Company Project),
5.850% 12/01/30..... Aa2 AA 956,380
2,000,000 South Broward,
Florida, Hospital
District Revenue
Refunding, (FSA
Insured),
5.500% 05/01/28..... Aaa AAA 1,857,100
----------
5,815,360
----------
GEORGIA -- 13.9%
1,680,000 Georgia State, GO,
Series D,
6.800% 08/01/02....... Aaa AA+ 1,843,598
1,000,000 Metropolitan Atlanta
Rapid Transit
Authority (MARTA),
Georgia, Sales Tax
Revenue Refunding,
Series P, (AMBAC
Insured),
6.100% 07/01/05..... Aaa AAA 1,068,370
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
73
<PAGE> 78
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
GEORGIA -- (CONTINUED)
$1,000,000 Monroe County,
Georgia, Development
Authority, PCR,
(Oglethorpe Power
Corporation), Series A,
6.800% 01/01/11..... A3 A+ $ 1,103,760
Savannah, Georgia,
Hospital Authority,
Revenue Refunding
and Improvement:
3,000,000 (Candler Hospital
Project),
7.000% 01/01/23..... Ba BB 3,060,540
2,000,000 (St. Joseph's Hospital
Project),
6.125% 07/01/12..... A NR 2,057,760
2,690,000 Union County, Georgia,
Housing Authority,
Multi-family Housing
Revenue Refunding,
(Hidden Lake
Apartments), Series
A, (FHA Insured/FNMA
Collateral),
7.125% 12/01/25..... Aaa NR 2,838,569
3,000,000 White County, Georgia,
Industrial
Development
Authority Revenue
Refunding, (Clark-
Schwebel Fiber and
Glass Company
Project),
6.850% 06/01/10..... NR BBB+ 3,125,190
----------
15,097,787
----------
ILLINOIS -- 7.6%
1,000,000 Chicago, Illinois,
O'Hare International
Airport: Revenue
Refunding, Second
Lien, Series C,
(MBIA Insured),
5.000% 01/01/18..... Aaa AAA 885,370
1,500,000 Special Facilities
Revenue Refunding,
(American Airlines
Inc. Project),
8.200% 12/01/24..... Baa2 BB+ 1,755,045
1,000,000 Illinois State
Development Finance
Authority, PCR,
Refunding, (Edison
Company Project),
Series D, (AMBAC
Insured),
6.750% 03/01/15..... Aaa AAA 1,084,250
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
ILLINOIS -- (CONTINUED)
$2,000,000 Illinois State Health
Facilities Authority
Revenue, (OSF
Healthcare System),
6.000% 11/15/10..... A1 A+ $ 1,983,340
1,500,000 Illinois State Sales
Tax Revenue
Refunding, Series V,
6.375% 06/15/17..... A1 AAA 1,565,565
1,000,000 Illinois State Toll
Highway Authority
Revenue, Series A,
(FGIC Insured),
6.200% 01/01/16..... Aaa AAA 1,013,990
----------
8,287,560
----------
INDIANA -- 5.3%
2,500,000 Franklin, Indiana,
Economic Development
Revenue Refunding,
(Hoover Universal
Inc. Project
Guaranteed),
6.100% 12/01/04..... A2 A 2,634,100
1,000,000 Indiana State Health
Facilities Financing
Authority, Hospital
Revenue Refunding,
(Methodist Hospital
Inc. Project),
Series A,
5.750% 09/01/15..... Aa AA- 976,650
2,000,000 Indianapolis, Indiana,
Airport Authority,
Special Facilities
Revenue, (Federal
Express Corporation
Project),
7.100% 01/15/17..... Baa2 BBB 2,140,420
----------
5,751,170
----------
KANSAS -- 1.9%
2,000,000 Kansas City, Kansas,
Utilities System
Revenue Refunding
and Improvement,
(FGIC Insured),
6.250% 09/01/14..... Aaa AAA 2,097,000
----------
MAINE -- 0.9%
1,000,000 Maine State, Health
and Higher
Educational
Facilities Authority
Revenue, Series B,
(AMBAC Insured),
5.500% 07/01/16..... Aaa AAA 959,790
----------
MISSISSIPPI -- 0.9%
1,000,000 Claiborne County,
Mississippi, PCR,
(Systems Energy
Resource Inc.
Project),
6.200% 02/01/26..... Ba1 BBB- 963,170
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
74
<PAGE> 79
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
NEVADA -- 1.0%
$1,000,000 Nevada State, GO,
(Project No.
40-41-A),
6.375% 12/01/17..... NR AAA $ 1,036,860
----------
NEW JERSEY -- 2.8%
3,000,000 New Jersey State,
Transportation Trust
Fund Authority,
(Transportation
Systems Project),
Series B, (MBIA
Insured),
5.000% 06/15/04..... Aaa AAA 3,008,790
----------
OHIO -- 2.8%
1,000,000 Dayton, Ohio, Special
Facilities Revenue,
(Emery Air Freight
Corporation
Project), Series F,
6.050% 10/01/09..... NR BBB- 1,012,250
1,000,000 Lucas County, Ohio,
Hospital Revenue,
(Flower Hospital
Project),
Pre-refunded,
6.125% 12/01/13..... NR BBB+ 1,075,040
1,000,000 Ohio State Air Quality
Development
Authority, PCR,
Refunding, (Ohio
Edison Company),
Class A,
5.950% 05/15/29..... Baa2 BBB- 961,370
----------
3,048,660
----------
PENNSYLVANIA -- 6.3%
2,000,000 Lehigh County,
Pennsylvania,
Industrial
Development
Authority, PCR,
Refunding,
(Pennsylvania Power
and Light Company
Project), Series A,
(MBIA Insured),
6.400% 11/01/21..... Aaa AAA 2,091,360
1,000,000 Philadelphia,
Pennsylvania, Gas
Works Revenue
Refunding, 14th
Series,
6.250% 07/01/08..... Baa1 BBB 1,030,390
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
PENNSYLVANIA -- (CONTINUED)
$1,725,000 Philadelphia,
Pennsylvania,
Hospital and Higher
Education Facilities
Authority, Hospital
Revenue, (Frankford
Hospital Project),
Series A,
6.000% 06/01/14..... A3 BBB+ $ 1,660,502
2,000,000 Philadelphia,
Pennsylvania,
Industrial
Development
Authority,
Industrial
Development Revenue
Refunding, (Ashland
Oil Inc. Project),
5.700% 06/01/05..... Baa1 NR 2,033,220
----------
6,815,472
----------
PUERTO RICO -- 1.0%
1,000,000 Commonwealth of Puerto
Rico, Public
Improvements
Revenue, GO, Series A,
7.750% 07/01/17..... NR AAA 1,088,120
----------
SOUTH CAROLINA -- 6.5%
1,000,000 Greenville, South
Carolina, Waterworks
Revenue,
5.500% 02/01/22..... Aa1 AA 951,860
2,000,000 South Carolina, State
Housing Finance and
Development
Authority,
Homeownership
Mortgage Purchase,
Series A,
6.375% 07/01/16..... Aa AA 2,036,800
2,000,000 Spartanburg County,
South Carolina,
Solid Waste Disposal
Facilities Revenue,
(BMW Project),
7.550% 11/01/24..... NR NR 2,167,300
2,000,000 York County, South
Carolina, Industrial
Development Revenue,
Exempt Facility,
(Hoechst Celanese
Corporation
Project), AMT,
5.700% 01/01/24..... A2 A+ 1,925,500
----------
7,081,460
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
75
<PAGE> 80
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
TENNESSEE -- 4.1%
$2,500,000 Maury County,
Tennessee,
Industrial
Development Board,
PCR, Multi-Modal,
Refunding, (Saturn
Corporation
Project), General
Motors Guaranty
Agreement,
6.500% 09/01/24..... A3 A- $ 2,605,575
1,750,000 McMinn County,
Tennessee,
Industrial
Development Board,
Solid Waste
Recycling Facility
Revenue, (Calhoun
Newsprint Project),
AMT,
7.400% 12/01/22..... Baa1 BBB 1,875,528
----------
4,481,103
----------
TEXAS -- 10.6%
4,000,000 Alliance Airport
Authority Inc.,
Texas, Special
Facilities Revenue,
(American Airlines
Inc. Project), AMT,
7.000% 12/01/11..... Baa2 BB+ 4,379,920
1,000,000 Brazos River
Authority, Texas,
Revenue Refunding,
(Houston Light &
Power Company
Project), Series B,
(MBIA Insured),
6.375% 04/01/12..... Aaa AAA 1,051,930
1,750,000 Dallas County, Texas,
GO,
5.250% 08/15/16..... Aaa AAA 1,666,105
2,000,000 Harris County, Texas,
Health Facilities
Development
Authority, Hospital
Revenue Refunding,
(Memorial Hospital
Systems Project),
Series A,
4.875% 06/01/05..... Aaa AAA 1,950,560
1,500,000 Lubbock, Texas, Health
Facilities
Development
Corporation, Revenue
Refunding, (St.
Joseph Health System
Project),
5.500% 07/01/14..... Aa3 AA 1,430,775
1,000,000 San Antonio, Texas,
Electricity & Gas
Refunding, Revenue
Bonds,
5.750% 02/01/11..... Aa1 AA 1,003,350
----------
11,482,640
----------
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
VIRGINIA -- 2.0%
$2,000,000 Covington-Allegheny
County, Virginia,
Industrial
Development
Authority, PCR,
(Westvaco
Corporation
Project),
6.650% 09/01/18..... A1 A $ 2,145,900
----------
WASHINGTON -- 5.1%
2,500,000 Public Industrial
Corporation, Port
Camas -- Washougal,
Washington, PCR,
(James River
Corporation
Project),
6.700% 04/01/23..... NR BBB- 2,535,475
3,000,000 Washington State,
Public Power Supply
System, Revenue
Refunding, Series B,
(Systems Nuclear
Project No. 3), (FSA
Insured),
5.400% 07/01/05..... Aaa AAA 3,029,550
----------
5,565,025
----------
WYOMING -- 0.9%
1,000,000 Campbell County,
Wyoming, School
District No. 001
Gillette, GO,
(School Board
Guarantee),
5.550% 06/01/06..... Aaa AAA 1,019,340
----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $101,326,398).......... 105,918,423
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
76
<PAGE> 81
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MONEY MARKET FUND -- 1.4%
(Cost $1,591,000)
1,591,000 AIM Tax-Exempt Fund............ $ 1,591,000
=============
TOTAL INVESTMENTS
(Cost $102,917,398*)................... 98.9% 107,509,423
OTHER ASSETS AND
LIABILITIES (NET)...................... 1.1 1,153,609
----- ------------
NET ASSETS............................... 100.0% $108,663,032
----- ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance
Corporation
AMT Alternative Minimum Tax
CONNIE LEE College Construction Loan Association
FGIC Financial Guaranty Insurance Corporation
FHA Federal Housing Authority
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
</TABLE>
Nations Municipal Income Fund had the following insurance
concentration greater than 10% at March 31, 1997 (as a percentage of
net assets):
<TABLE>
<S> <C>
MBIA 11.0%
</TABLE>
Nations Municipal Income Fund had the following industry concentration greater
than 10% at March 31, 1997 (as a percentage of net assets):
Pollution Control Revenue/Industrial Development Revenue 35.5%
SEE NOTES TO FINANCIAL STATEMENTS.
77
<PAGE> 82
NATIONS FUNDS
Nations Florida Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
94.4%
FLORIDA -- 89.8%
$1,000,000 Bay Medical Center,
Florida, Hospital
Revenue Refunding,
(Bay Medical Center
Project), (AMBAC
Insured),
5.000% 10/01/05...... Aaa AAA $ 993,850
750,000 Broward County,
Florida, Gas Tax
Revenue,
6.000% 09/01/99...... A1 AA- 775,627
1,000,000 Broward County,
Florida, GO, Series C,
6.200% 01/01/07...... Aa AA 1,058,550
500,000 Broward County,
Florida, Solid Waste
Revenue, (MBIA
Insured),
5.500% 07/01/04...... Aaa AAA 515,005
1,000,000 Citrus County, Florida,
PCR Refunding,
Crystal River,
(Florida Power
Corporation), Series B,
6.350% 02/01/22...... Aa3 A+ 1,039,940
1,000,000 Clearwater, Florida,
Water and Sewer
Authority Revenue,
(AMBAC Insured),
5.000% 12/01/02...... Aaa AAA 1,010,250
1,000,000 Dade County, Florida,
Aviation Facility
Revenue, Series B,
AMT, (AMBAC Insured),
6.300% 10/01/05...... Aaa AAA 1,081,790
1,650,000 Dade County, Florida,
School District
Revenue Refunding,
(AMBAC Insured),
5.000% 07/15/01...... Aaa AAA 1,669,553
1,000,000 Delray Beach, Florida,
Water and Sewer
Authority Revenue,
Series A, Refunding,
(AMBAC Insured),
5.000% 10/01/03...... Aaa AAA 1,005,510
1,565,000 Dunes, Florida,
Community Development
District Revenue,
(Intercoastal Water
Way Bridge),
5.300% 10/01/03...... NR BBB 1,560,759
1,000,000 Florida Ports Financing
Community Revenue,
State Transportation
Trust Fund, (MBIA
Insured),
5.375% 06/01/16...... Aaa AAA 936,860
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
FLORIDA -- (CONTINUED)
Florida State Board of
Education, GO,
Capital Outlay,
Public Education,
Series A:
$1,000,000 Refunding,
5.000% 06/01/08...... Aa AA $ 983,150
1,500,000 Unrefunded Balance,
7.250% 06/01/23...... Aa AA 1,631,070
1,000,000 Florida State Division
Bond, Financial
Department of General
Service Revenue,
Preservation
Authority, (MBIA
Insured),
5.800% 07/01/01...... Aaa AAA 1,042,240
Florida State Housing
Finance Agency,
Refunding:
2,000,000 Multi-family Housing,
(Altamonte Project),
Series C,
7.000% 12/01/24...... NR BBB+ 2,127,520
1,000,000 Multi-family Housing
Revenue, (Andover
Project), Series E,
6.350% 05/01/26...... NR BBB+ 1,010,230
1,000,000 (The Vinyards Project),
Series H,
6.400% 11/01/15...... NR BBB+ 1,002,980
750,000 Florida State Municipal
Power Agency, GO,
(St. Lucie Project),
(FGIC Insured),
5.600% 10/01/07...... Aaa AAA 767,505
525,000 Florida State Sunshine
Skyway Revenue,
6.100% 07/01/00...... A A 547,675
1,000,000 Florida State Turnpike
Authority Revenue,
Department of
Transportation,
7.350% 07/01/98...... A1 NR 1,039,120
1,000,000 Fort Lauderdale,
Florida, Water and
Sewer Authority
Revenue,
5.500% 09/01/01...... NR AAA 1,030,320
1,375,000 Hialeah, Florida,
Capital Improvement
Revenue,
5.500% 10/01/18...... Baa1 NR 1,272,274
1,000,000 Hillsborough County,
Florida, Capital
Improvement Program,
Revenue Refunding,
(County Center
Project), Series B,
(MBIA Insured),
5.000% 07/01/11...... Aaa AAA 947,180
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
78
<PAGE> 83
NATIONS FUNDS
Nations Florida Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
FLORIDA -- (CONTINUED)
$2,640,000 Hillsborough County,
Florida,
Environmentally
Sensitive Lands,
(AMBAC Insured),
6.250% 07/01/06...... Aaa AAA $ 2,808,511
2,000,000 Hillsborough County,
Florida, Utility
Refunding Revenue,
Capital Appreciation,
Series A, (MBIA-IBC
Insured),
Zero Coupon
08/01/99 +........... Aaa AAA 1,802,340
1,500,000 Indian River County,
Florida, School
District, (FSA
Insured),
5.000% 04/01/03...... Aaa AAA 1,510,035
Jacksonville, Florida,
Electric Authority
Revenue Refunding,
4th Series, St.
John's River
Authority:
1,000,000 Series 6B,
6.650% 10/01/02...... Aa1 AA 1,076,350
1,000,000 Series 10,
4.600% 10/01/00...... Aa1 AA 999,780
1,000,000 Jacksonville, Florida,
Excise Tax Revenue
Refunding, Series A,
(FGIC Insured),
5.000% 10/01/09...... Aaa AAA 971,940
750,000 Manatee County,
Florida, Public
Utilities Revenue,
Series A, (MBIA
Insured),
6.250% 10/01/00...... Aaa AAA 789,907
500,000 Miami Beach, Florida,
GO, (FGIC Insured),
5.300% 09/01/03...... Aaa AAA 510,050
Orange County, Florida,
Health Facilities
Authority Revenue
Refunding:
1,375,000 (Lakeside Alternatives
Inc.),
6.250% 07/01/05...... NR BBB 1,399,640
(Orlando Regional
Medical Center
Hospital), (MBIA
Insured):
3,000,000 4.400% 10/01/02........ Aaa AAA 2,930,130
1,000,000 6.250% 10/01/16........ Aaa AAA 1,067,910
1,000,000 Orange County, Florida,
Housing Finance
Authority, Single-
family Mortgage
Revenue, Series A,
(GNMA/FNMA
Collateral),
5.900% 09/01/19...... NR AAA 980,460
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
FLORIDA -- (CONTINUED)
$2,000,000 Orlando and Orange
County, Florida,
Expressway Authority
Revenue Refunding,
(FGIC Insured),
6.500% 07/01/10...... Aaa AAA $ 2,214,100
Palm Beach County,
Florida, GO:
1,300,000 7.000% 12/01/04........ Aa AA 1,469,962
75,000 Series B,
4.250% 07/01/08...... Aa AA 67,617
1,000,000 Palm Beach County,
Florida, Housing
Finance Authority,
Series A,
6.300% 10/01/12...... Aaa NR 1,014,570
St. John's County,
Florida, Industrial
Development
Authority, Hospital
Revenue, (Flagler
Hospital Project):
850,000 5.700% 08/01/02........ A BBB+ 847,994
945,000 6.000% 08/01/08........ A BBB+ 948,241
1,230,000 South Broward, Florida,
Hospital District
Revenue Refunding,
(AMBAC Insured),
4.650% 05/01/00...... Aaa AAA 1,230,652
1,000,000 Tallahassee, Florida,
Health Facilities
Revenue, Memorial
Regional Medical
Center, Series A,
(MBIA Insured),
5.750% 12/01/04...... Aaa.. AAA 1,047,850
1,025,000 Venice, Florida, Health
Facilities Revenue
Refunding, (Venice
Hospital, Inc.
Project),
5.300% 12/01/02...... A NR 1,045,510
----------
51,782,507
----------
PUERTO RICO -- 4.6%
1,650,000 Puerto Rico Industrial,
Medical and
Environmental Agency,
Pollution Control
Facilities, Finance
Authority Revenue,
Higher Education,
(Catholic University
Project), Series A,
5.600% 12/01/07...... NR.. BBB- 1,600,929
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
79
<PAGE> 84
NATIONS FUNDS
Nations Florida Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
PUERTO RICO -- (CONTINUED)
$1,000,000 Puerto Rico Industrial,
Tourist, Educational,
Medical and
Environmental Control
Facilities Financing
Authority, (Ryder
Memorial Hospital
Project), Series A,
6.600% 05/01/14...... NR... BBB $ 1,018,570
----------
2,619,499
----------
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $53,407,135).............. 54,402,006
==========
SHORT TERM
MUNICIPAL
BOND --
2.3%
(Cost
$1,350,000)
FLORIDA -- 2.3%
1,350,000 Florida State Housing
Finance Agency,
Refunding, Multi-
family Housing,
3.550% 06/01/07++.... NR A/A-1 1,350,000
==========
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MONEY MARKET
FUND --
2.1%
(Cost
$1,207,000)
1,207,000 AIM Tax-Exempt Fund............. $ 1,207,000
===========
TOTAL INVESTMENTS
(Cost $55,964,135*)..................... 98.8% 56,959,006
OTHER ASSETS AND
LIABILITIES (NET)....................... 1.2 691,032
----- -----------
NET ASSETS................................ 100.0% $57,650,038
===== ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Yield to maturity is 4.670%.
++ Variable rate note. The interest shown reflects the rate in effect at March
31, 1997.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National Mortgage Association
GO General Obligation
IBC Insured Bond Certificate
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
</TABLE>
Nations Florida Intermediate Municipal Bond Fund had the following insurance
concentrations greater than 10% at March 31, 1997 (as a percentage of net
assets):
<TABLE>
<S> <C>
AMBAC 17.0%
MBIA 19.2%
</TABLE>
Nations Florida Intermediate Municipal Bond Fund had the following industry
concentrations greater than 10% at March 31, 1997 (as a percentage of net
assets):
<TABLE>
<S> <C>
Hospital 10.1%
Housing Revenue 12.9%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
80
<PAGE> 85
NATIONS FUNDS
Nations Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
97.1%
FLORIDA -- 94.5%
Alachua County,
Florida, Health
Facilities Authority
Revenue Refunding:
$1,000,000 (Santa Fe Healthcare
Facilities Project),
ETM,
6.000% 11/15/09...... Baa1 AAA $ 1,043,700
1,000,000 (Shands Teaching
Hospitals and Clinics
Inc. Project), Series
A, (MBIA Insured),
5.000% 12/01/04...... Aaa AAA 999,930
1,000,000 Canaveral, Florida,
Port Authority
Revenue Refunding,
Port Improvement,
Series B, (FGIC
Insured),
5.700% 06/01/13...... Aaa AAA 993,440
1,000,000 Citrus County, Florida,
PCR Refunding,
Crystal River,
(Florida Power
Corporation),
Series B,
6.350% 02/01/22...... Aa3 A+ 1,039,940
1,000,000 Dade County, Florida,
Health Facilities
Authority, Hospital
Revenue Refunding,
(Baptist Hospital,
Miami Project),
Series A, (MBIA
Insured),
5.250% 05/15/21...... Aaa AAA 901,430
1,000,000 Dade County, Florida,
School District
Revenue Refunding,
GO, Series A, (MBIA
Insured),
6.125% 06/01/14...... Aaa AAA 1,034,980
1,500,000 Dade County, Florida,
Water and Sewer
System Revenue
Refunding, (FGIC
Insured),
5.000% 10/01/13...... Aaa AAA 1,387,155
1,000,000 Escambia County,
Florida, PCR,
(Champion
International
Corporation Project),
AMT,
6.900% 08/01/22...... Baa1 BBB 1,056,910
Florida State Board of
Education, GO,
Capital Outlay,
Public Education:
1,000,000 Refunding, Series A,
5.000% 06/01/08...... Aa AA 983,150
1,000,000 Refunding, Series D,
5.125% 06/01/18...... Aa AA 908,050
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
FLORIDA -- (CONTINUED)
Florida State Board of
Education, GO, Capital Outlay,
Public
Education -- (continued):
$1,000,000 Unrefunded Balance,
Series A,
7.250% 06/01/23...... Aa AA $ 1,087,380
1,000,000 Florida State
Department of
Transportation, Fuel
Sales Tax Revenue,
(Right-of-Way),
5.375% 07/01/26...... Aa2 AA+ 929,780
Florida State Housing
Finance Agency,
Refunding: Multi-
family Housing:
1,000,000 (Altamonte Project),
Series C,
7.000% 12/01/24...... NR BBB+ 1,063,760
900,000 Single-family Mortgage,
Series B, AMT,
(GNMA/FNMA
Collateral),
6.550% 07/01/17...... Aaa AAA 923,085
500,000 (The Vinyards Project),
Series H,
6.500% 11/01/25...... NR BBB+ 502,620
1,000,000 Florida State Municipal
Power Agency Revenue,
(Stanton II Project),
Pre-refunded, (AMBAC
Insured),
6.500% 10/01/20...... Aaa AAA 1,097,750
1,000,000 Florida State Turnpike
Authority Revenue,
Department of
Transportation,
Series A, (FGIC
Insured),
5.500% 07/01/11...... Aaa AAA 997,950
1,000,000 Hillsborough County,
Florida, Industrial
Development
Authority, PCR,
(Tampa Electric
Company Project),
8.000% 05/01/22...... Aa3 AA 1,153,540
1,000,000 Hillsborough County,
Florida, Utility
Refunding Revenue,
(MBIA Insured),
5.500% 08/01/12...... Aaa AAA 988,700
1,000,000 Jacksonville, Florida,
Excise Tax Revenue
Refunding, Series A,
(FGIC Insured),
5.000% 10/01/16...... Aaa AAA 912,750
750,000 Jacksonville, Florida,
PCR Refunding,
(Anheuser-Busch
Companies Project),
5.700% 08/01/31...... A1 AA- 723,690
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
81
<PAGE> 86
NATIONS FUNDS
Nations Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
FLORIDA -- (CONTINUED)
$1,000,000 Martin County, Florida,
Industrial
Development Authority
Revenue, (Indiantown
Cogeneration
Project), Series A,
AMT,
7.875% 12/15/25...... Baa3 BBB- $ 1,135,530
1,000,000 North Broward, Florida,
Hospital Revenue,
(MBIA Insured),
6.250% 01/01/06...... Aaa AAA 1,075,930
1,000,000 Orange County, Florida,
Health Facilities
Authority Revenue
Refunding, (Orlando
Regional Medical
Center Hospital),
Series B, (MBIA
Insured),
5.000% 10/01/10...... Aaa AAA 949,140
1,000,000 Orange County, Florida,
Sales Tax Revenue,
Series B,
5.375% 01/01/24...... A1 A+ 918,400
1,000,000 Orange County, Florida,
Tourist Development
Tax Revenue, Series
B, (MBIA Insured),
6.000% 10/01/14...... Aaa AAA 1,026,940
1,000,000 Osceola County,
Florida, Health
Facilities Authority
Revenue Refunding,
Lutheran Good
Samaritan Society,
(AMBAC Insured),
6.000% 05/01/10...... Aaa AAA 1,031,710
45,000 Palm Beach County,
Florida, GO, Series B,
4.250% 07/01/08...... Aa AA 40,570
1,500,000 Palm Beach County,
Florida, Health
Facilities Authority
Revenue, (Good
Samaritans Health
System),
6.200% 10/01/11...... NR A+ 1,528,740
1,000,000 Palm Beach County,
Florida, Housing
Finance Authority,
Single-family
Mortgage Purchase
Revenue, Series A,
(GNMA/FNMA
Collateral),
6.500% 10/01/21...... Aaa NR 1,024,450
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
FLORIDA -- (CONTINUED)
$1,000,000 Polk County, Florida,
Industrial
Development
Authority, Solid
Waste Disposal
Facilities Revenue,
(Tampa Electric
Company Project),
5.850% 12/01/30...... Aa2 AA $ 956,380
1,000,000 St. Petersburg,
Florida, Excise Tax
Revenue Refunding,
(FGIC Insured),
5.000% 10/01/16...... Aaa AAA 901,900
2,000,000 South Broward, Florida,
Hospital District
Revenue Refunding,
(FSA Insured),
5.500% 05/01/28...... Aaa AAA 1,857,100
Venice, Florida, Health
Facilities Revenue
Refunding, (Venice
Hospital Inc.
Project):
900,000 5.600% 12/01/05........ A NR 943,353
1,000,000 5.700% 12/01/06........ A NR 1,053,160
1,000,000 Volusia County,
Florida, Educational
Facilities Authority
Revenue, Series A,
6.125% 10/15/26...... Baa NR 991,200
----------
36,164,193
----------
PUERTO RICO -- 2.6%
1,000,000 Puerto Rico, Housing,
Bank and Finance
Agency, Single-family
Mortgage Revenue,
(Affordable Housing
Mortgage-Portfolio
I), AMT, (GNMA/
FNMA/FHLMC
Collateral),
6.250% 04/01/29...... Aaa AAA 1,007,390
----------
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $36,382,370).............. 37,171,583
==========
SHORT TERM
MUNICIPAL
BOND --
0.9% (Cost
$350,000)
FLORIDA -- 0.9%
350,000 Florida State Housing
Finance Agency,
Refunding, Multi-
family Housing,
3.550% 06/01/07+..... NR A/A-1 350,000
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
82
<PAGE> 87
NATIONS FUNDS
Nations Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MONEY MARKET FUND -- 0.4%
(Cost $153,000)
153,000 AIM Tax-Exempt Fund............. $ 153,000
==========
TOTAL INVESTMENTS
(Cost $36,885,370*)..................... 98.4% 37,674,583
OTHER ASSETS AND
LIABILITIES (NET)....................... 1.6 599,290
---- -----------
NET ASSETS................................ 100.0% $38,273,873
===== ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Variable rate note. The interest rate shown reflects the rate in effect at
March 31, 1997.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corporation
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National Mortgage Association
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
</TABLE>
Nations Florida Municipal Bond Fund had the following
insurance concentrations greater than 10% at March 31, 1997
(as a percentage of net assets):
FGIC 13.6%
MBIA 18.2%
Nations Florida Municipal Bond Fund had the following industry concentrations
greater than 10% at March 31, 1997 (as a percentage of net assets):
<TABLE>
<S> <C>
Pollution Control Revenue/Industrial Development
Revenue 12.9%
Housing Revenue 10.0%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
83
<PAGE> 88
NATIONS FUNDS
Nations Georgia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
95.2%
GEORGIA -- 95.2%
$ 500,000 Alpharetta, Georgia,
GO,
6.100% 05/01/04...... Aa AA- $ 535,395
1,000,000 Atlanta, Georgia,
Airport Facilities
Revenue Refunding,
(AMBAC Insured),
6.000% 01/01/03...... Aaa AAA 1,056,500
1,000,000 Atlanta, Georgia,
Downtown Development
Authority Revenue
Refunding,
(Underground Atlanta
Project),
6.250% 10/01/12...... Aa AA 1,035,040
Atlanta and Fulton
Counties, Georgia,
Recreation Authority
Revenue Refunding,
(Atlanta Zoo
Project):
1,000,000 5.850% 12/01/00........ Aa AA 1,039,950
500,000 6.050% 12/01/02........ Aa AA 529,380
1,000,000 Burke County, Georgia,
Development
Authority, PCR,
(Oglethorpe Power
Corporation),
Series B,
4.350% 01/01/01...... NR A+ 978,290
560,000 Cartersville, Georgia,
School District, GO,
6.150% 01/01/03...... A A 593,046
1,000,000 Cherokee County,
Georgia, School
System Revenue, GO,
(AMBAC Insured),
5.875% 02/01/09...... Aaa AAA 1,051,330
1,000,000 Clarke County, Georgia,
School District
Refunding, GO, (FGIC
Insured),
5.100% 07/01/04...... Aaa AAA 1,010,180
Clayton County,
Georgia, Water and
Sewer Authority
Revenue:
585,000 6.400% 05/01/04........ A1 A+ 629,343
1,000,000 (MBIA Insured),
5.400% 05/01/07...... Aaa AAA 1,013,010
1,000,000 Cobb County, Georgia,
Detention Buildings
and Facilities, GO,
5.300% 01/01/08...... Aaa AA+ 1,007,110
1,000,000 Cobb County, Georgia,
Kennestone Hospital
Authority Revenue,
Series A,
5.700% 04/01/06...... Aa AA 1,031,390
685,000 Cobb County, Georgia,
Water and Sewer
Authority, Revenue
Refunding, Series A,
4.400% 07/01/99...... Aa AA- 685,829
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
GEORGIA -- (CONTINUED)
$ 750,000 Columbus, Georgia,
Water and Sewer
Authority Revenue
Refunding, Series
1992, (FGIC Insured),
6.000% 05/01/03...... Aaa AAA $ 793,718
1,000,000 Dalton, Georgia,
Building Authority
Revenue,
5.000% 07/01/02...... A1 NR 1,008,190
2,000,000 Dalton, Georgia,
Multiple Utility
Revenue Refunding,
(MBIA Insured),
4.450% 01/01/03...... Aaa AAA 1,948,780
500,000 DeKalb County, Georgia,
Development Authority
Revenue, (Emory
University Project),
GO, Series A,
5.250% 11/01/15...... Aa1 AA 473,295
DeKalb County, Georgia,
School District, GO:
1,000,000 5.000% 07/01/03........ Aa AA 1,007,390
1,000,000 Series A,
4.250% 07/01/99...... Aa AA 997,610
Fayette County,
Georgia, School
District, GO, Series
1992:
1,000,000 5.200% 03/01/00........ Aa A+ 1,016,710
500,000 (FGIC Insured),
6.000% 09/01/02...... Aaa AAA 529,275
750,000 Forsyth County,
Georgia, School
District, GO,
6.400% 07/01/05...... A1 A+ 815,655
Fulco, Georgia,
Hospital Authority
Revenue, Revenue
Anticipation
Certificates:
1,000,000 Georgia Baptist
Healthcare, Series A,
6.000% 09/01/03...... Baa1 NR 1,006,810
1,000,000 St. Joseph's Hospital,
4.900% 10/01/03...... A A 985,250
1,000,000 Fulton and DeKalb
Counties, Georgia,
Hospital Authority,
Revenue Refunding,
(MBIA Insured),
5.250% 01/01/04...... Aaa AAA 1,010,670
1,025,000 Fulton County, Georgia,
Building Authority
Revenue, (County
Government and Health
Facilities Project),
Series A,
5.700% 01/01/04...... Aaa AAA 1,066,779
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
84
<PAGE> 89
NATIONS FUNDS
Nations Georgia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
GEORGIA -- (CONTINUED)
$1,105,000 Fulton County, Georgia,
Development Authority
Revenue, (Clark
Atlanta University
Project), (CONNIE LEE
Insured),
5.100% 01/01/05...... Baa AAA $ 1,085,375
Fulton County, Georgia,
School District, GO:
1,000,000 7.500% 01/01/02........ Aa AA 1,113,590
500,000 6.250% 05/01/04........ Aa AA 538,725
1,300,000 Fulton County, Georgia,
Water and Sewer
Authority Revenue
Refunding, (FGIC
Insured),
5.100% 01/01/98...... Aaa AAA 1,312,207
1,000,000 George L. Smith II,
Georgia, World
Congress Center
Authority,
Recreational Revenue,
(Domed Stadium
Project),
7.875% 07/01/20...... Aa3 AA- 1,088,940
Georgia State, GO:
1,500,000 Series A,
6.250% 03/01/06....... Aaa AA+ 1,627,875
2,750,000 Series C,
6.500% 07/01/05...... Aaa AA+ 3,029,703
1,000,000 Series D,
6.800% 08/01/99...... Aaa AA+ 1,054,180
1,000,000 Georgia State, Housing
and Finance Authority
Revenue,
(Homeownership
Opportunity Program),
(FHA/VA Collateral),
Series B,
6.600% 06/01/25...... Aa AA+ 1,024,880
500,000 Georgia State,
Municipal Electric
Authority, GO,
Series A,
6.500% 01/01/12...... A3 A 538,970
1,500,000 Georgia State,
Municipal Gas
Authority, Gas Tax
Revenue, (Southern
Storage Gas Project),
6.000% 07/01/04...... NR A- 1,577,115
2,000,000 Georgia State Tollway
Authority Revenue,
(Georgia 400
Project),
6.375% 07/01/02...... Aaa AA+ 2,153,120
Gwinnett County,
Georgia, School
District, GO:
500,000 Series A,
6.000% 02/01/02...... Aa1 AA 527,115
1,000,000 Refunding, Series B,
6.000% 02/01/01...... Aa1 AA 1,047,540
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
GEORGIA -- (CONTINUED)
Hall County, Georgia,
School District, GO:
$1,000,000 (AMBAC Insured),
6.700% 12/01/14...... Aaa AAA $ 1,091,290
750,000 Refunding, Series B,
6.000% 12/01/03...... A NR 794,197
1,000,000 Macon, Georgia, Water
and Sewer Authority
Revenue Refunding,
Series A,
4.700% 10/01/04...... A1 A+ 980,080
Metropolitan Atlanta
Rapid Transit
Authority (MARTA),
Georgia, Sales Tax
Revenue Refunding:
1,000,000 Series M,
6.150% 07/01/02...... A1 NR 1,057,630
Series P, (AMBAC
Insured):
500,000 5.800% 07/01/02........ Aaa AAA 522,685
1,000,000 5.900% 07/01/03........ Aaa AAA 1,052,640
Monroe County, Georgia,
Development
Authority, PCR,
(Oglethorpe Power
Corporation),
Series A:
500,000 6.050% 01/01/02........ A3 A+ 518,830
1,000,000 6.800% 01/01/12........ A3 A+ 1,101,250
1,100,000 Paulding County,
Georgia, School
District, GO,
Series A,
6.400% 02/01/04...... A A 1,184,436
Private Colleges and
Universities
Facilities Authority
Revenue, Georgia:
1,400,000 (Emory University
Project), Series C,
5.750% 10/01/02...... Aa1 AA 1,462,258
1,000,000 (Spellman College
Project), (FGIC
Insured),
4.850% 06/01/98...... Aaa AAA 1,009,030
1,000,000 Richmond County,
Georgia, Board of
Education, GO, (FGIC
Insured),
4.700% 11/01/06...... Aaa AAA 962,590
1,500,000 Richmond County,
Georgia, Water and
Sewer Revenue
Refunding and
Improvement, Series
A, (FGIC Insured),
5.250% 10/01/28...... Aaa AAA 1,369,170
1,250,000 Savannah, Georgia,
Hospital Authority
Revenue Refunding and
Improvement, (Candler
Hospital Project),
7.000% 01/01/11...... Ba1 BB 1,275,225
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
85
<PAGE> 90
NATIONS FUNDS
Nations Georgia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
GEORGIA -- (CONTINUED)
$ 750,000 Savannah, Georgia,
Resource Recovery
Development
Authority, Revenue
Refunding, (Southern
Energy Systems
Company Project),
5.850% 12/01/01...... A1 A+ $ 771,907
630,000 Spalding County,
Georgia, Water and
Sewer Authority
Revenue, (MBIA
Insured),
6.000% 09/01/03...... Aaa.. AAA 667,019
500,000 Warner Robbins,
Georgia, Water and
Sewer Authority,
Revenue Refunding,
(MBIA Insured),
6.000% 07/01/02...... Aaa.. AAA 527,275
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $57,639,273)............ 58,922,772
===========
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MONEY MARKET FUND -- 3.8%
(Cost $2,319,000)
2,319,000 AIM Tax-Exempt Fund............. $ 2,319,000
===========
TOTAL INVESTMENTS
(Cost $59,958,273*)..................... 99.0% 61,241,772
OTHER ASSETS AND
LIABILITIES (NET)....................... 1.0 621,822
----- -----------
NET ASSETS................................ 100.0% $61,863,594
===== ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance
Corporation
CONNIE LEE College Construction Loan Association
FGIC Financial Guaranty Insurance Corporation
FHA Federal Housing Authority
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
VA Veterans Administration
</TABLE>
Nations Georgia Intermediate Municipal Bond Fund had the following insurance
concentration greater than 10% at March 31, 1997 (as a percentage of net
assets):
<TABLE>
<S> <C>
FGIC 11.3%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
86
<PAGE> 91
NATIONS FUNDS
Nations Georgia Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
94.5%
GEORGIA -- 91.4%
$ 500,000 Albany, Georgia, Sewer
System Revenue, (MBIA
Insured),
4.900% 07/01/07...... Aaa AAA $ 489,480
500,000 Burke County, Georgia,
Development
Authority, PCR,
(Oglethorpe Power
Corporation Project),
Series B,
4.700% 01/01/04...... A3 A 485,885
500,000 Clayton County,
Georgia, Housing
Authority,
Multi-family Housing
Revenue, (Advantages
of Atlanta Apartments
Project), (FHLMC
Collateral),
5.700% 12/01/16...... NR AAA 487,840
500,000 Columbia County,
Georgia, School
District, Series B,
(MBIA Insured),
6.250% 04/01/13...... Aaa AAA 523,810
500,000 Columbus, Georgia,
Water and Sewer
Authority Revenue
Refunding,
5.700% 05/01/20...... A A+ 487,450
850,000 Coweta County, Georgia,
Development
Authority, Industrial
Development Revenue,
(Sivaco National Wire
Project), AMT,
5.400% 02/01/09...... A NR 805,503
500,000 Dalton, Georgia,
Multiple Utility
Revenue Refunding,
(MBIA Insured),
4.450% 01/01/03...... Aaa AAA 487,195
500,000 Fayette County,
Georgia, School
District, GO,
6.125% 03/01/15...... Aa A+ 515,370
1,000,000 Fulco, Georgia,
Hospital Authority
Revenue, Revenue
Anticipation
Certificates, St.
Joseph's Hospital,
5.500% 10/01/14...... A A 958,810
1,000,000 Georgia L. Smith II,
Georgia, World
Congress Center
Authority,
Recreational Revenue,
(Domed Stadium
Project),
7.875% 07/01/20...... Aa3 AA- 1,088,940
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
GEORGIA -- (CONTINUED)
$ 500,000 Georgia State, GO,
Series E,
5.500% 07/01/07...... Aaa AA+ $ 516,980
500,000 Georgia State Municipal
Electric Authority
Power Revenue: Series
CC,
4.500% 01/01/02...... A A 485,810
1,000,000 GO, Series A,
6.500% 01/01/12...... A3 A 1,077,940
500,000 Gwinnett County,
Georgia, School
District, GO,
Series A,
5.125% 02/01/10...... Aa1 AA 486,090
500,000 Gwinnett County,
Georgia, Water and
Sewer Revenue
Refunding,
4.900% 08/01/06...... Aa1 AA+ 493,340
500,000 Macon, Georgia, Water
and Sewer Authority
Revenue Refunding,
Series B,
5.000% 10/01/16...... A1 A+ 452,570
500,000 Peach County, Georgia,
School District, GO,
(MBIA Insured),
6.500% 02/01/08...... Aaa AAA 553,715
1,000,000 Richmond County,
Georgia, Development
Authority Revenue, ETM,
Zero coupon
12/01/21+............ Aaa NR 185,850
500,000 Richmond County,
Georgia, Water and
Sewer Revenue
Refunding and
Improvement, Series
A, (FGIC Insured),
5.250% 10/01/28...... Aaa AAA 456,390
1,000,000 Roswell, Georgia, GO,
5.600% 02/01/10...... Aa AA 1,011,980
Savannah, Georgia,
Hospital Authority,
Revenue Refunding and
Improvement:
500,000 (Candler Hospital
Project),
7.000% 01/01/23...... Ba BB 510,090
450,000 (St. Joseph's Hospital
Project),
6.125% 07/01/12...... A NR 462,996
500,000 Savannah, Georgia,
Water and Sewer
Revenue Refunding and
Improvement,
5.100% 12/01/10...... A1 AA- 479,530
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
87
<PAGE> 92
NATIONS FUNDS
Nations Georgia Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
GEORGIA -- (CONTINUED)
$ 500,000 Union County, Georgia,
Housing Authority,
Multi-family Housing
Revenue Refunding,
(Hidden Lake
Apartments), Series
A, (FHA/FNMA
Insured),
7.125% 12/01/25...... Aaa NR $ 527,615
570,000 White County, Georgia,
Industrial
Development Authority
Revenue Refunding,
(Clark-Schwebel Fiber
and Glass Company
Project),
6.850% 06/01/10...... NR BBB+ 593,786
-----------
14,624,965
-----------
PUERTO RICO -- 3.1%
500,000 Puerto Rico Housing,
Bank and Finance
Agency, Single-family
Mortgage Revenue,
(Affordable Housing
Mortgage-Portfolio
I), AMT, (GNMA/
FNMA/FHLMC
Collateral),
6.100% 10/01/15...... Aaa AAA 502,600
-----------
TOTAL MUNICIPAL BONDS
AND NOTES
(Cost $15,008,646)............ 15,127,565
==========
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------
<S> <C> <C>
MONEY MARKET FUND -- 4.8%
(Cost $766,000)
766,000 AIM Tax-Exempt Fund............. $ 766,000
===========
TOTAL INVESTMENTS
(Cost $15,774,646*)..................... 99.3% 15,893,565
OTHER ASSETS AND
LIABILITIES (NET)....................... 0.7 117,954
----- -----------
NET ASSETS................................ 100.0% $16,011,519
===== ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Yield to maturity is 3.505%.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMT Alternative Minimum Tax
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Corporation
FHA Federal Housing Authority
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
GNMA Government National Mortgage Association
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
</TABLE>
Nations Georgia Municipal Bond Fund had the following insurance concentration
greater than 10% at March 31, 1997 (as a percentage of net assets):
<TABLE>
<S> <C>
MBIA 12.8%
</TABLE>
Nations Georgia Municipal Bond Fund had the following industry concentrations
greater than 10% at March 31, 1997 (as a percentage of net assets):
<TABLE>
<S> <C>
Power/Utilities Revenue 12.8%
Hospital 12.1%
Water Revenue 11.9%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
88
<PAGE> 93
NATIONS FUNDS
Nations Maryland Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
97.1%
MARYLAND -- 95.7%
Anne Arundel County,
Maryland, Consolidated
Public Improvement
Revenue, GO:
$1,500,000 5.500% 07/15/00......... Aa1 AA+ $ 1,542,960
1,000,000 6.200% 04/15/03......... Aa1 AA+ 1,064,750
1,000,000 5.125% 07/15/08......... Aa1 AA+ 990,210
1,000,000 Baltimore, Maryland, GO,
Series B, (MBIA
Insured),
7.050% 10/15/07....... Aaa AAA 1,145,820
1,750,000 Baltimore, Maryland,
Port Facilities
Revenue, Consolidated
Coal Sales, Series 85,
6.500% 12/01/10....... Aa3 AA- 1,895,355
1,000,000 Baltimore, Maryland,
Wastewater Systems,
GO, (MBIA Insured),
5.100% 07/01/04....... Aaa AAA 1,010,180
Baltimore County,
Maryland, Consolidated
Public Improvement,
Revenue Refunding:
1,000,000 5.900% 03/01/98......... Aaa AAA 1,018,730
1,000,000 6.100% 07/01/01......... Aaa AAA 1,056,910
1,000,000 Series A, (AMBAC
Insured),
5.300% 10/15/06....... Aaa AAA 1,007,660
1,075,000 Series C, (FGIC
Insured),
6.375% 10/15/07....... Aaa AAA 1,181,049
Baltimore County,
Maryland, Metropolitan
District Special
Assignment Refunding,
GO:
1,375,000 5.750% 05/01/02......... Aaa AAA 1,437,659
1,000,000 5.800% 05/01/03......... Aaa AAA 1,050,020
Calvert County,
Maryland, Consolidated
Public Improvement
Revenue Refunding, GO,
2,000,000 4.625% 07/15/05......... Aa A+ 1,932,360
Carroll County,
Maryland, Consolidated
Public Improvement
Revenue, GO:
1,350,000 6.000% 11/01/00......... Aa3 AA 1,413,086
500,000 6.900% 10/01/02......... Aaa AA 545,315
Cecil County, Maryland,
Revenue Refunding,
Consolidated Public
Improvement, GO, (FGIC
Insured):
1,000,000 5.300% 12/01/00......... Aaa AAA 1,022,630
2,000,000 4.800% 12/01/04......... Aaa AAA 1,977,160
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
MARYLAND -- (CONTINUED)
Charles County,
Maryland, Consolidated
Public Improvement,
Revenue Refunding, GO:
$3,400,000 4.400% 06/01/03......... Aa AA- $ 3,301,094
Pre-refunded:
750,000 6.450% 06/01/04......... Aaa AA- 811,440
1,000,000 6.375% 12/01/04......... Aaa AA- 1,066,920
2,000,000 Frederick County,
Maryland, Consolidated
Public Improvement,
Revenue Refunding, GO,
(FGIC Insured),
5.750% 12/01/01....... Aaa AAA 2,085,240
1,000,000 Frederick County,
Maryland, GO, Series B,
6.300% 07/01/06....... Aa AA- 1,077,610
600,000 Harford County,
Maryland, GO,
Pre-refunded,
6.100% 12/01/04....... Aaa AAA 640,668
1,455,000 Harford County,
Maryland, Public
Improvement Revenue,
GO,
5.300% 09/01/03....... Aa AA- 1,489,062
1,000,000 Howard County, Maryland,
Metropolitan District,
GO, Series B,
6.000% 08/15/03....... Aaa AA+ 1,064,020
605,000 Laurel, Maryland, GO,
Series A, (MBIA
Insured),
6.300% 07/01/00....... Aaa AAA 636,224
1,530,000 Laurel, Maryland, Public
Improvement Refunding,
Series A, (FGIC
Insured),
5.000% 10/01/11....... Aaa AAA 1,449,843
500,000 Maryland-National
Capital Park and
Planning Commission,
(Prince Georges
County), GO, Series
J-2,
Pre-refunded,
6.900% 07/01/02....... Aa2 AA 542,610
1,100,000 Maryland State, GO,
Third Series,
Pre-Refunded,
6.800% 07/15/00....... Aaa AAA 1,187,890
Maryland State, Health
and Higher Education
Facilities Authority
Revenue:
Howard County General
Hospital:
1,000,000 5.125% 07/01/03......... Baa1 BBB 982,630
1,000,000 5.500% 07/01/13......... Baa1 BBB 945,180
1,000,000 Northwest Hospital
Center, (AMBAC
Insured),
5.250% 07/01/13....... Aaa AAA 959,790
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
89
<PAGE> 94
NATIONS FUNDS
Nations Maryland Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
MARYLAND -- (CONTINUED)
Maryland State, Health
and Higher Education
Facilities Authority
Revenue -- (continued):
$ 500,000 Sinai Hospital,
Pre-refunded, (AMBAC
Insured),
7.300% 07/01/05....... Aaa AAA $ 548,420
The Johns Hopkins
Hospital:
700,000 7.000% 07/01/00......... Aa AA- 740,964
1,500,000 5.500% 07/01/07......... Aa AA- 1,529,745
Refunding,
500,000 5.000% 07/01/23......... Aa AA- 437,850
1,000,000 University of Maryland
Medical Center, (FGIC
Insured),
5.200% 07/01/04....... Aaa AAA 1,012,560
3,000,000 Maryland State, State
and Local Facilities
Loan, GO, Third
Series, Pre-Refunded,
5.000% 10/15/06....... Aaa AAA 2,990,940
Maryland State,
Transportation
Authority Revenue, GO:
1,250,000 6.100% 09/01/01......... Aa AA 1,311,775
3,235,000 4.375% 12/15/03......... Aa AA 3,122,584
2,790,000 Maryland State,
Transportation
Authority, Special
Obligation Revenue,
(Baltimore-Washington
D.C. International
Airport Project),
Series A, AMT, (FGIC
Insured),
6.400% 07/01/19....... Aaa AAA 2,862,847
1,005,000 Maryland Water Quality
Financing
Administration,
Revolving Loan Fund
Revenue, Series A,
6.650% 09/01/98....... Aa AA 1,041,140
Montgomery County,
Maryland, Consolidated
Public Improvement
Revenue, GO,
Series A:
1,000,000 4.900% 10/01/07......... Aaa AAA 983,420
1,000,000 5.000% 10/01/11......... Aaa AAA 956,260
500,000 Pre-refunded,
6.700% 04/01/06....... Aaa AAA 545,190
1,000,000 Montgomery County,
Maryland, GO,
Pre-Refunded,
6.125% 10/01/07....... Aaa AAA 1,073,210
1,575,000 Montgomery County,
Maryland, Parking
Revenue, Bethesda
Parking Lot District,
Series A, (FGIC
Insured),
5.700% 06/01/00....... Aaa AAA 1,624,471
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
MARYLAND -- (CONTINUED)
Northeast Maryland,
Solid Waste Disposal
Authority Revenue
Refunding, (Southwest
Resource Recovery
Facility Project),
(MBIA Insured):
$2,000,000 6.900% 01/01/00......... Aaa AAA $ 2,112,280
1,535,000 7.000% 01/01/01......... Aaa AAA 1,650,570
630,000 Ocean City, Maryland,
GO, Pre-refunded,
(MBIA Insured),
6.100% 11/01/04....... Aaa AAA 675,977
Prince Georges County,
Maryland, Consolidated
Public Improvement
Revenue, GO:
1,000,000 6.500% 07/01/02......... A1 AA- 1,080,380
1,000,000 5.600% 01/15/03......... A1 AA- 1,032,290
1,000,000 Prince Georges County,
Maryland, GO, Series
A, (MBIA Insured),
5.400% 03/01/02....... Aaa AAA 1,026,400
Prince Georges County,
Maryland, Solid Waste
Management Systems
Authority, Revenue
Refunding, (FSA
Insured):
800,000 6.600% 06/30/00......... Aaa AAA 848,360
2,000,000 5.100% 06/15/05......... Aaa AAA 1,989,260
1,000,000 Rockville, Maryland, GO,
4.750% 04/15/05....... Aa1 AA+ 981,000
1,000,000 St. Mary's County,
Maryland, GO, (MBIA
Insured),
5.700% 03/01/08....... Aaa AAA 1,034,390
University of Maryland,
Auxiliary Facilities
and Tuition Revenue:
Series A:
745,000 6.000% 02/01/04......... Aa AA+ 788,329
1,000,000 6.300% 02/01/08......... Aa AA+ 1,067,090
1,000,000 6.300% 02/01/10......... Aa AA+ 1,064,920
1,000,000 Series C,
4.900% 10/01/08....... Aa AA+ 969,900
1,000,000 Washington County,
Maryland, Consolidated
Public Improvement
Revenue, GO, (FGIC
Insured),
5.250% 01/01/06....... Aaa AAA 1,009,420
Washington County,
Maryland, GO:
500,000 6.400% 12/01/00......... A1 A+ 523,345
1,000,000 Series F, (FGIC
Insured),
5.250% 01/01/06....... Aaa AAA 1,009,420
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
90
<PAGE> 95
NATIONS FUNDS
Nations Maryland Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
MARYLAND -- (CONTINUED)
Washington Suburban
Sanitation District
Authority, Maryland,
Water Supply Revenue,
GO:
$1,000,000 5.000% 06/01/03......... Aa1 AA $ 1,007,320
1,000,000 5.600% 06/01/15......... Aa1 AA 988,690
-------------
81,172,792
-------------
GUAM -- 0.3%
250,000 Government of Guam, GO,
Series A,
5.200% 11/15/08......... NR BBB 233,416
-------------
ILLINOIS -- 1.1%
5,000,000 Metropolitan Pier and
Exposition Authority,
Illinois, Dedicated
State Tax Revenue,
Series A, (MBIA
Insured),
Zero Coupon
06/15/24+............. Aaa AAA 961,200
-------------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $81,000,869)............. 82,367,408
==========
<CAPTION>
VALUE
SHARES (NOTE 1)
-----------------------------------------------------------
<S> <C> <C>
MONEY MARKET FUND -- 1.9%
(Cost $1,637,000)
1,637,000 AIM Tax-Exempt Fund.............. $ 1,637,000
===========
TOTAL INVESTMENTS
(Cost $82,637,869*).................. 99.0% 84,004,408
OTHER ASSETS AND
LIABILITIES (NET).................... 1.0 848,003
----- -----------
NET ASSETS............................. 100.0% $84,852,411
----- ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Yield to maturity is 5.800%.
ABBREVIATIONS:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Corporation
FSA Financial Security Assurance
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
Nations Maryland Intermediate Municipal Bond Fund had the following insurance
concentrations greater than 10% at March 31, 1997 (as a percentage of net
assets):
<TABLE>
<S> <C>
FGIC 18.0%
MBIA 12.1%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
91
<PAGE> 96
NATIONS FUNDS
Nations Maryland Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
94.8%
MARYLAND -- 71.9%
Anne Arundel County,
Maryland, Consolidated
Public Improvement
Revenue, GO:
$500,000 5.300% 04/01/10......... Aa1 AA+ $ 494,635
500,000 5.250% 07/15/11......... Aa1 AA+ 489,635
150,000 Baltimore, Maryland,
Consolidated Public
Improvement Revenue,
GO, AMT, Series B,
(FGIC Insured),
6.300% 10/15/08....... Aaa AAA 157,041
250,000 Baltimore, Maryland,
Convention Center
Revenue, (FGIC
Insured),
6.150% 09/01/19....... Aaa AAA 254,748
250,000 Baltimore, Maryland,
Port Facilities
Revenue, Consolidated
Coal Sales, Series 85,
6.500% 12/01/10....... Aa3 A-1+ 270,765
300,000 Baltimore County,
Maryland, Mortgage
Revenue Refunding,
(Kingswood Common
III-A), (FHA Insured),
5.750% 11/01/20....... NR AAA 292,800
610,000 Bel Air, Maryland,
Industrial Development
Revenue, (May
Department Stores
Company Project),
6.375% 10/01/99....... NR A 629,313
250,000 Cumberland, Maryland,
Refunding, GO, Series
A, (FGIC Insured),
5.250% 05/01/21....... Aaa AAA 230,137
400,000 Howard County, Maryland,
Special Facilities
Revenue, Series A,
6.000% 02/15/21....... Aa AA- 407,496
Maryland State, Health
and Higher Education
Facilities Authority
Revenue:
110,000 Anne Arundel Medical
Center, (AMBAC
Insured),
5.250% 07/01/13....... Aaa AAA 105,577
100,000 Frederick Memorial
Hospital, (FGIC
Insured),
5.250% 07/01/13....... Aaa AAA 96,495
200,000 Greater Baltimore
Medical Center, (FGIC
Insured),
5.000% 07/01/13....... Aaa AAA 185,676
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
MARYLAND -- (CONTINUED)
Maryland State, Health
and Higher Education
Facilities Authority
Revenue -- (continued):
$290,000 Memorial Hospital of
Cumberland,
6.500% 07/01/10....... A A $ 305,347
Project and Refunding:
150,000 Doctors Community
Hospital,
5.750% 07/01/13....... Baa BBB- 144,171
200,000 Peninsula Regional
Medical Center,
5.000% 07/01/08....... A A 192,000
The Johns Hopkins
Hospital:
300,000 5.600% 07/01/09......... Aa AA- 301,899
500,000 5.000% 07/01/23......... Aa AA- 437,850
370,000 Maryland State,
Industrial Development
Financing Authority,
(American Center
Physics Headquarters),
6.375% 01/01/12....... NR BBB 378,917
500,000 Maryland State, Stadium
Authority, Lease
Revenue, (Ocean City
Convention Center),
5.375% 12/15/13....... Aa AA 478,960
220,000 Maryland State,
Transportation
Authority, Special
Obligation Revenue,
(Baltimore-Washington
D.C. International
Airport Project),
Series A, AMT, (FGIC
Insured),
6.400% 07/01/19....... Aaa AAA 225,744
Maryland State,
Transportation
Authority Revenue,
(Transportation
Facilities Project):
300,000 5.750% 07/01/15......... A1 A+ 296,631
500,000 6.800% 07/01/16......... Aaa AAA 564,105
Maryland Water Quality
Financing
Administration,
Revolving Loan Fund
Revenue, Series A:
250,000 5.400% 09/01/10......... Aa AA 247,870
200,000 6.550% 09/01/14......... Aa AA 213,522
250,000 Montgomery County,
Maryland, Housing
Opportunities
Commission, Multi-
family Mortgage
Revenue, Series A,
6.000% 07/01/14....... Aa NR 252,445
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
92
<PAGE> 97
NATIONS FUNDS
Nations Maryland Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
MARYLAND -- (CONTINUED)
$300,000 Northeast, Maryland,
Solid Waste Disposal
Authority Revenue
Refunding, (Montgomery
County Project),
Series A, AMT,
6.300% 07/01/16....... A NR $ 304,392
500,000 Prince Georges County,
Maryland, PCR
Refunding, (Potomac
Electric Power
Project),
5.750% 03/15/10....... A1 A 514,825
175,000 Prince Georges County,
Maryland, Project and
Refunding Revenue,
(Dimensions Health
Corporation), GO,
5.375% 07/01/14....... A NR 162,619
500,000 Prince Georges County,
Maryland, Solid Waste
Management Systems
Authority, Revenue
Refunding, (FSA
Insured),
5.200% 06/15/06....... Aaa AAA 497,430
500,000 Prince Georges County,
Maryland, Stormwater
Management, GO,
5.500% 03/15/13....... Aa AA 486,535
200,000 Washington County,
Maryland, Consolidated
Public Improvement
Revenue, GO, (MBIA
Insured),
5.800% 01/01/15....... Aaa AAA 201,460
320,000 Washington County,
Maryland, Sanitation
District Refunding,
GO, Series F, (FGIC
Insured),
5.000% 01/01/04....... Aaa AAA 320,339
-----------
10,141,379
-----------
DISTRICT OF COLUMBIA -- 3.3%
Washington, D.C.,
Metropolitan Area
Transportation
Authority Revenue,
Refunding, (FGIC
Insured):
100,000 4.900% 01/01/05......... Aaa AAA 98,248
350,000 6.000% 07/01/10......... Aaa AAA 370,338
-----------
468,586
-----------
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
GUAM -- 4.0%
$600,000 Government of Guam, GO,
Series A,
5.200% 11/15/08....... NR BBB $ 560,202
-----------
OHIO -- 3.6%
500,000 Dayton, Ohio, Special
Facilities Revenue,
(Emery Air Freight
Corporation Project),
Series D, AMT,
6.200% 10/01/09....... NR BBB- 503,895
-----------
PUERTO RICO -- 12.0%
Puerto Rico Electric
Power Authority, Power
Revenue Refunding:
200,000 Series U,
6.000% 07/01/14....... Baa1 BBB+ 199,978
500,000 Series Y, (MBIA
Insured),
6.500% 07/01/06....... Aaa AAA 550,285
500,000 Puerto Rico Housing,
Bank and Finance
Agency, Single-family
Mortgage Revenue,
(Affordable Housing
Mortgage -- Portfolio
I), AMT, (GNMA/FNMA/
FHLMC Collateral),
6.100% 10/01/15....... Aaa AAA 502,600
250,000 Puerto Rico Industrial,
Medical and
Environmental Agency,
Pollution Control
Facilities, Finance
Authority Revenue,
Higher Education,
(Catholic University
Project), Series A,
5.600% 12/01/07....... NR BBB- 242,565
200,000 Puerto Rico Industrial,
Tourist, Educational,
Medical and
Environmental Control
Facilities Financing
Authority, (Ryder
Memorial Hospital
Project), Series A,
6.600% 05/01/14....... NR BBB 203,714
-----------
1,699,142
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $13,144,157)........................ 13,373,204
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
93
<PAGE> 98
NATIONS FUNDS
Nations Maryland Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<S> <C> <C>
MONEY MARKET FUND -- 3.2%
(Cost $456,000)
456,000 AIM Tax-Exempt Fund.............. $ 456,000
----------
TOTAL INVESTMENTS
(Cost $13,600,157*)................... 98.0% 13,829,204
OTHER ASSETS AND
LIABILITIES (NET)..................... 2.0 277,833
----- -----------
NET ASSETS.............................. 100.0% $14,107,037
===== ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
<TABLE>
<S> <C>
ABBREVIATIONS:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Corporation
FHA Federal Housing Authority
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National Mortgage Association
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
</TABLE>
Nations Maryland Municipal Bond Fund had the following insurance concentration
greater than 10% at March 31, 1997 (as a percentage of net assets):
<TABLE>
<S> <C>
FGIC 13.7%
</TABLE>
Nations Maryland Municipal Bond Fund had the following industry concentration
greater than 10% at March 31, 1997 (as a percentage of net assets):
<TABLE>
<S> <C>
Pollution Control Revenue/Industrial Development 11.7%
Revenue
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
94
<PAGE> 99
NATIONS FUNDS
Nations North Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
95.7%
NORTH CAROLINA -- 78.7%
$1,000,000 Buncombe County, North
Carolina, GO,
5.000% 03/01/02....... Aa AA- $ 1,012,120
1,000,000 Charlotte, North
Carolina, COP,
(Convention Facilities
Project),
(AMBAC Insured),
6.750% 12/01/21....... Aaa AAA 1,100,140
1,130,000 Charlotte, North
Carolina, Health Care
Systems Revenue
Refunding, Mecklenburg
Hospital Authority,
6.250% 01/01/20....... Aa AA 1,150,374
1,000,000 Charlotte, North
Carolina, Refunding,
GO,
4.500% 02/01/03....... Aaa AAA 984,830
1,000,000 Cleveland County, North
Carolina, GO, (FGIC
Insured),
5.100% 06/01/05....... Aaa AAA 1,005,240
500,000 Concord, North Carolina,
GO,
6.200% 06/01/05....... Aa A+ 532,840
1,000,000 Fayetteville, North
Carolina, Public Works
Commission Revenue
Refunding, (FGIC
Insured),
4.500% 03/01/04....... Aaa AAA 972,160
500,000 Gastonia, North
Carolina, Water
Revenue and Street
Improvement,
(FGIC Insured),
5.200% 04/01/02....... Aaa AAA 509,910
2,000,000 Greenville, North
Carolina, Combined
Enterprises Revenue,
6.000% 09/01/10....... A1 A+ 2,063,720
1,000,000 Haywood County, North
Carolina, Industrial
Facilities and
Pollution Control
Financing Authority,
Solid Waste Disposal,
(Champion
International
Corporation Project),
AMT,
5.500% 10/01/18....... Baa1 BBB 924,050
500,000 Henderson County, North
Carolina, School and
Community College, GO,
6.500% 06/01/08....... A1 A+ 530,360
750,000 Lower Cape Fear, North
Carolina, Water and
Sewer Authority
Revenue, AMT,
5.200% 03/01/04....... A BBB 749,963
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
NORTH CAROLINA --
(CONTINUED)
$1,000,000 Martin County, North
Carolina, Industrial
Facilities and
Pollution Control
Financing Authority
Revenue, (Weyerhaeuser
Company Project),
8.500% 06/15/99....... A2 A $ 1,081,020
1,000,000 Mecklenburg County,
North Carolina,
Pre-refunded, Public
Improvement, Series B,
6.200% 04/01/06....... Aaa AAA 1,072,170
North Carolina Housing
Finance Agency,
Single-family Housing
Revenue, Series R:
835,000 6.350% 03/01/03......... Aa A+ 875,230
840,000 6.350% 09/01/03......... Aa A+ 870,778
1,000,000 North Carolina Medical
Care Community Health
Care Facilities
Revenue, (Stanly
Memorial Hospital
Project), (AMBAC
Insured),
5.250% 10/01/06....... Aaa AAA 1,001,480
North Carolina Municipal
Power Agency,
Refunding #1, Catawba
Electric Revenue
Refunding:
1,000,000 (FGIC Insured),
5.200% 01/01/00....... Aaa AAA 1,016,290
1,000,000 (FSA Insured),
5.500% 01/01/01....... Aaa AAA 1,028,860
1,000,000 North Carolina State,
Educational Authority
Revenue, AMT,
5.300% 07/01/03....... A NR 997,290
North Carolina State,
GO, Series A:
2,000,000 6.100% 03/01/01......... Aaa AAA 2,107,920
1,000,000 5.100% 03/01/06......... Aaa AAA 1,005,650
1,240,000 Pitt County, North
Carolina, Revenue
Refunding, (Pitt
County Memorial
Hospital),
5.375% 12/01/10....... Aa AA- 1,211,182
1,000,000 Raleigh, North Carolina,
Combined Enterprise
System Revenue,
5.250% 03/01/07....... Aa AA+ 1,009,970
750,000 Rutherford County, North
Carolina, GO, (MBIA
Insured),
6.400% 06/01/01....... Aaa AAA 800,310
500,000 Union County, North
Carolina, School
District, GO,
5.800% 03/01/05....... A1 A+ 522,660
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
95
<PAGE> 100
NATIONS FUNDS
Nations North Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
NORTH CAROLINA --
(CONTINUED)
$1,000,000 University of North
Carolina, Revenue
Refunding, Utilities
Systems,
5.200% 08/01/06....... Aa AA $ 1,005,980
Wake County, North
Carolina, GO,
Refunded:
1,000,000 4.200% 04/01/98......... Aaa.. AAA 1,004,570
1,000,000 4.700% 04/01/05......... Aaa.. AAA 982,610
1,000,000 Wake County, North
Carolina, Public
Improvement Revenue,
GO,
4.600% 02/01/06....... Aaa.. AAA 966,390
1,200,000 Wayne County, North
Carolina, GO,
4.900% 04/01/05....... Aaa.. AAA 1,192,164
-----------
31,288,231
-----------
GUAM -- 7.2%
Government of Guam, GO,
Series A:
1,500,000 4.900% 09/01/97......... NR BBB 1,505,340
1,445,000 5.150% 11/15/07......... NR BBB 1,360,265
-----------
2,865,605
-----------
OHIO -- 2.6%
1,000,000 Dayton, Ohio, Special
Facilities Revenue,
(Emery Air Freight
Corporation Project),
Series D, AMT
6.200% 10/01/09....... NR BBB- 1,007,790
-----------
PUERTO RICO -- 4.2%
1,000,000 Puerto Rico Electric
Power Authority, Power
Revenue Refunding,
Series Y, (MBIA
Insured),
7.000% 07/01/07....... Aaa AAA 1,146,660
500,000 Puerto Rico Industrial,
Tourist, Educational,
Medical and
Environmental Control
Facilities Financing
Authority, (Ryder
Memorial Hospital
Project), Series A,
6.600% 05/01/14....... NR BBB 509,285
-----------
1,655,945
-----------
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS
AND NOTES --
(CONTINUED)
WASHINGTON -- 3.0%
$1,150,000 Washington State Public
Power Supply System,
Revenue Refunding,
(Nuclear Project
Number 2), Series A,
5.800% 07/01/07....... Aa AA $ 1,189,583
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $36,943,905)............. 38,007,154
===========
<CAPTION>
SHARES
- ---------
<S> <C> <C>
MONEY MARKET FUND -- 1.0%
(Cost $410,000)
410,000 AIM Tax-Exempt Fund.............. 410,000
============
TOTAL INVESTMENTS
(Cost $37,353,905*)..................... 96.7% 38,417,154
OTHER ASSETS AND
LIABILITIES (NET)....................... 3.3 1,321,650
---- -----------
NET ASSETS................................ 100.0% $39,738,804
---- ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
COP Certificates of Participation
FGIC Financial Guaranty Insurance Corporation
FSA Financial Security Assurance
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
</TABLE>
Nations North Carolina Intermediate Municipal Bond Fund had the following
industry concentration greater than 10% at March 31, 1997 (as a percentage of
net assets):
<TABLE>
<S> <C>
Pollution Control Revenue/Industrial Development 12.8%
Revenue
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
96
<PAGE> 101
NATIONS FUNDS
Nations North Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
92.8%
NORTH CAROLINA -- 90.7%
$1,000,000 Buncombe County, North
Carolina,
Metropolitan Sewer
District, Sewer
System Revenue,
Series B,
Pre-refunded,
6.750% 07/01/22....... Aaa NR $ 1,105,540
1,500,000 Charlotte, North
Carolina, Health
Care Systems Revenue
Refunding,
Mecklenburg Hospital
Authority,
6.250% 01/01/20....... Aa AA 1,527,045
1,000,000 Craven County, North
Carolina, Industrial
Facilities and
Pollution Control
Financing Authority,
PCR, Refunding,
(Weyerhaeuser
Company Project),
6.350% 01/01/10....... NR A 1,050,690
1,000,000 Haywood County, North
Carolina, Industrial
Facilities and
Pollution Control
Financing Authority,
Solid Waste
Disposal, (Champion
International
Corporation
Project), AMT,
5.500% 10/01/18....... Baa1 BBB 924,050
2,000,000 Martin County, North
Carolina, Industrial
Facilities and
Pollution Control
Financing Authority
Revenue, Solid Waste
Disposal, AMT,
(Weyerhaeuser
Company),
5.650% 12/01/23....... A2 A 1,888,260
2,000,000 Mecklenburg County,
North Carolina,
Industrial
Facilities and
Pollution Control
Finance Authority
Revenue Refunding,
(Fluor Corporation
Project),
5.250% 12/01/09....... NR A+ 1,949,320
Mecklenburg County,
North Carolina,
Refunding, GO:
1,000,000 5.400% 03/01/00....... Aaa AAA 1,024,850
1,000,000 6.000% 04/01/11....... Aaa AAA 1,063,480
1,000,000 Monroe, North
Carolina, Combined
Enterprise System
Revenue,
6.000% 03/01/14....... A A 989,480
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
NORTH CAROLINA --
(CONTINUED)
$1,000,000 Morganton, North
Carolina, Water and
Sewer Revenue, GO,
(FGIC Insured),
5.600% 06/01/10....... Aaa AAA $ 1,016,700
1,000,000 New Hanover County,
North Carolina,
Industrial
Facilities and
Pollution Control
Financing Authority,
(Solid Waste
Disposal, Occidental
Petroleum
Corporation
Project), AMT,
6.500% 08/01/14....... Baa3 BBB 1,023,750
North Carolina Housing
Finance Agency:
830,000 Series U,
6.700% 03/01/18....... Aa A+ 865,325
970,000 Single-family Housing
Revenue, Series W,
6.200% 09/01/09....... Aa A+ 1,003,484
North Carolina Medical
Care Commission,
Hospital Revenue
Refunding:
1,130,000 (AMBAC Insured),
5.250% 02/15/07....... Aaa AAA 1,135,978
1,000,000 (Grace Hospital Inc.
Project), (AMBAC
Insured),
5.250% 10/01/16....... Aaa AAA 930,750
1,000,000 (Rex Hospital
Project),
6.250% 06/01/17....... A1 A+ 1,024,930
1,000,000 North Carolina
Municipal Power
Agency, Refunding
#1, Catawba Electric
Revenue Refunding,
(FSA Insured),
6.200% 01/01/18....... Aaa AAA 1,022,700
1,000,000 North Carolina State,
University and
College
Improvements, GO,
5.100% 06/01/06....... Aaa AAA 1,005,750
1,500,000 Onslow County, North
Carolina, Combined
Enterprise System
Revenue, (MBIA
Insured),
5.875% 06/01/09....... Aaa AAA 1,562,970
1,000,000 Orange County, North
Carolina, GO,
5.500% 02/01/14....... Aa1 AA+ 990,180
1,000,000 Pitt County, North
Carolina, Hospital
Revenue, (Pitt
County Memorial
Hospital Project),
5.250% 12/01/21....... Aa AA- 906,380
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
97
<PAGE> 102
NATIONS FUNDS
Nations North Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
NORTH CAROLINA --
(CONTINUED)
$1,000,000 Wilmington, North
Carolina, Water
Authority, GO,
5.700% 06/01/15....... A1 A+ $ 1,002,610
-----------
25,014,222
-----------
PUERTO RICO -- 2.1%
600,000 Puerto Rico
Industrial, Medical
and Environmental
Agency, Pollution
Control Facilities,
Finance Authority
Revenue, Higher
Education, (Catholic
University Project),
Series A,
5.600% 12/01/07....... NR BBB- 582,156
==========
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $25,033,578)............. 25,596,378
==========
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
MONEY MARKET
FUNDS --
6.0%
1,376,000 AIM Tax-Exempt Fund............ $ 1,376,000
265,000 Nuveen Tax-Free Money Market
Fund......................... 265,000
-----------
TOTAL MONEY MARKET
FUNDS
(Cost $1,641,000).............. 1,641,000
===========
TOTAL INVESTMENTS
(Cost $26,674,578*)..................... 98.8% 27,237,378
OTHER ASSETS AND
LIABILITIES (NET)....................... 1.2 331,951
----- -----------
NET ASSETS................................ 100.0% $27,569,329
===== ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Corporation
FSA Financial Security Assurance
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
</TABLE>
Nations North Carolina Municipal Bond Fund had the following industry
concentrations greater than 10% at March 31, 1997 (as a percentage of net
assets):
<TABLE>
<S> <C>
Hospital 14.6%
Pollution Control Revenue/Industrial Development 24.8%
Revenue
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
98
<PAGE> 103
NATIONS FUNDS
Nations South Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
97.8%
SOUTH CAROLINA -- 97.8%
$1,100,000 Anderson County, South
Carolina, Revenue
Refunding, GO,
6.400% 04/01/03...... A A $ 1,180,157
500,000 Beaufort County, South
Carolina, School
District, GO, (AMBAC
Insured),
6.250% 02/01/01...... Aaa AAA 527,215
1,000,000 Berkeley County, South
Carolina, Pollution
Control Facilities
Revenue Refunding,
(Alumax Inc.
Project), (Royal Bank
of Canada LOC),
3.400% 12/01/08+..... Aa2 NR 1,000,000
1,000,000 Berkeley County, South
Carolina, Refunding
and Improvement
Authority, (FGIC
Insured),
5.300% 05/01/04...... Aaa AAA 1,021,850
500,000 Berkeley County, South
Carolina, Water and
Sewer Authority
Revenue, (MBIA
Insured),
6.100% 06/01/98...... Aaa AAA 512,080
1,000,000 Camden, South Carolina,
Combined Public
Utilities Revenue,
Refunding and
Improvement, (MBIA
Insured),
5.500% 03/01/17...... Aaa AAA 967,080
Charleston County,
South Carolina,
Hospital Facilities,
Revenue Refunding and
Improvement, (Medical
Society Health
Project), (MBIA
Insured):
500,000 5.000% 10/01/99........ Aaa AAA 506,205
1,000,000 6.000% 10/01/09........ Aaa AAA 1,031,010
1,000,000 Charleston County,
South Carolina, Park
and Recreation
Commission District,
GO,
4.900% 02/01/99...... Aa AA- 1,011,240
1,040,000 Charleston County,
South Carolina, Solid
Waste User Fee
Revenue, (MBIA
Insured),
5.800% 01/01/06...... Aaa AAA 1,086,301
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
SOUTH CAROLINA --
(CONTINUED)
$ 500,000 Chester County, South
Carolina, Industrial
Development Authority
Revenue Refunding,
(Springs Industries
Inc. Project),
7.350% 02/01/14...... NR BBB+ $ 527,875
500,000 Chester County, South
Carolina, School
District, GO,
6.100% 02/01/01...... NR A 528,795
Columbia, South
Carolina, Waterworks
and Sewer System
Revenue:
1,000,000 5.500% 02/01/09........ Aa AA 1,022,640
2,700,000 Capital Appreciation,
Zero coupon
02/01/03++........... Aa AA 2,041,551
1,000,000 Darlington County,
South Carolina,
Industrial
Development Revenue,
(Nucor Corporation
Project), Series A,
5.750% 08/01/23...... A1 AA- 985,240
1,500,000 Dorchester County,
South Carolina,
School District No.
2, GO, (FGIC
Insured),
5.200% 02/01/15...... Aaa AAA 1,421,580
1,250,000 Florence, South
Carolina, Water and
Sewer Revenue
Refunding #2, (AMBAC
Insured),
5.150% 03/01/06...... Aaa AAA 1,253,162
Grand Strand Water and
Sewer Authority
Revenue Refunding,
(MBIA Insured):
1,000,000 5.900% 06/01/01........ Aaa AAA 1,042,550
1,950,000 6.300% 06/01/05........ Aaa AAA 2,090,341
Greenville, South
Carolina, Hospital
Facilities Revenue
Refunding:
1,000,000 Series A,
5.400% 05/01/07...... Aa3 AA- 993,970
1,000,000 Series C,
5.300% 05/01/04...... NR AA- 997,850
2,000,000 Greenville, South
Carolina, Waterworks
Revenue, Water
Utility Improvements,
6.000% 02/01/06...... Aa1 AA 2,133,900
1,885,000 Greenwood, South
Carolina, Combined
Public Utilities,
Revenue Refunding and
Improvement, (AMBAC
Insured),
5.500% 12/01/06...... Aaa AAA 1,935,820
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
99
<PAGE> 104
NATIONS FUNDS
Nations South Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
SOUTH CAROLINA --
(CONTINUED)
Lancaster County, South
Carolina, School
District, GO, (MBIA
Insured):
$ 600,000 5.900% 07/01/01........ Aaa AAA $ 629,280
500,000 6.500% 07/01/07........ Aaa AAA 536,875
Medical University of
South Carolina,
Hospital Facilities
Revenue, Series A:
500,000 6.400% 07/01/99........ A A+ 517,145
Refunding:
500,000 7.000% 07/01/01........ A A+ 540,160
1,000,000 7.000% 07/01/02........ A A+ 1,077,490
2,250,000 7.200% 07/01/05........ A A+ 2,386,733
1,750,000 North Charleston, South
Carolina, Refunding,
GO,
5.600% 08/01/07...... A AA- 1,801,485
1,500,000 Oconee County, South
Carolina, School
District, Refunding,
Series B,
6.000% 03/01/99...... A A 1,541,565
Piedmont Municipal
Power Agency, South
Carolina, Revenue
Bonds, (MBIA
Insured):
1,000,000 Series B,
5.250% 01/01/09...... Aaa AAA 980,180
1,600,000 (South Carolina
Electric Company
Project),
6.000% 01/01/05...... Aaa AAA 1,702,672
Richland County, South
Carolina, PCR, (Union
Camp Corporation
Project), Series C:
2,000,000 5.875% 11/01/02........ A1 A- 2,069,480
1,000,000 6.350% 11/01/07........ A1 A- 1,053,970
Richland County, South
Carolina, Revenue
Refunding and
Improvement:
500,000 5.750% 12/01/99........ Aa AA 517,665
2,120,000 Series B,
4.850% 03/01/04...... Aa AA 2,116,226
Richland County, South
Carolina, School
District:
1,000,000 No. 1, GO, (State Aid
Withholding),
4.625% 03/01/22...... Aa AA- 844,950
1,590,000 No. 2, Refunding,
Series A, (MBIA
Insured),
4.900% 03/01/04...... Aaa AAA 1,587,170
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
SOUTH CAROLINA --
(CONTINUED)
Rock Hill, South
Carolina, School
District No. 3,
Refunding, Series B,
(FGIC Insured):
$ 500,000 5.800% 02/01/01........ Aaa AAA $ 519,405
1,910,000 5.900% 02/01/02........ Aaa AAA 1,997,020
2,135,000 South Carolina State,
Capital Improvement,
GO, Series A,
3.500% 07/01/06...... Aaa AAA 1,868,146
South Carolina State,
Housing Finance and
Development
Authority:
1,000,000 Homeownership Mortgage
Purchase, Series A,
5.550% 07/01/15...... Aa AA 995,140
Multi-family Housing
Revenue:
895,000 Rental Housing Revenue,
(Windsor Shores
Project), Series B,
(FHA Insured):
5.600% 07/01/16...... NR AA 858,305
1,000,000 Series A, (FNMA
Collateral)
6.800% 11/15/11...... Aaa NR 1,044,550
5,000,000 (United Dominion
Project),
6.500% 05/01/24...... NR BBB+ 5,119,100
South Carolina State,
Public Service
Authority, Revenue
Bonds:
1,000,000 Series A,
5.200% 07/01/03...... Aa A+ 1,012,680
1,000,000 Series B, Refunded,
6.600% 07/01/01...... Aaa A+ 1,071,780
1,000,000 South Carolina State
Refunding, Capital
Improvement, GO,
4.400% 04/01/04...... Aaa AA+ 970,100
1,750,000 South Carolina State
Revenue Bonds, GO,
Series W,
6.000% 05/01/01...... Aaa AA+ 1,842,173
1,000,000 Spartanburg, South
Carolina, Waterworks
and Sewer System
Authority, Revenue
Refunding and
Improvement,
6.200% 06/01/09...... A1 AA- 1,044,990
1,005,000 Spartanburg County,
South Carolina, GO,
5.700% 02/01/06...... A1 A+ 1,043,461
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
100
<PAGE> 105
NATIONS FUNDS
Nations South Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS AND
NOTES -- (CONTINUED)
SOUTH CAROLINA --
(CONTINUED)
$ 560,000 Summerville, South
Carolina, Water and
Sewer Authority
Revenue,
6.050% 09/01/00...... A A $ 585,738
1,000,000 York County, South
Carolina, Industrial
Development Revenue,
Exempt Facility,
(Hoechst Celanese
Corporation Project),
AMT,
5.700% 01/01/24...... A2 A+ 962,750
1,000,000 York County, South
Carolina, PCR
Refunding, (Bowater
Inc. Project), Series
B,
6.850% 04/01/01...... Baa1 BBB 1,048,980
500,000 York County, South
Carolina, School
District No. 3, GO,
Series B,
5.700% 07/01/97...... Ba A 502,100
500,000 York County, South
Carolina, Water and
Sewer Revenue,
6.125% 12/01/08...... NR NR 483,590
----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $67,436,259)............. 68,691,466
==========
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C>
MONEY MARKET FUND -- 1.1%
(Cost $772,000)
772,000 AIM Tax-Exempt Fund............ $ 772,000
===========
TOTAL INVESTMENTS
(Cost $68,208,259*)..................... 98.9% 69,463,466
OTHER ASSETS AND
LIABILITIES (NET)....................... 1.1 746,612
---- -----------
NET ASSETS................................ 100.0% $70,210,078
---- ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Variable rate note. The interest rate shown reflects the rate in effect at
March 31, 1997.
++ Yield to maturity is 4.815%.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Corporation
FHA Federal Housing Authority
FNMA Federal National Mortgage Association
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
VA Veterans Administration
</TABLE>
Nations South Carolina Intermediate Municipal Bond Fund had the following
insurance concentration greater than 10% at March 31, 1997 (as a percentage of
net assets):
<TABLE>
<S> <C>
MBIA 18.0%
</TABLE>
Nations South Carolina Intermediate Municipal Bond Fund had the following
industry concentrations greater than 10% at March 31, 1997 (as a percentage of
net assets):
<TABLE>
<S> <C>
Pollution Control Revenue/Industrial Development 10.9%
Revenue
Housing Revenue 11.4%
Water Revenue 10.4%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
101
<PAGE> 106
NATIONS FUNDS
Nations South Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
97.9%
SOUTH CAROLINA --
89.6%
$ 750,000 Berkeley County,
South Carolina,
PCR, (South
Carolina Electric
and Gas Company),
6.500% 10/01/14.... A2 A- $ 801,690
525,000 Camden, South
Carolina, Combined
Public Utilities
Revenue, Refunding
and Improvement,
(MBIA Insured),
4.900% 03/01/06.... Aaa AAA 516,569
500,000 Charleston, South
Carolina, GO,
6.500% 06/01/11.... Aa AA 540,910
500,000 Charleston County,
South Carolina,
Hospital Facilities
Revenue, (Bon
Secours Health
Systems Project),
(FSA Insured),
5.625% 08/15/25.... Aaa AAA 471,310
1,000,000 Chester County, South
Carolina,
Industrial
Development
Authority Revenue
Refunding, (Springs
Industries Inc.
Project),
7.350% 02/01/14.... NR BBB+ 1,055,750
500,000 Clemson University,
South Carolina,
Stadium Refunding
Bonds, Student and
Faculty Housing,
Series M, (MBIA
Insured),
6.600% 06/01/08.... Aaa AAA 527,405
1,000,000 Columbia, South
Carolina,
Waterworks and
Sewer System
Revenue,
5.500% 02/01/09.... Aa AA 1,022,640
Darlington County,
South Carolina,
Industrial
Development
Revenue:
1,000,000 (Nucor Corporation
Project), Series A,
5.750% 08/01/23.... A1 AA- 985,240
500,000 (Sonoco Products
Company Project),
6.125% 06/01/25.... A2 A+ 506,250
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
SOUTH CAROLINA --
(CONTINUED)
$ 500,000 Darlington County,
South Carolina,
PCR, (Carolina
Power and Light
Company Project),
6.600% 11/01/10.... A2 A/A-1 $ 538,140
Dorchester County,
South Carolina,
School District No.
2, GO, (FGIC
Insured) (Student
Aid Withholding):
500,000 4.800% 07/01/05...... Aaa AAA 493,870
650,000 5.125% 02/01/13...... Aaa AAA 619,255
500,000 Georgetown County,
South Carolina,
PCR, (International
Paper Company
Project),
6.250% 06/15/05.... A3 A- 522,010
400,000 Greenville, South
Carolina, Hospital
Facilities Revenue
Refunding, Series
C,
5.500% 05/01/11.... NR AA- 389,288
500,000 Greenville, South
Carolina,
Waterworks Revenue,
5.500% 02/01/22.... Aa1 AA 475,930
1,000,000 Piedmont Municipal
Power Agency, South
Carolina, Electric
Revenue Bonds,
Series B, (MBIA
Insured),
5.250% 01/01/09.... Aaa AAA 980,180
1,000,000 Richland County,
South Carolina,
School District No.
1, GO, (State Aid
Withholding),
4.625% 03/01/22.... Aa AA- 844,950
525,000 Richland County,
South Carolina,
Sewer System
Revenue, GO, Series
A,
5.500% 03/01/17.... Aa AA 509,528
500,000 Richland County,
South Carolina,
Waste Disposal
Facilities Revenue
Refunding, (Union
Camp Corporation
Project), Series A,
AMT,
6.750% 05/01/22.... A1 A- 524,875
750,000 South Carolina State,
Capital
Improvement,
4.400% 04/01/04.... Aaa AA+ 727,575
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
102
<PAGE> 107
NATIONS FUNDS
Nations South Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
SOUTH CAROLINA --
(CONTINUED)
$1,000,000 South Carolina, State
Educational
Facilities
Authority, (Furman
University
Project), Series A,
(MBIA Insured),
5.500% 10/01/26.... Aaa AAA $ 944,400
500,000 South Carolina State,
Jobs-Economic
Development
Authority, Hospital
Facilities Revenue
First Mortgage,
(Lowman Home-
Trinity Lutheran
Home Project),
6.700% 09/01/20.... NR NR 495,475
500,000 South Carolina State,
Public Service
Authority, Revenue
Bonds, Series C,
(MBIA Insured),
5.125% 01/01/21.... Aaa AAA 446,105
500,000 York County, South
Carolina, GO,
(AMBAC Insured),
4.750% 06/01/07.... Aaa AAA 483,140
900,000 York County, South
Carolina, PCR
Refunding, (Bowater
Inc. Project),
Series B,
6.850% 04/01/01.... Baa1 BBB 944,082
-----------
16,366,567
-----------
OHIO -- 2.8%
500,000 Dayton, Ohio, Special
Facilities Revenue
Refunding, (Emery
Air Freight
Corporation
Project), Series F,
6.050% 10/01/09.... NR BBB- 506,125
-----------
PUERTO RICO -- 5.5%
1,000,000 Puerto Rico, Housing,
Bank and Finance
Agency,
Single-family
Mortgage Revenue,
(Affordable Housing
Mortgage-Portfolio
I), AMT,
(GNMA/FNMA/ FHLMC
Collateral),
6.250% 04/01/29.... Aaa.. AAA 1,007,390
-----------
TOTAL MUNICIPAL BONDS
AND NOTES
(Cost $17,736,002)............ 17,880,082
===========
<CAPTION>
VALUE
SHARES (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- (CONTINUED)
SHARES
- ---------
MONEY MARKET FUND -- 0.7%
(Cost $137,000)
137,000 AIM Tax-Exempt Fund............. 137,000
===========
TOTAL INVESTMENTS
(Cost $17,873,002*)..................... 98.6% 18,017,082
OTHER ASSETS AND
LIABILITIES (NET)....................... 1.4 257,004
----- -----------
NET ASSETS................................ 100.0% $18,274,086
===== ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Corporation
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National Mortgage Association
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
</TABLE>
Nations South Carolina Municipal Bond Fund had the following insurance
concentration greater than 10% at March 31, 1997 (as a percentage of net
assets):
<TABLE>
<S> <C>
MBIA 18.7%
</TABLE>
Nations South Carolina Municipal Bond Fund had the following industry
concentration greater than 10% at March 31, 1997 (as a percentage of net
assets):
<TABLE>
<S> <C>
Pollution Control Revenue/Industrial Development 34.9%
Revenue
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
103
<PAGE> 108
NATIONS FUNDS
Nations Tennessee Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
95.1%
TENNESSEE -- 78.3%
Anderson County,
Tennessee, Health and
Educational Facilities
Board, (Methodist
Medical Center):
$ 585,000 5.000% 07/01/01......... A1 NR $ 582,192
1,000,000 5.400% 07/01/04......... A1 NR 1,000,020
Chattanooga-Hamilton
County, Tennessee,
Hospital Authority
Revenue, GO, (Erlanger
Medical Center), (FSA
Insured):
500,000 5.000% 10/01/00......... Aaa AAA 506,075
500,000 5.375% 10/01/04......... Aaa AAA 511,920
650,000 Hamilton County,
Tennessee, GO,
5.000% 07/01/01....... Aa NR 658,385
600,000 Knox County, Tennessee,
Health, Educational
and Housing Facilities
Board, Hospital
Facilities Revenue,
Refunding and
Improvement, (Baptist
Health System of East
Tennessee, Inc.
Project), (CONNIE LEE
Insured),
5.500% 04/15/11....... NR AAA 580,620
500,000 Knoxville, Tennessee,
Refunding and
Improvement, GO,
Series A, (MBIA
Insured),
5.250% 05/01/03....... Aaa AAA 510,140
500,000 Madison County,
Tennessee, GO, Series
A,
5.850% 08/01/03....... A1 NR 525,000
500,000 Maury County, Tennessee,
Industrial Development
Board, PCR, Multi-
Modal Refunding,
(Saturn Corporation
Project), General
Motors Guaranty
Agreement,
6.500% 09/01/24....... A3 A- 521,115
800,000 McMinn County,
Tennessee, Industrial
Development Board,
PCR, Refunding,
(Bowater Inc.
Project),
6.850% 04/01/01....... Baa1 BBB 852,072
Memphis, Tennessee,
Electric System
Revenue:
235,000 Pre-refunded,
6.750% 01/01/03....... NR NR 248,945
500,000 Refunding,
5.000% 01/01/99....... Aa AA 505,875
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
TENNESSEE -- (CONTINUED)
Memphis, Tennessee,
Electric System
Revenue -- (continued):
$ 300,000 Memphis, Tennessee,
Refunding, GO,
5.000% 11/01/00....... Aa AA $ 304,605
1,500,000 Memphis, Tennessee,
Water Revenue,
5.900% 01/01/04....... Aa AA 1,579,920
Metropolitan Government,
Nashville and Davidson
County, Tennessee,
Health and Educational
Facilities Board
Revenue, Refunding and
Improvement, (Meharry
Medical College
Project), (AMBAC
Insured):
505,000 6.000% 12/01/08......... Aaa AAA 536,330
295,000 6.000% 12/01/09......... Aaa AAA 312,172
750,000 Metropolitan Government,
Nashville and Davidson
County, Tennessee,
Refunding, GO,
5.250% 05/15/07....... Aa AA 755,813
Shelby County,
Tennessee, Health,
Educational and
Housing Facilities
Board, Methodist
Health Systems, Inc.,
(MBIA Insured):
500,000 6.250% 08/01/09......... Aaa AAA 539,270
520,000 Series D,
5.300% 08/15/04....... Aaa AAA 532,709
500,000 Shelby County,
Tennessee, Public
Improvement, GO,
Series A,
5.625% 06/01/06....... Aa AA+ 518,990
Tennessee Housing
Development Agency,
Mortgage Finance, AMT:
200,000 Series A,
6.300% 01/01/08....... A1 A+ 204,474
300,000 Series B,
6.550% 07/01/19....... A1 A+ 307,272
305,000 Tennessee State, GO,
Series A,
7.000% 03/01/05....... Aaa AA+ 345,312
500,000 Tennessee State, Local
Development Revenue,
Series A,
5.750% 03/01/11....... A AA- 500,285
500,000 Tennessee State,
Volunteer State
Student Funding
Corporation,
Educational Loan
Revenue, Series B,
AMT,
4.850% 06/01/99....... Aa NR 500,805
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
104
<PAGE> 109
NATIONS FUNDS
Nations Tennessee Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
TENNESSEE --
(CONTINUED)
$ 730,000 Williamson County,
Tennessee, Capital
Outlay Notes,
5.700% 05/01/02....... Aa NR $ 760,623
-----------
14,700,939
-----------
PUERTO RICO -- 16.8%
600,000 Commonwealth of Puerto
Rico, Refunding, GO,
5.500% 07/01/01....... Baa1 A 612,690
600,000 Puerto Rico Electric
Power Authority, Power
Revenue, Series P,
6.750% 07/01/03....... Baa1 BBB+ 650,868
600,000 Puerto Rico, Housing,
Bank and Finance
Agency, Single-family
Mortgage Revenue,
(Affordable Housing
Mortgage-Portfolio I),
AMT, (GNMA/
FNMA/FHLMC
Collateral),
5.450% 04/01/05....... Aaa AAA 605,532
500,000 Puerto Rico, Industrial,
Medical and
Environmental Agency
Facilities Financing
Authority Revenue,
Series A, (Intel
Corporation Project),
4.000% 09/01/13+...... A1 A+ 498,625
750,000 Puerto Rico, Industrial,
Tourist, Educational,
Medical and
Environmental Control
Facilities Financing
Authority, (Ryder
Memorial Hospital
Project), Series A,
6.400% 05/01/09....... NR BBB 778,860
-----------
3,146,575
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $17,566,070)..................... 17,847,514
===========
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C>
MONEY MARKET FUNDS -- 7.0%
949,000 AIM Tax-Exempt Fund............. $ 949,000
360,000 Nuveen Tax-Free Money Market
Fund.......................... 360,000
-----------
TOTAL MONEY
MARKET FUNDS
(Cost $1,309,000)............... 1,309,000
===========
TOTAL INVESTMENTS
(Cost $18,875,070*)..................... 102.1% 19,156,514
OTHER ASSETS AND
LIABILITIES (NET)....................... (2.1) (395,719)
----- -----------
NET ASSETS................................ 100.0% $18,760,795
===== ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Variable rate note. The interest rate shown reflects the rate in effect at
March 31, 1997.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance
Corporation
AMT Alternative Minimum Tax
CONNIE LEE College Construction Loan Association
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National Mortgage Association
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
</TABLE>
Nations Tennessee Intermediate Municipal Bond Fund had the following industry
concentration greater than 10% at March 31, 1997 (as a percentage of net
assets):
<TABLE>
<S> <C>
Hospital 12.6%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
105
<PAGE> 110
NATIONS FUNDS
Nations Tennessee Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
97.6%
TENNESSEE -- 86.5%
$ 250,000 Chattanooga-Hamilton
County, Tennessee,
Hospital Authority
Revenue, GO, (Erlanger
Medical Center), (FSA
Insured), 5.500%
10/01/07.............. Aaa AAA $ 255,807
500,000 Humphreys County,
Tennessee, Industrial
Development Board,
Solid Waste Disposal
Revenue, (du Pont
(E.I.) de Nemours &
Company Project), AMT,
6.700% 05/01/24....... Aa3 AA- 531,760
Knox County, Tennessee,
Health, Educational
and Housing Facilities
Board, Hospital
Facilities Revenue,
Refunding and
Improvement:
400,000 (Baptist Health System
of East Tennessee,
Inc. Project), (CONNIE
LEE Insured), 5.500%
04/15/11.............. NR AAA 387,080
300,000 (Fort Sanders Alliance
Project), (MBIA
Insured), 7.250%
01/01/09.............. Aaa AAA 347,361
250,000 Knoxville, Tennessee,
Water Authority
Revenue, Refunding and
Improvement, 5.100%
04/01/10.............. Aa AA- 240,125
200,000 Loudon County,
Tennessee, Industrial
Development Board,
Solid Waste Disposal
Revenue, (Kimberly-
Clark Corporation
Project), AMT, 6.200%
02/01/23.............. Aa2 AA 202,450
270,000 Maury County, Tennessee,
Industrial Development
Board, PCR, Multi-
Modal Refunding,
(Saturn Corporation
Project), General
Motors Guaranty
Agreement, 6.500%
09/01/24.............. A3 A- 281,402
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
TENNESSEE -- (CONTINUED)
$ 250,000 McMinn County,
Tennessee, Industrial
Development Board,
Solid Waste Recycling
Facility Revenue,
(Calhoun Newsprint
Project), AMT, 7.400%
12/01/22.............. Baa1 BBB $ 267,932
300,000 Memphis, Tennessee,
Electric System
Revenue Refunding,
4.900% 01/01/11....... Aa AA 278,826
Memphis, Tennessee, GO:
300,000 Public Improvements,
5.250% 03/01/12....... Aa AA 292,122
250,000 Refunding, 5.000%
11/01/00.............. Aa AA 253,837
Memphis-Shelby County,
Tennessee, Airport
Authority, Special
Facilities and Project
Revenue Refunding,
(Federal Express
Corporation Project),
AMT:
250,000 6.750% 09/01/12......... Baa2 BBB 264,520
100,000 6.200% 07/01/14......... Baa2 BBB 100,129
350,000 Metropolitan Government,
Nashville and Davidson
County, Tennessee,
Electric Revenue,
Series A, 5.625%
05/15/14.............. Aa AA 348,642
Metropolitan Government,
Nashville and Davidson
County, Tennessee,
Health and Educational
Facilities Board
Revenue, Refunding and
Improvement, (Meharry
Medical College
Project), (AMBAC
Insured):
300,000 6.000% 12/01/09......... Aaa AAA 317,463
250,000 7.000% 12/01/11......... Aaa AAA 285,780
300,000 6.000% 12/01/16......... Aaa AAA 309,453
250,000 Metropolitan Government,
Nashville and Davidson
County, Tennessee,
Refunding, GO, 5.250%
05/15/07.............. Aa AA 251,938
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
106
<PAGE> 111
NATIONS FUNDS
Nations Tennessee Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
TENNESSEE -- (CONTINUED)
Metropolitan Government,
Nashville and Davidson
County, Tennessee,
Water and Sewer
Revenue, (FGIC
Insured):
$ 300,000 6.500% 01/01/10......... Aaa AAA $ 331,266
300,000 5.200% 01/01/13......... Aaa AAA 290,112
200,000 Putnam County,
Tennessee, GO, (MBIA
Insured), 5.125%
04/01/11.............. Aaa AAA 190,158
300,000 Rutherford County,
Tennessee, Public
Improvement, GO,
6.000% 04/01/06....... Aa AA- 319,293
400,000 Shelby County,
Tennessee, GO, Series
A, 5.125% 03/01/18.... Aa AA+ 367,508
240,000 Shelby County,
Tennessee, School
Bonds, GO, Series A,
5.900% 03/01/15....... Aa AA+ 243,641
250,000 Sumner County,
Tennessee, Health,
Education and Housing
Facilities Board
Revenue Refunding,
(Sumner Regional
Health System Inc.),
7.000% 11/01/03....... NR A- 269,035
250,000 Tennessee State, GO,
Series A, 7.000%
03/01/05.............. Aaa AA+ 283,043
250,000 Tennessee State, Local
Development Revenue,
Series A, 5.750%
03/01/11.............. A AA- 250,143
----------
7,760,826
==========
PUERTO RICO -- 11.1%
400,000 Commonwealth of Puerto
Rico, Refunding, GO,
5.500% 07/01/01....... Baa1 A 408,460
300,000 Puerto Rico, Industrial,
Tourist, Educational,
Medical and
Environmental Control
Facilities Financing
Authority, (Ryder
Memorial Hospital
Project), Series A,
6.600% 05/01/14....... NR BBB 305,571
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
PUERTO RICO --
(CONTINUED)
$ 300,000 Puerto Rico Public
Building Authority,
Guaranteed Public
Education and Health
Facilities Revenue
Refunding, Series M,
5.500% 07/01/21....... Baa1 A $ 280,569
----------
994,600
----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $8,560,005)....... 8,755,426
==========
SHARES
- ----------
MONEY MARKET FUNDS -- 5.7%
470,000 AIM Tax-Exempt Fund.............. 470,000
43,000 Nuveen Tax-Free Money
Market Fund........... 43,000
----------
TOTAL MONEY MARKET FUNDS
(Cost $513,000).................. 513,000
==========
TOTAL INVESTMENTS
(Cost $9,073,005*)....................... 103.3% 9,268,426
OTHER ASSETS AND
LIABILITIES (NET)........................ (3.3) (298,366)
---- ----------
NET ASSETS................................. 100.0% $8,970,060
===== ==========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance
Corporation
AMT Alternative Minimum Tax
CONNIE LEE College Construction Loan Association
FGIC Financial Guaranty Insurance Corporation
FSA Financial Security Assurance
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
</TABLE>
Nations Tennessee Municipal Bond Fund had the following insurance concentration
greater than 10% at March 31, 1997 (as a percentage of net assets):
<TABLE>
<S> <C>
AMBAC 10.2%
</TABLE>
Nations Tennessee Municipal Bond Fund had the following industry concentration
greater than 10% at March 31, 1997 (as a percentage of net assets):
<TABLE>
<S> <C>
Pollution Control Revenue/Industrial Development 18.4%
Revenue
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
107
<PAGE> 112
NATIONS FUNDS
Nations Texas Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
98.4%
TEXAS -- 80.5%
Alief, Texas,
Independent School
District, GO (PSFG
Insured):
$1,000,000 Zero Coupon
02/15/01+............ Aaa AAA $ 830,640
525,000 5.000% 02/15/17........ Aaa AAA 473,508
1,450,000 Alliance Airport
Authority Inc.,
Texas, Special
Facilities Revenue,
(American Airlines
Inc. Project), AMT,
7.000% 12/01/11...... Baa2 BB+ 1,587,721
750,000 Amarillo, Texas, Junior
College District, GO,
(FGIC Insured),
7.600% 02/15/06...... Aaa AAA 865,110
Arlington, Texas,
Independent School
District, GO, (PSFG
Insured):
1,060,000 Unrefunded,
5.800% 02/15/02........ Aaa NR 1,104,096
940,000 Pre-refunded,
5.800% 02/15/02...... Aaa NR 980,016
985,000 Bell County, Texas,
Health Facilities
Development,
Corporate Revenue
Refunding, (Central
Texas Pooled Health),
Series A,
4.750% 10/01/23...... NR AA- 988,388
1,000,000 Brazos, Texas, Higher
Education Authority
Inc., Revenue
Refunding, Senior
Lien, Series A-2,
AMT, (Guaranteed
Student Loans),
6.050% 06/01/03...... Aaa NR 1,047,490
500,000 Denton, Texas, Health
Facilities
Development,
Refunding, (AMBAC
Insured),
6.000% 05/01/05...... Aaa AAA 512,830
1,050,000 Garland, Texas,
Independent School
District, GO, (PSFG
Insured),
5.500% 02/15/00...... Aaa AAA 1,074,245
1,000,000 Granbury, Texas,
Independent School
District, GO, (PSFG
Insured),
5.000% 08/01/09...... Aaa AAA 960,770
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
TEXAS -- (CONTINUED)
Harris County, Texas,
Health Facilities
Development
Authority, Memorial
Hospital:
$1,000,000 6.700% 06/01/00........ A2 A- $ 1,060,000
1,000,000 Series A, (MBIA
Insured),
6.000% 06/01/10...... Aaa AAA 1,045,360
1,000,000 Harris County, Texas,
GO,
5.750% 10/01/03...... Aa3 AA 1,042,990
1,000,000 Lower Colorado River
Authority, Texas,
Revenue Refunding,
Series A, (AMBAC
Insured),
6.400% 01/01/01...... Aaa AAA 1,058,440
1,000,000 North Texas, Municipal
Water District,
Revenue Refunding,
(MBIA Insured),
5.000% 09/01/06...... Aaa AAA 988,140
1,000,000 Tarrant County, Texas,
GO,
6.750% 07/15/07...... NR AA+ 1,063,580
Texas A&M University:
1,000,000 Permanent Funding,
Series C,
5.250% 07/01/02...... Aaa AA+ 1,022,450
1,000,000 Revenue Financing
System, Refunding,
5.950% 05/15/05...... Aa AA 1,057,240
500,000 Texas State College,
Texas, Student Loan
Authority Revenue,
GO, AMT,
5.750% 08/01/11...... Aa AA 498,025
1,200,000 Texas State, Public
Finance Authority,
Building Revenue,
Series A, (AMBAC
Insured),
6.000% 10/01/06...... Aaa AAA 1,274,952
795,000 Texas State, Revenue
Refunding, Veterans
Housing Assistance,
Series B-4, AMT,
6.200% 12/01/14...... Aa AA 805,836
1,500,000 Travis County, Texas,
Limited Tax Revenue
Refunding, Series A,
(MBIA Insured),
5.750% 03/01/06...... Aaa AAA 1,544,564
-----------
22,886,391
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
108
<PAGE> 113
NATIONS FUNDS
Nations Texas Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
ARIZONA -- 3.8%
$1,000,000 Maricopa County,
Arizona, Unified
School District No.
69, (Paradise Valley
Refunding Project),
GO, (MBIA Insured),
6.350% 07/01/10...... Aaa AAA $ 1,092,950
-----------
FLORIDA -- 3.6%
1,000,000 Florida State, Housing
Finance Agency,
Refunding,
Multi-family Housing
Revenue, (Andover
Place Project),
Series E,
6.350% 05/01/26...... NR BBB+ 1,010,230
-----------
MAINE -- 3.5%
1,000,000 Bucksport, Maine, Solid
Waste Disposal
Revenue, (Champion
International
Corporation Project),
6.250% 05/01/10...... Baa1 BBB 1,008,570
-----------
PENNSYLVANIA -- 3.5%
1,000,000 Monroeville,
Pennsylvania,
Hospital Authority
Revenue,
5.000% 10/01/99...... Baa1 BBB+ 999,540
-----------
SOUTH DAKOTA -- 3.5%
1,000,000 South Dakota State,
Housing Development
Authority Revenue,
Homeownership
Mortgage Revenue,
Series A,
5.000% 05/01/01...... Aa1 AAA 1,007,300
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $27,589,273)........... 28,004,981
===========
<CAPTION>
VALUE
SHARES (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C>
MONEY MARKET FUND -- 1.2%
(Cost $329,000)
329,000 AIM Tax-Exempt Fund............ $ 329,000
===========
TOTAL INVESTMENTS
(Cost $27,918,273*)..................... 99.6% 28,333,981
OTHER ASSETS AND
LIABILITIES (NET)....................... 0.4 112,177
----- -----------
NET ASSETS................................ 100.0% $28,446,158
===== ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Yield to maturity is 4.447%.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Corporation
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PSFG Permanent School Funding Guaranty
</TABLE>
Nations Texas Intermediate Bond Fund had the following insurance concentrations
greater than 10% at March 31, 1997 (as a percentage of net assets):
<TABLE>
<S> <C>
AMBAC 10.0%
MBIA 16.4%
PSFG 19.1%
</TABLE>
Nations Texas Intermediate Municipal Bond Fund had the following industry
concentrations greater than 10% at March 31, 1997 (as a percentage of net
assets):
<TABLE>
<S> <C>
Hospital 12.5%
Education 12.7%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
109
<PAGE> 114
NATIONS FUNDS
Nations Texas Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
96.6%
TEXAS -- 77.9%
$ 500,000 Alief, Texas,
Independent School
District, GO, (PSFG
Insured),
5.000% 02/15/17..... Aaa AAA $ 450,960
500,000 Conroe, Texas,
Independent School
District Revenue,
Lot A, GO, (PSFG
Insured),
5.000% 02/01/11..... Aaa AAA 471,805
500,000 Corpus Christi, Texas,
Utilities System
Revenue, (MBIA
Insured),
5.200% 07/15/12..... Aaa AAA 479,145
500,000 Dallas County,
Texas, GO,
5.250% 08/15/14..... Aaa AAA 481,760
750,000 Dallas-Fort Worth,
Texas, Regional
Airport Revenue
Refunding, Series A,
(MBIA Insured),
6.000% 11/01/09..... Aaa AAA 779,078
500,000 Denison, Texas,
Hospital Authority
Revenue, (Texoma
Medical Center Inc.
Project),
5.450% 08/15/02..... NR BBB+ 497,670
500,000 Gulf Coast, Texas,
Waste Disposal
Authority Revenue
Refunding, (Houston
Light & Power
Company), Series A,
(MBIA Insured),
6.375% 04/01/12..... Aaa AAA 525,965
500,000 Harris County, Texas,
Health Facilities
Development
Authority, Hospital
Revenue Refunding,
(Texas Childrens
Hospital Project),
(MBIA Insured),
6.000% 06/01/10..... Aaa AAA 522,680
1,500,000 Irving, Texas,
Independent School
District, Capital
Appreciation
Refunding, GO, (PSFG
Insured),
Zero coupon
02/15/02+........... Aaa AAA 1,182,015
500,000 Laredo, Texas,
International Toll
Bridge Revenue
Refunding, (AMBAC
Insured),
5.200% 10/01/05..... Aaa AAA 504,100
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
TEXAS -- (CONTINUED)
$ 500,000 Plano, Texas,
Independent School
District, GO, (PSFG
Insured),
7.250% 02/15/04..... Aaa AAA $ 564,185
1,000,000 Red River Authority,
Texas, PCR, (Hoechst
Celanese Corporation
Project), AMT,
6.875% 04/01/17..... A2 A+ 1,065,150
585,000 Sherman, Texas,
Independent School
District, GO, (PSFG
Insured),
6.500% 02/15/20..... Aaa AAA 642,283
1,000,000 Tarrant County, Texas,
Health Facilities
Development
Corporation, Health
System Revenue,
(Harris Methodist
Health System),
6.000% 09/01/10..... A NR 1,029,650
500,000 Texas State College,
Texas, Student Loan
Authority Revenue,
GO, AMT,
5.750% 08/01/11..... Aa AA 498,025
375,000 Texas State, Revenue
Refunding, Veterans
Housing Assistance,
GO, Series C,
6.400% 12/01/09..... Aa AA 387,788
600,000 Texas State, Water
Development Board
Revenue, State
Revolving Fund,
Senior Lien,
6.400% 07/15/08..... Aa1 AAA 631,271
1,000,000 Trinity River
Authority, Texas,
PCR, (Texas
Instruments Inc.
Project),
6.200% 03/01/20..... NR A 989,090
500,000 University of Texas,
University Revenue
Financing, Series A,
5.200% 08/15/17..... Aa1 AA+ 467,265
500,000 Waller, Texas,
Consolidated
Independent School
District, GO, (PSFG
Insured),
5.250% 02/15/21..... Aaa NR 463,445
-----------
12,633,330
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
110
<PAGE> 115
NATIONS FUNDS
Nations Texas Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
ARIZONA -- 3.4%
$ 500,000 Maricopa County,
Arizona, Unified
School District No.
69, (Paradise Valley
Refunding Project),
GO, (MBIA Insured),
6.350% 07/01/10..... Aaa AAA $ 546,475
-----------
COLORADO -- 5.7%
1,500,000 Arapahoe County,
Colorado, Capital
Improvements Highway
Revenue, Series E,
Zero Coupon
08/31/05++.......... Baa NR 919,485
-----------
OHIO -- 6.6%
1,000,000 Lucas County, Ohio,
Hospital Revenue,
(Flower Hospital
Project),
6.125% 12/01/13..... NR BBB+ 1,075,040
-----------
PUERTO RICO -- 3.0%
500,000 Puerto Rico
Industrial, Medical
and Environmental
Agency, Pollution
Control Facilities,
Finance Authority
Revenue, Higher
Education, (Catholic
University Project),
Series A,
5.600% 12/01/07..... NR BBB- 485,130
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $15,114,591)............. 15,659,460
==========
<CAPTION>
VALUE
SHARES (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C>
MONEY MARKET FUND -- 2.7%
(Cost $442,000)
442,000 AIM Tax-Exempt Fund.......... $ 442,000
===========
TOTAL INVESTMENTS
(Cost $15,556,591*)..................... 99.3% 16,101,460
OTHER ASSETS AND
LIABILITIES (NET)....................... 0.7 108,493
----- -----------
NET ASSETS................................ 100.0% $16,209,953
===== ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Yield to maturity is 5.384%.
++ Yield to maturity is 6.500%.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
PSFG Permanent School Funding Guaranty
</TABLE>
Nations Texas Municipal Bond Fund had the following insurance concentrations
greater than 10% at March 31, 1997 (as a percentage of net assets):
MBIA 17.6%
PSFG 23.3%
Nations Texas Municipal Bond Fund had the following industry concentration
greater than 10% at March 31, 1997 (as a percentage of net assets):
<TABLE>
<S> <C>
Pollution Control Revenue/Industrial Development Revenue 12.7%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
111
<PAGE> 116
NATIONS FUNDS
Nations Virginia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
97.8%
VIRGINIA -- 96.4%
$2,000,000 Alexandria, Virginia,
Redevelopment and
Housing Authority,
Multi-family Housing
Revenue Mortgage,
Buckingham Village
Apartments,
Series A, AMT,
6.050% 07/01/16..... NR A $ 1,986,300
Arlington County,
Virginia, GO:
2,345,000 5.400% 08/01/02....... Aaa AAA 2,422,596
3,000,000 5.000% 07/15/03....... Aaa AAA 3,033,660
2,900,000 5.900% 12/01/03....... Aaa AAA 3,079,481
1,000,000 Series A,
Pre-refunded,
6.700% 06/01/99..... Aaa AAA 1,066,880
1,000,000 Arlington County,
Virginia, Industrial
Development
Authority, Hospital
Facilities Revenue,
Pre-refunded,
6.650% 09/01/01..... Aaa NR 1,090,850
3,455,000 Augusta County,
Virginia, Industrial
Development
Authority,
Pre-refunded,
7.000% 09/01/01..... A NR 3,804,335
2,000,000 Brunswick County,
Virginia, Industrial
Development
Authority,
Correctional
Facility Lease,
(MBIA Insured),
5.250% 07/01/04..... Aaa AAA 2,031,140
1,000,000 Charlottesville-
Albemarle, Virginia,
Airport Authority
Revenue Refunding,
AMT,
6.125% 12/01/09..... NR BBB 974,500
1,000,000 Chesapeake, Virginia,
GO,
5.700% 08/01/01..... Aa AA 1,040,310
1,525,000 Chesapeake, Virginia,
Public Improvement,
GO, (State Aid
Withholding
Insured),
5.000% 05/01/03..... Aa AA 1,536,071
6,195,000 Chesapeake, Virginia,
Revenue Refunding,
5.125% 12/01/05..... Aa AA 6,239,852
Chesterfield County,
Virginia, GO:
1,095,000 7.100% 03/01/00....... Aaa AA+ 1,166,985
1,000,000 Series A,
6.500% 01/15/01..... Aaa AA+ 1,065,290
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
VIRGINIA -- (CONTINUED)
Chesterfield County,
Virginia, GO --
(continued):
Series B:
$1,000,000 6.500% 01/01/02....... Aaa AA+ $ 1,075,740
2,120,000 Pre-refunded,
6.700% 01/01/11..... NR AA+ 2,299,034
2,000,000 Chesterfield County,
Virginia, Public
Improvement, GO,
5.900% 07/15/02..... Aaa AA+ 2,112,040
Chesterfield County,
Virginia, Water and
Sewer Authority
Revenue, Revenue
Bond:
1,000,000 6.200% 11/01/05....... Aa AA 1,070,030
Series A:
2,000,000 5.500% 11/01/00....... Aa AA 2,059,420
2,020,000 5.625% 11/01/01....... Aa AA 2,097,002
1,320,000 Covington-Allegheny
County, Virginia,
Industrial
Development
Authority, PCR,
(Westvaco
Corporation
Project),
5.900% 03/01/05..... A1 A 1,395,055
1,000,000 Fairfax County,
Virginia, Industrial
Development
Authority Revenue
Refunding, (Inova
Health Systems
Hospital Project),
6.100% 08/15/99..... Aa AA 1,039,210
3,500,000 Fairfax County,
Virginia, Public
Improvement, GO,
Series A,
4.900% 06/01/04..... Aaa AAA 3,499,755
3,135,000 Fairfax County,
Virginia, Water and
Sewer Authority
Revenue, (AMBAC
Insured),
5.100% 11/15/04..... Aaa AAA 3,156,475
1,330,000 Halifax County,
Virginia, Industrial
Development
Authority, Exempt
Facilities Revenue,
(Old Dominion
Electric Co-op
Project), AMT,
5.900% 12/01/02..... NR A+ 1,364,580
Hampton, Virginia,
Public Improvement,
GO:
1,000,000 6.500% 01/01/00....... Aa AA- 1,049,520
2,190,000 Series C,
4.750% 08/01/05..... Aa AA- 2,141,251
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
112
<PAGE> 117
NATIONS FUNDS
Nations Virginia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
VIRGINIA -- (CONTINUED)
Hampton Roads
Sanitation District,
Virginia, Sewer
Revenue Refunding:
$2,500,000 4.500% 10/01/02....... Aa AA $ 2,460,575
1,000,000 Pre-refunded,
7.100% 07/01/99..... Aaa AAA 1,076,400
Hanover County,
Virginia, Industrial
Development
Authority Revenue,
(MBIA Insured):
2,000,000 (Bon Secours Health
Systems Project),
5.500% 08/15/25..... Aaa AAA 1,864,320
5,000,000 (Memorial Regional
Medical Center
Project),
5.500% 08/15/25..... Aaa AAA 4,660,800
Henrico County,
Virginia, Industrial
Development
Authority Revenue:
2,105,000 Public Facilities
Lease Revenue,
7.500% 08/01/02..... Aa AA 2,351,096
3,500,000 Solid Waste,
(Browning-Ferris
Industries Inc.
Project),
5.300% 12/01/11..... A2 A 3,475,290
3,500,000 Henrico County,
Virginia, Public
Improvement
Authority,
4.700% 01/15/02..... Aaa AAA 3,500,665
1,500,000 Henrico County,
Virginia, Water and
Sewer Authority
Revenue,
Pre-refunded,
6.200% 05/01/02..... A1 AAA 1,555,815
1,110,000 Henry County,
Virginia, Public
Service Authority,
Water and Sewer
Authority Revenue,
(FGIC Insured),
5.500% 11/15/99..... Aaa AAA 1,139,315
1,915,000 James City County,
Virginia, GO, (FGIC
Insured),
5.000% 12/15/08..... Aaa AAA 1,873,368
1,000,000 Leesburg, Virginia,
Revenue Refunding,
5.500% 08/01/06..... A1 A 1,021,360
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
VIRGINIA -- (CONTINUED)
Loudoun County,
Virginia, Industrial
Development
Authority, Hospital
Revenue, (Loudoun
Hospital Center),
(FSA Insured):
$1,500,000 5.500% 06/01/08....... Aaa AAA $ 1,503,345
1,000,000 5.600% 06/01/09....... Aaa AAA 1,002,840
Loudoun County,
Virginia, Sanitation
Authority:
2,000,000 Refunding and
Improvement
Authority,
5.000% 10/01/02..... Aa AA- 2,019,140
1,000,000 Water and Sewer
Authority Revenue,
(FGIC Insured),
5.800% 01/01/01..... Aaa AAA 1,038,380
1,140,000 Lynchburg, Virginia,
Public Improvement,
GO,
5.400% 05/01/17..... Aa3 AA 1,100,134
5,000,000 Newport News,
Virginia, Public
Improvement, Series
B,
5.200% 11/01/04..... Aa AA- 5,068,550
Newport News,
Virginia, Water and
Sewer Authority
Revenue:
Series A:
1,020,000 5.500% 06/01/01....... Aa AA- 1,050,090
1,095,000 5.600% 06/01/02....... Aa AA- 1,134,081
1,000,000 Series B,
5.100% 11/01/03..... Aa AA- 1,010,540
1,000,000 Norfolk, Virginia,
Public Improvement,
GO, Series A,
5.900% 02/01/06..... Aa AA 1,039,340
2,250,000 Norfolk, Virginia,
Redevelopment and
Housing Authority,
Educational Facility
Revenue, (Tidewater
Community College
Campus),
5.875% 11/01/15..... Aa AA 2,208,735
2,000,000 Norfolk, Virginia,
Water Revenue, (MBIA
Insured),
5.700% 11/01/10..... Aaa AAA 2,031,020
Portsmouth, Virginia,
Public Improvement,
GO, Pre-refunded:
1,750,000 6.700% 08/01/03....... NR AA- 1,890,717
1,735,000 6.800% 08/01/06....... NR AA- 1,879,699
1,000,000 6.800% 08/01/09....... NR AA- 1,083,400
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
113
<PAGE> 118
NATIONS FUNDS
Nations Virginia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
VIRGINIA -- (CONTINUED)
Portsmouth, Virginia,
Refunding, GO:
$1,000,000 5.000% 08/01/02....... A AA- $ 1,008,780
1,000,000 5.250% 08/01/04....... A AA- 1,016,350
Prince William County,
Virginia, GO, Series
A:
3,500,000 4.900% 08/01/05....... Aa AA 3,471,440
1,465,000 6.200% 12/01/10....... Aa AA 1,525,050
Prince William County,
Virginia, Industrial
Development
Authority, Hospital
Revenue Refunding:
1,775,000 (Potomoc Hospital
Corporation
Project), (GO of
Hospital),
6.550% 10/01/05..... A NR 1,891,280
1,300,000 (Prince William
Hospital Project),
5.625% 04/01/12..... A NR 1,255,956
1,000,000 Prince William County,
Virginia, Park
Authority Revenue,
6.300% 10/15/07..... NR A- 1,071,000
1,000,000 Richmond, Virginia,
Metropolitan
Expressway
Authority, Revenue
Refunding, Series A,
(FGIC Insured),
5.650% 07/15/00..... Aaa AAA 1,031,330
Richmond, Virginia,
Public Improvement,
GO:
Series A:
2,300,000 6.500% 01/15/02....... A1 AA 2,460,241
Pre-refunded:
1,000,000 6.700% 01/15/01....... Aaa AA 1,086,520
1,000,000 6.200% 01/15/03....... Aaa AA 1,069,560
2,945,000 Series B,
5.500% 07/15/13..... A1 AA 2,858,446
Roanoke, Virginia,
Public Improvement,
GO, Series B:
2,000,000 5.800% 08/01/99....... Aa AA 2,060,420
1,000,000 5.800% 08/01/00....... Aa AA 1,036,310
3,295,000 6.000% 08/01/03....... Aa AA 3,446,768
600,000 Roanoke, Virginia,
Redevelopment and
Housing Authority,
Multi-family Housing
Revenue Refunding,
United Dominion-
Laurel Ridge,
6.625% 05/01/23..... NR BBB+ 621,780
5,000,000 Southeastern Public
Service Authority,
Virginia, Series A,
(MBIA Insured),
5.100% 07/01/08..... Aaa AAA 4,954,450
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
VIRGINIA -- (CONTINUED)
Spotsylvania County,
Virginia, Public
Improvement, GO:
$1,580,000 5.200% 07/15/01....... A1 A+ $ 1,609,025
2,320,000 5.875% 07/15/09....... A1 A+ 2,402,870
2,535,000 Staunton, Virginia,
Industrial
Development
Authority,
Educational
Facilities Revenue,
(Mary Baldwin
College Project),
6.600% 11/01/14..... NR NR 2,508,839
Suffolk, Virginia,
Refunding and
Improvement, GO:
1,110,000 5.400% 08/01/04....... A1 A 1,134,165
1,500,000 5.750% 08/01/08....... A1 A 1,539,795
2,000,000 University of
Virginia, Hospital
Revenue Bond,
6.000% 06/01/13..... Aa AA 2,003,820
Upper Occoquan,
Virginia, Sewer
Authority, Regional
Sewer Revenue, (MBIA
Insured):
2,625,000 5.850% 07/01/99....... Aaa AAA 2,707,189
2,000,000 6.250% 07/01/05....... Aaa AAA 2,150,020
1,000,000 Virginia Beach,
Virginia,
Development
Authority
Facilities, Sentara
Bayside Hospital,
5.800% 11/01/99..... Aa AA 1,027,160
Virginia Beach,
Virginia, GO:
1,000,000 Pre-refunded,
6.950% 06/01/06..... NR NR 1,082,360
Refunding:
1,000,000 5.550% 02/01/01....... Aa AA 1,030,140
2,300,000 5.400% 07/15/08....... Aa AA 2,343,033
Series A:
1,000,000 6.900% 10/01/00....... Aa AA 1,072,820
1,000,000 6.850% 06/01/01....... Aa AA 1,080,370
2,350,000 Virginia Biotechnology
Research Park
Authority, Lease
Revenue, (Biotech
Two Project),
5.750% 09/01/05..... Aa AA 2,458,265
2,000,000 Virginia College
Building Authority,
Educational
Facilities Revenue,
University of
Richmond,
5.625% 11/01/02..... NR AA- 2,069,180
1,340,000 Virginia Port
Authority,
Commonwealth Port
Fund Revenue, AMT,
5.750% 07/01/02..... Aa A+ 1,382,666
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
114
<PAGE> 119
NATIONS FUNDS
Nations Virginia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
VIRGINIA -- (CONTINUED)
Virginia State, Higher
Educational
Institutions
Revenue, GO:
$1,175,000 6.000% 06/01/01....... Aaa AAA $ 1,230,014
1,000,000 Series A,
Pre-refunded,
6.600% 06/01/07..... Aaa AAA 1,064,830
1,695,000 Virginia State,
Housing Development
Authority,
Commonwealth
Mortgage, Series D,
Sub-Series D-3,
6.100% 01/01/15..... Aa1 AA+ 1,713,730
Virginia State, Public
Building Authority,
Series A:
1,970,000 Building Revenue
Refunding,
5.700% 08/01/00..... Aa AA 2,034,892
2,000,000 Correctional
Facilities,
5.800% 08/01/02..... Aa AA 2,091,060
Virginia State, Public
School Authority
Revenue:
4,275,000 5.750% 01/01/00....... Aa AA 4,405,858
2,500,000 5.000% 01/01/04....... Aa AA 2,501,225
Series A:
1,000,000 6.000% 01/01/01....... Aa AA 1,040,980
2,195,000 5.400% 01/01/08....... Aa AA 2,207,226
1,000,000 6.500% 08/01/08....... Aa AA 1,068,600
1,480,000 Series B,
5.100% 01/01/05..... Aa AA 1,481,761
3,500,000 Virginia State,
Refunding, GO,
Series B,
4.800% 06/01/07..... Aaa AAA 3,417,260
1,000,000 Virginia State
Residential
Authority, Sewer
System Revenue,
(Hopewell Regional
Wastewater
Facility), Series A,
6.000% 10/01/15..... NR A 993,380
Virginia State
Residential
Authority, Water and
Sewer System
Revenue, Series A:
1,000,000 5.500% 10/01/00....... NR AA 1,025,870
1,020,000 (Suffolk Project),
5.500% 04/01/17..... NR AA 984,055
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
VIRGINIA -- (CONTINUED)
Virginia State
Transportation Board
Authority, Contract
Revenue:
$2,105,000 5.100% 05/15/05....... Aa AA $ 2,107,652
3,000,000 Project A,
4.900% 05/15/03..... Aa AA 2,996,700
3,150,000 Route 28,
6.000% 04/01/02..... Aa AA 3,313,422
5,390,000 Route 58, Series A,
5.500% 05/15/09..... Aa AA 5,414,147
2,470,000 Virginia State, Water
and Sewer Revenue
Authority, Revenue
Bond,
5.150% 10/01/07..... NR AA 2,460,095
Washington County,
Virginia, Industrial
Development
Authority, Hospital
Facility Revenue
Refunding, First
Mortgage, (Johnston
Memorial Hospital):
1,000,000 5.625% 07/01/02....... A NR 1,018,300
1,000,000 6.000% 07/01/14....... A NR 989,310
1,500,000 Winchester, Virginia,
Industrial
Development
Authority Revenue,
(AMBAC Insured),
6.150% 01/01/99..... Aaa.. AAA 1,544,055
-----------
213,508,197
-----------
ALASKA -- 0.4%
1,000,000 Alaska State, Student
Loan Corporation,
Student Loan
Revenue,
Series A, AMT,
(AMBAC Insured),
5.250% 07/01/03..... Aaa.. AAA 998,860
-----------
DISTRICT OF COLUMBIA -- 0.5%
1,000,000 Washington, D.C.,
Metropolitan
Airports Authority,
Virginia General
Airport Revenue,
Series A, AMT, (MBIA
Insured),
5.200% 10/01/02..... Aaa.. AAA 1,014,790
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
115
<PAGE> 120
NATIONS FUNDS
Nations Virginia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
SOUTH CAROLINA -- 0.5%
$1,000,000 Berkeley County, South
Carolina, Pollution
Control Facilities
Revenue Refunding,
(Alumax Inc.
Project), (Royal
Bank
of Canada LOC),
3.400% 12/01/08+.... Aa2.. NR $ 1,000,000
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $210,884,739).......... 216,521,847
===========
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- -------------------------------------------------------------------
<S> <C> <C>
MONEY MARKET FUND -- 1.3%
(Cost $2,911,000)
2,911,000 AIM Tax-Exempt Fund........... $ 2,911,000
===========
TOTAL INVESTMENTS
(Cost $213,795,739*)................... 99.1% 219,432,847
OTHER ASSETS AND
LIABILITIES (NET)...................... 0.9 2,037,098
---- ------------
NET ASSETS............................... 100.0% $221,469,945
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Variable rate note. The interest rate shown reflects the rate in effect at
March 31, 1997.
<TABLE>
<S> <C>
ABBREVIATIONS:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Corporation
FSA Financial Security Assurance
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
116
<PAGE> 121
NATIONS FUNDS
Nations Virginia Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
95.7%
VIRGINIA -- 88.5%
$1,000,000 Augusta County,
Virginia, Industrial
Development
Authority, Hospital
Revenue Refunding,
(Augusta Hospital
Corporation), (AMBAC
Insured),
5.500% 09/01/15...... Aaa AAA $ 955,380
475,000 Chesapeake, Virginia,
Industrial
Development Authority
Revenue Refunding,
Port Facilities,
(Cargill
Inc. Project),
5.875% 03/01/13...... Aa3 AA- 481,294
500,000 Covington-Allegheny
County, Virginia,
Industrial
Development
Authority, PCR,
(Westvaco Corporation
Project),
6.650% 09/01/18...... A1 A 536,475
500,000 Fairfax County,
Virginia, Industrial
Development Authority
Revenue Refunding,
(Inova Health Systems
Hospital Project),
5.500% 08/15/10...... Aa AA 498,095
1,000,000 Fairfax County,
Virginia, Sewer
Revenue Refunding,
(AMBAC Insured),
5.500% 11/15/13...... Aaa AAA 983,900
800,000 Giles County, Virginia,
Industrial
Development
Authority, Revenue
Exempt Facilities,
(Hoechst Celanese
Corporation Project),
AMT,
5.950% 12/01/25...... A2 A+ 802,112
400,000 Hampton, Virginia,
Museum Revenue
Refunding,
5.250% 01/01/09...... NR A- 385,032
500,000 Hanover County,
Virginia, Industrial
Development
Authority, (Bon
Secours Health System
Projects), (MBIA
Insured),
5.500% 08/15/25...... Aaa AAA 466,080
500,000 Henrico County,
Virginia, Industrial
Development Authority
Revenue, Public
Facilities Lease
Revenue,
7.000% 08/01/13...... Aa AA 555,200
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
VIRGINIA -- (CONTINUED)
$ 500,000 Henry County,
Virginia, GO,
5.750% 07/15/07...... A A $ 518,090
700,000 James City County,
Virginia, Public
Improvement, GO,
(FGIC Insured),
5.250% 12/15/14...... Aaa AAA 671,125
Loudoun County,
Virginia, Industrial
Development
Authority, Hospital
Revenue, (Loudoun
Hospital Center),
(FSA Insured):
765,000 5.600% 06/01/09........ Aaa AAA 767,172
500,000 5.800% 06/01/20........ Aaa AAA 487,525
500,000 Peninsula Ports
Authority, Virginia,
Health Systems
Revenue Refunding,
(Riverside Health
Systems Project),
Series A,
6.625% 07/01/18...... Aa AA- 522,870
500,000 Pittsylvania County,
Virginia, Public
Improvement, GO,
5.850% 07/01/08...... A A 518,300
500,000 Poquoson, Virginia, GO,
Series A,
5.375% 01/01/16...... A1 A 475,310
1,000,000 Prince William County,
Virginia, Industrial
Development
Authority, Lease
Revenue, (ATCC
Project),
6.000% 02/01/14...... A NR 1,005,680
500,000 Prince William County,
Virginia, Park
Authority Revenue,
6.875% 10/15/16...... NR A- 530,665
800,000 Richmond, Virginia,
Metropolitan
Expressway Authority,
Revenue Refunding,
Series B, (FGIC
Insured),
6.250% 07/15/22...... Aaa AAA 820,112
1,390,000 Rivanna, Virginia,
Regional Water and
Sewer Authority,
Regional Water and
Sewer Systems Revenue
Refunding,
6.450% 10/01/12...... Aa A+ 1,459,806
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
117
<PAGE> 122
NATIONS FUNDS
Nations Virginia Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
VIRGINIA -- (CONTINUED)
$1,000,000 Staunton, Virginia,
Industrial
Development
Authority,
Educational
Facilities Revenue,
(Mary Baldwin College
Project),
6.600% 11/01/14...... NR NR $ 989,680
500,000 Upper Occoquan,
Virginia, Sewer
Authority, Regional
Sewer Revenue, Series
A, (MBIA Insured),
5.000% 07/01/25...... Aaa AAA 441,555
500,000 Virginia Beach,
Virginia, Public
Improvement
Refunding, GO,
5.750% 11/01/08...... Aa AA 518,230
640,000 Virginia State, Public
School Authority
Revenue, Series A,
6.125% 08/01/11...... Aa AA 663,168
750,000 Virginia State,
Resource Authority,
Sewer Systems
Revenue, (Hopewell
Regional Wastewater
Facility), Series A,
AMT,
6.000% 10/01/15...... NR AA 745,035
500,000 Virginia State,
Resource Authority,
Water and Sewer
Systems Revenue,
(Fauquier County
Water and Sanitation
Authority), Series C,
6.125% 05/01/14...... NR AA 516,665
800,000 West Point, Virginia,
Industrial
Development
Authority, Solid
Waste Disposal
Revenue, (Chesapeake
Corporation Project),
Series A, AMT,
6.375% 03/01/19...... Baa3 BBB 809,592
-----------
18,124,148
-----------
OHIO -- 2.5%
500,000 Dayton, Ohio, Special
Facilities Revenue,
(Emery Air Freight
Corporation Project),
Series D,
6.200% 10/01/09...... NR BBB- 503,895
-----------
<CAPTION>
RATING
PRINCIPAL (UNAUDITED) VALUE
AMOUNT MOODY'S S&P (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL
BONDS AND
NOTES --
(CONTINUED)
PUERTO RICO -- 4.7%
$ 875,000 Puerto Rico, Electric
Power Authority,
Power Revenue
Refunding, Series Y,
(MBIA Insured),
6.500% 07/01/06...... Aaa AAA $ 962,999
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $19,245,295)............ 19,591,042
==========
</TABLE>
<TABLE>
<CAPTION>
SHARES
- -----------
<S> <C> <C>
MONEY MARKET FUND -- 3.0%
(Cost $606,000)
606,000 AIM Tax-Exempt Fund............ 606,000
===========
TOTAL INVESTMENTS
(Cost $19,851,295*)..................... 98.7 20,197,042
OTHER ASSETS AND
LIABILITIES (NET)....................... 1.3 272,081
---- -----------
NET ASSETS................................ 100.0% $20,469,123
===== ===========
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Corporation
FSA Financial Security Assurance
GO General Obligation
MBIA Municipal Bond Investors Assurance
NR Not Rated
PCR Pollution Control Revenue
</TABLE>
Nations Virginia Municipal Bond Fund had the following industry concentrations
greater than 10% at March 31, 1997 (as a percentage of net assets):
<TABLE>
<S> <C>
Pollution Control Revenue/Industrial Development 22.9%
Revenue
Water Revenue 13.3%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
118
<PAGE> 123
[THIS PAGE INTENTIONALLY LEFT BLANK]
119
<PAGE> 124
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS
NATIONS NATIONS FLORIDA
SHORT-TERM INTERMEDIATE NATIONS INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
INCOME FUND BOND FUND INCOME FUND BOND FUND
-------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (Note 1),
See accompanying schedules................. $80,757,453 $113,741,218 $107,509,423 $56,959,006
Cash......................................... 214 761 179 284
Interest receivable.......................... 1,204,759 1,690,384 1,821,251 1,029,688
Dividends receivable......................... 3,634 18,974 5,757 3,035
Receivable for Fund shares sold.............. 1,642,744 566,227 84,070 404,062
Receivable for investment securities sold.... -- 1,354,263 -- --
Unamortized organization costs (Note 6)...... 12,783 12,211 -- 4,036
Other assets................................. 4,150 14,551 2,455 2,000
----------- ------------ ------------ -----------
Total Assets............................... 83,625,737 117,398,589 109,423,135 58,402,111
----------- ------------ ------------ -----------
LIABILITIES:
Payable for Fund shares redeemed............. 45,472 182,771 261,110 480,141
Payable for investment securities
purchased.................................. 2,060,258 4,205,621 -- --
Investment advisory fee payable (Note 2)..... 6,578 20,957 28,545 10,194
Administration fee payable (Note 2).......... 5,399 7,552 7,442 3,919
Shareholder servicing and distribution fees
payable (Note 3)........................... 6,667 1,281 15,308 1,985
Transfer agent fees payable (Note 2)......... 9,724 15,955 4,515 5,560
Custodian fees payable (Note 2).............. 3,030 3,953 3,608 2,493
Dividends payable............................ 228,420 416,035 396,285 213,306
Accrued Trustees' fees and expenses
(Note 2)................................... 4,041 5,439 5,928 2,977
Accrued expenses and other payables.......... 32,618 29,768 37,362 31,498
----------- ------------ ------------ -----------
Total Liabilities.......................... 2,402,207 4,889,332 760,103 752,073
----------- ------------ ------------ -----------
NET ASSETS................................... $81,223,530 $112,509,257 $108,663,032 $57,650,038
=========== ============ ============ ===========
Investments, at cost......................... $80,267,655 $112,215,952 $102,917,398 $55,964,135
=========== ============ ============ ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
120
<PAGE> 125
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS
NATIONS GEORGIA NATIONS
FLORIDA INTERMEDIATE GEORGIA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (Note 1),
See accompanying schedules................. $37,674,583 $61,241,772 $15,893,565
Cash......................................... 165 333 567
Interest receivable.......................... 798,758 899,708 246,445
Dividends receivable......................... 267 4,164 2,148
Receivable for Fund shares sold.............. 28,483 1,342 10,935
Receivable for investment securities sold.... -- -- --
Unamortized organization costs (Note 6)...... 833 1,255 833
Other assets................................. 2,000 2,050 2,000
----------- ----------- -----------
Total Assets............................... 38,505,089 62,150,624 16,156,493
----------- ----------- -----------
LIABILITIES:
Payable for Fund shares redeemed............. 49,115 30,666 75,028
Payable for investment securities
purchased.................................. -- -- --
Investment advisory fee payable (Note 2)..... 10,065 12,325 2,358
Administration fee payable (Note 2).......... 2,635 4,181 1,104
Shareholder servicing and distribution fees
payable (Note 3)........................... 15,182 5,612 6,862
Transfer agent fees payable (Note 2)......... 1,786 9,061 2,732
Custodian fees payable (Note 2).............. 2,099 2,620 1,603
Dividends payable............................ 118,718 195,860 39,688
Accrued Trustees' fees and expenses
(Note 2)................................... 2,041 4,570 851
Accrued expenses and other payables.......... 29,575 22,135 14,748
----------- ----------- -----------
Total Liabilities.......................... 231,216 287,030 144,974
----------- ----------- -----------
NET ASSETS................................... $38,273,873 $61,863,594 $16,011,519
=========== =========== ===========
Investments, at cost......................... $36,885,370 $59,958,273 $15,774,646
=========== =========== ===========
<CAPTION>
NATIONS NATIONS
MARYLAND NATIONS NORTH CAROLINA
INTERMEDIATE MARYLAND INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-----------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (Note 1),
See accompanying schedules................. $84,004,408 $13,829,204 $38,417,154
Cash......................................... 549 314 748
Interest receivable.......................... 1,335,716 222,646 545,178
Dividends receivable......................... 4,083 1,395 2,306
Receivable for Fund shares sold.............. 87,053 106,171 107,556
Receivable for investment securities sold.... -- -- 924,123
Unamortized organization costs (Note 6)...... -- 1,308 1,679
Other assets................................. 15,278 2,250 2,000
----------- ----------- -----------
Total Assets............................... 85,447,087 14,163,288 40,000,744
----------- ----------- -----------
LIABILITIES:
Payable for Fund shares redeemed............. 253,957 -- 110,501
Payable for investment securities
purchased.................................. -- -- --
Investment advisory fee payable (Note 2)..... 17,000 962 6,703
Administration fee payable (Note 2).......... 5,811 963 2,712
Shareholder servicing and distribution fees
payable (Note 3)........................... 5,211 5,260 4,447
Transfer agent fees payable (Note 2)......... 1,129 1,890 1,164
Custodian fees payable (Note 2).............. 2,993 1,543 2,090
Dividends payable............................ 267,382 26,354 110,478
Accrued Trustees' fees and expenses
(Note 2)................................... 3,952 735 2,060
Accrued expenses and other payables.......... 37,241 18,544 21,785
----------- ----------- -----------
Total Liabilities.......................... 594,676 56,251 261,940
----------- ----------- -----------
NET ASSETS................................... $84,852,411 $14,107,037 $39,738,804
=========== =========== ===========
Investments, at cost......................... $82,637,869 $13,600,157 $37,353,905
=========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
121
<PAGE> 126
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS
NATIONS SOUTH CAROLINA NATIONS
NORTH CAROLINA INTERMEDIATE SOUTH CAROLINA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-----------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (Note 1),
See accompanying schedules................................ $ 27,237,378 $ 69,463,466 $ 18,017,082
Cash........................................................ 386 683 42
Interest receivable......................................... 402,464 1,050,627 326,534
Dividends receivable........................................ 2,933 1,337 130
Receivable for Fund shares sold............................. 12,046 42,201 87
Receivable for investment securities sold................... -- -- --
Unamortized organization costs (Note 6)..................... 834 2,776 992
Other assets................................................ 1,999 2,050 2,088
-------------- ------------- -------------
Total Assets.............................................. 27,658,040 70,563,140 18,346,955
-------------- ------------- -------------
LIABILITIES:
Payable for Fund shares redeemed............................ -- 57,781 --
Payable for investment securities purchased................. -- -- --
Investment advisory fee payable (Note 2).................... 6,318 12,890 3,173
Administration fee payable (Note 2)......................... 1,904 4,812 1,248
Shareholder servicing and distribution fees payable
(Note 3).................................................. 14,483 7,151 8,482
Transfer agent fees payable (Note 2)........................ 1,124 2,189 2,101
Custodian fees payable (Note 2)............................. 1,828 2,798 1,576
Dividends payable........................................... 38,973 229,670 40,196
Accrued Trustees' fees and expenses (Note 2)................ 1,531 3,738 926
Accrued expenses and other payables......................... 22,550 32,033 15,167
-------------- ------------- -------------
Total Liabilities......................................... 88,711 353,062 72,869
-------------- ------------- -------------
NET ASSETS.................................................. $ 27,569,329 $ 70,210,078 $ 18,274,086
============= ============= =============
Investments, at cost........................................ $ 26,674,578 $ 68,208,259 $ 17,873,002
============= ============= =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
122
<PAGE> 127
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS NATIONS
TENNESSEE NATIONS TEXAS
INTERMEDIATE TENNESSEE INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-----------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (Note 1),
See accompanying schedules................................ $19,156,514 $9,268,426 $28,333,981
Cash........................................................ 69 390 52
Interest receivable......................................... 287,400 146,001 433,963
Dividends receivable........................................ 2,817 1,402 267
Receivable for Fund shares sold............................. -- 23 20,498
Receivable for investment securities sold................... -- -- --
Unamortized organization costs (Note 6)..................... 2,106 1,338 932
Other assets................................................ 2,000 2,150 2,000
---------- ---------- ----------
Total Assets.............................................. 19,450,906 9,419,730 28,791,693
---------- ---------- ----------
LIABILITIES:
Payable for Fund shares redeemed............................ -- -- 204,976
Payable for investment securities purchased................. 619,997 413,332 --
Investment advisory fee payable (Note 2).................... 1,154 -- 3,845
Administration fee payable (Note 2)......................... 1,283 615 1,971
Shareholder servicing and distribution fees payable
(Note 3).................................................. 2,679 3,613 1,291
Transfer agent fees payable (Note 2)........................ 1,794 2,117 653
Custodian fees payable (Note 2)............................. 1,531 1,399 1,851
Dividends payable........................................... 41,373 15,304 106,506
Accrued Trustees' fees and expenses (Note 2)................ 988 458 1,520
Accrued expenses and other payables......................... 19,312 12,832 22,922
---------- ---------- ----------
Total Liabilities......................................... 690,111 449,670 345,535
---------- ---------- ----------
NET ASSETS.................................................. $18,760,795 $8,970,060 $28,446,158
=========== ========== ===========
Investments, at cost........................................ $18,875,070 $9,073,005 $27,918,273
=========== ========== ===========
<CAPTION>
NATIONS
NATIONS VIRGINIA NATIONS
TEXAS INTERMEDIATE VIRGINIA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-------------------------------------------
<C> <C> <C>
ASSETS:
Investments, at value (Note 1),
See accompanying schedules................................ $16,101,460 $219,432,847 $20,197,042
Cash........................................................ 510 369 140
Interest receivable......................................... 200,371 3,399,166 342,934
Dividends receivable........................................ 285 6,865 1,239
Receivable for Fund shares sold............................. 12,511 125,388 11,995
Receivable for investment securities sold................... 467,008 -- --
Unamortized organization costs (Note 6)..................... 1,793 -- 833
Other assets................................................ 2,155 2,300 2,000
---------- ----------- -----------
Total Assets.............................................. 16,786,093 222,966,935 20,556,183
---------- ----------- -----------
LIABILITIES:
Payable for Fund shares redeemed............................ 2,228 650,718 10,722
Payable for investment securities purchased................. 501,741 -- --
Investment advisory fee payable (Note 2).................... 1,894 51,176 3,227
Administration fee payable (Note 2)......................... 1,115 15,126 1,391
Shareholder servicing and distribution fees payable
(Note 3).................................................. 6,894 16,656 8,295
Transfer agent fees payable (Note 2)........................ 603 -- 1,825
Custodian fees payable (Note 2)............................. 1,586 6,230 1,678
Dividends payable........................................... 40,160 687,115 43,243
Accrued Trustees' fees and expenses (Note 2)................ 871 12,129 1,076
Accrued expenses and other payables......................... 19,048 57,840 15,603
---------- ----------- -----------
Total Liabilities......................................... 576,140 1,496,990 87,060
---------- ----------- -----------
NET ASSETS.................................................. $16,209,953 $221,469,945 $20,469,123
=========== ============ ===========
Investments, at cost........................................ $15,556,591 $213,795,739 $19,851,295
=========== ============ ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
123
<PAGE> 128
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS
NATIONS NATIONS FLORIDA
SHORT-TERM INTERMEDIATE NATIONS INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
INCOME FUND BOND FUND INCOME FUND BOND FUND
-------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSETS CONSIST OF:
Undistributed net investment income.......... $ 947 $ 60,630 $ 103,572 $ --
Accumulated net realized loss on investments
sold....................................... (647,102) (143,415) (3,308,334) (1,000,441)
Net unrealized appreciation of investments... 489,798 1,525,266 4,592,025 994,871
Paid-in capital.............................. 81,379,887 111,066,776 107,275,769 57,655,608
----------- ------------ ------------ -----------
$81,223,530 $112,509,257 $108,663,032 $57,650,038
=========== ============ ============ ===========
NET ASSETS:
Primary A Shares............................. $61,071,865 $108,204,471 $ 77,260,259 $51,748,415
=========== ============ ============ ===========
Investor A Shares............................ $ 8,416,962 $ 2,067,251 $ 15,075,244 $ 2,141,601
=========== ============ ============ ===========
Investor C Shares............................ $ 1,079,737 $ 756,111 $ 1,712,823 $ 271,625
=========== ============ ============ ===========
Investor N Shares............................ $10,654,966 $ 1,481,424 $ 14,614,706 $ 3,488,397
=========== ============ ============ ===========
SHARES OUTSTANDING:
Primary A Shares............................. 6,135,774 10,813,739 7,093,827 4,976,396
=========== ============ ============ ===========
Investor A Shares............................ 845,653 206,602 1,384,162 205,919
=========== ============ ============ ===========
Investor C Shares............................ 108,477 75,561 157,265 26,121
=========== ============ ============ ===========
Investor N Shares............................ 1,070,468 148,049 1,341,861 335,462
=========== ============ ============ ===========
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share............................ $9.95 $10.01 $10.89 $10.40
===== ====== ====== ======
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share............................ $9.95 $10.01 $10.89 $10.40
===== ====== ====== ======
INVESTOR C SHARES:
Net asset value and offering price per
share*..................................... $9.95 $10.01 $10.89 $10.40
===== ====== ====== ======
INVESTOR N SHARES:
Net asset value, offering and redemption
price per share............................ $9.95 $10.01 $10.89 $10.40
===== ====== ====== ======
</TABLE>
- ---------------
* Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
124
<PAGE> 129
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS NATIONS
NATIONS GEORGIA NATIONS MARYLAND
FLORIDA INTERMEDIATE GEORGIA INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND BOND FUND
------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSETS CONSIST OF:
Undistributed net investment income.......... $ 17,978 $ 9,933 $ 8,172 $ 28,863
Accumulated net realized loss on investments
sold....................................... (1,132,763) (278,109) (360,268) (983,734)
Net unrealized appreciation of investments... 789,213 1,283,499 118,919 1,366,539
Paid-in capital.............................. 38,599,445 60,848,271 16,244,696 84,440,743
----------- ----------- ----------- -----------
$38,273,873 $61,863,594 $16,011,519 $84,852,411
=========== =========== =========== ===========
NET ASSETS:
Primary A Shares............................. $16,702,171 $43,469,553 $ 5,549,537 $63,548,850
=========== =========== =========== ===========
Investor A Shares............................ $ 1,781,073 $ 8,810,001 $ 207,652 $14,988,068
=========== =========== =========== ===========
Investor C Shares............................ $ 39,669 $ 1,982,564 $ 71,849 $ 2,016,851
=========== =========== =========== ===========
Investor N Shares............................ $19,750,960 $ 7,601,476 $10,182,481 $ 4,298,642
=========== =========== =========== ===========
SHARES OUTSTANDING:
Primary A Shares............................. 1,762,734 4,109,063 584,215 5,940,466
=========== =========== =========== ===========
Investor A Shares............................ 187,976 832,796 21,861 1,401,059
=========== =========== =========== ===========
Investor C Shares............................ 4,186 187,408 7,564 188,531
=========== =========== =========== ===========
Investor N Shares............................ 2,084,466 718,561 1,071,983 401,836
=========== =========== =========== ===========
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share............................ $9.48 $10.58 $9.50 $10.70
===== ====== ===== ======
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share............................ $9.48 $10.58 $9.50 $10.70
===== ====== ===== ======
INVESTOR C SHARES:
Net asset value and offering price per
share*..................................... $9.48 $10.58 $9.50 $10.70
===== ====== ===== ======
INVESTOR N SHARES:
Net asset value, offering and redemption
price per share............................ $9.48 $10.58 $9.50 $10.70
===== ====== ===== ======
</TABLE>
<TABLE>
<CAPTION>
NATIONS
NATIONS NORTH CAROLINA
MARYLAND INTERMEDIATE
MUNICIPAL MUNICIPAL
BOND FUND BOND FUND
-----------------------------
<S> <C> <C>
NET ASSETS CONSIST OF:
Undistributed net investment income.......... $ 6,677 $ 10,964
Accumulated net realized loss on investments
sold....................................... (85,974) (347,164)
Net unrealized appreciation of investments... 229,047 1,063,249
Paid-in capital.............................. 13,957,287 39,011,755
----------- -------------
$14,107,037 $39,738,804
=========== =============
NET ASSETS:
Primary A Shares............................. $ 4,596,162 $25,855,185
=========== =============
Investor A Shares............................ $ 1,409,406 $ 5,723,156
=========== =============
Investor C Shares............................ $ 2,494 $ 1,364,368
=========== =============
Investor N Shares............................ $ 8,098,975 $ 6,796,095
=========== =============
SHARES OUTSTANDING:
Primary A Shares............................. 488,317 2,500,224
=========== =============
Investor A Shares............................ 149,742 553,439
=========== =============
Investor C Shares............................ 265 131,936
=========== =============
Investor N Shares............................ 860,479 657,191
=========== =============
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share............................ $9.41 $10.34
===== ======
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share............................ $9.41 $10.34
===== ======
INVESTOR C SHARES:
Net asset value and offering price per
share*..................................... $9.41 $10.34
===== ======
INVESTOR N SHARES:
Net asset value, offering and redemption
price per share............................ $9.41 $10.34
===== ======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
125
<PAGE> 130
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS
NATIONS SOUTH NATIONS
NORTH CAROLINA SOUTH
CAROLINA INTERMEDIATE CAROLINA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-----------------------------------------
<S> <C> <C> <C>
NET ASSETS CONSIST OF:
Undistributed net investment income............................ $ 24,024 $ 3,934 $ 7,728
Accumulated net realized gain/(loss) on investments sold....... (990,988) (223,578) 15,186
Net unrealized appreciation of investments..................... 562,800 1,255,207 144,080
Paid-in capital................................................ 27,973,493 69,174,515 18,107,092
----------- ----------- -----------
$27,569,329 $70,210,078 $18,274,086
=========== =========== ===========
NET ASSETS:
Primary A Shares............................................... $ 3,094,558 $48,917,770 $ 5,112,666
=========== =========== ===========
Investor A Shares.............................................. $ 593,764 $10,465,250 $ 810,672
=========== =========== ===========
Investor C Shares.............................................. $ 18,194 $ 5,088,821 $ 247,214
=========== =========== ===========
Investor N Shares.............................................. $23,862,813 $ 5,738,237 $12,103,534
=========== =========== ===========
SHARES OUTSTANDING:
Primary A Shares............................................... 326,745 4,659,641 522,423
=========== =========== ===========
Investor A Shares.............................................. 62,697 996,862 82,837
=========== =========== ===========
Investor C Shares.............................................. 1,921 484,726 25,261
=========== =========== ===========
Investor N Shares.............................................. 2,519,716 546,611 1,236,767
=========== =========== ===========
PRIMARY A SHARES:
Net asset value, offering and redemption price per share....... $9.47 $10.50 $9.79
===== ====== =====
INVESTOR A SHARES:
Net asset value, offering and redemption price per share....... $9.47 $10.50 $9.79
===== ====== =====
INVESTOR C SHARES:
Net asset value and offering price per share*.................. $9.47 $10.50 $9.79
===== ====== =====
INVESTOR N SHARES:
Net asset value, offering and redemption price per share....... $9.47 $10.50 $9.79
===== ====== =====
</TABLE>
- ---------------
* Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
126
<PAGE> 131
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS NATIONS
TENNESSEE NATIONS TEXAS
INTERMEDIATE TENNESSEE INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-----------------------------------------
<S> <C> <C> <C>
NET ASSETS CONSIST OF:
Undistributed net investment income............................ $ 1,693 $ 5,896 $ 1,137
Accumulated net realized gain/(loss) on investments sold....... (308,661) (205,440) (1,011,162)
Net unrealized appreciation of investments..................... 281,444 195,421 415,708
Paid-in capital................................................ 18,786,319 8,974,183 29,040,475
---------- --------- ----------
$18,760,795 $8,970,060 $28,446,158
=========== ========== ===========
NET ASSETS:
Primary A Shares............................................... $ 8,868,633 $2,594,394 $24,763,784
=========== ========== ===========
Investor A Shares.............................................. $ 6,840,274 $1,018,481 $ 909,020
=========== ========== ===========
Investor C Shares.............................................. $ 2,380 $ 38,334 $ 591,204
=========== ========== ===========
Investor N Shares.............................................. $ 3,049,508 $5,318,851 $ 2,182,150
=========== ========== ===========
SHARES OUTSTANDING:
Primary A Shares............................................... 879,793 267,374 2,433,453
=========== ========== ===========
Investor A Shares.............................................. 678,581 104,960 89,326
=========== ========== ===========
Investor C Shares.............................................. 236 3,951 58,095
=========== ========== ===========
Investor N Shares.............................................. 302,524 548,152 214,431
=========== ========== ===========
PRIMARY A SHARES:
Net asset value, offering and redemption price per share....... $10.08 $9.70 $10.18
====== ===== ======
INVESTOR A SHARES:
Net asset value, offering and redemption price per share....... $10.08 $9.70 $10.18
====== ===== ======
INVESTOR C SHARES:
Net asset value and offering price per share*.................. $10.08 $9.70 $10.18
====== ===== ======
INVESTOR N SHARES:
Net asset value, offering and redemption price per share....... $10.08 $9.70 $10.18
====== ===== ======
<CAPTION>
NATIONS
NATIONS VIRGINIA NATIONS
TEXAS INTERMEDIATE VIRGINIA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-----------------------------------------
<S> <C> <C> <C>
NET ASSETS CONSIST OF:
Undistributed net investment income............................ $ 15,212 $ 145,586 $ 6,892
Accumulated net realized gain/(loss) on investments sold....... (736,586) (742,427) (666,755)
Net unrealized appreciation of investments..................... 544,869 5,637,108 345,747
Paid-in capital................................................ 16,386,458 216,429,678 20,783,239
----------- ------------ -----------
$16,209,953 $221,469,945 $20,469,123
=========== ============ ===========
NET ASSETS:
Primary A Shares............................................... $ 5,675,371 $148,700,627 $ 5,726,076
=========== ============ ===========
Investor A Shares.............................................. $ 371,300 $ 55,791,013 $ 726,200
=========== ============ ===========
Investor C Shares.............................................. $ 72,931 $ 6,462,626 $ 45,186
=========== ============ ===========
Investor N Shares.............................................. $10,090,351 $ 10,515,679 $13,971,661
=========== ============ ===========
SHARES OUTSTANDING:
Primary A Shares............................................... 598,611 14,037,987 609,125
=========== ============ ===========
Investor A Shares.............................................. 39,160 5,266,874 77,252
=========== ============ ===========
Investor C Shares.............................................. 7,692 610,101 4,807
=========== ============ ===========
Investor N Shares.............................................. 1,064,233 992,734 1,486,257
=========== ============ ===========
PRIMARY A SHARES:
Net asset value, offering and redemption price per share....... $9.48 $10.59 $9.40
===== ====== =====
INVESTOR A SHARES:
Net asset value, offering and redemption price per share....... $9.48 $10.59 $9.40
===== ====== =====
INVESTOR C SHARES:
Net asset value and offering price per share*.................. $9.48 $10.59 $9.40
===== ====== =====
INVESTOR N SHARES:
Net asset value, offering and redemption price per share....... $9.48 $10.59 $9.40
===== ====== =====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
127
<PAGE> 132
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS NATIONS
SHORT-TERM NATIONS FLORIDA
MUNICIPAL INTERMEDIATE NATIONS INTERMEDIATE
INCOME MUNICIPAL MUNICIPAL MUNICIPAL
FUND BOND FUND INCOME FUND BOND FUND
--------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest.................................................. $3,332,871 $4,790,656 $6,255,239 $2,730,726
Dividends................................................. 50,199 101,237 46,516 52,426
---------- ---------- ---------- ----------
Total investment income................................. 3,383,070 4,891,893 6,301,755 2,783,152
---------- ---------- ---------- ----------
EXPENSES:
Investment advisory fee (Note 2).......................... 354,887 467,017 628,973 266,435
Administration fee (Note 2)............................... 70,978 93,403 104,829 53,287
Transfer agent fees (Note 2).............................. 59,662 81,123 80,033 44,912
Custodian fees (Note 2)................................... 13,114 16,467 17,098 11,712
Legal and audit fees...................................... 23,728 27,939 32,014 19,600
Trustees' fees and expenses (Note 2)...................... 3,513 4,914 4,843 2,551
Amortization of organization costs (Note 6)............... 8,355 9,158 -- 5,765
Registration and filing fees.............................. 40,046 34,756 46,300 9,627
Other..................................................... 19,803 19,815 35,479 20,191
---------- ---------- ---------- ----------
Subtotal................................................ 594,086 754,592 949,569 434,080
Shareholder servicing and distribution fees (Note 3):
Investor A Shares....................................... 12,350 3,620 35,742 5,002
Investor C Shares....................................... 5,176 3,798 9,250 1,113
Investor N Shares....................................... 39,274 7,765 120,033 19,702
Fees waived by investment adviser, administrator
and/or custodian (Note 2)............................... (308,457) (287,250) (315,931) (167,286)
---------- ---------- ---------- ----------
Total expenses.......................................... 342,429 482,525 798,663 292,611
---------- ---------- ---------- ----------
NET INVESTMENT INCOME..................................... 3,040,641 4,409,368 5,503,092 2,490,541
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS (NOTES 1 AND 4):
Net realized gain/(loss) on investments sold during the
year.................................................... 61,058 235,923 1,142,681 (30,898)
Change in unrealized appreciation/(depreciation)
of investments during the year.......................... (307,856) (562,215) (753,768) (354,732)
---------- ---------- ---------- ----------
Net realized and unrealized gain/(loss) on investments.... (246,798) (326,292) 388,913 (385,630)
---------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS............................... $2,793,843 $4,083,076 $5,892,005 $2,104,911
========== ========== ========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
128
<PAGE> 133
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
NATIONS
NATIONS GEORGIA NATIONS
FLORIDA INTERMEDIATE GEORGIA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest.................................................. $ 2,153,976 $ 3,000,577 $ 797,366
Dividends................................................. 18,778 33,383 17,390
----------- ----------- ---------
Total investment income................................. 2,172,754 3,033,960 814,756
----------- ----------- ---------
EXPENSES:
Investment advisory fee (Note 2).......................... 229,750 290,713 87,924
Administration fee (Note 2)............................... 38,291 58,142 14,654
Transfer agent fees (Note 2).............................. 32,100 47,525 16,839
Custodian fees (Note 2)................................... 9,530 11,874 7,023
Legal and audit fees...................................... 16,408 20,721 11,331
Trustees' fees and expenses (Note 2)...................... 1,714 2,721 718
Amortization of organization costs (Note 6)............... 500 3,657 500
Registration and filing fees.............................. 6,582 9,114 7,259
Other..................................................... 23,052 18,275 7,540
----------- ----------- ---------
Subtotal................................................ 357,927 462,742 153,788
Shareholder servicing and distribution fees (Note 3):
Investor A Shares....................................... 3,968 17,248 264
Investor C Shares....................................... 195 11,388 352
Investor N Shares....................................... 163,956 39,520 84,537
Fees waived by investment adviser, administrator
and/or custodian (Note 2)............................... (126,102) (171,856) (65,565)
----------- ----------- ---------
Total expenses.......................................... 399,944 359,042 173,376
----------- ----------- ---------
NET INVESTMENT INCOME..................................... 1,772,810 2,674,918 641,380
----------- ----------- ---------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS (NOTES 1 AND 4):
Net realized gain/(loss) on investments sold during the
year.................................................... (210,373) 73,261 43,488
Change in unrealized appreciation/(depreciation)
of investments during the year.......................... 189,030 (398,430) (35,496)
----------- ----------- ---------
Net realized and unrealized gain/(loss) on investments.... (21,343) (325,169) 7,992
----------- ----------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS............................... $ 1,751,467 $ 2,349,749 $ 649,372
=========== =========== =========
<CAPTION>
NATIONS NATIONS
MARYLAND NATIONS NORTH CAROLINA
INTERMEDIATE MARYLAND INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest.................................................. $ 4,403,634 $ 749,707 $ 1,969,244
Dividends................................................. 37,096 10,555 35,162
---------- --------- -----------
Total investment income................................. 4,440,730 760,262 2,004,406
----------- ---------- -----------
EXPENSES:
Investment advisory fee (Note 2).......................... 427,305 83,187 197,790
Administration fee (Note 2)............................... 85,461 13,865 39,559
Transfer agent fees (Note 2).............................. 63,771 15,440 32,872
Custodian fees (Note 2)................................... 14,764 6,712 10,262
Legal and audit fees...................................... 26,752 11,049 16,429
Trustees' fees and expenses (Note 2)...................... 3,782 627 1,765
Amortization of organization costs (Note 6)............... -- 801 2,399
Registration and filing fees.............................. 11,100 6,885 8,115
Other..................................................... 30,594 16,750 13,868
----------- ---------- -----------
Subtotal................................................ 663,529 155,316 323,059
Shareholder servicing and distribution fees (Note 3):
Investor A Shares....................................... 33,674 2,835 13,227
Investor C Shares....................................... 12,707 12 6,957
Investor N Shares....................................... 22,198 65,961 36,843
Fees waived by investment adviser, administrator
and/or custodian (Note 2)............................... (235,731) (71,959) (125,035)
----------- ---------- -----------
Total expenses.......................................... 496,377 152,165 255,051
----------- ---------- -----------
NET INVESTMENT INCOME..................................... 3,944,353 608,097 1,749,355
----------- ---------- -----------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS (NOTES 1 AND 4):
Net realized gain/(loss) on investments sold during the
year.................................................... 1,745 (30,459) (11,423)
Change in unrealized appreciation/(depreciation)
of investments during the year.......................... (832,530) 55,520 (66,100)
----------- ---------- -----------
Net realized and unrealized gain/(loss) on investments.... (830,785) 25,061 (77,523)
----------- ---------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS............................... $ 3,113,568 $ 633,158 $ 1,671,832
=========== ========= ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
129
<PAGE> 134
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS
NATIONS SOUTH CAROLINA NATIONS
NORTH CAROLINA INTERMEDIATE SOUTH CAROLINA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest................................................ $1,585,344 $3,667,712 $ 984,670
Dividends............................................... 19,963 43,585 19,643
---------- ---------- ----------
Total investment income............................... 1,605,307 3,711,297 1,004,313
---------- ---------- ----------
EXPENSES:
Investment advisory fee (Note 2)........................ 173,085 350,142 107,749
Administration fee (Note 2)............................. 28,847 70,029 17,958
Transfer agent fees (Note 2)............................ 24,814 53,811 18,272
Custodian fees (Note 2)................................. 8,117 13,110 6,933
Legal and audit fees.................................... 14,403 22,945 11,787
Trustees' fees and expenses (Note 2).................... 1,239 3,131 812
Amortization of organization costs (Note 6)............. 500 7,204 600
Registration and filing fees............................ 5,290 9,212 6,765
Other................................................... 16,440 23,452 8,318
---------- ---------- ----------
Subtotal.............................................. 272,735 553,036 179,194
Shareholder servicing and distribution fees (Note 3):
Investor A Shares..................................... 996 25,493 1,972
Investor C Shares..................................... 89 27,155 1,246
Investor N Shares..................................... 196,184 33,541 96,106
Fees waived and/or expenses reimbursed by investment
adviser, administrator and/or custodian (Note 2)...... (99,331) (204,276) (71,807)
---------- ---------- ----------
Total expenses........................................ 370,673 434,949 206,711
---------- ---------- ----------
NET INVESTMENT INCOME................................... 1,234,634 3,276,348 797,602
---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
(NOTES 1 AND 4):
Net realized gain/(loss) on investments sold during the
year.................................................. (30,053) 200,162 54,323
Change in unrealized appreciation/(depreciation) of
investments during the year........................... (31,510) (320,293) (24,716)
---------- ---------- ----------
Net realized and unrealized gain/(loss) on
investments........................................... (61,563) (120,131) 29,607
---------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.... $1,173,071 $3,156,217 $ 827,209
========== ========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
130
<PAGE> 135
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
NATIONS NATIONS
TENNESSEE NATIONS TEXAS NATIONS
INTERMEDIATE TENNESSEE INTERMEDIATE TEXAS
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND BOND FUND
----------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest................................................ $930,660 $449,364 $ 1,607,016 $958,892
Dividends............................................... 20,114 9,118 19,390 12,763
-------- -------- ---------- --------
Total investment income............................... 950,774 458,482 1,626,406 971,655
-------- -------- ---------- --------
EXPENSES:
Investment advisory fee (Note 2)........................ 94,200 49,955 159,827 104,224
Administration fee (Note 2)............................. 18,840 8,326 31,966 17,371
Transfer agent fees (Note 2)............................ 18,632 11,971 27,367 16,950
Custodian fees (Note 2)................................. 8,127 5,993 8,638 8,050
Legal and audit fees.................................... 12,205 9,997 14,622 11,737
Trustees' fees and expenses (Note 2).................... 835 400 1,283 725
Amortization of organization costs (Note 6)............. 1,989 819 1,242 1,107
Registration and filing fees............................ 6,679 7,215 7,293 8,065
Other................................................... 14,496 8,510 16,546 10,985
-------- -------- ---------- --------
Subtotal.............................................. 176,003 103,186 268,784 179,214
Shareholder servicing and distribution fees (Note 3):
Investor A Shares..................................... 14,078 1,991 1,737 715
Investor C Shares..................................... 12 187 2,902 357
Investor N Shares..................................... 16,516 43,373 12,274 82,917
Fees waived and/or expenses reimbursed by investment
adviser, administrator and/or custodian (Note 2)...... (81,584) (53,210) (108,059) (74,676)
-------- -------- ---------- --------
Total expenses........................................ 125,025 95,527 177,638 188,527
-------- -------- ---------- --------
NET INVESTMENT INCOME................................... 825,749 362,955 1,448,768 783,128
-------- -------- ---------- --------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
(NOTES 1 AND 4):
Net realized gain/(loss) on investments sold during the
year.................................................. 5,649 3,409 7,708 76,398
Change in unrealized appreciation/(depreciation) of
investments during the year........................... (40,872) 5,672 (34,218) (46,562)
-------- -------- ---------- --------
Net realized and unrealized gain/(loss) on (35,223) 9,081 (26,510) 29,836
investments........................................... -------- -------- ---------- --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.... $790,526 $372,036 $ 1,422,258 $812,964
======== ======== =========== ========
NATIONS
VIRGINIA NATIONS
INTERMEDIATE VIRGINIA
MUNICIPAL MUNICIPAL
BOND FUND BOND FUND
-------------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest................................................ $ 11,952,822 $1,140,426
Dividends............................................... 62,318 13,154
------------ ----------
Total investment income............................... 12,015,140 1,153,580
------------ ----------
EXPENSES:
Investment advisory fee (Note 2)........................ 1,134,960 121,454
Administration fee (Note 2)............................. 226,992 20,243
Transfer agent fees (Note 2)............................ 156,631 19,702
Custodian fees (Note 2)................................. 30,079 7,734
Legal and audit fees.................................... 46,562 12,410
Trustees' fees and expenses (Note 2).................... 9,843 905
Amortization of organization costs (Note 6)............. -- 500
Registration and filing fees............................ 6,097 6,364
Other................................................... 69,304 9,274
------------ ----------
Subtotal.............................................. 1,680,468 198,586
Shareholder servicing and distribution fees (Note 3):
Investor A Shares..................................... 121,077 1,304
Investor C Shares..................................... 33,754 221
Investor N Shares..................................... 57,223 113,903
Fees waived and/or expenses reimbursed by investment
adviser, administrator and/or custodian (Note 2)...... (543,210) (77,321)
------------ ----------
Total expenses........................................ 1,349,312 236,693
------------ ----------
NET INVESTMENT INCOME................................... 10,665,828 916,887
------------ ----------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
(NOTES 1 AND 4):
Net realized gain/(loss) on investments sold during the
year.................................................. 939,225 (40,560)
Change in unrealized appreciation/(depreciation) of
investments during the year........................... (3,178,654) 84,735
------------ ----------
Net realized and unrealized gain/(loss) on
investments........................................... (2,239,429) 44,175
------------ ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.... $ 8,426,399 $ 961,062
============ ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
131
<PAGE> 136
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS
NATIONS NATIONS FLORIDA
SHORT-TERM INTERMEDIATE NATIONS INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
INCOME FUND BOND FUND INCOME FUND BOND FUND
----------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income............................ $ 3,040,641 $ 4,409,368 $ 5,503,092 $ 2,490,541
Net realized gain/(loss) on investments sold
during the year................................ 61,058 235,923 1,142,681 (30,898)
Change in unrealized appreciation/(depreciation)
of investments during the year................. (307,856) (562,215) (753,768) (354,732)
----------- ------------ ------------ -----------
Net increase in net assets resulting from
operations..................................... 2,793,843 4,083,076 5,892,005 2,104,911
Distributions to shareholders from net investment
income:
Primary A Shares............................... (2,281,637) (4,229,321) (3,726,441) (2,200,901)
Investor A Shares.............................. (252,440) (82,555) (935,349) (114,523)
Investor C Shares.............................. (59,779) (32,255) (91,197) (9,440)
Investor N Shares.............................. (446,785) (65,237) (750,105) (165,677)
Net increase/(decrease) in net assets from Fund
share transactions:
Primary A Shares............................... 12,736,118 31,093,197 9,007,226 7,109,886
Investor A Shares.............................. 3,838,818 581,183 (11,054,474) 121,830
Investor C Shares.............................. (986,312) 37,778 (470,496) 323
Investor N Shares.............................. (3,159,815) (138,009) (2,357,406) (489,261)
----------- ------------ ------------ -----------
Net increase/(decrease) in net assets............ 12,182,011 31,247,857 (4,486,237) 6,357,148
NET ASSETS:
Beginning of year................................ 69,041,519 81,261,400 113,149,269 51,292,890
----------- ------------ ------------ -----------
End of year...................................... $81,223,530 $112,509,257 $108,663,032 $57,650,038
=========== ============ ============ ===========
Undistributed net investment income at end of
year........................................... $ 947 $ 60,630 $ 103,572 $ --
=========== ============ ============ ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
132
<PAGE> 137
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
NATIONS
NATIONS GEORGIA NATIONS
FLORIDA INTERMEDIATE GEORGIA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
------------------------------------------------
<S> <C> <C> <C>
Net investment income............................ $ 1,772,810 $ 2,674,918 $ 641,380
Net realized gain/(loss) on investments sold
during the year................................ (210,373) 73,261 43,488
Change in unrealized appreciation/(depreciation)
of investments during the year................. 189,030 (398,430) (35,496)
----------- ----------- -----------
Net increase in net assets resulting from
operations..................................... 1,751,467 2,349,749 649,372
Distributions to shareholders from net investment
income:
Primary A Shares............................... (725,315) (1,857,490) (158,769)
Investor A Shares.............................. (95,467) (390,944) (6,345)
Investor C Shares.............................. (1,778) (96,306) (3,087)
Investor N Shares.............................. (950,250) (330,178) (473,179)
Net increase/(decrease) in net assets from Fund
share transactions:
Primary A Shares............................... 3,709,085 5,482,256 3,500,180
Investor A Shares.............................. (65,643) 232,646 200,730
Investor C Shares.............................. 1,778 (456,040) 3,087
Investor N Shares.............................. (4,214,981) (459,769) (2,097,679)
----------- ----------- -----------
Net increase/(decrease) in net assets............ (591,104) 4,473,924 1,614,310
NET ASSETS:
Beginning of year................................ 38,864,977 57,389,670 14,397,209
----------- ----------- -----------
End of year...................................... $38,273,873 $61,863,594 $16,011,519
=========== =========== ===========
Undistributed net investment income at end of
year........................................... $ 17,978 $ 9,933 $ 8,172
=========== =========== ===========
<CAPTION>
NATIONS NATIONS
MARYLAND NATIONS NORTH CAROLINA
INTERMEDIATE MARYLAND INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
---------------------------------------------
<S> <C> <C> <C>
Net investment income............................ $ 3,944,353 $ 608,097 $ 1,749,355
Net realized gain/(loss) on investments sold
during the year................................ 1,745 (30,459) (11,423)
Change in unrealized appreciation/(depreciation)
of investments during the year................. (832,530) 55,520 (66,100)
----------- ----------- -----------
Net increase in net assets resulting from
operations..................................... 3,113,568 633,158 1,671,832
Distributions to shareholders from net investment
income:
Primary A Shares............................... (2,892,805) (179,533) (1,106,565)
Investor A Shares.............................. (760,315) (66,776) (289,190)
Investor C Shares.............................. (106,908) (108) (56,587)
Investor N Shares.............................. (184,325) (361,680) (297,013)
Net increase/(decrease) in net assets from Fund
share transactions:
Primary A Shares............................... 2,823,654 1,802,900 4,732,402
Investor A Shares.............................. (4,309,404) 317,957 (1,931,811)
Investor C Shares.............................. (863,300) 108 (11,762
Investor N Shares.............................. (160,894) (1,576,575) (1,285,915)
----------- ----------- -----------
Net increase/(decrease) in net assets............ (3,340,729) 569,451 1,425,391
NET ASSETS:
Beginning of year................................ 88,193,140 13,537,586 38,313,413
----------- ----------- -----------
End of year...................................... $84,852,411 $14,107,037 $ 39,738,804
=========== =========== ============
Undistributed net investment income at end of
year........................................... $ 28,863 $ 6,677 $ 10,964
=========== =========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
133
<PAGE> 138
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONS
NATIONS SOUTH CAROLINA NATIONS
NORTH CAROLINA INTERMEDIATE SOUTH CAROLINA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-------------------------------------------------
<S> <C> <C> <C>
Net investment income........................................ $ 1,234,634 $ 3,276,348 $ 797,602
Net realized gain/(loss) on investments sold during the
year....................................................... (30,053) 200,162 54,323
Change in unrealized appreciation/(depreciation) of
investments during the year................................ (31,510) (320,293) (24,716)
----------- ------------ ------------
Net increase in net assets resulting from operations......... 1,173,071 3,156,217 827,209
Distributions to shareholders from net investment income:
Primary A Shares........................................... (115,090) (2,152,396) (197,197)
Investor A Shares.......................................... (24,029) (602,275) (47,497)
Investor C Shares.......................................... (793) (234,614) (11,218)
Investor N Shares.......................................... (1,094,722) (287,063) (541,690)
Net increase/(decrease) in net assets from Fund share
transactions:
Primary A Shares........................................... 1,513,901 7,210,466 3,052,543
Investor A Shares.......................................... 148,174 (3,826,508) (409,632)
Investor C Shares.......................................... 793 (315,082) (16,765)
Investor N Shares.......................................... (4,388,434) (1,220,014) (914,041)
------------ ------------ ------------
Net increase/(decrease) in net assets........................ (2,787,129) 1,728,731 1,741,712
NET ASSETS:
Beginning of year............................................ 30,356,458 68,481,347 16,532,374
------------ ------------ ------------
End of year.................................................. $ 27,569,329 $ 70,210,078 $ 18,274,086
============ ============ ============
Undistributed net investment income at end of year........... $ 24,024 $ 3,934 $ 7,728
============ ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
134
<PAGE> 139
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
NATIONS NATIONS
TENNESSEE NATIONS TEXAS
INTERMEDIATE TENNESSEE INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
--------------------------------------------
<S> <C> <C> <C>
Net investment income........................................ $ 825,749 $ 362,955 $ 1,448,768
Net realized gain/(loss) on investments sold during the
year....................................................... 5,649 3,409 7,708
Change in unrealized appreciation/(depreciation) of
investments during the year................................ (40,872) 5,672 (34,218)
----------- ---------- -----------
Net increase in net assets resulting from operations......... 790,526 372,036 1,422,258
Distributions to shareholders from net investment income:
Primary A Shares........................................... (385,987) (75,170) (1,287,524)
Investor A Shares.......................................... (305,932) (46,783) (38,114)
Investor C Shares.......................................... (96) (1,653) (23,725)
Investor N Shares.......................................... (133,734) (239,349) (99,405)
Net increase/(decrease) in net assets from Fund share
transactions:
Primary A Shares........................................... 487,962 1,627,730 (2,398,208)
Investor A Shares.......................................... (591,615) 43,604 109,465
Investor C Shares.......................................... 96 1,653 23,725
Investor N Shares.......................................... (477,355) (1,457,124) (653,342)
----------- ---------- -----------
Net increase/(decrease) in net assets........................ (616,135) 224,944 (2,944,870)
NET ASSETS:
Beginning of year............................................ 19,376,930 8,745,116 31,391,028
----------- ---------- -----------
End of year.................................................. $18,760,795 $8,970,060 $28,446,158
----------- ---------- -----------
Undistributed net investment income at end of year........... $ 1,693 $ 5,896 $ 1,137
----------- ---------- -----------
<CAPTION>
NATIONS
NATIONS VIRGINIA NATIONS
TEXAS INTERMEDIATE VIRGINIA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
---------------------------------------------
<C> <C> <C>
Net investment income........................................ $ 783,128 $ 10,665,828 $ 916,887
Net realized gain/(loss) on investments sold during the
year....................................................... 76,398 939,225 (40,560)
Change in unrealized appreciation/(depreciation) of
investments during the year................................ (46,562) (3,178,654) 84,735
----------- ------------- -----------
Net increase in net assets resulting from operations......... 812,964 8,426,399 961,062
Distributions to shareholders from net investment income:
Primary A Shares........................................... (293,983) (7,108,542) (223,872)
Investor A Shares.......................................... (17,461) (2,780,800) (32,652)
Investor C Shares.......................................... (3,216) (289,987) (2,032)
Investor N Shares.......................................... (468,468) (486,499) (658,331)
Net increase/(decrease) in net assets from Fund share
transactions:
Primary A Shares........................................... 510,593 (5,256,690) 2,428,702
Investor A Shares.......................................... 53,715 (11,640,180) 64,024
Investor C Shares.......................................... 3,215 (384,351) 2,032
Investor N Shares.......................................... (1,750,002) (1,311,327) (2,008,842)
----------- ------------- -----------
Net increase/(decrease) in net assets........................ (1,152,643) (20,831,977) 530,091
NET ASSETS:
Beginning of year............................................ 17,362,596 242,301,922 19,939,032
----------- ------------- -----------
End of year.................................................. $16,209,953 $221,469,945 $20,469,123
=========== ============ ===========
Undistributed net investment income at end of year........... $ 15,212 $ 145,586 $ 6,892
=========== ============ ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
135
<PAGE> 140
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED MARCH 31, 1996(A)
<TABLE>
<CAPTION>
NATIONS
NATIONS NATIONS FLORIDA
SHORT-TERM INTERMEDIATE NATIONS INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
INCOME FUND BOND FUND INCOME FUND BOND FUND
------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income................................. $ 965,658 $ 1,276,433 $ 1,998,797 $ 806,122
Net realized gain/(loss) on investments sold during
the period.......................................... 23,232 62,751 239,877 158,265
Change in unrealized depreciation of investments
during the period................................... (389,551) (1,270,274) (2,859,978) (968,548)
----------- ----------- ------------ -----------
Net increase/(decrease) in net assets resulting
from operations..................................... 599,339 68,910 (621,304) (4,161)
Distributions to shareholders from net investment
income:
Primary A Shares.................................... (728,377) (1,225,918) (1,226,815) (706,751)
Investor A Shares................................... (53,577) (21,114) (466,482) (33,651)
Investor C Shares................................... (25,203) (8,469) (35,721) (3,856)
Investor N Shares................................... (158,501) (20,932) (269,779) (61,864)
Net increase/(decrease) in net assets from Fund
share transactions:
Primary A Shares.................................... (1,188,013) 4,673,740 766,863 1,665,007
Investor A Shares................................... 882,954 273,860 (1,276,002) (227,704)
Investor C Shares................................... 128,549 368,003 (45,152) 2,593
Investor N Shares................................... 4,126,003 296,167 (908,664) (718,637)
----------- ----------- ------------ -----------
Net increase/(decrease) in net assets................. 3,583,174 4,404,247 (4,083,056) (89,024)
NET ASSETS:
Beginning of period................................... 65,458,345 76,857,153 117,232,325 51,381,914
----------- ----------- ------------ -----------
End of period......................................... $69,041,519 $81,261,400 $113,149,269 $51,292,890
=========== =========== ============ ===========
Undistributed net investment income/(distributions in
excess of net investment income) at end of period... $ 947 $ 25,134 $ 28,068 $ (3,525)
=========== =========== ============ ===========
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30. The numbers reflected are for the period December 1, 1995
through March 31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
136
<PAGE> 141
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
NATIONS
NATIONS GEORGIA NATIONS
FLORIDA INTERMEDIATE GEORGIA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-----------------------------------------------
<S> <C> <C> <C>
Net investment income................................. $ 595,972 $ 891,811 $ 215,557
Net realized gain/(loss) on investments sold during
the period.......................................... (25,347) 37,770 8,393
Change in unrealized depreciation of investments
during the period................................... (1,140,671) (1,008,471) (366,730)
----------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations..................................... (570,046) (78,890) (142,780)
Distributions to shareholders from net investment
income:
Primary A Shares.................................... (208,210) (609,891) (35,925)
Investor A Shares................................... (30,348) (133,317) (105)
Investor C Shares................................... (703) (34,594) (1,019)
Investor N Shares................................... (356,711) (113,838) (178,508)
Net increase/(decrease) in net assets from Fund
share transactions:
Primary A Shares.................................... 2,209,957 (1,515,078) (513,607)
Investor A Shares................................... 104,876 (404,070) 459
Investor C Shares................................... (191) (120,198) 1,029
Investor N Shares................................... (726,692) 74,608 (453,351)
----------- ----------- -----------
Net increase/(decrease) in net assets................. 421,932 (2,935,268) (1,323,807)
NET ASSETS:
Beginning of period................................... 38,443,045 60,324,938 15,721,016
----------- ----------- -----------
End of period......................................... $38,864,977 $57,389,670 $14,397,209
=========== =========== ===========
Undistributed net investment income/(distributions in
excess of net investment income) at end of period... $ 11,038 $ (4,379) $ 431
=========== =========== ===========
<CAPTION>
NATIONS NATIONS
MARYLAND NATIONS NORTH CAROLINA
INTERMEDIATE MARYLAND INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
----------------------------------------------
<S> <C> <C> <C>
Net investment income................................. $ 1,384,926 $ 190,487 $ 554,212
Net realized gain/(loss) on investments sold during
the period.......................................... 62,051 (14,816) 1,744
Change in unrealized depreciation of investments
during the period................................... (1,324,743) (323,905) (548,540)
----------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations..................................... 122,234 (148,234) 7,416
Distributions to shareholders from net investment
income:
Primary A Shares.................................... (974,442) (43,249) (315,936)
Investor A Shares................................... (309,446) (15,162) (113,170)
Investor C Shares................................... (39,122) (33) (18,191)
Investor N Shares................................... (61,916) (132,043) (106,915)
Net increase/(decrease) in net assets from Fund
share transactions:
Primary A Shares.................................... (246,692) 262,294 546,867
Investor A Shares................................... (1,469,154) 78,396 (745,999)
Investor C Shares................................... 132,701 43 31,509
Investor N Shares................................... 77,898 (94,912) 372,628
----------- ----------- -----------
Net increase/(decrease) in net assets................. (2,767,939) (92,900) (341,791)
NET ASSETS:
Beginning of period................................... 90,961,079 13,630,486 38,655,204
----------- ----------- -----------
End of period......................................... $88,193,140 $13,537,586 $ 38,313,413
=========== =========== ============
Undistributed net investment income/(distributions in
excess of net investment income) at end of period... $ 28,863 $ 2,074 $ 4,391
=========== =========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
137
<PAGE> 142
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE PERIOD ENDED MARCH 31, 1996(A)
<TABLE>
<CAPTION>
NATIONS
NATIONS SOUTH CAROLINA NATIONS
NORTH CAROLINA INTERMEDIATE SOUTH CAROLINA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
-------------------------------------------------
<S> <C> <C> <C>
Net investment income....................................... $ 436,514 $ 1,101,730 $ 237,902
Net realized gain/(loss) on investments sold during the
period.................................................... (151,023) 20,415 40,598
Change in unrealized depreciation of investments during the
period.................................................... (602,825) (1,125,003) (403,299)
----------- ----------- -----------
Net increase/(decrease) in net assets resulting from
operations................................................ (317,334) (2,858) (124,799)
Distributions to shareholders from net investment income:
Primary A Shares.......................................... (23,655) (700,580) (31,705)
Investor A Shares......................................... (6,075) (224,472) (19,636)
Investor C Shares......................................... (53) (79,341) (5,994)
Investor N Shares......................................... (406,731) (97,337) (180,567)
Net increase/(decrease) in net assets from Fund share
transactions:
Primary A Shares.......................................... 343,908 (2,769,895) 320,258
Investor A Shares......................................... 111,833 67,455 7,700
Investor C Shares......................................... 15,063 (29,949) 248,504
Investor N Shares......................................... (1,051,328) 626,082 608,489
----------- ----------- -----------
Net increase/(decrease) in net assets....................... (1,334,372) (3,210,895) 822,250
NET ASSETS:
Beginning of period......................................... 31,690,830 71,692,242 15,710,124
----------- ----------- -----------
End of period............................................... $ 30,356,458 $ 68,481,347 $ 16,532,374
============ ============ ============
Undistributed net investment income/(distributions in excess
of net investment income) at end of period................ $ 16,687 $ 28 $ 2,070
============ ============ ============
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30. The numbers reflected are for the period December 1, 1995
through March 31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
138
<PAGE> 143
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
NATIONS NATIONS
TENNESSEE NATIONS TEXAS
INTERMEDIATE TENNESSEE INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
----------------------------------------------
<S> <C> <C> <C>
Net investment income....................................... $ 272,926 $ 110,961 $ 464,718
Net realized gain/(loss) on investments sold during the
period.................................................... (4,989) 14,032 58,375
Change in unrealized depreciation of investments during the
period.................................................... (264,536) (176,556) (539,809)
----------- ---------- -----------
Net increase/(decrease) in net assets resulting from
operations................................................ 3,401 (51,563) (16,716)
Distributions to shareholders from net investment income:
Primary A Shares.......................................... (117,326) (14,096) (405,685)
Investor A Shares......................................... (108,339) (3,339) (11,662)
Investor C Shares......................................... (31) (805) (7,683)
Investor N Shares......................................... (47,230) (92,721) (39,688)
Net increase/(decrease) in net assets from Fund share
transactions:
Primary A Shares.......................................... 1,360,337 227,528 1,212,980
Investor A Shares......................................... (27,813) 773,762 6,664
Investor C Shares......................................... 42 (27,005) 7,694
Investor N Shares......................................... 6,261 279,296 (249,395)
----------- ---------- -----------
Net increase/(decrease) in net assets....................... 1,069,302 1,091,057 496,509
NET ASSETS:
Beginning of period......................................... 18,307,628 7,654,059 30,894,519
----------- ---------- -----------
End of period............................................... $19,376,930 $8,745,116 $31,391,028
=========== ========== ===========
Undistributed net investment income/(distributions in excess
of net investment income) at end of period................ $ (487) $ 5,215 $ (1,938)
=========== ========== ===========
<CAPTION>
NATIONS
NATIONS VIRGINIA NATIONS
TEXAS INTERMEDIATE VIRGINIA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
--------------------------------------------
<S> <C> <C> <C>
Net investment income....................................... $ 256,506 $ 3,802,583 $ 303,010
Net realized gain/(loss) on investments sold during the
period.................................................... 8,093 397,976 1,713
Change in unrealized depreciation of investments during the
period.................................................... (405,009) (3,555,469) (513,081)
----------- ------------ -----------
Net increase/(decrease) in net assets resulting from
operations................................................ (140,410) 645,090 (208,358)
Distributions to shareholders from net investment income:
Primary A Shares.......................................... (78,433) (2,458,927) (56,336)
Investor A Shares......................................... (5,320) (1,074,449) (10,695)
Investor C Shares......................................... (1,024) (99,325) (650)
Investor N Shares......................................... (171,729) (169,882) (235,329)
Net increase/(decrease) in net assets from Fund share
transactions:
Primary A Shares.......................................... 642,899 233,297 (147,993)
Investor A Shares......................................... (27,628) (4,360,161) 28,565
Investor C Shares......................................... 1,034 (152,553) 10,660
Investor N Shares......................................... (478,509) (80,935) (139,814)
----------- ------------ -----------
Net increase/(decrease) in net assets....................... (259,120) (7,517,845) (759,950)
NET ASSETS:
Beginning of period......................................... 17,621,716 249,819,767 20,698,982
----------- ------------ -----------
End of period............................................... $17,362,596 $242,301,922 $19,939,032
=========== ============ ===========
Undistributed net investment income/(distributions in excess
of net investment income) at end of period................ $ 8,575 $ 138,617 $ 3,602
=========== ============ ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
139
<PAGE> 144
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
SHORT-TERM MUNICIPAL INCOME FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
--------------------------- ---------------------------
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................. 4,368,213 $ 43,578,419 1,045,433 $ 10,507,361
Issued as reinvestment of dividends.............................. 1,632 16,286 311 3,111
Redeemed......................................................... (3,093,414) (30,858,587) (1,166,784) (11,698,485)
---------- ------------ ---------- ------------
Net increase/(decrease).......................................... 1,276,431 $ 12,736,118 (121,040) $ (1,188,013)
========== ============ ========== ============
INVESTOR A SHARES:
Sold............................................................. 866,486 $ 8,632,324 150,130 $ 1,510,243
Issued as reinvestment of dividends.............................. 21,810 217,532 5,120 51,349
Redeemed......................................................... (503,339) (5,011,038) (67,467) (678,638)
---------- ------------ ---------- ------------
Net increase/(decrease).......................................... 384,957 $ 3,838,818 87,783 $ 882,954
========== ============ ========== ============
INVESTOR C SHARES:
Sold............................................................. 17,035 $ 169,722 49,801 $ 500,000
Issued as reinvestment of dividends.............................. 5,832 58,158 2,334 23,417
Redeemed......................................................... (121,972) (1,214,192) (39,268) (394,868)
---------- ------------ ---------- ------------
Net increase/(decrease).......................................... (99,105) $ (986,312) 12,867 $ 128,549
========== ============ ========== ============
INVESTOR N SHARES:
Sold............................................................. 632,233 $ 6,308,576 504,230 $ 5,060,605
Issued as reinvestment of dividends.............................. 41,012 409,216 14,522 145,675
Redeemed......................................................... (991,095) (9,877,607) (107,658) (1,080,277)
---------- ------------ ---------- ------------
Net increase/(decrease).......................................... (317,850) $ (3,159,815) 411,094 $ 4,126,003
========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
FLORIDA INTERMEDIATE MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
--------------------------- ---------------------------
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................. 1,806,440 $ 18,900,351 426,934 $ 4,545,038
Issued in exchange for Shares of Peachtree Georgia Tax-Free
Income Fund (Note 9)........................................... -- -- -- --
Issued as reinvestment of dividends.............................. 7,678 80,228 2,154 22,952
Redeemed......................................................... (1,138,077) (11,870,693) (272,693) (2,902,983)
---------- ------------ ---------- ------------
Net increase/(decrease).......................................... 676,041 $ 7,109,886 156,395 $ 1,665,007
========== ============ ========== ============
INVESTOR A SHARES:
Sold............................................................. 295,572 $ 3,093,698 1,725 $ 17,997
Issued as reinvestment of dividends.............................. 4,813 50,328 2,126 22,620
Redeemed......................................................... (288,370) (3,022,196) (25,633) (268,321)
---------- ------------ ---------- ------------
Net increase/(decrease).......................................... 12,015 $ 121,830 (21,782) $ (227,704)
========== ============ ========== ============
INVESTOR C SHARES:
Sold............................................................. 14,327 $ 150,599 -- $ --
Issued as reinvestment of dividends.............................. 554 5,806 246 2,618
Redeemed......................................................... (15,037) (156,082) (2) (25)
---------- ------------ ---------- ------------
Net increase/(decrease).......................................... (156) $ 323 244 $ 2,593
========== ============ ========== ============
INVESTOR N SHARES:
Sold............................................................. 12,072 $ 125,929 11,873 $ 126,629
Issued as reinvestment of dividends.............................. 9,672 101,158 3,173 33,729
Redeemed......................................................... (68,762) (716,348) (81,900) (878,995)
---------- ------------ ---------- ------------
Net increase/(decrease).......................................... (47,018) $ (489,261) (66,854) $ (718,637)
========== ============ ========== ============
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
140
<PAGE> 145
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
INTERMEDIATE MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
--------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................. 4,979,213 $ 50,069,761 960,264 $ 9,779,988
Issued as reinvestment of dividends.............................. 7,773 78,150 2,204 22,398
Redeemed......................................................... (1,895,410) (19,054,714) (505,355) (5,128,646)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... 3,091,576 $ 31,093,197 457,113 $ 4,673,740
========== ============ ======== ===========
INVESTOR A SHARES:
Sold............................................................. 169,102 $ 1,696,765 26,432 $ 269,682
Issued as reinvestment of dividends.............................. 5,517 55,382 1,197 12,184
Redeemed......................................................... (117,609) (1,170,964) (785) (8,006)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... 57,010 $ 581,183 26,844 $ 273,860
========== ============ ======== ===========
INVESTOR C SHARES:
Sold............................................................. 22,724 $ 229,240 35,258 $ 359,738
Issued as reinvestment of dividends.............................. 3,462 32,336 834 8,469
Redeemed......................................................... (21,999) (223,798) (20) (204)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... 4,187 $ 37,778 36,072 $ 368,003
========== ============ ======== ===========
INVESTOR N SHARES:
Sold............................................................. 11,720 $ 118,086 27,929 $ 285,500
Issued as reinvestment of dividends.............................. 3,724 37,407 1,050 10,667
Redeemed......................................................... (29,316) (293,502) -- --
---------- ------------ -------- -----------
Net increase/(decrease).......................................... (13,872) $ (138,009) 28,979 $ 296,167
========== ============ ======== ===========
</TABLE>
<TABLE>
<CAPTION>
FLORIDA MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
--------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................. 780,552 $ 7,452,607 250,387 $ 2,439,111
Issued in exchange for Shares of Peachtree Georgia Tax-Free
Income Fund (Note 9)........................................... -- -- -- --
Issued as reinvestment of dividends.............................. 365 3,485 45 437
Redeemed......................................................... (394,938) (3,747,007) (23,390) (229,591)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... 385,979 $ 3,709,085 227,042 $ 2,209,957
========== ============ ======== ===========
INVESTOR A SHARES:
Sold............................................................. 174,121 $ 1,646,866 12,823 $ 125,245
Issued as reinvestment of dividends.............................. 1,691 16,147 483 4,698
Redeemed......................................................... (181,645) (1,728,656) (2,646) (25,067)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... (5,833) $ (65,643) 10,660 $ 104,876
========== ============ ======== ===========
INVESTOR C SHARES:
Sold............................................................. -- $ -- 15,448 $ 151,548
Issued as reinvestment of dividends.............................. 186 1,778 59 572
Redeemed......................................................... -- -- (15,447) (152,311)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... 186 $ 1,778 60 $ (191)
========== ============ ======== ===========
INVESTOR N SHARES:
Sold............................................................. 42,999 $ 409,858 28,067 $ 275,586
Issued as reinvestment of dividends.............................. 44,974 428,432 17,719 171,975
Redeemed......................................................... (531,093) (5,053,271) (120,970) (1,174,253)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... (443,120) $ (4,214,981) (75,184) $ (726,692)
========== ============ ======== ===========
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
--------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................. 2,730,515 $ 29,871,880 451,180 $ 5,003,601
Issued as reinvestment of dividends.............................. 9,420 102,911 3,723 41,168
Redeemed......................................................... (1,923,927) (20,967,565) (387,428) (4,277,906)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... 816,008 $ 9,007,226 67,475 $ 766,863
========== ============ ======== ===========
INVESTOR A SHARES:
Sold............................................................. 1,080,246 $ 11,738,664 80,739 $ 881,611
Issued as reinvestment of dividends.............................. 47,889 522,701 21,450 237,117
Redeemed......................................................... (2,151,350) (23,315,839) (217,618) (2,394,730)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... (1,023,215) $(11,054,474) (115,429) $(1,276,002)
========== ============ ======== ===========
INVESTOR C SHARES:
Sold............................................................. 6,900 $ 76,000 450 $ 5,000
Issued as reinvestment of dividends.............................. 5,154 56,295 2,129 23,528
Redeemed......................................................... (55,293) (602,791) (6,660) (73,680)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... (43,239) $ (470,496) (4,081) $ (45,152)
========== ============ ======== ===========
INVESTOR N SHARES:
Sold............................................................. 46,816 $ 505,476 20,506 $ 227,021
Issued as reinvestment of dividends.............................. 35,015 382,426 12,403 137,123
Redeemed......................................................... (296,881) (3,245,308) (114,832) (1,272,808)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... (215,050) $ (2,357,406) (81,923) $ (908,664)
========== ============ ======== ===========
</TABLE>
<TABLE>
<CAPTION>
GEORGIA INTERMEDIATE MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
--------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................. 1,093,268 $ 11,620,800 215,451 $ 2,333,137
Issued in exchange for Shares of Peachtree Georgia Tax-Free
Income Fund (Note 9)........................................... 120,237 1,278,074 -- --
Issued as reinvestment of dividends.............................. 1,745 18,655 321 3,474
Redeemed......................................................... (700,605) (7,435,273) (356,183) (3,851,689)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... 514,645 $ 5,482,256 (140,411) $(1,515,078)
========== ============ ======== ===========
INVESTOR A SHARES:
Sold............................................................. 88,314 $ 944,307 2,786 $ 29,915
Issued as reinvestment of dividends.............................. 28,390 302,296 9,658 104,404
Redeemed......................................................... (95,049) (1,013,957) (49,860) (538,389)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... 21,655 $ 232,646 (37,416) $ (404,070)
========== ============ ======== ===========
INVESTOR C SHARES:
Sold............................................................. 104 $ 1,101 4,482 $ 47,791
Issued as reinvestment of dividends.............................. 6,230 66,333 1,989 21,495
Redeemed......................................................... (48,861) (523,474) (17,569) (189,484)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... (42,527) $ (456,040) (11,098) $ (120,198)
========== ============ ======== ===========
INVESTOR N SHARES:
Sold............................................................. 15,463 $ 164,476 27,010 $ 293,325
Issued as reinvestment of dividends.............................. 13,852 147,469 4,577 49,457
Redeemed......................................................... (72,333) (771,714) (24,720) (268,174)
---------- ------------ -------- -----------
Net increase/(decrease).......................................... (43,018) $ (459,769) 6,867 $ 74,608
========== ============ ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
141
<PAGE> 146
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
GEORGIA MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold.................................................................. 476,900 $ 4,553,988 78,810 $ 762,805
Issued as reinvestment of dividends................................... 28 265 16 162
Redeemed.............................................................. (110,850) (1,054,073) (131,078) (1,276,574)
--------- ----------- -------- -----------
Net increase/(decrease)............................................... 366,078 $ 3,500,180 (52,252) $ (513,607)
========= =========== ======== ===========
INVESTOR A SHARES:
Sold.................................................................. 21,228 $ 201,516 92 $ 887
Issued as reinvestment of dividends................................... 584 5,574 11 105
Redeemed.............................................................. (670) (6,360) (55) (533)
--------- ----------- -------- -----------
Net increase/(decrease)............................................... 21,142 $ 200,730 48 $ 459
========= =========== ======== ===========
INVESTOR C SHARES:
Sold.................................................................. -- $ -- 1 $ 10
Issued as reinvestment of dividends................................... 329 3,087 105 1,019
Redeemed.............................................................. -- -- -- --
--------- ----------- -------- -----------
Net increase/(decrease)............................................... 329 $ 3,087 106 $ 1,029
========= =========== ======== ===========
INVESTOR N SHARES:
Sold.................................................................. 4,541 $ 42,751 8,854 $ 86,386
Issued as reinvestment of dividends................................... 27,898 265,858 10,743 104,168
Redeemed.............................................................. (252,803) (2,406,288) (66,400) (643,905)
--------- ----------- -------- -----------
Net increase/(decrease)............................................... (220,364) $(2,097,679) (46,803) $ (453,351)
========= =========== ======== ===========
<CAPTION>
NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold................................................................... 1,014,731 $10,515,384 171,702 $ 1,809,636
Issued as reinvestment of dividends.................................... 607 6,285 231 3,227
Redeemed............................................................... (557,201) (5,789,267) (120,210) (1,265,996)
--------- ----------- -------- -----------
Net increase/(decrease)................................................ 458,137 $ 4,732,402 51,723 $ 546,867
========= =========== ======== ===========
INVESTOR A SHARES:
Sold................................................................... 347,293 $ 3,646,011 22,853 $ 240,377
Issued as reinvestment of dividends.................................... 21,334 222,005 6,393 67,230
Redeemed............................................................... (555,498) (5,799,827) (100,126) (1,053,606)
--------- ----------- -------- -----------
Net increase/(decrease)................................................ (186,871) $(1,931,811) (70,880) $ (745,999)
========= =========== ======== ===========
INVESTOR C SHARES:
Sold................................................................... -- $ -- 1,449 $ 15,000
Issued as reinvestment of dividends.................................... 4,951 51,463 1,569 16,509
Redeemed............................................................... (6,051) (63,225) -- --
--------- ----------- -------- -----------
Net increase/(decrease)................................................ (1,100) $ (11,762) 3,018 $ 31,509
========= =========== ======== ===========
INVESTOR N SHARES:
Sold................................................................... 51,624 $ 534,364 51,146 $ 538,130
Issued as reinvestment of dividends.................................... 22,387 232,636 8,114 85,324
Redeemed............................................................... (198,704) (2,052,915) (24,143) (250,826)
--------- ----------- -------- -----------
Net increase/(decrease)................................................ (124,693) $(1,285,915) 35,117 $ 372,628
========= =========== ======== ===========
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
142
<PAGE> 147
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
MARYLAND INTERMEDIATE MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
------------------------- ------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold.................................................................. 570,112 $ 16,929,308 505,608 $ 5,538,107
Issued as reinvestment of dividends................................... 4,891 52,630 2,165 23,655
Redeemed.............................................................. 315,560) (14,158,284) (532,835) (5,808,454)
------- ------------ ---------- -----------
Net increase/(decrease)............................................... 259,443 $ 2,823,654 (25,062) $ (246,692)
======= ============ ========== ===========
INVESTOR A SHARES:
Sold.................................................................. 193,291 $ 2,078,842 28,679 $ 313,851
Issued as reinvestment of dividends................................... 56,201 605,703 22,246 243,587
Redeemed.............................................................. 650,416) (6,993,949) (186,416) (2,026,592)
------- ------------ ---------- -----------
Net increase/(decrease)............................................... 400,924) $ (4,309,404) (135,491) $(1,469,154)
======= ============ ========== ===========
INVESTOR C SHARES:
Sold.................................................................. 5,524 $ 59,620 18,277 $ 201,549
Issued as reinvestment of dividends................................... 8,140 87,716 2,956 32,361
Redeemed.............................................................. (93,693) (1,010,636) (9,204) (101,209)
------- ------------ ---------- -----------
Net increase/(decrease)............................................... (80,029) $ (863,300) 12,029 $ 132,701
======= ============ ========== ===========
INVESTOR N SHARES:
Sold.................................................................. 7,691 $ 82,996 6,644 $ 73,296
Issued as reinvestment of dividends................................... 13,622 146,840 4,513 49,421
Redeemed.............................................................. (36,251) (390,730) (4,071) (44,819)
------- ------------ ---------- -----------
Net increase/(decrease)............................................... (14,938) $ (160,894) 7,086 $ 77,898
======= ============ ========== ===========
<CAPTION>
MARYLAND MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold.................................................................. 234,636 $ 2,211,353 34,297 $ 330,542
Issued as reinvestment of dividends................................... 669 6,304 183 1,752
Redeemed.............................................................. (43,789) (414,757) (7,194) (70,000)
---------- ----------- ---------- -----------
Net increase/(decrease)............................................... 191,516 $ 1,802,900 27,286 $ 262,294
========== =========== ========== ===========
INVESTOR A SHARES:
Sold.................................................................. 67,007 $ 629,185 11,875 $ 110,562
Issued as reinvestment of dividends................................... 5,602 52,846 921 8,809
Redeemed.............................................................. (38,486) (364,074) (4,259) (40,975)
---------- ----------- ---------- -----------
Net increase/(decrease)............................................... 34,123 $ 317,957 8,537 $ 78,396
========== =========== ========== ===========
INVESTOR C SHARES:
Sold.................................................................. -- $ -- 1 $ 10
Issued as reinvestment of dividends................................... 12 108 3 33
Redeemed.............................................................. -- -- -- --
---------- ----------- ---------- -----------
Net increase/(decrease)............................................... 12 $ 108 4 $ 43
========== =========== ========== ===========
INVESTOR N SHARES:
Sold.................................................................. 15,656 $ 146,980 1,131 $ 12,326
Issued as reinvestment of dividends................................... 28,413 268,108 10,220 98,130
Redeemed.............................................................. (212,307) (1,991,663) (21,471) (205,368)
---------- ----------- ---------- -----------
Net increase/(decrease)............................................... (168,238) $(1,576,575) (10,120) $ (94,912)
========== =========== ========== ===========
<CAPTION>
NORTH CAROLINA MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
--------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold.................................................................. 321,358 $ 3,060,134 38,727 $ 382,413
Issued as reinvestment of dividends................................... 261 2,464 138 1,007
Redeemed.............................................................. (162,637) (1,548,697) (4,065) (39,512)
-------- ------------ ---------- -----------
Net increase/(decrease)............................................... 158,982 $ 1,513,901 34,800 $ 343,908
======== ============ ========== ===========
INVESTOR A SHARES:
Sold.................................................................. 33,554 $ 319,668 11,184 $ 108,756
Issued as reinvestment of dividends................................... 2,283 21,755 463 4,492
Redeemed.............................................................. (20,351) (193,249) (144) (1,415)
-------- ------------ ---------- -----------
Net increase/(decrease)............................................... 15,486 $ 148,174 11,503 $ 111,833
======== ============ ========== ===========
INVESTOR C SHARES:
Sold.................................................................. -- $ -- 1,583 $ 15,010
Issued as reinvestment of dividends................................... 83 793 6 53
Redeemed.............................................................. -- -- -- --
-------- ------------ ---------- -----------
Net increase/(decrease)............................................... 83 $ 793 1,589 $ 15,063
======== ============ ========== ===========
INVESTOR N SHARES:
Sold.................................................................. 21,081 $ 200,477 56,074 $ 548,267
Issued as reinvestment of dividends................................... 81,214 772,682 29,621 288,155
Redeemed.............................................................. (563,321) (5,361,593) (193,797) (1,887,750)
-------- ------------ ---------- -----------
Net increase/(decrease)............................................... (461,026) $ (4,388,434) (108,102) $(1,051,328)
========== ============ ========== ===========
<CAPTION>
SOUTH CAROLINA INTERMEDIATE MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold.................................................................. 1,335,506 $14,059,668 269,174 $ 2,874,114
Issued as reinvestment of dividends................................... 9,601 101,149 2,578 27,499
Redeemed.............................................................. (660,889) (6,950,351) (529,107) (5,671,508)
--------- ----------- -------- -----------
Net increase/(decrease)............................................... 684,218 $ 7,210,466 (257,355) $(2,769,895)
========= =========== ======== ===========
INVESTOR A SHARES:
Sold.................................................................. 28,019 $ 295,941 88,345 $ 946,537
Issued as reinvestment of dividends................................... 25,255 265,917 9,588 102,383
Redeemed.............................................................. (414,675) (4,388,366) (91,422) (981,465)
--------- ----------- -------- -----------
Net increase/(decrease)............................................... (361,401) $(3,826,508) 6,511 $ 67,455
========= =========== ======== ===========
INVESTOR C SHARES:
Sold.................................................................. 58,225 $ 606,527 1,514 $ 15,931
Issued as reinvestment of dividends................................... 13,422 141,375 5,085 54,300
Redeemed.............................................................. (101,102) (1,062,984) (9,387) (100,180)
--------- ----------- -------- -----------
Net increase/(decrease)............................................... (29,455) $ (315,082) (2,788) $ (29,949)
========= =========== ======== ===========
INVESTOR N SHARES:
Sold.................................................................. 165,111 $ 1,751,110 68,683 $ 735,005
Issued as reinvestment of dividends................................... 17,417 183,517 5,411 57,762
Redeemed.............................................................. (298,337) (3,154,641) (15,644) (166,685)
--------- ----------- -------- -----------
Net increase/(decrease)............................................... (115,809) $(1,220,014) 58,450 $ 626,082
========== =========== ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
143
<PAGE> 148
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
SOUTH CAROLINA MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(A)
-------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................... 360,137 $ 3,527,760 43,732 $ 435,010
Issued as reinvestment of dividends................................ -- -- -- --
Redeemed........................................................... (48,358) (475,217) (11,402) (114,752)
-------- ----------- ------- ----------
Net increase....................................................... 311,779 $ 3,052,543 32,330 $ 320,258
======== =========== ======= ==========
INVESTOR A SHARES:
Sold............................................................... 7,567 $ 74,339 1,718 $ 17,256
Issued as reinvestment of dividends................................ 3,635 35,610 1,783 17,812
Redeemed........................................................... (53,101) (519,581) (2,710) (27,368)
-------- ----------- ------- ----------
Net increase/(decrease)............................................ (41,899) $ (409,632) 791 $ 7,700
======== =========== ======= ==========
INVESTOR C SHARES:
Sold............................................................... -- $ -- 54,672 $ 550,000
Issued as reinvestment of dividends................................ 19 180 29 288
Redeemed........................................................... (1,739) (16,945) (29,674) (301,784)
-------- ----------- ------- ----------
Net increase/(decrease)............................................ (1,720) $ (16,765) 25,027 $ 248,504
======== =========== ======= ==========
INVESTOR N SHARES:
Sold............................................................... 145,761 $ 1,437,355 80,526 $ 800,208
Issued as reinvestment of dividends................................ 32,931 323,684 11,265 112,544
Redeemed........................................................... (271,284) (2,675,080) (30,449) (304,263)
-------- ----------- ------- ----------
Net increase/(decrease)............................................ (92,592) $ (914,041) 61,342 $ 608,489
======== =========== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
TEXAS INTERMEDIATE MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(A)
-------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................... 647,531 $ 6,585,701 202,753 $2,114,082
Issued as reinvestment of dividends................................ -- -- -- --
Redeemed........................................................... (877,019) (8,983,909) (87,027) (901,102)
-------- ----------- ------- ----------
Net increase/(decrease)............................................ (229,488) $(2,398,208) 115,726 $1,212,980
======== =========== ======= ==========
INVESTOR A SHARES:
Sold............................................................... 19,906 $ 202,395 129 $ 1,342
Issued as reinvestment of dividends................................ 1,811 18,394 623 6,452
Redeemed........................................................... (10,885) (111,324) (109) (1,130)
-------- ----------- ------- ----------
Net increase/(decrease)............................................ 10,832 $ 109,465 643 $ 6,664
======== =========== ======= ==========
INVESTOR C SHARES:
Sold............................................................... -- $ -- 1 $ 11
Issued as reinvestment of dividends................................ 2,321 23,725 742 7,683
Redeemed........................................................... -- -- -- --
-------- ----------- ------- ----------
Net increase/(decrease)............................................ 2,321 $ 23,725 743 $ 7,694
======== =========== ======= ==========
INVESTOR N SHARES:
Sold............................................................... 1,216 $ 12,460 1,040 $ 10,800
Issued as reinvestment of dividends................................ 6,080 62,109 2,383 24,698
Redeemed........................................................... (71,626) (727,911) (27,471) (284,893)
-------- ----------- ------- ----------
Net decrease....................................................... (64,330) $ (653,342) (24,048) $ (249,395)
======== =========== ======= ==========
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
144
<PAGE> 149
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
TENNESSEE INTERMEDIATE MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
------------------------ ----------------------
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................... 291,105 $ 2,938,293 157,752 $1,607,430
Issued as reinvestment of dividends................................ 1,071 10,734 2,109 21,573
Redeemed........................................................... (245,724) (2,461,065) (26,193) (268,666)
-------- ----------- ------- ----------
Net increase....................................................... 46,452 $ 487,962 133,668 $1,360,337
======== =========== ======= ==========
INVESTOR A SHARES:
Sold............................................................... 6,038 $ 60,692 52 $ 542
Issued as reinvestment of dividends................................ 24,148 244,190 8,442 86,375
Redeemed........................................................... (88,908) (896,497) (11,200) (114,730)
-------- ----------- ------- ----------
Net increase/(decrease)............................................ (58,722) $ (591,615) (2,706) $ (27,813)
======== =========== ======= ==========
INVESTOR C SHARES:
Sold............................................................... -- $ -- 1 $ 11
Issued as reinvestment of dividends................................ 9 96 3 31
Redeemed........................................................... -- -- -- --
-------- ----------- ------ ----------
Net increase/(decrease)............................................ 9 $ 96 4 $ 42
======== =========== ======= ==========
INVESTOR N SHARES:
Sold............................................................... 9,489 $ 95,584 12,206 $ 125,200
Issued as reinvestment of dividends................................ 10,558 106,766 3,623 37,065
Redeemed........................................................... (67,201) (679,705) (15,289) (156,004)
-------- ----------- ------- ----------
Net increase/(decrease)............................................ (47,154) $ (477,355) 540 $ 6,261
======== =========== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
TENNESSEE MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
--------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................... 173,358 $ 1,693,318 23,133 $ 230,008
Issued as reinvestment of dividends................................ 7 68 2 20
Redeemed........................................................... (6,759) (65,656) (253) (2,500)
--------- ------------ -------- -----------
Net increase....................................................... 166,606 $ 1,627,730 22,882 $ 227,528
========= =========== ======== ===========
INVESTOR A SHARES:
Sold............................................................... 200 $ 1,946 80,756 $ 782,383
Issued as reinvestment of dividends................................ 4,457 43,363 268 2,607
Redeemed........................................................... (177) (1,705) (1,129) (11,228)
--------- ------------ -------- -----------
Net increase/(decrease)............................................ 4,480 $ 43,604 79,895 $ 773,762
========= ============ ======== ===========
INVESTOR C SHARES:
Sold............................................................... -- $ -- 28 $ 275
Issued as reinvestment of dividends................................ 170 1,653 48 475
Redeemed........................................................... -- -- (2,759) (27,755)
-------- ------------ -------- -----------
Net increase/(decrease)............................................ 170 $ 1,653 (2,683) $ (27,005)
======== ============ ======== ===========
INVESTOR N SHARES:
Sold............................................................... 3,320 $ 32,017 69,966 $ 699,596
Issued as reinvestment of dividends................................ 18,104 176,057 6,689 66,084
Redeemed........................................................... (171,629) (1,665,198) (49,231) (486,384)
-------- ------------ -------- -----------
Net increase/(decrease)............................................ (150,205) $ (1,457,124) 27,424 $ 279,296
======== ============ ======== ===========
</TABLE>
<TABLE>
<CAPTION>
TEXAS MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
------------------------ ----------------------
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................... 250,760 $ 2,375,276 76,130 $ 739,643
Issued as reinvestment of dividends................................ 12 118 2 20
Redeemed........................................................... (193,829) (1,864,801) (9,963) (96,764)
-------- ----------- ------- ----------
Net increase....................................................... 56,943 $ 510,593 66,169 $ 642,899
======== =========== ======= ==========
INVESTOR A SHARES:
Sold............................................................... 6,766 $ 62,991 330 $ 3,168
Issued as reinvestment of dividends................................ 599 5,725 114 1,121
Redeemed........................................................... (1,598) (15,001) (3,263) (31,917)
-------- ----------- ------- ----------
Net increase/(decrease)............................................ 5,767 $ 53,715 (2,819) $ (27,628)
======== =========== ======= ==========
INVESTOR C SHARES:
Sold............................................................... -- $ -- 1 $ 10
Issued as reinvestment of dividends................................ 337 3,215 106 1,024
Redeemed........................................................... -- -- -- --
-------- ----------- ------- ----------
Net increase/(decrease)............................................ 337 $ 3,215 107 $ 1,034
======== =========== ======= ==========
INVESTOR N SHARES:
Sold............................................................... 8,632 $ 82,485 7,649 $ 74,600
Issued as reinvestment of dividends................................ 30,093 286,900 11,199 108,407
Redeemed........................................................... (222,374) (2,119,387) (68,456) (661,516)
-------- ----------- ------- ----------
Net increase/(decrease)............................................ (183,649) $(1,750,002) (49,608) $ (478,509)
======== =========== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(a)
--------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................... 2,958,562 $ 31,620,975 732,138 $ 7,945,587
Issued as reinvestment of dividends................................ 7,432 79,415 2,904 31,517
Redeemed........................................................... (3,464,921) (36,957,080) (712,840) (7,743,807)
---------- ------------ -------- -----------
Net increase....................................................... (498,927) $ (5,256,690) 22,202 $ 233,297
========== ============ ======== ===========
INVESTOR A SHARES:
Sold............................................................... 359,732 $ 3,852,993 98,354 $ 1,066,154
Issued as reinvestment of dividends................................ 182,885 1,952,616 72,511 786,569
Redeemed........................................................... (1,634,419) (17,445,789) (573,486) (6,212,884)
---------- ------------ -------- -----------
Net increase/(decrease)............................................ (1,091,802) $(11,640,180) (402,621) $(4,360,161)
========== ============ ======== ===========
INVESTOR C SHARES:
Sold............................................................... 8,421 $ 89,965 1,351 $ 14,653
Issued as reinvestment of dividends................................ 18,059 192,864 6,100 66,176
Redeemed........................................................... (62,436) (667,180) (21,503) (233,382)
---------- ------------ -------- -----------
Net increase/(decrease)............................................ (35,956) $ (384,351) (14,052) $ (152,553)
========== ============ ======== ===========
INVESTOR N SHARES:
Sold............................................................... 8,035 $ 85,353 4,369 $ 47,365
Issued as reinvestment of dividends................................ 29,858 318,831 10,584 114,804
Redeemed........................................................... (160,347) (1,715,511) (22,397) (243,104)
---------- ------------ -------- -----------
Net increase/(decrease)............................................ (122,454) $ (1,311,327) (7,444) $ (80,935)
========== ============ ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
145
<PAGE> 150
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
VIRGINIA MUNICIPAL BOND FUND
YEAR ENDED PERIOD ENDED
MARCH 31, 1997 MARCH 31, 1996(A)
-------------------------- -----------------------
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold................................................................ 445,108 $ 4,182,650 61,232 $ 590,875
Redeemed............................................................ (187,420) (1,753,948) (76,321) (738,868)
-------- ----------- ------- ---------
Net increase/(decrease)............................................. 257,688 $ 2,428,702 (15,089) $(147,993)
======== =========== ======= =========
INVESTOR A SHARES:
Sold................................................................ 36,304 $ 342,983 2,097 $ 20,432
Issued as reinvestment of dividends................................. 2,474 23,323 880 8,443
Redeemed............................................................ (32,024) (302,282) (31) (310)
-------- ----------- ------- ---------
Net increase........................................................ 6,754 $ 64,024 2,946 $ 28,565
======== =========== ======= =========
INVESTOR C SHARES:
Sold................................................................ -- $ -- 1,038 $ 10,010
Issued as reinvestment of dividends................................. 216 2,032 68 650
-------- ----------- ------- ---------
Net increase........................................................ 216 $ 2,032 1,106 $ 10,660
======== =========== ======= =========
INVESTOR N SHARES:
Sold................................................................ 20,853 $ 197,062 27,104 $ 259,471
Issued as reinvestment of dividends................................. 43,741 413,677 15,468 148,440
Redeemed............................................................ (277,624) (2,619,581) (56,955) (547,725)
-------- ----------- ------- ---------
Net decrease........................................................ (213,030) $(2,008,842) (14,383) $(139,814)
======== =========== ======= =========
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
146
<PAGE> 151
[THIS PAGE INTENTIONALLY LEFT BLANK]
147
<PAGE> 152
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT NET INVESTMENT REALIZED
OF YEAR INCOME ON INVESTMENTS FROM OPERATIONS INCOME INCOME CAPITAL GAINS
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS SHORT-TERM
MUNICIPAL INCOME FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ 9.98 $ 0.44 $(0.03) $ 0.41 $(0.44) -- --
Period ended
03/31/1996(b).......... 10.03 0.15 (0.05) 0.10 (0.15) -- --
Year ended 11/30/1995.... 9.69 0.44 0.34 0.78 (0.44) -- --
Year ended 11/30/1994.... 9.96 0.38 (0.27) 0.11 (0.38) -- $ (0.00)#
Period ended
11/30/1993*............ 10.00 0.05 (0.04) 0.01 (0.05) -- --
INVESTOR A SHARES
Year ended 03/31/1997.... $ 9.98 $ 0.42 $(0.03) $ 0.39 $(0.42) -- --
Period ended
03/31/1996(b).......... 10.03 0.14 (0.05) 0.09 (0.14) -- --
Year ended 11/30/1995.... 9.69 0.42 0.34 0.76 (0.42) -- --
Year ended 11/30/1994.... 9.96 0.36 (0.27) 0.09 (0.36) -- $ (0.00)#
Period ended
11/30/1993*............ 9.98 0.03 (0.02) 0.01 (0.03) -- --
INVESTOR C SHARES
Year ended 03/31/1997.... $ 9.98 $ 0.40 $(0.03) $ 0.37 $(0.40) -- --
Period ended
03/31/1996(b).......... 10.03 0.14 (0.05) 0.09 (0.14) -- --
Year ended 11/30/1995.... 9.69 0.42 0.34 0.76 (0.42) -- --
Period ended
11/30/1994*............ 9.84 0.19 (0.15) 0.04 (0.19) -- $ (0.00)#
INVESTOR N SHARES
Year ended 03/31/1997.... $ 9.98 $ 0.40 $(0.03) $ 0.37 $(0.40) -- --
Period ended
03/31/1996(b).......... 10.03 0.13 (0.05) 0.08 (0.13) -- --
Year ended 11/30/1995.... 9.69 0.40 0.34 0.74 (0.40) -- --
Year ended 11/30/1994.... 9.96 0.34 (0.27) 0.07 (0.34) -- $ (0.00)#
Period ended
11/30/1993*............ 10.00 0.04 (0.04) 0.00 (0.04) -- --
NATIONS INTERMEDIATE
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ 10.03 $ 0.48 $(0.02) $ 0.46 $(0.48) -- --
Period ended
03/31/1996(b).......... 10.17 0.16 (0.14) 0.02 (0.16) -- --
Year ended 11/30/1995.... 9.24 0.48 0.93 1.41 (0.48) -- --
Year ended 11/30/1994.... 10.11 0.45 (0.86) (0.41) (0.45) $(0.00)# $ (0.01)
Period ended
11/30/1993**........... 10.00 0.14 0.11 0.25 (0.14) -- --
INVESTOR A SHARES
Year ended 03/31/1997.... $ 10.03 $ 0.46 $(0.02) $ 0.44 $(0.46) -- --
Period ended
03/31/1996(b).......... 10.17 0.15 (0.14) 0.01 (0.15) -- --
Year ended 11/30/1995.... 9.24 0.47 0.93 1.40 (0.47) -- --
Year ended 11/30/1994.... 10.11 0.42 (0.86) (0.44) (0.42) $(0.00)# $ (0.01)
Period ended
11/30/1993**........... 10.10 0.12 0.01 0.13 (0.12) -- --
INVESTOR C SHARES
Year ended 03/31/1997.... $ 10.03 $ 0.43 $(0.02) $ 0.41 $(0.43) -- --
Period ended
03/31/1996(b).......... 10.17 0.14 (0.14) 0.00 (0.14) -- --
Year ended 11/30/1995.... 9.24 0.43 0.93 1.36 (0.43) -- --
Period ended
11/30/1994**........... 9.35 0.03 (0.11) (0.08) (0.03) -- --
INVESTOR N SHARES
Year ended 03/31/1997.... $ 10.03 $ 0.43 $(0.02) $ 0.41 $(0.43) -- --
Period ended
03/31/1996(b).......... 10.17 0.14 (0.14) 0.00 (0.14) -- --
Year ended 11/30/1995.... 9.24 0.43 0.93 1.36 (0.43) -- --
Period ended
11/30/1994**........... 10.13 0.39 (0.88) (0.49) (0.39) $(0.00)# $ (0.01)
</TABLE>
- ---------------
* Nations Short-Term Municipal Income Fund's Primary A, Investor A, Investor C
and Investor N Shares commenced operations on October 7, 1993, November 2,
1993, May 19, 1994 and October 12, 1993, respectively.
** Nations Intermediate Municipal Bond Fund's Primary A, Investor A, Investor C
and Investor N Shares commenced operations on July 30, 1993, August 17,
1993, November 3, 1994 and December 2, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
148
<PAGE> 153
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT
DIVIDENDS VALUE END OF EXPENSES TO INCOME TO PORTFOLIO
AND END OF TOTAL YEAR AVERAGE NET AVERAGE NET TURNOVER
DISTRIBUTIONS YEAR RETURN++ (IN 000'S) ASSETS ASSETS RATE
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS SHORT-TERM
MUNICIPAL INCOME FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ (0.44) $ 9.95 4.15% $ 61,072 0.40%(a) 4.36% 80%
Period ended
03/31/1996(b).......... (0.15) 9.98 0.96 48,511 0.40+(a) 4.37+ 16
Year ended 11/30/1995.... (0.44) 10.03 8.16 49,961 0.45(a) 4.38 82
Year ended 11/30/1994.... (0.38) 9.69 1.09 33,488 0.34(a) 3.83 57
Period ended
11/30/1993*............ (0.05) 9.96 0.06 5,999 0.09+ 3.16+ 45
INVESTOR A SHARES
Year ended 03/31/1997.... $ (0.42) $ 9.95 3.96% $ 8,417 0.60%(a) 4.16% 80%
Period ended
03/31/1996(b).......... (0.14) 9.98 0.90 4,599 0.60+(a) 4.17+ 16
Year ended 11/30/1995.... (0.42) 10.03 7.95 3,741 0.65(a) 4.18 82
Year ended 11/30/1994.... (0.36) 9.69 0.90 217 0.52(a) 3.65 57
Period ended
11/30/1993*............ (0.03) 9.96 0.06 731 0.24+ 3.01+ 45
INVESTOR C SHARES
Year ended 03/31/1997.... $ (0.40) $ 9.95 3.79% $ 1,080 0.75%(a) 4.01% 80%
Period ended
03/31/1996(b).......... (0.14) 9.98 0.85 2,072 0.72+(a) 4.05+ 16
Year ended 11/30/1995.... (0.42) 10.03 7.95 1,953 0.70(a) 4.13 82
Period ended
11/30/1994*............ (0.19) 9.69 0.45 323 0.59+(a) 3.58+ 57
INVESTOR N SHARES
Year ended 03/31/1997.... $ (0.40) $ 9.95 3.78% $ 10,655 0.75%(a) 4.01% 80%
Period ended
03/31/1996(b).......... (0.13) 9.98 0.84 13,859 0.75+(a) 4.02+ 16
Year ended 11/30/1995.... (0.40) 10.03 7.78 9,803 0.80(a) 4.03 82
Year ended 11/30/1994.... (0.34) 9.69 0.73 13,421 0.69(a) 3.48 57
Period ended
11/30/1993*............ (0.04) 9.96 (0.02) 5,863 0.44+ 2.81+ 45
NATIONS INTERMEDIATE
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ (0.48) $ 10.01 4.63% $108,204 0.50%(a) 4.74% 21%
Period ended
03/31/1996(b).......... (0.16) 10.03 0.20 77,423 0.50+(a) 4.75+ 4
Year ended 11/30/1995.... (0.48) 10.17 15.60 73,897 0.45(a) 4.91 31
Year ended 11/30/1994.... (0.46) 9.24 (4.25) 38,055 0.35(a) 4.59 51
Period ended
11/30/1993**........... (0.14) 10.11 2.46 28,335 0.24+ 4.07+ 23
INVESTOR A SHARES
Year ended 03/31/1997.... $ (0.46) $ 10.01 4.42% $ 2,067 0.70%(a) 4.54% 21%
Period ended
03/31/1996(b).......... (0.15) 10.03 0.13 1,500 0.70+(a) 4.55+ 4
Year ended 11/30/1995.... (0.47) 10.17 15.38 1,249 0.65(a) 4.71 31
Year ended 11/30/1994.... (0.43) 9.24 (4.48) 172 0.53(a) 4.41 51
Period ended
11/30/1993**........... (0.12) 10.11 1.28 68 0.39+ 3.92+ 23
INVESTOR C SHARES
Year ended 03/31/1997.... $ (0.43) $ 10.01 4.11% $ 756 1.00%(a) 4.24% 21%
Period ended
03/31/1996(b).......... (0.14) 10.03 0.03 716 1.00+(a) 4.25+ 4
Year ended 11/30/1995.... (0.43) 10.17 14.96 359 0.95(a) 4.41 31
Period ended
11/30/1994**........... (0.03) 9.24 (0.52) 2 0.85+(a) 4.09+ 51
INVESTOR N SHARES
Year ended 03/31/1997.... $ (0.43) $ 10.01 4.12% $ 1,481 1.00%(a) 4.24% 21%
Period ended
03/31/1996(b).......... (0.14) 10.03 0.03 1,623 1.00+(a) 4.25+ 4
Year ended 11/30/1995.... (0.43) 10.17 15.02 1,352 0.95(a) 4.41 31
Period ended
11/30/1994**........... (0.40) 9.24 (5.00) 943 0.85+(a) 4.09+ 51
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
-------------------------------
RATIO OF
OPERATING
EXPENSES TO NET INVESTMENT
AVERAGE NET INCOME
ASSETS PER SHARE
-------------------------------
<S> <C> <C>
NATIONS SHORT-TERM
MUNICIPAL INCOME FUND
PRIMARY A SHARES
Year ended 03/31/1997.... 0.84% $ 0.39
Period ended
03/31/1996(b).......... 0.86+ 0.13
Year ended 11/30/1995.... 0.93 0.39
Year ended 11/30/1994.... 0.80 0.33
Period ended
11/30/1993*............ 1.04+ 0.04
INVESTOR A SHARES
Year ended 03/31/1997.... 1.04% $ 0.37
Period ended
03/31/1996(b).......... 1.06+ 0.12
Year ended 11/30/1995.... 1.13 0.37
Year ended 11/30/1994.... 0.99 0.33
Period ended
11/30/1993*............ 1.19+ 0.02
INVESTOR C SHARES
Year ended 03/31/1997.... 1.19% $ 0.35
Period ended
03/31/1996(b).......... 1.18+ 0.12
Year ended 11/30/1995.... 1.18 0.37
Period ended
11/30/1994*............ 1.05+ 0.18
INVESTOR N SHARES
Year ended 03/31/1997.... 1.19% $ 0.35
Period ended
03/31/1996(b).......... 1.21+ 0.11
Year ended 11/30/1995.... 1.28 0.35
Year ended 11/30/1994.... 1.15 0.31
Period ended
11/30/1993*............ 1.39+ 0.04
NATIONS INTERMEDIATE
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... 0.81% $ 0.44
Period ended
03/31/1996(b).......... 0.83+ 0.15
Year ended 11/30/1995.... 0.84 0.45
Year ended 11/30/1994.... 0.88 0.40
Period ended
11/30/1993**........... 0.96+ 0.12
INVESTOR A SHARES
Year ended 03/31/1997.... 1.01% $ 0.42
Period ended
03/31/1996(b).......... 1.03+ 0.14
Year ended 11/30/1995.... 1.04 0.44
Year ended 11/30/1994.... 1.06 0.38
Period ended
11/30/1993**........... 1.11+ 0.10
INVESTOR C SHARES
Year ended 03/31/1997.... 1.31% $ 0.39
Period ended
03/31/1996(b).......... 1.33+ 0.13
Year ended 11/30/1995.... 1.34 0.40
Period ended
11/30/1994**........... 1.38+ 0.02
INVESTOR N SHARES
Year ended 03/31/1997.... 1.31% $ 0.39
Period ended
03/31/1996(b).......... 1.33+ 0.13
Year ended 11/30/1995.... 1.34 0.40
Period ended
11/30/1994**........... 1.38+ 0.34
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
149
<PAGE> 154
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET INCREASE/ DISTRIBUTIONS
NET ASSET NET REALIZED (DECREASE) IN DIVIDENDS DISTRIBUTIONS FROM NET
VALUE NET AND UNREALIZED NET ASSET FROM NET IN EXCESS OF REALIZED
BEGINNING INVESTMENT GAIN/(LOSS) VALUE INVESTMENT NET INVESTMENT CAPITAL
OF YEAR INCOME ON INVESTMENTS FROM OPERATIONS INCOME INCOME GAINS
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS MUNICIPAL
INCOME FUND
PRIMARY A SHARES
Year ended
03/31/1997........ $ 10.84 $ 0.59 $ 0.05 $ 0.64 $(0.59) -- --
Period ended
03/31/1996(b)..... 11.08 0.20 (0.24) (0.04) (0.20) -- --
Year ended
11/30/1995........ 9.64 0.59 1.44 2.03 (0.59) -- --
Year ended
11/30/1994........ 11.33 0.57 (1.44) (0.87) (0.57) $(0.00)# $ (0.25)
Year ended
11/30/1993........ 10.65 0.59 0.72 1.31 (0.59) -- (0.04)
Year ended
11/30/1992........ 10.25 0.59 0.41 1.00 (0.59) -- (0.01)
Period ended
11/30/1991*....... 10.00 0.52 0.25 0.77 (0.52) -- --
INVESTOR A SHARES
Year ended
03/31/1997........ $ 10.84 $ 0.57 $ 0.05 $ 0.62 $(0.57) -- --
Period ended
03/31/1996(b)..... 11.08 0.19 (0.24) (0.05) (0.19) -- --
Year ended
11/30/1995........ 9.64 0.57 1.44 2.01 (0.57) -- --
Year ended
11/30/1994........ 11.33 0.55 (1.44) (0.89) (0.55) $(0.00)# $ (0.25)
Year ended
11/30/1993........ 10.65 0.57 0.72 1.29 (0.57) -- (0.04)
Year ended
11/30/1992........ 10.25 0.58 0.41 0.99 (0.58) -- (0.01)
Period ended
11/30/1991*....... 10.00 0.52 0.25 0.77 (0.52) -- --
INVESTOR C SHARES
Year ended
03/31/1997........ $ 10.84 $ 0.53 $ 0.05 $ 0.58 $(0.53) -- --
Period ended
03/31/1996(b)..... 11.08 0.18 (0.24) (0.06) (0.18) -- --
Year ended
11/30/1995........ 9.64 0.51 1.44 1.95 (0.51) -- --
Year ended
11/30/1994........ 11.33 0.49 (1.44) (0.95) (0.49) $(0.00)# $ (0.25)
Year ended
11/30/1993........ 10.65 0.50 0.72 1.22 (0.50) -- (0.04)
Period ended
11/30/1992*....... 10.48 0.21 0.17 0.38 (0.21) -- --
INVESTOR N SHARES
Year ended
03/31/1997........ $ 10.84 $ 0.51 $ 0.05 $ 0.56 $(0.51) -- --
Period ended
03/31/1996(b)..... 11.08 0.17 (0.24) (0.07) (0.17) -- --
Year ended
11/30/1995........ 9.64 0.51 1.44 1.95 (0.51) -- --
Year ended
11/30/1994........ 11.33 0.49 (1.44) (0.95) (0.49) $(0.00)# $ (0.25)
Period ended
11/30/1993*....... 11.13 0.23 0.20 0.43 (0.23) -- --
NATIONS FLORIDA
INTERMEDIATE
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997........ $ 10.46 $ 0.49 $(0.06) $ 0.43 $(0.49) -- --
Period ended
03/31/1996(b)..... 10.63 0.17 (0.17) 0.00 (0.17) -- --
Year ended
11/30/1995........ 9.61 0.48 1.02 1.50 (0.48) -- --
Year ended
11/30/1994........ 10.50 0.45 (0.88) (0.43) (0.45) $(0.00)# $ (0.01)
Period ended
11/30/1993**...... 10.00 0.44 0.50 0.94 (0.44) -- --
INVESTOR A SHARES
Year ended
03/31/1997........ $ 10.46 $ 0.47 $(0.06) $ 0.41 $(0.47) -- --
Period ended
03/31/1996(b)..... 10.63 0.16 (0.17) (0.01) (0.16) -- --
Year ended
11/30/1995........ 9.61 0.46 1.02 1.48 (0.46) -- --
Year ended
11/30/1994........ 10.50 0.43 (0.88) (0.45) (0.43) $(0.00)# $ (0.01)
Period ended
11/30/1993**...... 9.99 0.42 0.51 0.93 (0.42) -- --
INVESTOR C SHARES
Year ended
03/31/1997........ $ 10.46 $ 0.44 $(0.06) $ 0.38 $(0.44) -- --
Period ended
03/31/1996(b)..... 10.63 0.15 (0.17) (0.02) (0.15) -- --
Year ended
11/30/1995........ 9.61 0.43 1.02 1.45 (0.43) -- --
Year ended
11/30/1994........ 10.50 0.39 (0.88) (0.49) (0.39) $(0.00)# $ (0.01)
Period ended
11/30/1993**...... 9.98 0.35 0.52 0.87 (0.35) -- --
INVESTOR N SHARES
Year ended
03/31/1997........ $ 10.46 $ 0.44 $(0.06) $ 0.38 $(0.44) -- --
Period ended
03/31/1996(b)..... 10.63 0.15 (0.17) (0.02) (0.15) -- --
Year ended
11/30/1995........ 9.61 0.43 1.02 1.45 (0.43) -- --
Year ended
11/30/1994........ 10.50 0.40 (0.88) (0.48) (0.40) $(0.00)# $ (0.01)
Period ended
11/30/1993**...... 10.32 0.18 0.18 0.36 (0.18) -- --
</TABLE>
- ---------------
* Nations Municipal Income Fund's Primary A, Investor A, Investor C and
Investor N Shares commenced operations on February 1, 1991, February 1,
1991, June 17, 1992 and June 7, 1993, respectively.
** Nations Florida Intermediate Municipal Bond Fund's Primary A, Investor A,
Investor C and Investor N Shares commenced operations on December 11,
1992, December 14, 1992, December 17, 1992 and June 7, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated
and does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less
than 0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
150
<PAGE> 155
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF
OPERATING
RATIO OF EXPENSES TO
TOTAL NET ASSET NET ASSETS OPERATING AVERAGE NET
DIVIDENDS VALUE END OF EXPENSES TO ASSETS
AND END OF TOTAL YEAR AVERAGE NET INCLUDING
DISTRIBUTIONS YEAR RETURN++ (IN 000'S) ASSETS INTEREST EXPENSE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NATIONS MUNICIPAL
INCOME FUND
PRIMARY A SHARES
Year ended
03/31/1997........ $ (0.59) $ 10.89 6.03% $ 77,260 0.60% (a)
Period ended
03/31/1996(b)..... (0.20) 10.84 (0.41) 68,022 0.60+ (a)
Year ended
11/30/1995........ (0.59) 11.08 21.55 68,836 0.60 (a)
Year ended
11/30/1994........ (0.82) 9.64 (8.17) 59,279 0.61 0.62%
Year ended
11/30/1993........ (0.63) 11.33 12.54 88,386 0.52 --
Year ended
11/30/1992........ (0.60) 10.65 9.97+++ 62,387 0.43 --
Period ended
11/30/1991*....... (0.52) 10.25 7.87+++ 23,631 0.20+ --
INVESTOR A SHARES
Year ended
03/31/1997........ $ (0.57) $ 10.89 5.82% $ 15,075 0.80% (a)
Period ended
03/31/1996(b)..... (0.19) 10.84 (0.47) 26,085 0.80+ (a)
Year ended
11/30/1995........ (0.57) 11.08 21.31 27,963 0.80 (a)
Year ended
11/30/1994........ (0.80) 9.64 (8.34) 23,754 0.79 0.80%
Year ended
11/30/1993........ (0.61) 11.33 12.37 28,415 0.60 --
Year ended
11/30/1992........ (0.59) 10.65 9.88+++ 21,056 0.52 --
Period ended
11/30/1991*....... (0.52) 10.25 7.87+++ 7,234 0.20+ --
INVESTOR C SHARES
Year ended
03/31/1997........ $ (0.53) $ 10.89 5.50% $ 1,713 1.10% (a)
Period ended
03/31/1996(b)..... (0.18) 10.84 (0.60) 2,173 1.16+ (a)
Year ended
11/30/1995........ (0.51) 11.08 20.65 2,268 1.35 (a)
Year ended
11/30/1994........ (0.74) 9.64 (8.86) 3,064 1.36 1.37%
Year ended
11/30/1993........ (0.54) 11.33 11.69 6,331 1.27 --
Period ended
11/30/1992*....... (0.21) 10.65 3.63+++ 3,774 1.21+ --
INVESTOR N SHARES
Year ended
03/31/1997........
Period ended $ (0.51) $ 10.89 5.24% $ 14,615 1.35% (a)
03/31/1996(b).....
Year ended (0.17) 10.84 (0.66) 16,870 1.35+ (a)
11/30/1995........
Year ended (0.51) 11.08 20.65 18,165 1.35 (a)
11/30/1994........
Period ended (0.74) 9.64 (8.86) 17,101 1.36 1.37%
11/30/1993*.......
NATIONS FLORIDA
INTERMEDIATE MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended
03/31/1997........ $ (0.49) $ 10.40 4.22% $ 51,748 0.50% (a)
Period ended
03/31/1996(b)..... (0.17) 10.46 (0.06) 44,988 0.50+ (a)
Year ended
11/30/1995........ (0.48) 10.63 15.92 44,038 0.55 (a)
Year ended
11/30/1994........ (0.46) 9.61 (4.26) 42,717 0.55 (a)
Period ended
11/30/1993**...... (0.44) 10.50 9.50 41,489 0.44+ --
INVESTOR A SHARES
Year ended
03/31/1997........ $ (0.47) $ 10.40 4.01% $ 2,142 0.70% (a)
Period ended
03/31/1996(b)..... (0.16) 10.46 (0.13) 2,029 0.70+ (a)
Year ended
11/30/1995........ (0.46) 10.63 15.68 2,292 0.75 (a)
Year ended
11/30/1994........ (0.44) 9.61 (4.43) 2,114 0.73 (a)
Period ended
11/30/1993**...... (0.42) 10.50 9.44 2,261 0.59+ --
INVESTOR C SHARES
Year ended
03/31/1997........ $ (0.44) $ 10.40 3.71% $ 272 1.00% (a)
Period ended
03/31/1996(b)..... (0.15) 10.46 (0.23) 275 1.00+ (a)
Year ended
11/30/1995........ (0.43) 10.63 15.34 277 1.05 (a)
Year ended
11/30/1994........ (0.40) 9.61 (4.81) 614 1.13 (a)
Period ended
11/30/1993**...... (0.35) 10.50 8.80 684 1.19+ --
INVESTOR N SHARES
Year ended
03/31/1997........ $ (0.44) $ 10.40 3.70% $ 3,488 1.00% (a)
Period ended
03/31/1996(b)..... (0.15) 10.46 (0.23) 4,001 1.00+ (a)
Year ended
11/30/1995........ (0.43) 10.63 15.34 4,775 1.05 (a)
Year ended
11/30/1994........ (0.41) 9.61 (4.73) 4,691 1.05 (a)
Period ended
11/30/1993**...... (0.18) 10.50 3.53 3,328 0.94+ --
<CAPTION>
WITHOUT WAIVERS AND/OR
---------------------------------
RATIO OF RATIO OF
NET INVESTMENT OPERATING
INCOME TO PORTFOLIO EXPENSES TO NET INVESTMENT
AVERAGE NET TURNOVER AVERAGE NET INCOME
ASSETS RATE ASSETS PER SHARE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NATIONS MUNICIPAL
INCOME FUND
PRIMARY A SHARES
Year ended
03/31/1997........ 5.41% 25% 0.91% $ 0.56
Period ended
03/31/1996(b)..... 5.35+ 4 0.91+ 0.19
Year ended
11/30/1995........ 5.63 49 0.88 0.56
Year ended
11/30/1994........ 5.42 63 0.90 0.54
Year ended
11/30/1993........ 5.24 48 0.84 0.55
Year ended
11/30/1992........ 5.51 19 0.90 0.54
Period ended
11/30/1991*....... 6.07+ 54 0.88+ 0.45
INVESTOR A SHARES
Year ended
03/31/1997........ 5.21% 25% 1.11% $ 0.54
Period ended
03/31/1996(b)..... 5.15+ 4 1.11+ 0.18
Year ended
11/30/1995........ 5.43 49 1.08 0.54
Year ended
11/30/1994........ 5.24 63 1.08 0.52
Year ended
11/30/1993........ 5.09 48 0.99 0.53
Year ended
11/30/1992........ 5.42 19 0.99 0.53
Period ended
11/30/1991*....... 6.07+ 54 0.88+ 0.45
INVESTOR C SHARES
Year ended
03/31/1997........ 4.91% 25% 1.41% $ 0.50
Period ended
03/31/1996(b)..... 4.79+ 4 1.47+ 0.17
Year ended
11/30/1995........ 4.88 49 1.63 0.48
Year ended
11/30/1994........ 4.67 63 1.65 0.46
Year ended
11/30/1993........ 4.49 48 1.59 0.46
Period ended
11/30/1992*....... 4.36+ 19 1.61+ 0.19
INVESTOR N SHARES
Year ended
03/31/1997........ 4.66% 25% 1.66% $ 0.48
Period ended
03/31/1996(b)..... 4.60+ 4 1.66+ 0.16
Year ended
11/30/1995........ 4.88 49 1.63 0.48
Year ended
11/30/1994........ 4.67 63 1.65 0.46
Period ended
11/30/1993*....... 4.49+ 48 1.59+ 0.22
NATIONS FLORIDA
INTERNATIONAL MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended
03/31/1997........ 4.72% 16% 0.81% $ 0.46
Period ended
03/31/1996(b)..... 4.66+ 18 0.86+ 0.15
Year ended
11/30/1995........ 4.70 27 0.81 0.46
Year ended
11/30/1994........ 4.44 34 0.76 0.43
Period ended
11/30/1993**...... 4.28+ 15 0.80+ 0.40
INVESTOR A SHARES
Year ended
03/31/1997........ 4.52% 16% 1.01% $ 0.44
Period ended
03/31/1996(b)..... 4.46+ 18 1.06+ 0.14
Year ended
11/30/1995........ 4.50 27 1.01 0.44
Year ended
11/30/1994........ 4.26 34 0.94 0.41
Period ended
11/30/1993**...... 4.13+ 15 0.95+ 0.39
INVESTOR C SHARES
Year ended
03/31/1997........ 4.22% 16% 1.31% $ 0.41
Period ended
03/31/1996(b)..... 4.16+ 18 1.36+ 0.13
Year ended
11/30/1995........ 4.20 27 1.31 0.41
Year ended
11/30/1994........ 3.86 34 1.34 0.37
Period ended
11/30/1993**...... 3.53+ 15 1.55+ 0.31
INVESTOR N SHARES
Year ended
03/31/1997........ 4.22% 16% 1.31% $ 0.41
Period ended
03/31/1996(b)..... 4.16+ 18 1.36+ 0.13
Year ended
11/30/1995........ 4.20 27 1.31 0.41
Year ended
11/30/1994........ 3.94 34 1.26 0.38
Period ended
11/30/1993**...... 3.78+ 15 1.30+ 0.17
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
151
<PAGE> 156
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT NET INVESTMENT REALIZED
OF YEAR INCOME ON INVESTMENTS FROM OPERATIONS INCOME INCOME CAPITAL GAINS
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS FLORIDA
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997........ $ 9.47 $ 0.48 $ 0.01 $ 0.49 $(0.48) -- --
Period ended
03/31/1996(b)..... 9.76 0.16 (0.29) (0.13) (0.16) -- --
Year ended
11/30/1995........ 8.40 0.51 1.36 1.87 (0.51) -- --
Period ended
11/30/1994*....... 9.93 0.49 (1.53) (1.04) (0.49) -- --
INVESTOR A SHARES
Year ended
03/31/1997........ $ 9.47 $ 0.46 $ 0.01 $ 0.47 $(0.46) -- --
Period ended
03/31/1996(b)..... 9.76 0.15 (0.29) (0.14) (0.15) -- --
Year ended
11/30/1995........ 8.40 0.49 1.36 1.85 (0.49) -- --
Period ended
11/30/1994*....... 9.98 0.47 (1.58) (1.11) (0.47) -- --
INVESTOR C SHARES
Year ended
03/31/1997........ $ 9.47 $ 0.44 $ 0.01 $ 0.45 $(0.44) -- --
Period ended
03/31/1996(b)..... 9.76 0.14 (0.29) (0.15) (0.14) -- --
Year ended
11/30/1995........ 8.40 0.44 1.36 1.80 (0.44) -- --
Period ended
11/30/1994*....... 8.47 0.03 (0.07) (0.04) (0.03) -- --
INVESTOR N SHARES
Year ended
03/31/1997........ $ 9.47 $ 0.41 $ 0.01 $ 0.42 $(0.41) -- --
Period ended
03/31/1996(b)..... 9.76 0.14 (0.29) (0.15) (0.14) -- --
Year ended
11/30/1995........ 8.40 0.44 1.36 1.80 (0.44) -- --
Year ended
11/30/1994........ 9.73 0.45 (1.33) (0.88) (0.45) -- --
Period ended
11/30/1993*....... 10.00 0.03 (0.27) (0.24) (0.03) -- --
NATIONS GEORGIA
INTERMEDIATE
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997........ $ 10.63 $ 0.50 $(0.05) $ 0.45 $(0.50) -- --
Period ended
03/31/1996(b)..... 10.81 0.17 (0.18) (0.01) (0.17) -- --
Year ended
11/30/1995........ 9.82 0.50 0.99 1.49 (0.50) -- --
Year ended
11/30/1994........ 10.82 0.49 (0.98) (0.49) (0.49) $(0.00)# $ (0.02)
Year ended
11/30/1993........ 10.29 0.50 0.56 1.06 (0.50) -- (0.03)
Period ended
11/30/1992**...... 10.00 0.41 0.29 0.70 (0.41) -- --
INVESTOR A SHARES
Year ended
03/31/1997........ $ 10.63 $ 0.48 $(0.05) $ 0.43 $(0.48) -- --
Period ended
03/31/1996(b)..... 10.81 0.16 (0.18) (0.02) (0.16) -- --
Year ended
11/30/1995........ 9.82 0.48 0.99 1.47 (0.48) -- --
Year ended
11/30/1994........ 10.82 0.47 (0.98) (0.51) (0.47) $(0.00)# $ (0.02)
Year ended
11/30/1993........ 10.28 0.48 0.57 1.05 (0.48) -- (0.03)
Period ended
11/30/1992**...... 9.98 0.30 0.30 0.60 (0.30) -- --
INVESTOR C SHARES
Year ended
03/31/1997........ $ 10.63 $ 0.45 $(0.05) $ 0.40 $(0.45) -- --
Period ended
03/31/1996(b)..... 10.81 0.15 (0.18) (0.03) (0.15) -- --
Year ended
11/30/1995........ 9.82 0.45 0.99 1.44 (0.45) -- --
Year ended
11/30/1994........ 10.82 0.43 (0.98) (0.55) (0.43) $(0.00)# $ (0.02)
Year ended
11/30/1993........ 10.29 0.42 0.56 0.98 (0.42) -- (0.03)
Period ended
11/30/1992**...... 10.11 0.20 0.18 0.38 (0.20) -- --
INVESTOR N SHARES
Year ended
03/31/1997........ $ 10.63 $ 0.45 $(0.05) $ 0.40 $(0.45) -- --
Period ended
03/31/1996(b)..... 10.81 0.15 (0.18) (0.03) (0.15) -- --
Year ended
11/30/1995........ 9.82 0.45 0.99 1.44 (0.45) -- --
Year ended
11/30/1994........ 10.82 0.44 (0.98) (0.54) (0.44) $(0.00)# $ (0.02)
Period ended
11/30/1993**...... 10.61 0.20 0.21 0.41 (0.20) -- --
</TABLE>
- ---------------
* Nations Florida Municipal Bond Fund's Primary A, Investor A, Investor C and
Investor N Shares commenced operations on December 13, 1993, December 10,
1993, November 3, 1994 and October 22, 1993, respectively.
** Nations Georgia Intermediate Municipal Bond Fund's Primary A, Investor A,
Investor C and Investor N Shares commenced operations on March 1, 1992, May
4, 1992, June 17, 1992 and June 7, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
152
<PAGE> 157
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
RATIO OF
OPERATING
RATIO OF EXPENSES TO RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING AVERAGE NET NET INVESTMENT
DIVIDENDS VALUE END OF EXPENSES TO ASSETS INCOME TO
AND END OF TOTAL YEAR AVERAGE NET INCLUDING AVERAGE NET
DISTRIBUTIONS YEAR RETURN++ (IN 000'S) ASSETS INTEREST EXPENSE ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS FLORIDA
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997........ $ (0.48) $ 9.48 5.29% $ 16,702 0.60% (a) 5.07%
Period ended
03/31/1996(b)..... (0.16) 9.47 (1.33) 13,044 0.60+ (a) 5.03+
Year ended
11/30/1995........ (0.51) 9.76 22.69 11,219 0.39 (a) 5.44
Period ended
11/30/1994*....... (0.49) 8.40 (10.70) 4,258 0.21+ (a) 5.55+
INVESTOR A SHARES
Year ended
03/31/1997........ $ (0.46) $ 9.48 5.09% $ 1,781 0.80% (a) 4.87%
Period ended
03/31/1996(b)..... (0.15) 9.47 (1.40) 1,836 0.80+ (a) 4.83+
Year ended
11/30/1995........ (0.49) 9.76 22.45 1,787 0.59 (a) 5.24
Period ended
11/30/1994*....... (0.47) 8.40 (11.35) 1,024 0.39+ (a) 5.37+
INVESTOR C SHARES
Year ended
03/31/1997........ $ (0.44) $ 9.48 4.78% $ 40 1.10% (a) 4.57%
Period ended
03/31/1996(b)..... (0.14) 9.47 (1.52) 38 1.15+ (a) 4.48+
Year ended
11/30/1995........ (0.44) 9.76 21.80 38 1.14 (a) 4.69
Period ended
11/30/1994*....... (0.03) 8.40 (0.43) 2 0.96+ (a) 4.80+
INVESTOR N SHARES
Year ended
03/31/1997........ $ (0.41) $ 9.48 4.52% $ 19,751 1.35% (a) 4.32%
Period ended
03/31/1996(b)..... (0.14) 9.47 (1.58) 23,947 1.35+ (a) 4.28+
Year ended
11/30/1995........ (0.44) 9.76 21.78 25,398 1.14 (a) 4.69
Year ended
11/30/1994........ (0.45) 8.40 (9.37) 19,868 0.96 (a) 4.80
Period ended
11/30/1993*....... (0.03) 9.73 (2.35) 11,434 0.68+ -- 3.29+
NATIONS GEORGIA
INTERMEDIATE
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997........ $ (0.50) $ 10.58 4.33% $ 43,470 0.50% (a) 4.72%
Period ended
03/31/1996(b)..... (0.17) 10.63 (0.13) 38,222 0.50+ (a) 4.67+
Year ended
11/30/1995........ (0.50) 10.81 15.42 40,383 0.55 (a) 4.76
Year ended
11/30/1994........ (0.51) 9.82 (4.70) 33,111 0.54 0.55% 4.74
Year ended
11/30/1993........ (0.53) 10.82 10.43 30,738 0.46 -- 4.57
Period ended
11/30/1992**...... (0.41) 10.29 7.07+++ 20,584 0.20+ -- 5.25+
INVESTOR A SHARES
Year ended
03/31/1997........ $ (0.48) $ 10.58 4.12% $ 8,810 0.70% (a) 4.52%
Period ended
03/31/1996(b)..... (0.16) 10.63 (0.19) 8,625 0.70+ (a) 4.47+
Year ended
11/30/1995........ (0.48) 10.81 15.20 9,175 0.75 (a) 4.56
Year ended
11/30/1994........ (0.49) 9.82 (4.87) 10,401 0.72 0.73% 4.56
Year ended
11/30/1993........ (0.51) 10.82 10.37 16,752 0.61 -- 4.42
Period ended
11/30/1992**...... (0.30) 10.28 6.12+++ 3,809 0.34+ -- 5.01+
INVESTOR C SHARES
Year ended
03/31/1997........ $ (0.45) $ 10.58 3.81% $ 1,983 1.00% (a) 4.22%
Period ended
03/31/1996(b)..... (0.15) 10.63 (0.29) 2,445 1.00+ (a) 4.17+
Year ended
11/30/1995........ (0.45) 10.81 14.85 2,606 1.05 (a) 4.26
Year ended
11/30/1994........ (0.45) 9.82 (5.25) 2,397 1.12 1.13% 4.16
Year ended
11/30/1993........ (0.45) 10.82 9.61 2,990 1.21 -- 3.82
Period ended
11/30/1992**...... (0.20) 10.29 3.82+++ 992 0.91+ -- 4.21+
INVESTOR N SHARES
Year ended
03/31/1997........ $ (0.45) $ 10.58 3.81% $ 7,601 1.00% (a) 4.22%
Period ended
03/31/1996(b)..... (0.15) 10.63 (0.29) 8,098 1.00+ (a) 4.17+
Year ended
11/30/1995........ (0.45) 10.81 14.85 8,160 1.05 (a) 4.26
Year ended
11/30/1994........ (0.46) 9.82 (5.17) 7,269 1.04 1.05% 4.24
Period ended
11/30/1993**...... (0.20) 10.82 3.86 4,506 0.96+ -- 4.07+
<CAPTION>
WITHOUT WAIVERS AND/OR
-----------------------------
RATIO OF
OPERATING
PORTFOLIO EXPENSES TO NET INVESTMENT
TURNOVER AVERAGE NET INCOME
RATE ASSETS PER SHARE
- -----------------------------------------------------------------
<S> <C> <C> <C>
NATIONS FLORIDA
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended
03/31/1997........ 23% 0.93% $ 0.45
Period ended
03/31/1996(b)..... 7 0.96+ 0.15
Year ended
11/30/1995........ 13 0.95 0.46
Period ended
11/30/1994*....... 46 0.91+ 0.43
INVESTOR A SHARES
Year ended
03/31/1997........ 23% 1.13% $ 0.43
Period ended
03/31/1996(b)..... 7 1.16+ 0.14
Year ended
11/30/1995........ 13 1.15 0.44
Period ended
11/30/1994*....... 46 1.09+ 0.42
INVESTOR C SHARES
Year ended
03/31/1997........ 23% 1.43% $ 0.41
Period ended
03/31/1996(b)..... 7 1.51+ 0.13
Year ended
11/30/1995........ 13 1.70 0.39
Period ended
11/30/1994*....... 46 1.66+ 0.03
INVESTOR N SHARES
Year ended
03/31/1997........ 23% 1.68% $ 0.38
Period ended
03/31/1996(b)..... 7 1.71+ 0.13
Year ended
11/30/1995........ 13 1.70 0.39
Year ended
11/30/1994........ 46 1.66 0.38
Period ended
11/30/1993*....... 0 1.84+ 0.02
NATIONS GEORGIA
INTERMEDIATE
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997........ 9% 0.80% $ 0.47
Period ended
03/31/1996(b)..... 3 0.83+ 0.16
Year ended
11/30/1995........ 17 0.80 0.47
Year ended
11/30/1994........ 22 0.75 0.47
Year ended
11/30/1993........ 6 0.77 0.46
Period ended
11/30/1992**...... 12 0.77+ 0.37
INVESTOR A SHARES
Year ended
03/31/1997........ 9% 1.00% $ 0.45
Period ended
03/31/1996(b)..... 3 1.03+ 0.15
Year ended
11/30/1995........ 17 1.00 0.45
Year ended
11/30/1994........ 22 0.93 0.45
Year ended
11/30/1993........ 6 0.92 0.45
Period ended
11/30/1992**...... 12 0.91+ 0.27
INVESTOR C SHARES
Year ended
03/31/1997........ 9% 1.30% $ 0.42
Period ended
03/31/1996(b)..... 3 1.33+ 0.14
Year ended
11/30/1995........ 17 1.30 0.42
Year ended
11/30/1994........ 22 1.33 0.41
Year ended
11/30/1993........ 6 1.52 0.39
Period ended
11/30/1992**...... 12 1.72+ 0.16
INVESTOR N SHARES
Year ended
03/31/1997........ 9% 1.30% $ 0.42
Period ended
03/31/1996(b)..... 3 1.33+ 0.14
Year ended
11/30/1995........ 17 1.30 0.42
Year ended
11/30/1994........ 22 1.25 0.42
Period ended
11/30/1993**...... 6 1.27+ 0.18
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
153
<PAGE> 158
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET IN EXCESS OF
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT REALIZED NET REALIZED
OF YEAR INCOME ON INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS CAPITAL GAINS
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS GEORGIA
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997......... $ 9.48 $ 0.47 $ 0.02 $ 0.49 $(0.47) -- --
Period ended
03/31/1996(b)...... 9.72 0.16 (0.24) (0.08) (0.16) -- --
Year ended
11/30/1995......... 8.38 0.51 1.34 1.85 (0.51) -- --
Period ended
11/30/1994*........ 10.02 0.46 (1.64) (1.18) (0.46) -- --
INVESTOR A SHARES
Year ended
03/31/1997......... $ 9.48 $ 0.45 $ 0.02 $ 0.47 $(0.45) -- --
Period ended
03/31/1996(b)...... 9.72 0.14 (0.24) (0.10) (0.14) -- --
Year ended
11/30/1995......... 8.38 0.49 1.34 1.83 (0.49) -- --
Period ended
11/30/1994*........ 9.99 0.47 (1.61) (1.14) (0.47) -- --
INVESTOR C SHARES
Year ended
03/31/1997......... $ 9.48 $ 0.42 $ 0.02 $ 0.44 $(0.42) -- --
Period ended
03/31/1996(b)...... 9.72 0.14 (0.24) (0.10) (0.14) -- --
Year ended
11/30/1995......... 8.38 0.44 1.34 1.78 (0.44) -- --
Period ended
11/30/1994*........ 8.45 0.03 (0.07) (0.04) (0.03) -- --
INVESTOR N SHARES
Year ended
03/31/1997......... $ 9.48 $ 0.40 $ 0.02 $ 0.42 $(0.40) -- --
Period ended
03/31/1996(b)...... 9.72 0.14 (0.24) (0.10) (0.14) -- --
Year ended
11/30/1995......... 8.38 0.44 1.34 1.78 (0.44) -- --
Year ended
11/30/1994......... 9.81 0.45 (1.43) (0.98) (0.45) -- --
Period ended
11/30/1993*........ 10.00 0.04 (0.19) (0.15) (0.04) -- --
NATIONS MARYLAND
INTERMEDIATE
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997......... $ 10.80 $ 0.51 $(0.10) $ 0.41 $(0.51) -- --
Period ended
03/31/1996(b)...... 10.95 0.17 (0.15) 0.02 (0.17) -- --
Year ended
11/30/1995......... 10.00 0.51 0.98 1.49 (0.51) $ (0.03) --
Year ended
11/30/1994......... 11.09 0.50 (0.99) (0.49) (0.50) (0.10) $ (0.00)#
Year ended
11/30/1993......... 10.72 0.52 0.44 0.96 (0.52) (0.07) --
Year ended
11/30/1992......... 10.44 0.55 0.31 0.86 (0.55) (0.03) --
Year ended
11/30/1991......... 10.21 0.60 0.24 0.84 (0.60) (0.01) --
Period ended
11/30/1990**....... 10.00 0.16 0.21 0.37 (0.16) -- --
INVESTOR A SHARES
Year ended
03/31/1997......... $ 10.80 $ 0.48 $(0.10) $ 0.38 $(0.48) -- --
Period ended
03/31/1996(b)...... 10.95 0.16 (0.15) 0.01 (0.16) -- --
Year ended
11/30/1995......... 10.00 0.48 0.98 1.46 (0.48) $ (0.03) --
Year ended
11/30/1994......... 11.09 0.48 (0.99) (0.51) (0.48) (0.10) $ (0.00)#
Year ended
11/30/1993......... 10.72 0.51 0.44 0.95 (0.51) (0.07) --
Year ended
11/30/1992......... 10.44 0.54 0.31 0.85 (0.54) (0.03) --
Year ended
11/30/1991......... 10.21 0.60 0.24 0.84 (0.60) (0.01) --
Period ended
11/30/1990**....... 10.00 0.16 0.21 0.37 (0.16) -- --
INVESTOR C SHARES
Year ended
03/31/1997......... $ 10.80 $ 0.45 $(0.10) $ 0.35 $(0.45) -- --
Period ended
03/31/1996(b)...... 10.95 0.15 (0.15) 0.00 (0.15) -- --
Year ended
11/30/1995......... 10.00 0.45 0.98 1.43 (0.45) $ (0.03) --
Year ended
11/30/1994......... 11.09 0.44 (0.99) (0.55) (0.44) (0.10) $ (0.00)#
Year ended
11/30/1993......... 10.72 0.40 0.44 0.84 (0.40) (0.07) --
Period ended
11/30/1992**....... 10.58 0.19 0.14 0.33 (0.19) -- --
INVESTOR N SHARES
Year ended
03/31/1997......... $ 10.80 $ 0.45 $(0.10) $ 0.35 $(0.45) -- --
Period ended
03/31/1996(b)...... 10.95 0.15 (0.15) 0.00 (0.15) -- --
Year ended
11/30/1995......... 10.00 0.45 0.98 1.43 (0.45) $ (0.03) --
Year ended
11/30/1994......... 11.09 0.45 (0.99) (0.54) (0.45) (0.10) $ (0.00)#
Period ended
11/30/1993**....... 10.94 0.21 0.17 0.38 (0.21) (0.02) --
</TABLE>
- ---------------
* Nations Georgia Municipal Bond Fund's Primary A, Investor A, Investor C and
Investor N Shares commenced operations on January 13, 1994, December 30,
1993, November 3, 1994 and October 21, 1993, respectively.
** Nations Maryland Intermediate Municipal Bond Fund's Primary A, Investor A,
Investor C and Investor N Shares commenced operations on September 1, 1990,
September 1, 1990, June 17, 1992 and June 8, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
154
<PAGE> 159
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING
DIVIDENDS VALUE END OF EXPENSES TO
AND END OF TOTAL YEAR AVERAGE NET
DISTRIBUTIONS YEAR RETURN++ (IN 000'S) ASSETS
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS GEORGIA
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended
03/31/1997......... $ (0.47) $ 9.50 5.29% $ 5,550 0.60%(a)
Period ended
03/31/1996(b)...... (0.16) 9.48 (0.84) 2,068 0.60+(a)
Year ended
11/30/1995......... (0.51) 9.72 22.48 2,628 0.40(a)
Period ended
11/30/1994*........ (0.46) 8.38 (12.07) 232 0.21+(a)
INVESTOR A SHARES
Year ended
03/31/1997......... $ (0.45) $ 9.50 5.05% $ 208 0.80%(a)
Period ended
03/31/1996(b)...... (0.14) 9.48 (1.08) 7 0.80+(a)
Year ended
11/30/1995......... (0.49) 9.72 22.25 7 0.60((a)
Period ended
11/30/1994*........ (0.47) 8.38 (11.71) 6 0.39+(a)
INVESTOR C SHARES
Year ended
03/31/1997......... $ (0.42) $ 9.50 4.77% $ 72 1.10%(a)
Period ended
03/31/1996(b)...... (0.14) 9.48 (1.03) 69 1.16+(a)
Year ended
11/30/1995......... (0.44) 9.72 21.59 69 1.15(a)
Period ended
11/30/1994*........ (0.03) 8.38 (0.44) 2 0.96+(a)
INVESTOR N SHARES
Year ended
03/31/1997......... $ (0.40) $ 9.50 4.50% $ 10,182 1.35%(a)
Period ended
03/31/1996(b)...... (0.14) 9.48 (1.09) 12,254 1.35+(a)
Year ended
11/30/1995......... (0.44) 9.72 21.58 13,017 1.15(a)
Year ended
11/30/1994......... (0.45) 8.38 (10.28) 9,500 0.96(a)
Period ended
11/30/1993*........ (0.04) 9.81 (1.49) 4,820 0.70+
NATIONS MARYLAND
INTERMEDIATE MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended
03/31/1997......... $ (0.51) $ 10.70 3.83% $ 63,549 0.50%(a)
Period ended
03/31/1996(b)...... (0.17) 10.80 0.16 61,337 0.50+(a)
Year ended
11/30/1995......... (0.54) 10.95 15.16 62,460 0.55(a)
Year ended
11/30/1994......... (0.60) 10.00 (4.64) 61,349 0.53(a)
Year ended
11/30/1993......... (0.59) 11.09 9.11 61,552 0.49
Year ended
11/30/1992......... (0.58) 10.72 8.41+++ 48,192 0.39
Year ended
11/30/1991......... (0.61) 10.44 8.46+++ 31,088 0.20
Period ended
11/30/1990**....... (0.16) 10.21 3.72+++ 11,087 0.21+
INVESTOR A SHARES
Year ended
03/31/1997......... $ (0.48) $ 10.70 3.62% $ 14,988 0.70%(a)
Period ended
03/31/1996(b)...... (0.16) 10.80 0.09 19,456 0.70+(a)
Year ended
11/30/1995......... (0.51) 10.95 14.94 21,208 0.75(a)
Year ended
11/30/1994......... (0.58) 10.00 (4.82) 22,145 0.71(a)
Year ended
11/30/1993......... (0.58) 11.09 8.96 22,144 0.64
Year ended
11/30/1992......... (0.57) 10.72 8.32+++ 20,092 0.48
Year ended
11/30/1991......... (0.61) 10.44 8.46+++ 9,934 0.20
Period ended
11/30/1990**....... (0.16) 10.21 3.72+++ 2,228 0.21+
INVESTOR C SHARES
Year ended
03/31/1997......... $ (0.45) $ 10.70 3.31% $ 2,017 1.00%(a)
Period ended
03/31/1996(b)...... (0.15) 10.80 (0.01) 2,900 1.00+(a)
Year ended
11/30/1995......... (0.48) 10.95 14.59 2,808 1.05(a)
Year ended
11/30/1994......... (0.54) 10.00 (5.20) 2,570 1.11(a)
Year ended
11/30/1993......... (0.47) 11.09 8.30 4,424 1.24
Period ended
11/30/1992**....... (0.19) 10.72 3.13+++ 1,796 1.16+
INVESTOR N SHARES
Year ended
03/31/1997......... $ (0.45) $ 10.70 3.31% $ 4,299 1.00%(a)
Period ended
03/31/1996(b)...... (0.15) 10.80 (0.01) 4,500 1.00+(a)
Year ended
11/30/1995......... (0.48) 10.95 14.59 4,485 1.05(a)
Year ended
11/30/1994......... (0.55) 10.00 (5.12) 4,368 1.03(a)
Period ended
11/30/1993**....... (0.23) 11.09 3.53 3,234 0.99+
<CAPTION>
WITHOUT
WAIVERS
AND/OR
EXPENSES
REIMBURSEMENTS
--------------
RATIO OF RATIO OF
NET INVESTMENT OPERATING
INCOME TO PORTFOLIO EXPENSES TO INVESTMENT
AVERAGE NET TURNOVER AVERAGE NET INCOME
ASSETS RATE ASSETS SHARE
-------------------------------------------------------------
<S> <C> <C> <C> <C>
NATIONS GEORGIA
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended
03/31/1997......... 4.96% 19% 1.05% $ 0.43
Period ended
03/31/1996(b)...... 4.96+ 7 1.14+ 0.14
Year ended
11/30/1995......... 5.42 26 1.09 0.44
Period ended
11/30/1994*........ 5.60+ 35 1.04+ 0.39
INVESTOR A SHARES
Year ended
03/31/1997......... 4.76% 19% 1.25% $ 0.41
Period ended
03/31/1996(b)...... 4.76+ 7 1.34+ 0.12
Year ended
11/30/1995......... 5.22 26 1.29 0.42
Period ended
11/30/1994*........ 5.42+ 35 1.22+ 0.40
INVESTOR C SHARES
Year ended
03/31/1997......... 4.46% 19% 1.55% $ 0.38
Period ended
03/31/1996(b)...... 4.40+ 7 1.70+ 0.12
Year ended
11/30/1995......... 4.67 26 1.84 0.37
Period ended
11/30/1994*........ 4.85+ 35 1.79+ 0.02
INVESTOR N SHARES
Year ended
03/31/1997......... 4.21% 19% 1.80% $ 0.36
Period ended
03/31/1996(b)...... 4.21+ 7 1.89+ 0.12
Year ended
11/30/1995......... 4.67 26 1.84 0.37
Year ended
11/30/1994......... 4.85 35 1.79 0.38
Period ended
11/30/1993*........ 3.63+ 30 2.08+ 0.03
NATIONS MARYLAND
INTERMEDIATE MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended
03/31/1997......... 4.70% 10% 0.78% $ 0.48
Period ended
03/31/1996(b)...... 4.62+ 4 0.81+ 0.16
Year ended
11/30/1995......... 4.76 11 0.80 0.48
Year ended
11/30/1994......... 4.73 22 0.73 0.48
Year ended
11/30/1993......... 4.73 26 0.73 0.49
Year ended
11/30/1992......... 5.12 38 0.78 0.51
Year ended
11/30/1991......... 5.76 26 0.71 0.55
Period ended
11/30/1990**....... 6.12+ 49 0.84+ 0.13
INVESTOR A SHARES
Year ended
03/31/1997......... 4.50% 10% 0.98% $ 0.45
Period ended
03/31/1996(b)...... 4.42+ 4 1.01+ 0.15
Year ended
11/30/1995......... 4.56 11 1.00 0.45
Year ended
11/30/1994......... 4.55 22 0.91 0.46
Year ended
11/30/1993......... 4.58 26 0.88 0.48
Year ended
11/30/1992......... 4.98 38 0.87 0.50
Year ended
11/30/1991......... 5.76 26 0.71 0.55
Period ended
11/30/1990**....... 6.12+ 49 0.84+ 0.13
INVESTOR C SHARES
Year ended
03/31/1997......... 4.20% 10% 1.28% $ 0.42
Period ended
03/31/1996(b)...... 4.12+ 4 1.31+ 0.14
Year ended
11/30/1995......... 4.26 11 1.30 0.42
Year ended
11/30/1994......... 4.15 22 1.31 0.42
Year ended
11/30/1993......... 3.98 26 1.48 0.38
Period ended
11/30/1992**....... 3.88+ 38 1.44+ 0.18
INVESTOR N SHARES
Year ended
03/31/1997......... 4.20% 10% 1.28% $ 0.42
Period ended
03/31/1996(b)...... 4.12+ 4 1.31+ 0.14
Year ended
11/30/1995......... 4.26 11 1.30 0.42
Year ended
11/30/1994......... 4.23 22 1.23 0.43
Period ended
11/30/1993**....... 4.23+ 26 1.23+ 0.20
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
155
<PAGE> 160
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT NET INVESTMENT REALIZED
OF YEAR INCOME ON INVESTMENTS FROM OPERATIONS INCOME INCOME CAPITAL GAINS
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS MARYLAND
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997........ $ 9.39 $ 0.46 $ 0.02 $ 0.48 $(0.46) -- --
Period ended
03/31/1996(b)..... 9.63 0.15 (0.24) (0.09) (0.15) -- --
Year ended
11/30/1995........ 8.37 0.48 1.26 1.74 (0.48) -- --
Period ended
11/30/1994*....... 8.90 0.11 (0.53) (0.42) (0.11) -- --
INVESTOR A SHARES
Year ended
03/31/1997........ $ 9.39 $ 0.44 $ 0.02 $ 0.46 $(0.44) -- --
Period ended
03/31/1996(b)..... 9.63 0.14 (0.24) (0.10) (0.14) -- --
Year ended
11/30/1995........ 8.37 0.46 1.26 1.72 (0.46) -- --
Year ended
11/30/1994........ 9.77 0.49 (1.40) (0.91) (0.49) -- --
Period ended
11/30/1993*....... 9.80 0.03 (0.03) 0.00 (0.03) -- --
INVESTOR C SHARES
Year ended
03/31/1997........ $ 9.39 $ 0.42 $ 0.02 $ 0.44 $(0.42) -- --
Period ended
03/31/1996(b)..... 9.63 0.13 (0.24) (0.11) (0.13) -- --
Year ended
11/30/1995........ 8.37 0.41 1.26 1.67 (0.41) -- --
Period ended
11/30/1994*....... 8.44 0.03 (0.07) (0.04) (0.03) -- --
INVESTOR N SHARES
Year ended
03/31/1997........ $ 9.39 $ 0.39 $ 0.02 $ 0.41 $(0.39) -- --
Period ended
03/31/1996(b)..... 9.63 0.13 (0.24) (0.11) (0.13) -- --
Year ended
11/30/1995........ 8.37 0.41 1.26 1.67 (0.41) -- --
Year ended
11/30/1994........ 9.77 0.44 (1.40) (0.96) (0.44) -- --
Period ended
11/30/1993*....... 10.00 0.04 (0.23) (0.19) (0.04) -- --
NATIONS NORTH
CAROLINA
INTERMEDIATE
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997........ $ 10.36 $ 0.47 $(0.02) $ 0.45 $(0.47) -- --
Period ended
03/31/1996(b)..... 10.51 0.16 (0.15) 0.01 (0.16) -- --
Year ended
11/30/1995........ 9.53 0.45 0.99 1.44 (0.45) $(0.00)# $ (0.01)
Year ended
11/30/1994........ 10.46 0.44 (0.88) (0.44) (0.44) -- (0.05)
Period ended
11/30/1993**...... 10.00 0.43 0.46 0.89 (0.43) -- --
INVESTOR A SHARES
Year ended
03/31/1997........ $ 10.36 $ 0.45 $(0.02) $ 0.43 $(0.45) -- --
Period ended
03/31/1996(b)..... 10.51 0.15 (0.15) 0.00 (0.15) -- --
Year ended
11/30/1995........ 9.53 0.43 0.99 1.42 (0.43) $(0.00)# $ (0.01)
Year ended
11/30/1994........ 10.46 0.42 (0.88) (0.46) (0.42) -- (0.05)
Period ended
11/30/1993**...... 10.01 0.42 0.45 0.87 (0.42) -- --
INVESTOR C SHARES
Year ended
03/31/1997........ $ 10.36 $ 0.42 $(0.02) $ 0.40 $(0.42) -- --
Period ended
03/31/1996(b)..... 10.51 0.14 (0.15) (0.01) (0.14) -- --
Year ended
11/30/1995........ 9.53 0.40 0.99 1.39 (0.40) $(0.00)# $ (0.01)
Year ended
11/30/1994........ 10.46 0.38 (0.88) (0.50) (0.38) -- (0.05)
Period ended
11/30/1993**...... 9.99 0.35 0.47 0.82 (0.35) -- --
INVESTOR N SHARES
Year ended
03/31/1997........ $ 10.36 $ 0.42 $(0.02) $ 0.40 $(0.42) -- --
Period ended
03/31/1996(b)..... 10.51 0.14 (0.15) (0.01) (0.14) -- --
Year ended
11/30/1995........ 9.53 0.40 0.99 1.39 (0.40) $(0.00)# $ (0.01)
Year ended
11/30/1994........ 10.46 0.39 (0.88) (0.49) (0.39) -- (0.05)
Period ended
11/30/1993**...... 10.31 0.18 0.15 0.33 (0.18) -- --
</TABLE>
- ---------------
* Nations Maryland Municipal Bond Fund's Primary A, Investor A, Investor C
and Investor N Shares commenced operations on September 20, 1994, November
4, 1993, November 3, 1994 and October 21, 1993, respectively.
** Nations North Carolina Intermediate Municipal Bond Fund's Primary A,
Investor A, Investor C and Investor N Shares commenced operations on
December 11, 1992, December 14, 1992, December 16, 1992 and June 7, 1993,
respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
156
<PAGE> 161
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING
DIVIDENDS VALUE END OF EXPENSES TO
AND END OF TOTAL YEAR AVERAGE NET
DISTRIBUTIONS YEAR RETURN++ (IN 000'S) ASSETS
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS MARYLAND
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997........ $ (0.46) $ 9.41 5.20% $ 4,596 0.60%
Period ended
03/31/1996(b)..... (0.15) 9.39 (0.95) 2,788 0.60+
Year ended
11/30/1995........ (0.48) 9.63 21.23 2,595 0.40
Period ended
11/30/1994*....... (0.11) 8.37 (4.89) 39 0.21+(a)
INVESTOR A SHARES
Year ended
03/31/1997........ $ (0.44) $ 9.41 4.99% $ 1,409 0.80%
Period ended
03/31/1996(b)..... (0.14) 9.39 (1.01) 1,086 0.80+
Year ended
11/30/1995........ (0.46) 9.63 20.99 1,031 0.60
Year ended
11/30/1994........ (0.49) 8.37 (9.59) 9 0.39(a)
Period ended
11/30/1993*....... (0.03) 9.77 0.05 6 0.13+
INVESTOR C SHARES
Year ended
03/31/1997........ $ (0.42) $ 9.41 4.73% $ 2 1.10%
Period ended
03/31/1996(b)..... (0.13) 9.39 (1.13) 2 1.16+
Year ended
11/30/1995........ (0.41) 9.63 20.29 2 1.15
Period ended
11/30/1994*....... (0.03) 8.37 (0.45) 2 0.96+(a)
INVESTOR N SHARES
Year ended
03/31/1997........ $ (0.39) $ 9.41 4.42% $ 8,099 1.35%
Period ended
03/31/1996(b)..... (0.13) 9.39 (1.19) 9,662 1.35+
Year ended
11/30/1995........ (0.41) 9.63 20.33 10,002 1.15
Year ended
11/30/1994........ (0.44) 8.37 (10.11) 4,819 0.96(a)
Period ended
11/30/1993*....... (0.04) 9.77 (1.94) 3,048 0.73+
NATIONS NORTH
CAROLINA
INTERMEDIATE
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997........ $ (0.47) $ 10.34 4.45% $ 25,855 0.50%(a)
Period ended
03/31/1996(b)..... (0.16) 10.36 0.05 21,161 0.50+
Year ended
11/30/1995........ (0.46) 10.51 15.41 20,916 0.57(a)
Year ended
11/30/1994........ (0.49) 9.53 (4.34) 14,148 0.55(a)
Period ended
11/30/1993**...... (0.43) 10.46 9.03 11,814 0.42+
INVESTOR A SHARES
Year ended
03/31/1997........ $ (0.45) $ 10.34 4.25% $ 5,723 0.70%(a)
Period ended
03/31/1996(b)..... (0.15) 10.36 (0.01) 7,672 0.70+
Year ended
11/30/1995........ (0.44) 10.51 15.18 8,525 0.77(a)
Year ended
11/30/1994........ (0.47) 9.53 (4.51) 8,896 0.73(a)
Period ended
11/30/1993**...... (0.42) 10.46 8.76 13,749 0.57+
INVESTOR C SHARES
Year ended
03/31/1997........ $ (0.42) $ 10.34 3.94% $ 1,364 1.00%(a)
Period ended
03/31/1996(b)..... (0.14) 10.36 (0.12) 1,379 1.00+
Year ended
11/30/1995........ (0.41) 10.51 14.84 1,366 1.07(a)
Year ended
11/30/1994........ (0.43) 9.53 (4.89) 1,486 1.13(a)
Period ended
11/30/1993**...... (0.35) 10.46 8.26 1,592 1.17+
INVESTOR N SHARES
Year ended
03/31/1997........ $ (0.42) $ 10.34 3.94% $ 6,796 1.00%(a)
Period ended
03/31/1996(b)..... (0.14) 10.36 (0.12) 8,102 1.00+
Year ended
11/30/1995........ (0.41) 10.51 14.84 7,848 1.07(a)
Year ended
11/30/1994........ (0.44) 9.53 (4.82) 5,706 1.05(a)
Period ended
11/30/1993**...... (0.18) 10.46 3.23 3,822 0.92+
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
---------------------------
RATIO OF RATIO OF
NET INVESTMENT OPERATING
INCOME TO PORTFOLIO EXPENSES TO INVESTMENT
AVERAGE NET TURNOVER AVERAGE NET INCOME
ASSETS RATE ASSETS SHARE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NATIONS MARYLAND
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997........ 4.88% 18% 1.12% $ 0.41
Period ended
03/31/1996(b)..... 4.72+ 7 1.23+ 0.13
Year ended
11/30/1995........ 5.14 11 1.26 0.40
Period ended
11/30/1994*....... 5.48+ 39 1.30+ 0.09
INVESTOR A SHARES
Year ended
03/31/1997........ 4.68% 18% 1.32% $ 0.39
Period ended
03/31/1996(b)..... 4.52+ 7 1.43+ 0.12
Year ended
11/30/1995........ 4.94 11 1.46 0.38
Year ended
11/30/1994........ 5.30 39 1.48 0.41
Period ended
11/30/1993*....... 3.97+ 1 1.76+ 0.02
INVESTOR C SHARES
Year ended
03/31/1997........ 4.38% 18% 1.62% $ 0.37
Period ended
03/31/1996(b)..... 4.16+ 7 1.79+ 0.11
Year ended
11/30/1995........ 4.39 11 2.01 0.33
Period ended
11/30/1994*....... 4.73+ 39 2.05+ 0.02
INVESTOR N SHARES
Year ended
03/31/1997........ 4.13% 18% 1.87% $ 0.34
Period ended
03/31/1996(b)..... 3.97+ 7 1.98+ 0.11
Year ended
11/30/1995........ 4.39 11 2.01 0.33
Year ended
11/30/1994........ 4.73 39 2.05 0.35
Period ended
11/30/1993*....... 3.37+ 1 2.36+ 0.02
NATIONS NORTH
CAROLINA
INTERMEDIATE
MUNICIPAL BOND
FUND
PRIMARY A SHARES
Year ended
03/31/1997........ 4.57% 26% 0.82% $ 0.44
Period ended
03/31/1996(b)..... 4.47+ 3 0.87+ 0.15
Year ended
11/30/1995........ 4.47 57 0.84 0.43
Year ended
11/30/1994........ 4.38 37 0.82 0.42
Period ended
11/30/1993**...... 4.23+ 29 0.85+ 0.39
INVESTOR A SHARES
Year ended
03/31/1997........ 4.37% 26% 1.02% $ 0.42
Period ended
03/31/1996(b)..... 4.27+ 3 1.07+ 0.14
Year ended
11/30/1995........ 4.27 57 1.04 0.41
Year ended
11/30/1994........ 4.20 37 1.00 0.40
Period ended
11/30/1993**...... 4.08+ 29 1.00+ 0.38
INVESTOR C SHARES
Year ended
03/31/1997........ 4.07% 26% 1.32% $ 0.39
Period ended
03/31/1996(b)..... 3.97+ 3 1.37+ 0.13
Year ended
11/30/1995........ 3.97 57 1.34 0.38
Year ended
11/30/1994........ 3.80 37 1.40 0.36
Period ended
11/30/1993**...... 3.48+ 29 1.60+ 0.30
INVESTOR N SHARES
Year ended
03/31/1997........ 4.07% 26% 1.32% $ 0.39
Period ended
03/31/1996(b)..... 3.97+ 3 1.37+ 0.13
Year ended
11/30/1995........ 3.97 57 1.34 0.38
Year ended
11/30/1994........ 3.88 37 1.32 0.37
Period ended
11/30/1993**...... 3.73+ 29 1.35+ 0.17
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
157
<PAGE> 162
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT NET INVESTMENT REALIZED
OF YEAR INCOME ON INVESTMENTS FROM OPERATIONS INCOME INCOME CAPITAL GAINS
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS NORTH CAROLINA
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ 9.49 $ 0.47 $(0.02) $ 0.45 $(0.47) -- --
Period ended
03/31/1996(b).......... 9.73 0.16 (0.24) (0.08) (0.16) -- --
Year ended 11/30/1995.... 8.36 0.50 1.37 1.87 (0.50) -- --
Period ended
11/30/1994*............ 10.06 0.45 (1.70) (1.25) (0.45) -- --
INVESTOR A SHARES
Year ended 03/31/1997.... $ 9.49 $ 0.45 $(0.02) $ 0.43 $(0.45) -- --
Period ended
03/31/1996(b).......... 9.73 0.15 (0.24) (0.09) (0.15) -- --
Year ended 11/30/1995.... 8.36 0.49 1.37 1.86 (0.49) -- --
Year ended 11/30/1994.... 9.85 0.50 (1.49) (0.99) (0.50) -- --
Period ended
11/30/1993*............ 9.97 0.04 (0.12) (0.08) (0.04) -- --
INVESTOR C SHARES
Year ended 03/31/1997.... $ 9.49 $ 0.42 $(0.02) $ 0.40 $(0.42) -- --
Period ended
03/31/1996(b).......... 9.73 0.14 (0.24) (0.10) (0.14) -- --
Year ended 11/30/1995.... 8.36 0.43 1.37 1.80 (0.43) -- --
Period ended
11/30/1994*............ 8.45 0.03 (0.09) (0.06) (0.03) -- --
INVESTOR N SHARES
Year ended 03/31/1997.... $ 9.49 $ 0.40 $(0.02) $ 0.38 $(0.40) -- --
Period ended
03/31/1996(b).......... 9.73 0.13 (0.24) (0.11) (0.13) -- --
Year ended 11/30/1995.... 8.36 0.43 1.37 1.80 (0.43) -- --
Year ended 11/30/1994.... 9.85 0.45 (1.49) (1.04) (0.45) -- --
Period ended
11/30/1993*............ 10.00 0.04 (0.15) (0.11) (0.04) -- --
NATIONS SOUTH CAROLINA
INTERMEDIATE MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ 10.52 $ 0.51 $(0.02) $ 0.49 $(0.51) -- --
Period ended
03/31/1996(b).......... 10.69 0.17 (0.17) 0.00 (0.17) -- --
Year ended 11/30/1995.... 9.76 0.51 0.93 1.44 (0.51) -- --
Year ended 11/30/1994.... 10.61 0.50 (0.84) (0.34) (0.50) $(0.00)# $ (0.01)
Year ended 11/30/1993.... 10.18 0.50 0.43 0.93 (0.50) -- --
Period ended
11/30/1992**........... 10.00 0.47 0.18 0.65 (0.47) -- --
INVESTOR A SHARES
Year ended 03/31/1997.... $ 10.52 $ 0.49 $(0.02) $ 0.47 $(0.49) -- --
Period ended
03/31/1996(b).......... 10.69 0.16 (0.17) (0.01) (0.16) -- --
Year ended 11/30/1995.... 9.76 0.49 0.93 1.42 (0.49) -- --
Year ended 11/30/1994.... 10.61 0.48 (0.84) (0.36) (0.48) $(0.00)# $ (0.01)
Year ended 11/30/1993.... 10.18 0.48 0.43 0.91 (0.48) -- --
Period ended
11/30/1992**........... 9.98 0.30 0.20 0.50 (0.30) -- --
INVESTOR C SHARES
Year ended 03/31/1997.... $ 10.52 $ 0.45 $(0.02) $ 0.43 $(0.45) -- --
Period ended
03/31/1996(b).......... 10.69 0.15 (0.17) (0.02) (0.15) -- --
Year ended 11/30/1995.... 9.76 0.46 0.93 1.39 (0.46) -- --
Year ended 11/30/1994.... 10.61 0.44 (0.84) (0.40) (0.44) $(0.00)# $ (0.01)
Year ended 11/30/1993.... 10.18 0.42 0.43 0.85 (0.42) -- --
Period ended
11/30/1992**........... 10.05 0.20 0.13 0.33 (0.20) -- --
INVESTOR N SHARES
Year ended 03/31/1997.... $ 10.52 $ 0.45 $(0.02) $ 0.43 $(0.45) -- --
Period ended
03/31/1996(b).......... 10.69 0.15 (0.17) (0.02) (0.15) -- --
Year ended 11/30/1995.... 9.76 0.46 0.93 1.39 (0.46) -- --
Year ended 11/30/1994.... 10.61 0.45 (0.84) (0.39) (0.45) $(0.00)# $ (0.01)
Period ended
11/30/1993**........... 10.47 0.20 0.14 0.34 (0.20) -- --
</TABLE>
- ---------------
* Nations North Carolina Municipal Bond Fund's Primary A, Investor A,
Investor C and Investor N Shares commenced operations on January 11, 1994,
November 1, 1993, November 3, 1994 and October 21, 1993, respectively.
** Nations South Carolina Intermediate Municipal Bond Fund's Primary A,
Investor A, Investor C and Investor N Shares commenced operations on
January 6, 1992, May 5, 1992, June 17, 1992 and June 8, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Amount represents less than $0.01 per share.
## Amount represents less than 0.01%.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
158
<PAGE> 163
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING
DIVIDENDS VALUE END OF EXPENSES TO
AND END OF TOTAL YEAR AVERAGE NET
DISTRIBUTIONS YEAR RETURN++ (IN 000'S) ASSETS
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS NORTH CAROLINA
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ (0.47) $ 9.47 4.84% $ 3,095 0.60%(a)
Period ended
03/31/1996(b).......... (0.16) 9.49 (0.87) 1,593 0.60+
Year ended 11/30/1995.... (0.50) 9.73 22.87 1,293 0.38(a)
Period ended
11/30/1994*............ (0.45) 8.36 (12.65) 531 0.21+(a)
INVESTOR A SHARES
Year ended 03/31/1997.... $ (0.45) $ 9.47 4.62% $ 594 0.80%(a)
Period ended
03/31/1996(b).......... (0.15) 9.49 (0.94) 448 0.80+
Year ended 11/30/1995.... (0.49) 9.73 22.63 347 0.58(a)
Year ended 11/30/1994.... (0.50) 8.36 (10.41) 1,161 0.39(a)
Period ended
11/30/1993*............ (0.04) 9.85 (0.80) 1,085 0.09+
INVESTOR C SHARES
Year ended 03/31/1997.... $ (0.42) $ 9.47 4.32% $ 18 1.10%(a)
Period ended
03/31/1996(b).......... (0.14) 9.49 (1.04) 17 1.14+
Year ended 11/30/1995.... (0.43) 9.73 21.93 2 1.13(a)
Period ended
11/30/1994*............ (0.03) 8.36 (0.67) 2 0.96+(a)
INVESTOR N SHARES
Year ended 03/31/1997.... $ (0.40) $ 9.47 4.06% $ 23,863 1.35%(a)
Period ended
03/31/1996(b).......... (0.13) 9.49 (1.12) 28,298 1.35+
Year ended 11/30/1995.... (0.43) 9.73 21.96 30,048 1.13(a)
Year ended 11/30/1994.... (0.45) 8.36 (10.92) 23,659 0.96(a)
Period ended
11/30/1993*............ (0.04) 9.85 (1.11) 11,395 0.69+
NATIONS SOUTH CAROLINA
INTERMEDIATE MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ (0.51) $ 10.50 4.71% $ 48,918 0.50%(a)
Period ended
03/31/1996(b).......... (0.17) 10.52 0.00## 41,817 0.50+(a)
Year ended 11/30/1995.... (0.51) 10.69 15.02 45,255 0.55(a)
Year ended 11/30/1994.... (0.51) 9.76 (3.37) 49,030 0.54(a)
Year ended 11/30/1993.... (0.50) 10.61 9.32 56,995 0.45
Period ended
11/30/1992**........... (0.47) 10.18 6.62+++ 39,535 0.20+
INVESTOR A SHARES
Year ended 03/31/1997.... $ (0.49) $ 10.50 4.51% $ 10,465 0.70%(a)
Period ended
03/31/1996(b).......... (0.16) 10.52 (0.07) 14,288 0.70+(a)
Year ended 11/30/1995.... (0.49) 10.69 14.79 14,452 0.75(a)
Year ended 11/30/1994.... (0.49) 9.76 (3.54) 16,378 0.72(a)
Year ended 11/30/1993.... (0.48) 10.61 9.16 20,024 0.60
Period ended
11/30/1992**........... (0.30) 10.18 5.03+++ 7,414 0.33+
INVESTOR C SHARES
Year ended 03/31/1997.... $ (0.45) $ 10.50 4.20% $ 5,089 1.00%(a)
Period ended
03/31/1996(b).......... (0.15) 10.52 (0.17) 5,409 1.00+(a)
Year ended 11/30/1995.... (0.46) 10.69 14.45 5,527 1.05(a)
Year ended 11/30/1994.... (0.45) 9.76 (3.94) 6,167 1.12(a)
Year ended 11/30/1993.... (0.42) 10.61 8.51 8,499 1.20
Period ended
11/30/1992**........... (0.20) 10.18 3.27+++ 4,436 0.88+
INVESTOR N SHARES
Year ended 03/31/1997.... $ (0.45) $ 10.50 4.19% $ 5,738 1.00%(a)
Period ended
03/31/1996(b).......... (0.15) 10.52 (0.17) 6,968 1.00+(a)
Year ended 11/30/1995.... (0.46) 10.69 14.45 6,457 1.05(a)
Year ended 11/30/1994.... (0.46) 9.76 (3.85) 5,740 1.04(a)
Period ended
11/30/1993**........... (0.20) 10.61 3.23 4,057 0.95+
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
------------------------
RATIO OF RATIO OF
NET INVESTMENT OPERATING NET
INCOME TO PORTFOLIO EXPENSES TO INVESTMENT
AVERAGE NET TURNOVER AVERAGE NET INCOME
ASSETS RATE ASSETS PER SHARE
-----------------------------------------------------
<S> <C> <C> <C> <C>
NATIONS NORTH CAROLINA
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... 4.95% 28% 0.94% $ 0.44
Period ended
03/31/1996(b).......... 4.86+ 22 0.99+ 0.15
Year ended 11/30/1995.... 5.43 40 0.96 0.45
Period ended
11/30/1994*............ 5.53+ 29 0.92+ 0.40
INVESTOR A SHARES
Year ended 03/31/1997.... 4.75% 28% 1.14% $ 0.42
Period ended
03/31/1996(b).......... 4.66+ 22 1.19+ 0.14
Year ended 11/30/1995.... 5.23 40 1.16 0.44
Year ended 11/30/1994.... 5.35 29 1.10 0.43
Period ended
11/30/1993*............ 3.97+ 10 1.21+ 0.03
INVESTOR C SHARES
Year ended 03/31/1997.... 4.45% 28% 1.44% $ 0.39
Period ended
03/31/1996(b).......... 4.32+ 22 1.53+ 0.13
Year ended 11/30/1995.... 4.68 40 1.71 0.38
Period ended
11/30/1994*............ 4.78+ 29 1.67+ 0.03
INVESTOR N SHARES
Year ended 03/31/1997.... 4.20% 28% 1.69% $ 0.37
Period ended
03/31/1996(b).......... 4.11+ 22 1.74+ 0.12
Year ended 11/30/1995.... 4.68 40 1.71 0.38
Year ended 11/30/1994.... 4.78 29 1.67 0.38
Period ended
11/30/1993*............ 3.37+ 10 1.81+ 0.03
NATIONS SOUTH CAROLINA
INTERMEDIATE MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... 4.80% 13% 0.79% $ 0.48
Period ended
03/31/1996(b).......... 4.81+ 6 0.82+ 0.16
Year ended 11/30/1995.... 4.92 11 0.75 0.49
Year ended 11/30/1994.... 4.82 30 0.75 0.48
Year ended 11/30/1993.... 4.68 11 0.75 0.47
Period ended
11/30/1992**........... 4.11+ 7 0.74+ 0.42
INVESTOR A SHARES
Year ended 03/31/1997.... 4.60% 13% 0.99% $ 0.46
Period ended
03/31/1996(b).......... 4.61+ 6 1.02+ 0.15
Year ended 11/30/1995.... 4.72 11 0.95 0.47
Year ended 11/30/1994.... 4.64 30 0.93 0.46
Year ended 11/30/1993.... 4.53 11 0.90 0.45
Period ended
11/30/1992**........... 4.83+ 7 0.85+ 0.27
INVESTOR C SHARES
Year ended 03/31/1997.... 4.30% 13% 1.29% $ 0.42
Period ended
03/31/1996(b).......... 4.31+ 6 1.32+ 0.14
Year ended 11/30/1995.... 4.42 11 1.25 0.44
Year ended 11/30/1994.... 4.24 30 1.33 0.42
Year ended 11/30/1993.... 3.93 11 1.50 0.39
Period ended
11/30/1992**........... 4.10+ 7 1.48+ 0.17
INVESTOR N SHARES
Year ended 03/31/1997.... 4.30% 13% 1.29% $ 0.42
Period ended
03/31/1996(b).......... 4.31+ 6 1.32+ 0.14
Year ended 11/30/1995.... 4.42 11 1.25 0.44
Year ended 11/30/1994.... 4.32 30 1.25 0.43
Period ended
11/30/1993**........... 4.18+ 11 1.25+ 0.19
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
159
<PAGE> 164
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT NET INVESTMENT REALIZED
OF YEAR INCOME ON INVESTMENTS FROM OPERATIONS INCOME INCOME CAPITAL GAINS
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS SOUTH CAROLINA
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ 9.77 $ 0.49 $ 0.02 $ 0.51 $(0.49) -- --
Period ended
03/31/1996(b).......... 9.99 0.17 (0.22) (0.05) (0.17) -- --
Year ended 11/30/1995.... 8.65 0.52 1.34 1.86 (0.52) -- --
Period ended
11/30/1994*............ 10.02 0.48 (1.37) (0.89) (0.48) -- --
INVESTOR A SHARES
Year ended 03/31/1997.... $ 9.77 $ 0.47 $ 0.02 $ 0.49 $(0.47) -- --
Period ended
03/31/1996(b).......... 9.99 0.16 (0.22) (0.06) (0.16) -- --
Year ended 11/30/1995.... 8.65 0.50 1.34 1.84 (0.50) -- --
Year ended 11/30/1994.... 9.86 0.50 (1.21) (0.71) (0.50) -- --
Period ended
11/30/1993*............ 9.87 0.03 (0.01) 0.02 (0.03) -- --
INVESTOR C SHARES
Year ended 03/31/1997.... $ 9.77 $ 0.44 $ 0.02 $ 0.46 $(0.44) -- --
Period ended
03/31/1996(b).......... 9.99 0.15 (0.22) (0.07) (0.15) -- --
Year ended 11/30/1995.... 8.65 0.45 1.34 1.79 (0.45) -- --
Period ended
11/30/1994*............ 8.73 0.03 (0.08) (0.05) (0.03) -- --
INVESTOR N SHARES
Year ended 03/31/1997.... $ 9.77 $ 0.42 $ 0.02 $ 0.44 $(0.42) -- --
Period ended
03/31/1996(b).......... 9.99 0.14 (0.22) (0.08) (0.14) -- --
Year ended 11/30/1995.... 8.65 0.45 1.34 1.79 (0.45) -- --
Year ended 11/30/1994.... 9.86 0.45 (1.21) (0.76) (0.45) -- --
Period ended
11/30/1993*............ 10.00 0.04 (0.14) (0.10) (0.04) -- --
NATIONS TENNESSEE
INTERMEDIATE MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ 10.09 $ 0.46 $(0.01) $ 0.45 $(0.46) -- --
Period ended
03/31/1996(b).......... 10.23 0.15 (0.14) 0.01 (0.15) -- --
Year ended 11/30/1995.... 9.30 0.46 0.93 1.39 (0.46) -- --
Year ended 11/30/1994.... 10.18 0.45 (0.87) (0.42) (0.45) $(0.00)# $ (0.01)
Period ended
11/30/1993**........... 10.06 0.29 0.12 0.41 (0.29) -- --
INVESTOR A SHARES
Year ended 03/31/1997.... $ 10.09 $ 0.44 $(0.01) $ 0.43 $(0.44) -- --
Period ended
03/31/1996(b).......... 10.23 0.15 (0.14) 0.01 (0.15) -- --
Year ended 11/30/1995.... 9.30 0.44 0.93 1.37 (0.44) -- --
Year ended 11/30/1994.... 10.18 0.43 (0.87) (0.44) (0.43) $(0.00)# $ (0.01)
Period ended
11/30/1993**........... 10.00 0.29 0.18 0.47 (0.29) -- --
INVESTOR C SHARES
Year ended 03/31/1997.... $ 10.09 $ 0.42 $(0.01) $ 0.41 $(0.42) -- --
Period ended
03/31/1996(b).......... 10.23 0.14 (0.14) 0.00 (0.14) -- --
Year ended 11/30/1995.... 9.30 0.41 0.93 1.34 (0.41) -- --
Period ended
11/30/1994**........... 9.38 0.03 (0.08) (0.05) (0.03) -- --
INVESTOR N SHARES
Year ended 03/31/1997.... $ 10.09 $ 0.41 $(0.01) $ 0.40 $(0.41) -- --
Period ended
03/31/1996(b).......... 10.23 0.14 (0.14) 0.00 (0.14) -- --
Year ended 11/30/1995.... 9.30 0.41 0.93 1.34 (0.41) -- --
Year ended 11/30/1994.... 10.18 0.40 (0.87) (0.47) (0.40) $(0.00)# $ (0.01)
Period ended
11/30/1993**........... 10.03 0.17 0.15 0.32 (0.17) -- --
</TABLE>
- ---------------
* Nations South Carolina Municipal Bond Fund's Primary A, Investor A,
Investor C and Investor N Shares commenced operations on December 27, 1993,
November 8, 1993, November 3, 1994 and October 21, 1993, respectively.
** Nations Tennessee Intermediate Municipal Bond Fund's Primary A, Investor A,
Investor C and Investor N Shares commenced operations on April 13, 1993,
April 2, 1993, November 3, 1994 and June 10, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
160
<PAGE> 165
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
TOTAL NET ASSET NET ASSETS
DIVIDENDS VALUE END OF
AND END OF TOTAL YEAR
DISTRIBUTIONS YEAR RETURN++ (IN 000'S)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NATIONS SOUTH CAROLINA
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ (0.49) $ 9.79 5.32% $ 5,113
Period ended
03/31/1996(b).......... (0.17) 9.77 (0.57) 2,058
Year ended 11/30/1995.... (0.52) 9.99 21.99 1,782
Period ended
11/30/1994*............ (0.48) 8.65 (9.12) 400
INVESTOR A SHARES
Year ended 03/31/1997.... $ (0.47) $ 9.79 5.12% $ 811
Period ended
03/31/1996(b).......... (0.16) 9.77 (0.64) 1,219
Year ended 11/30/1995.... (0.50) 9.99 21.74 1,238
Year ended 11/30/1994.... (0.50) 8.65 (7.45) 140
Period ended
11/30/1993*............ (0.03) 9.86 0.21 14
INVESTOR C SHARES
Year ended 03/31/1997.... $ (0.44) $ 9.79 4.80% $ 247
Period ended
03/31/1996(b).......... (0.15) 9.77 (0.76) 264
Year ended 11/30/1995.... (0.45) 9.99 21.01 20
Period ended
11/30/1994*............ (0.03) 8.65 (0.52) 2
INVESTOR N SHARES
Year ended 03/31/1997.... $ (0.42) $ 9.79 4.54% $ 12,104
Period ended
03/31/1996(b).......... (0.14) 9.77 (0.82) 12,991
Year ended 11/30/1995.... (0.45) 9.99 21.08 12,670
Year ended 11/30/1994.... (0.45) 8.65 (7.97) 8,263
Period ended
11/30/1993*............ (0.04) 9.86 (1.00) 4,048
NATIONS TENNESSEE
INTERMEDIATE MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ (0.46) $ 10.08 4.54% $ 8,869
Period ended
03/31/1996(b).......... (0.15) 10.09 0.12 8,408
Year ended 11/30/1995.... (0.46) 10.23 15.22 7,160
Year ended 11/30/1994.... (0.46) 9.30 (4.24) 4,116
Period ended
11/30/1993**........... (0.29) 10.18 4.09 2,123
INVESTOR A SHARES
Year ended 03/31/1997.... $ (0.44) $ 10.08 4.33% $ 6,840
Period ended
03/31/1996(b).......... (0.15) 10.09 0.06 7,439
Year ended 11/30/1995.... (0.44) 10.23 15.00 7,573
Year ended 11/30/1994.... (0.44) 9.30 (4.41) 7,831
Period ended
11/30/1993**........... (0.29) 10.18 4.68 15,573
INVESTOR C SHARES
Year ended 03/31/1997.... $ (0.42) $ 10.08 4.08% $ 2
Period ended
03/31/1996(b).......... (0.14) 10.09 (0.02) 2
Year ended 11/30/1995.... (0.41) 10.23 14.62 2
Period ended
11/30/1994**........... (0.03) 9.30 (0.53) 2
INVESTOR N SHARES
Year ended 03/31/1997.... $ (0.41) $ 10.08 4.02% $ 3,050
Period ended
03/31/1996(b).......... (0.14) 10.09 (0.04) 3,528
Year ended 11/30/1995.... (0.41) 10.23 14.65 3,573
Year ended 11/30/1994.... (0.41) 9.30 (4.72) 3,368
Period ended
11/30/1993**........... (0.17) 10.18 3.32 2,210
<CAPTION>
RATIO OF WITHOUT WAIVERS AND/OR
OPERATING -------------------------------
RATIO OF EXPENSES TO RATIO OF RATIO OF
OPERATING AVERAGE NET NET INVESTMENT OPERATING
EXPENSES TO ASSETS INCOME TO PORTFOLIO EXPENSES TO NET INVESTMENT
AVERAGE NET INCLUDING AVERAGE NET TURNOVER AVERAGE NET INCOME
ASSETS INTEREST EXPENSE ASSETS RATE ASSETS PER SHARE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NATIONS SOUTH CAROLINA
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... 0.60% (a) 4.99% 30% 1.00% $ 0.45
Period ended
03/31/1996(b).......... 0.60+ (a) 4.96+ 20 1.13+ 0.15
Year ended 11/30/1995.... 0.40 (a) 5.44 13 1.08 0.46
Period ended
11/30/1994*............ 0.21+ (a) 5.48+ 14 1.12+ 0.41
INVESTOR A SHARES
Year ended 03/31/1997.... 0.80% (a) 4.79% 30% 1.20% $ 0.43
Period ended
03/31/1996(b).......... 0.80+ (a) 4.76+ 20 1.33+ 0.14
Year ended 11/30/1995.... 0.60 (a) 5.24 13 1.28 0.44
Year ended 11/30/1994.... 0.39 (a) 5.30 14 1.30 0.42
Period ended
11/30/1993*............ 0.10+ -- 4.16+ 8 1.63+ 0.02
INVESTOR C SHARES
Year ended 03/31/1997.... 1.10% (a) 4.49% 30% 1.50% $ 0.40
Period ended
03/31/1996(b).......... 1.17+ (a) 4.39+ 20 1.70+ 0.13
Year ended 11/30/1995.... 1.15 (a) 4.69 13 1.83 0.39
Period ended
11/30/1994*............ 0.96+ (a) 4.73+ 14 1.87+ 0.03
INVESTOR N SHARES
Year ended 03/31/1997.... 1.35% (a) 4.24% 30% 1.75% $ 0.38
Period ended
03/31/1996(b).......... 1.35+ (a) 4.21+ 20 1.88+ 0.12
Year ended 11/30/1995.... 1.15 (a) 4.69 13 1.83 0.39
Year ended 11/30/1994.... 0.96 (a) 4.73 14 1.87 0.37
Period ended
11/30/1993*............ 0.70+ -- 3.56+ 8 2.23+ 0.02
NATIONS TENNESSEE
INTERMEDIATE MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... 0.50% (a) 4.55% 28% 0.93% $ 0.42
Period ended
03/31/1996(b).......... 0.50+ -- 4.51+ 3 1.02+ 0.13
Year ended 11/30/1995.... 0.57 (a) 4.65 34 0.92 0.43
Year ended 11/30/1994.... 0.52 .53% 4.56 41 0.89 0.41
Period ended
11/30/1993**........... 0.27+ -- 4.31+ 16 0.94+ 0.24
INVESTOR A SHARES
Year ended 03/31/1997.... 0.70% (a) 4.35% 28% 1.13% $ 0.40
Period ended
03/31/1996(b).......... 0.70+ -- 4.31+ 3 1.22+ 0.13
Year ended 11/30/1995.... 0.77 (a) 4.45 34 1.12 0.41
Year ended 11/30/1994.... 0.70 0.71% 4.38 41 1.07 0.40
Period ended
11/30/1993**........... 0.42+ -- 4.16+ 16 1.09+ 0.24
INVESTOR C SHARES
Year ended 03/31/1997.... 1.00% (a) 4.05% 28% 1.43% $ 0.38
Period ended
03/31/1996(b).......... 1.00+ -- 4.01+ 3 1.52+ 0.12
Year ended 11/30/1995.... 1.07 (a) 4.15 34 1.42 0.38
Period ended
11/30/1994**........... 1.02+ 1.03%+ 4.06+ 41 1.39+ 0.02
INVESTOR N SHARES
Year ended 03/31/1997.... 1.00% (a) 4.05% 28% 1.43% $ 0.37
Period ended
03/31/1996(b).......... 1.00+ -- 4.01+ 3 1.52+ 0.12
Year ended 11/30/1995.... 1.07 (a) 4.15 34 1.42 0.38
Year ended 11/30/1994.... 1.02 1.03% 4.06 41 1.39 0.37
Period ended
11/30/1993**........... 0.77+ -- 3.81+ 16 1.44+ 0.14
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
161
<PAGE> 166
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT NET INVESTMENT REALIZED
OF YEAR INCOME ON INVESTMENTS FROM OPERATIONS INCOME INCOME CAPITAL GAINS
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS TENNESSEE
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ 9.68 $ 0.48 $ 0.02 $ 0.50 $(0.48) -- --
Period ended
03/31/1996(b).......... 9.87 0.16 (0.19) (0.03) (0.16) -- --
Year ended 11/30/1995.... 8.58 0.52 1.29 1.81 (0.52) -- --
Period ended
11/30/1994*............ 9.59 0.39 (1.01) (0.62) (0.39) -- --
INVESTOR A SHARES
Year ended 03/31/1997.... $ 9.68 $ 0.46 $ 0.02 $ 0.48 $(0.46) -- --
Period ended
03/31/1996(b).......... 9.87 0.15 (0.19) (0.04) (0.15) -- --
Year ended 11/30/1995.... 8.58 0.50 1.29 1.79 (0.50) -- --
Year ended 11/30/1994.... 9.80 0.50 (1.22) (0.72) (0.50) -- --
Period ended
11/30/1993*............ 9.88 0.04 (0.08) (0.04) (0.04) -- --
INVESTOR C SHARES
Year ended 03/31/1997.... $ 9.68 $ 0.43 $ 0.02 $ 0.45 $(0.43) -- --
Period ended
03/31/1996(b).......... 9.87 0.14 (0.19) (0.05) (0.14) -- --
Year ended 11/30/1995.... 8.58 0.45 1.29 1.74 (0.45) -- --
Period ended
11/30/1994*............ 8.62 0.03 (0.04) (0.01) (0.03) -- --
INVESTOR N SHARES
Year ended 03/31/1997.... $ 9.68 $ 0.40 $ 0.02 $ 0.42 $(0.40) -- --
Period ended
03/31/1996(b).......... 9.87 0.14 (0.19) (0.05) (0.14) -- --
Year ended 11/30/1995.... 8.58 0.45 1.29 1.74 (0.45) -- --
Year ended 11/30/1994.... 9.80 0.45 (1.22) (0.77) (0.45) -- --
Period ended
11/30/1993*............ 10.00 0.04 (0.20) (0.16) (0.04) -- --
NATIONS TEXAS INTERMEDIATE
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ 10.21 $ 0.47 $(0.03) $ 0.44 $(0.47) -- --
Period ended
03/31/1996(b).......... 10.36 0.16 (0.15) 0.01 (0.16) -- --
Year ended 11/30/1995.... 9.53 0.46 0.83 1.29 (0.46) -- --
Year ended 11/30/1994.... 10.35 0.44 (0.79) (0.35) (0.44) $(0.00)# $ (0.03)
Period ended
11/30/1993**........... 10.00 0.41 0.35 0.76 (0.41) -- --
INVESTOR A SHARES
Year ended 03/31/1997.... $ 10.21 $ 0.45 $(0.03) $ 0.42 $(0.45) -- --
Period ended
03/31/1996(b).......... 10.36 0.15 (0.15) 0.00 (0.15) -- --
Year ended 11/30/1995.... 9.53 0.44 0.83 1.27 (0.44) -- --
Year ended 11/30/1994.... 10.35 0.42 (0.79) (0.37) (0.42) $(0.00)# $ (0.03)
Period ended
11/30/1993**........... 10.15 0.37 0.20 0.57 (0.37) -- --
INVESTOR C SHARES
Year ended 03/31/1997.... $ 10.21 $ 0.42 $(0.03) $ 0.39 $(0.42) -- --
Period ended
03/31/1996(b).......... 10.36 0.14 (0.15) (0.01) (0.14) -- --
Year ended 11/30/1995.... 9.53 0.41 0.83 1.24 (0.41) -- --
Period ended
11/30/1994**........... 9.55 0.03 (0.02) 0.01 (0.03) $(0.00)# --
INVESTOR N SHARES
Year ended 03/31/1997.... $ 10.21 $ 0.42 $(0.03) $ 0.39 $(0.42) -- --
Period ended
03/31/1996(b).......... 10.36 0.14 (0.15) (0.01) (0.14) -- --
Year ended 11/30/1995.... 9.53 0.41 0.83 1.24 (0.41) -- --
Year ended 11/30/1994.... 10.35 0.39 (0.79) (0.40) (0.39) $(0.00)# $ (0.03)
Period ended
11/30/1993**........... 10.25 0.17 0.10 0.27 (0.17) -- --
</TABLE>
- ---------------
* Nations Tennessee Municipal Bond Fund's Primary A, Investor A, Investor C
and Investor N Shares commenced operations on March 2, 1994, November 2,
1993, November 3, 1994 and October 21, 1993, respectively.
** Nations Texas Intermediate Municipal Bond Fund's Primary A, Investor A,
Investor C and Investor N Shares commenced operations on January 12, 1993,
February 4, 1993, November 3, 1994 and June 22, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
162
<PAGE> 167
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF
TOTAL NET ASSET NET ASSET OPERATING
DIVIDENDS VALUE END OF EXPENSES TO
AND END OF TOTAL YEAR AVERAGE NET
DISTRIBUTIONS YEAR RETURN++ (IN 000'S) ASSETS
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS TENNESSEE
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ (0.48) $ 9.70 5.23% $ 2,594 0.60%
Period ended
03/31/1996(b).......... 0.16) 9.68 (0.30) 975 0.60+
Year ended 11/30/1995.... 0.52) 9.87 21.52 768 0.40
Period ended
11/30/1994*............ (0.39) 8.58 (6.66) 311 0.21+
INVESTOR A SHARES
Year ended 03/31/1997.... $ (0.46) $ 9.70 5.02% $ 1,018 0.80%
Period ended
03/31/1996(b).......... (0.15) 9.68 (0.37) 973 0.80+
Year ended 11/30/1995.... (0.50) 9.87 21.28 203 0.60
Year ended 11/30/1994.... (0.50) 8.58 (7.58) 43 0.39
Period ended
11/30/1993*............ (0.04) 9.80 (0.43) 34 0.17+
INVESTOR C SHARES
Year ended 03/31/1997.... $ (0.43) $ 9.70 4.71% $ 38 1.10%
Period ended
03/31/1996(b).......... (0.14) 9.68 (0.49) 37 1.18+
Year ended 11/30/1995.... (0.45) 9.87 20.62 64 1.15
Period ended
11/30/1994*............ (0.03) 8.58 (0.07) 2 0.96+
INVESTOR N SHARES
Year ended 03/31/1997.... $ (0.40) $ 9.70 4.45% $ 5,319 1.35%
Period ended
03/31/1996(b).......... (0.14) 9.68 (0.55) 6,761 1.35+
Year ended 11/30/1995.... (0.45) 9.87 20.63 6,619 1.15
Year ended 11/30/1994.... (0.45) 8.58 (8.10) 5,504 0.96
Period ended
11/30/1993*............ (0.04) 9.80 (1.61) 3,284 0.77+
NATIONS TEXAS INTERMEDIATE
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... $ (0.47) $ 10.18 4.37% $ 24,764 0.50%
Period ended
03/31/1996(b).......... (0.16) 10.21 0.05 27,176 0.50+
Year ended 11/30/1995.... (0.46) 10.36 13.83 26,382 0.57
Year ended 11/30/1994.... (0.47) 9.53 (3.48) 24,066 0.55
Period ended
11/30/1993**........... (0.41) 10.35 7.72 31,875 0.44+
INVESTOR A SHARES
Year ended 03/31/1997.... $ (0.45) $ 10.18 4.17% $ 909 0.70%
Period ended
03/31/1996(b).......... (0.15) 10.21 (0.02) 801 0.70+
Year ended 11/30/1995.... (0.44) 10.36 13.60 806 0.77
Year ended 11/30/1994.... (0.45) 9.53 (3.66) 718 0.73
Period ended
11/30/1993**........... (0.37) 10.35 5.64 968 0.59+
INVESTOR C SHARES
Year ended 03/31/1997.... $ (0.42) $ 10.18 3.87% $ 591 1.00%
Period ended
03/31/1996(b).......... (0.14) 10.21 (0.12) 569 1.00+
Year ended 11/30/1995.... (0.41) 10.36 13.27 570 1.07
Period ended
11/30/1994**........... (0.03) 9.53 0.08 2 1.05+
INVESTOR N SHARES
Year ended 03/31/1997.... $ (0.42) $ 10.18 3.87% $ 2,182 1.00%
Period ended
03/31/1996(b).......... (0.14) 10.21 (0.12) 2,845 1.00+
Year ended 11/30/1995.... (0.41) 10.36 13.27 3,136 1.07
Year ended 11/30/1994.... (0.42) 9.53 (3.96) 2,774 1.05
Period ended
11/30/1993**........... (0.17) 10.35 2.61 1,330 0.94+
</TABLE>
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
RATIO OF EXPENSE REIMBURSEMENTS
OPERATING ------------------------------
EXPENSES TO RATIO OF RATIO OF
AVERAGE NET NET INVESTMENT OPERATING
ASSETS INCOME TO PORTFOLIO EXPENSES TO NET INVESTMENT
INCLUDING AVERAGE NET TURNOVER AVERAGE NET INCOME
INTEREST EXPENSE ASSETS RATE ASSETS PER SHARE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NATIONS TENNESSEE
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... (a) 4.91% 31% 1.24% $ 0.42
Period ended
03/31/1996(b).......... 0.61%+ 4.92+ 2 1.47+ 0.13
Year ended 11/30/1995.... (a) 5.49 45 1.27 0.44
Period ended
11/30/1994*............ (a) 5.56+ 38 1.20+ 0.32
INVESTOR A SHARES
Year ended 03/31/1997.... (a) 4.71% 31% 1.44% $ 0.40
Period ended
03/31/1996(b).......... 0.81%+ 4.72+ 2 1.67+ 0.12
Year ended 11/30/1995.... (a) 5.29 45 1.47 0.42
Year ended 11/30/1994.... (a) 5.38 38 1.38 0.42
Period ended
11/30/1993*............ -- 4.31+ 3 1.86+ 0.03
INVESTOR C SHARES
Year ended 03/31/1997.... (a) 4.41% 31% 1.74% $ 0.37
Period ended
03/31/1996(b).......... 1.18%+ 4.34+ 2 2.05+ 0.11
Year ended 11/30/1995.... (a) 4.74 45 2.02 0.37
Period ended
11/30/1994*............ (a) 4.81+ 38 1.95+ 0.02
INVESTOR N SHARES
Year ended 03/31/1997.... (a) 4.16% 31% 1.99% $ 0.34
Period ended
03/31/1996(b).......... 1.36%+ 4.17+ 2 2.22+ 0.11
Year ended 11/30/1995.... (a) 4.74 45 2.02 0.37
Year ended 11/30/1994.... (a) 4.81 38 1.95 0.37
Period ended
11/30/1993*............ -- 3.71+ 3 2.46+ 0.02
NATIONS TEXAS INTERMEDIATE
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997.... -- 4.59% 34% 0.84% $ 0.43
Period ended
03/31/1996(b).......... -- 4.52+ 11 0.89+ 0.15
Year ended 11/30/1995.... (a) 4.62 64 0.83 0.44
Year ended 11/30/1994.... (a) 4.40 61 0.78 0.42
Period ended
11/30/1993**........... -- 4.43+ 63 0.82+ 0.38
INVESTOR A SHARES
Year ended 03/31/1997.... -- 4.39% 34% 1.04% $ 0.41
Period ended
03/31/1996(b).......... -- 4.32+ 11 1.09+ 0.14
Year ended 11/30/1995.... (a) 4.42 64 1.03 0.42
Year ended 11/30/1994.... (a) 4.22 61 0.96 0.40
Period ended
11/30/1993**........... -- 4.28+ 63 0.97+ 0.34
INVESTOR C SHARES
Year ended 03/31/1997.... -- 4.09% 34% 1.34% $ 0.38
Period ended
03/31/1996(b).......... -- 4.02+ 11 1.39+ 0.13
Year ended 11/30/1995.... (a) 4.12 64 1.33 0.39
Period ended
11/30/1994**........... (a) 3.90+ 61 1.28+ 0.02
INVESTOR N SHARES
Year ended 03/31/1997.... -- 4.09% 34% 1.34% $ 0.38
Period ended
03/31/1996(b).......... -- 4.02+ 11 1.39+ 0.13
Year ended 11/30/1995.... (a) 4.12 64 1.33 0.39
Year ended 11/30/1994.... (a) 3.90 61 1.28 0.37
Period ended
11/30/1993**........... -- 3.93+ 63 1.32+ 0.16
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
163
<PAGE> 168
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT REALIZED
OF YEAR INCOME ON INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NATIONS TEXAS MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997................ $ 9.49 $ 0.48 $(0.01) $ 0.47 $(0.48) --
Period ended 03/31/1996(b)........... 9.70 0.16 (0.21) (0.05) (0.16) --
Year ended 11/30/1995................ 8.39 0.50 1.31 1.81 (0.50) --
Period ended 11/30/1994*............. 10.01 0.42 (1.62) (1.20) (0.42) --
INVESTOR A SHARES
Year ended 03/31/1997................ $ 9.49 $ 0.46 $(0.01) $ 0.45 $(0.46) --
Period ended 03/31/1996(b)........... 9.70 0.15 (0.21) (0.06) (0.15) --
Year ended 11/30/1995................ 8.39 0.49 1.31 1.80 (0.49) --
Period ended 11/30/1994*............. 9.92 0.47 (1.53) (1.06) (0.47) --
INVESTOR C SHARES
Year ended 03/31/1997................ $ 9.49 $ 0.43 $(0.01) $ 0.42 $(0.43) --
Period ended 03/31/1996(b)........... 9.70 0.14 (0.21) (0.07) (0.14) --
Year ended 11/30/1995................ 8.39 0.43 1.31 1.74 (0.43) --
Period ended 11/30/1994*............. 8.46 0.03 (0.07) (0.04) (0.03) --
INVESTOR N SHARES
Year ended 03/31/1997................ $ 9.49 $ 0.40 $(0.01) $ 0.39 $(0.40) --
Period ended 03/31/1996(b)........... 9.70 0.13 (0.21) (0.08) (0.13) --
Year ended 11/30/1995................ 8.39 0.43 1.31 1.74 (0.43) --
Year ended 11/30/1994................ 9.78 0.44 (1.39) (0.95) (0.44) --
Period ended 11/30/1993*............. 10.00 0.04 (0.22) (0.18) (0.04) --
NATIONS VIRGINIA INTERMEDIATE
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997................ $ 10.69 $ 0.51 $(0.10) $ 0.41 $(0.51) --
Period ended 03/31/1996(b)........... 10.83 0.17 (0.14) 0.03 (0.17) --
Year ended 11/30/1995................ 9.94 0.51 0.89 1.40 (0.51) $ (0.00)#
Year ended 11/30/1994................ 10.99 0.50 (0.96) (0.46) (0.50) (0.09)
Year ended 11/30/1993................ 10.59 0.48 0.42 0.90 (0.48) (0.02)
Year ended 11/30/1992................ 10.34 0.54 0.29 0.83 (0.54) (0.04)
Year ended 11/30/1991................ 10.14 0.58 0.21 0.79 (0.58) (0.01)
Year ended 11/30/1990................ 10.08 0.61 0.11 0.72 (0.66) --
Period ended 11/30/1989**............ 10.00 0.12 0.03 0.15 (0.07) --
INVESTOR A SHARES
Year ended 03/31/1997................ $ 10.69 $ 0.49 $(0.10) $ 0.39 $(0.49) --
Period ended 03/31/1996(b)........... 10.83 0.16 (0.14) 0.02 (0.16) --
Year ended 11/30/1995................ 9.94 0.49 0.89 1.38 (0.49) $ (0.00)#
Year ended 11/30/1994................ 10.99 0.48 (0.96) (0.48) (0.48) (0.09)
Year ended 11/30/1993................ 10.59 0.51 0.42 0.93 (0.51) (0.02)
Year ended 11/30/1992................ 10.34 0.54 0.29 0.83 (0.54) (0.04)
Year ended 11/30/1991................ 10.14 0.58 0.21 0.79 (0.58) (0.01)
Period ended 11/30/1990**............ 10.08 0.61 0.11 0.72 (0.66) --
INVESTOR C SHARES
Year ended 03/31/1997................ $ 10.69 $ 0.46 $(0.10) $ 0.36 $(0.46) --
Period ended 03/31/1996(b)........... 10.83 0.15 (0.14) 0.01 (0.15) --
Year ended 11/30/1995................ 9.94 0.46 0.89 1.35 (0.46) $ (0.00)#
Year ended 11/30/1994................ 10.99 0.44 (0.96) (0.52) (0.44) (0.09)
Year ended 11/30/1993................ 10.59 0.44 0.42 0.86 (0.44) (0.02)
Period ended 11/30/1992**............ 10.44 0.19 0.15 0.34 (0.19) --
INVESTOR N SHARES
Year ended 03/31/1997................ $ 10.69 $ 0.46 $(0.10) $ 0.36 $(0.46) --
Period ended 03/31/1996(b)........... 10.83 0.15 (0.14) 0.01 (0.15) --
Year ended 11/30/1995................ 9.94 0.46 0.89 1.35 (0.46) $ (0.00)#
Year ended 11/30/1994................ 10.99 0.45 (0.96) (0.51) (0.45) (0.09)
Period ended 11/30/1993**............ 10.83 0.21 0.16 0.37 (0.21) --
</TABLE>
- ---------------
* Nations Texas Municipal Bond Fund's Primary A, Investor A, Investor C and
Investor N Shares commenced operations on February 3, 1994, December 17,
1993, November 3, 1994 and October 21, 1993, respectively.
** Nations Virginia Intermediate Municipal Bond Fund's Primary A, Investor A,
Investor C and Investor N Shares commenced operations on September 20, 1989,
December 5, 1989, June 17, 1992 and June 7, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
164
<PAGE> 169
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
DISTRIBUTIONS TOTAL NET ASSET NET ASSETS
IN EXCESS OF DIVIDENDS VALUE END OF
NET REALIZED AND END OF TOTAL YEAR
CAPITAL GAINS DISTRIBUTIONS YEAR RETURN++ (IN 000'S)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS TEXAS MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997................ -- $ (0.48) $ 9.48 5.00% $ 5,675
Period ended 03/31/1996(b)........... -- (0.16) 9.49 (0.55) 5,138
Year ended 11/30/1995................ -- (0.50) 9.70 22.09 4,613
Period ended 11/30/1994*............. -- (0.42) 8.39 (12.21) 2,285
INVESTOR A SHARES
Year ended 03/31/1997................ -- $ (0.46) $ 9.48 4.78% $ 371
Period ended 03/31/1996(b)........... -- (0.15) 9.49 (0.62) 317
Year ended 11/30/1995................ -- (0.49) 9.70 21.85 351
Period ended 11/30/1994*............. -- (0.47) 8.39 (10.98) 55
INVESTOR C SHARES
Year ended 03/31/1997................ -- $ (0.43) $ 9.48 4.47% $ 73
Period ended 03/31/1996(b)........... -- (0.14) 9.49 (0.74) 70
Year ended 11/30/1995................ -- (0.43) 9.70 21.15 70
Period ended 11/30/1994*............. -- (0.03) 8.39 (0.43) 2
INVESTOR N SHARES
Year ended 03/31/1997................ -- $ (0.40) $ 9.48 4.21% $ 10,090
Period ended 03/31/1996(b)........... -- (0.13) 9.49 (0.80) 11,838
Year ended 11/30/1995................ -- (0.43) 9.70 21.19 12,587
Year ended 11/30/1994................ -- (0.44) 8.39 (9.98) 10,812
Period ended 11/30/1993*............. -- (0.04) 9.78 (1.82) 6,154
NATIONS VIRGINIA INTERMEDIATE
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997................ -- $ (0.51) $10.59 3.92% $148,701
Period ended 03/31/1996(b)........... -- (0.17) 10.69 0.27 155,464
Year ended 11/30/1995................ -- (0.51) 10.83 14.39 157,252
Year ended 11/30/1994................ $ (0.00)# (0.59) 9.94 (4.35) 167,405
Year ended 11/30/1993................ -- (0.50) 10.99 9.08 193,084
Year ended 11/30/1992................ -- (0.58) 10.59 8.28+++ 157,773
Year ended 11/30/1991................ -- (0.59) 10.34 8.04+++ 119,757
Year ended 11/30/1990................ -- (0.66) 10.14 7.41+++ 75,962
Period ended 11/30/1989**............ -- (0.07) 10.08 1.46+++ 46,560
INVESTOR A SHARES
Year ended 03/31/1997................ -- $ (0.49) $10.59 3.71% $ 55,791
Period ended 03/31/1996(b)........... -- (0.16) 10.69 0.20 68,003
Year ended 11/30/1995................ -- (0.49) 10.83 14.16 73,253
Year ended 11/30/1994................ $ (0.00)# (0.57) 9.94 (4.52) 79,412
Year ended 11/30/1993................ -- (0.53) 10.99 8.91 103,689
Year ended 11/30/1992................ -- (0.58) 10.59 8.18+++ 76,650
Year ended 11/30/1991................ -- (0.59) 10.34 8.04+++ 44,540
Period ended 11/30/1990**............ -- (0.66) 10.14 7.41+++ 24,303
INVESTOR C SHARES
Year ended 03/31/1997................ -- $ (0.46) $10.59 3.40% $ 6,463
Period ended 03/31/1996(b)........... -- (0.15) 10.69 0.10 6,909
Year ended 11/30/1995................ -- (0.46) 10.83 13.82 7,152
Year ended 11/30/1994................ $ (0.00)# (0.53) 9.94 (4.90) 8,372
Year ended 11/30/1993................ -- (0.46) 10.99 8.25 11,176
Period ended 11/30/1992**............ -- (0.19) 10.59 3.36+++ 4,769
INVESTOR N SHARES
Year ended 03/31/1997................ -- $ (0.46) $10.59 3.40% $ 10,516
Period ended 03/31/1996(b)........... -- (0.15) 10.69 0.10 11,926
Year ended 11/30/1995................ -- (0.46) 10.83 13.82 12,163
Year ended 11/30/1994................ $ (0.00)# (0.54) 9.94 (4.82) 9,690
Period ended 11/30/1993**............ -- (0.21) 10.99 3.48 5,249
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
RATIO OF RATIO OF ------------------------------
OPERATING NET INVESTMENT OPERATING
EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO NET INVESTMENT
AVERAGE NET AVERAGE NET TURNOVER AVERAGE NET INCOME
ASSETS ASSETS RATE ASSETS PER SHARE
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS TEXAS MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997................ 0.60%(a) 4.99% 52% 1.03% $ 0.44
Period ended 03/31/1996(b)........... 0.60+ 4.92+ 6 1.11+ 0.14
Year ended 11/30/1995................ 0.39(a) 5.45 50 1.05 0.44
Period ended 11/30/1994*............. 0.22+(a) 5.52+ 107 1.06+ 0.35
INVESTOR A SHARES
Year ended 03/31/1997................ 0.80%(a) 4.79% 52% 1.23% $ 0.42
Period ended 03/31/1996(b)........... 0.80+ 4.72+ 6 1.31+ 0.13
Year ended 11/30/1995................ 0.59(a) 5.25 50 1.25 0.43
Period ended 11/30/1994*............. 0.40+(a) 5.34+ 107 1.24+ 0.39
INVESTOR C SHARES
Year ended 03/31/1997................ 1.10%(a) 4.49% 52% 1.53% $ 0.39
Period ended 03/31/1996(b)........... 1.16+ 4.36+ 6 1.67+ 0.12
Year ended 11/30/1995................ 1.14(a) 4.70 50 1.80 0.37
Period ended 11/30/1994*............. 0.97+(a) 4.77+ 107 1.81+ 0.02
INVESTOR N SHARES
Year ended 03/31/1997................ 1.35%(a) 4.24% 52% 1.78% $ 0.36
Period ended 03/31/1996(b)........... 1.35+ 4.17+ 6 1.86+ 0.11
Year ended 11/30/1995................ 1.14(a) 4.70 50 1.80 0.37
Year ended 11/30/1994................ 0.97(a) 4.77 107 1.81 0.37
Period ended 11/30/1993*............. 0.70+ 3.32+ 5 2.05+ 0.03
NATIONS VIRGINIA INTERMEDIATE
MUNICIPAL BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997................ 0.50%(a) 4.79% 20% 0.74% $ 0.49
Period ended 03/31/1996(b)........... 0.50+(a) 4.72+ 2 0.76+ 0.16
Year ended 11/30/1995................ 0.56(a) 4.87 22 0.74 0.49
Year ended 11/30/1994................ 0.61(a) 4.76 14 0.73 0.49
Year ended 11/30/1993................ 0.57 4.80 26 0.69 0.47
Year ended 11/30/1992................ 0.56 5.17 13 0.68 0.53
Year ended 11/30/1991................ 0.45 5.67 24 0.73 0.55
Year ended 11/30/1990................ 0.26 6.09 19 0.80 0.55
Period ended 11/30/1989**............ 0.16+ 6.09+ 12 0.81+ 0.08
INVESTOR A SHARES
Year ended 03/31/1997................ 0.70%(a) 4.59% 20% 0.94% $ 0.47
Period ended 03/31/1996(b)........... 0.70+(a) 4.52+ 2 0.96+ 0.15
Year ended 11/30/1995................ 0.76(a) 4.67 22 0.94 0.47
Year ended 11/30/1994................ 0.79(a) 4.58 14 0.91 0.47
Year ended 11/30/1993................ 0.72 4.65 26 0.84 0.49
Year ended 11/30/1992................ 0.65 5.04 13 0.97 0.50
Year ended 11/30/1991................ 0.45 5.67 24 0.73 0.55
Period ended 11/30/1990**............ 0.26+ 6.09+ 19 0.80+ 0.55
INVESTOR C SHARES
Year ended 03/31/1997................ 1.00%(a) 4.29% 20% 1.24% $ 0.44
Period ended 03/31/1996(b)........... 1.00+(a) 4.22+ 2 1.26+ 0.14
Year ended 11/30/1995................ 1.06(a) 4.37 22 1.24 0.44
Year ended 11/30/1994................ 1.19(a) 4.18 14 1.31 0.43
Year ended 11/30/1993................ 1.32 4.05 26 1.44 0.43
Period ended 11/30/1992**............ 1.28+ 3.99+ 13 2.80+ 0.12
INVESTOR N SHARES
Year ended 03/31/1997................ 1.00%(a) 4.29% 20% 1.24% $ 0.44
Period ended 03/31/1996(b)........... 1.00+(a) 4.22+ 2 1.26+ 0.14
Year ended 11/30/1995................ 1.06(a) 4.37 22 1.24 0.44
Year ended 11/30/1994................ 1.11(a) 4.26 14 1.23 0.43
Period ended 11/30/1993**............ 1.07+ 4.30+ 26 1.19+ 0.20
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
165
<PAGE> 170
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS TOTAL NET ASSET
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET DIVIDENDS VALUE
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT AND END OF
OF YEAR INCOME ON INVESTMENTS FROM OPERATIONS INCOME DISTRIBUTIONS YEAR
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS VIRGINIA MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997......... $ 9.38 $ 0.48 $ 0.02 $ 0.50 $(0.48) $ (0.48) $9.40
Period ended 03/31/1996(b).... 9.62 0.16 (0.24) (0.08) (0.16) (0.16) 9.38
Year ended 11/30/1995......... 8.29 0.51 1.33 1.84 (0.51) (0.51) 9.62
Period ended 11/30/1994*...... 10.00 0.45 (1.71) (1.26) (0.45) (0.45) 8.29
INVESTOR A SHARES
Year ended 03/31/1997......... $ 9.38 $ 0.46 $ 0.02 $ 0.48 $(0.46) $ (0.46) $9.40
Period ended 03/31/1996(b).... 9.62 0.16 (0.24) (0.08) (0.16) (0.16) 9.38
Year ended 11/30/1995......... 8.29 0.49 1.33 1.82 (0.49) (0.49) 9.62
Year ended 11/30/1994......... 9.77 0.49 (1.48) (0.99) (0.49) (0.49) 8.29
Period ended 11/30/1993*...... 9.84 0.03 (0.07) (0.04) (0.03) (0.03) 9.77
INVESTOR C SHARES
Year ended 03/31/1997......... $ 9.38 $ 0.43 $ 0.02 $ 0.45 $(0.43) $ (0.43) $9.40
Period ended 03/31/1996(b).... 9.62 0.14 (0.24) (0.10) (0.14) (0.14) 9.38
Year ended 11/30/1995......... 8.29 0.44 1.33 1.77 (0.44) (0.44) 9.62
Period ended 11/30/1994*...... 8.38 0.03 (0.09) (0.06) (0.03) (0.03) 8.29
INVESTOR N SHARES
Year ended 03/31/1997......... $ 9.38 $ 0.41 $ 0.02 $ 0.43 $(0.41) $ (0.41) $9.40
Period ended 03/31/1996(b).... 9.62 0.14 (0.24) (0.10) (0.14) (0.14) 9.38
Year ended 11/30/1995......... 8.29 0.44 1.33 1.77 (0.44) (0.44) 9.62
Year ended 11/30/1994......... 9.77 0.44 (1.48) (1.04) (0.44) (0.44) 8.29
Period ended 11/30/1993*...... 10.00 0.04 (0.23) (0.19) (0.04) (0.04) 9.77
</TABLE>
- ---------------
* Nations Virginia Municipal Bond Fund's Primary A, Investor A, Investor C
and Investor N Shares commenced operations on January 11, 1994, November 8,
1993, November 3, 1994 and October 21, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
166
<PAGE> 171
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/
VALUE NET AND UNREALIZED (DECREASE) IN
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE
OF YEAR INCOME ON INVESTMENTS FROM OPERATIONS
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NATIONS VIRGINIA MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997......... 5.44% $ 5,726 0.60% (a)
Period ended 03/31/1996(b).... (0.84) 3,296 0.60+ 0.61%+
Year ended 11/30/1995......... 22.63 3,527 0.39 (a)
Period ended 11/30/1994*...... (12.86) 432 0.21+ (a)
INVESTOR A SHARES
Year ended 03/31/1997......... 5.23% $ 726 0.80% (a)
Period ended 03/31/1996(b).... (0.91) 661 0.80+ 0.81%+
Year ended 11/30/1995......... 22.39 650 0.59 (a)
Year ended 11/30/1994......... (10.44) 168 0.39 (a)
Period ended 11/30/1993*...... (0.42) 25 0.10+ --
INVESTOR C SHARES
Year ended 03/31/1997......... 4.92% $ 45 1.10% (a)
Period ended 03/31/1996(b).... (1.03) 43 1.16+ 1.17%+
Year ended 11/30/1995......... 21.71 34 1.14 (a)
Period ended 11/30/1994*...... (0.67) 2 0.96+ (a)
INVESTOR N SHARES
Year ended 03/31/1997......... 4.65% $ 13,972 1.35% (a)
Period ended 03/31/1996(b).... (1.09) 15,938 1.35+ 1.36%+
Year ended 11/30/1995......... 21.72 16,489 1.14 (a)
Year ended 11/30/1994......... (10.95) 12,738 0.96 (a)
Period ended 11/30/1993*...... (1.93) 6,580 0.70+ --
<CAPTION>
WITHOUT
WAIVERS
AND/OR
EXPENSE
REIMBURSEMENTS
RATIO OF --------------
OPERATING RATIO OF RATIO OF
EXPENSES TO NET INVESTMENT OPERATING
AVERAGE NET INCOME TO PORTFOLIO EXPENSES TO
ASSETS INCLUDING AVERAGE NET TURNOVER AVERAGE NET
INTEREST EXPENSE ASSETS RATE ASSETS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NATIONS VIRGINIA MUNICIPAL
BOND FUND
PRIMARY A SHARES
Year ended 03/31/1997......... 5.10% 37% 0.98% $ 0.44
Period ended 03/31/1996(b).... 5.06+ 8 1.07+ 0.14
Year ended 11/30/1995......... 5.51 16 1.04 0.46
Period ended 11/30/1994*...... 5.52+ 61 0.99+ 0.38
INVESTOR A SHARES
Year ended 03/31/1997......... 4.90% 37% 1.18% $ 0.42
Period ended 03/31/1996(b).... 4.86+ 8 1.27+ 0.14
Year ended 11/30/1995......... 5.31 16 1.24 0.44
Year ended 11/30/1994......... 5.34 61 1.17 0.43
Period ended 11/30/1993*...... 3.88+ 0 1.30+ 0.02
INVESTOR C SHARES
Year ended 03/31/1997......... 4.60% 37% 1.48% $ 0.39
Period ended 03/31/1996(b).... 4.50+ 8 1.63+ 0.12
Year ended 11/30/1995......... 4.76 16 1.79 0.39
Period ended 11/30/1994*...... 4.77+ 61 1.74+ 0.03
INVESTOR N SHARES
Year ended 03/31/1997......... 4.35% 37% 1.73% $ 0.37
Period ended 03/31/1996(b).... 4.31+ 8 1.82+ 0.12
Year ended 11/30/1995......... 4.76 16 1.79 0.39
Year ended 11/30/1994......... 4.77 61 1.74 0.37
Period ended 11/30/1993*...... 3.28+ 0 1.90+ 0.03
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
167
<PAGE> 172
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Nations Fund Trust (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end investment company. As of
the date of this report, the Trust offers thirty-three separate portfolios.
Information presented in these financial statements pertains only to: Nations
Short-Term Municipal Income Fund, Nations Intermediate Municipal Bond Fund,
Nations Municipal Income Fund, Nations Florida Intermediate Municipal Bond Fund,
Nations Florida Municipal Bond Fund, Nations Georgia Intermediate Municipal Bond
Fund, Nations Georgia Municipal Bond Fund, Nations Maryland Intermediate
Municipal Bond Fund, Nations Maryland Municipal Bond Fund, Nations North
Carolina Intermediate Municipal Bond Fund, Nations North Carolina Municipal Bond
Fund, Nations South Carolina Intermediate Municipal Bond Fund, Nations South
Carolina Municipal Bond Fund, Nations Tennessee Intermediate Municipal Bond
Fund, Nations Tennessee Municipal Bond Fund, Nations Texas Intermediate
Municipal Bond Fund, Nations Texas Municipal Bond Fund, Nations Virginia
Intermediate Municipal Bond Fund and Nations Virginia Municipal Bond Fund (each
a "Fund" and collectively, the "Funds"). The financial statements for the
remaining funds of the Trust are presented under separate cover. The Funds
currently offer four classes of shares: Primary A Shares, Investor A Shares,
Investor C Shares and Investor N Shares. The Board of Trustees has authorized
the issuance of Primary B Shares for all Funds. As of March 31, 1997, no Primary
B Shares have been issued. Shareholders of a Fund have equal voting rights on
matters affecting all shareholders of the Fund. In addition, each class of
shares of a Fund has exclusive voting rights on matters that relate solely to
its class and separate voting rights on matters in which the interests of one
class of shares differ from the interests of any other class.
1. SIGNIFICANT ACCOUNTING POLICIES.
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 in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Funds in the preparation of
their financial statements.
Securities Valuation: Investments in municipal bonds are valued by an
independent pricing service approved by the Board of Trustees. Valuations are
based upon a matrix system and/or appraisals provided by the pricing service
which take into consideration such factors as yields, prices, maturities,
redemption features and credit ratings on comparable securities. Certain
securities may be valued by one or more principal market makers. Restricted
securities, securities for which market quotations are not readily available,
and other assets are valued by the investment advisor under the supervision of
the Board of Trustees. Short-term investments that mature in 60 days or less are
valued at amortized cost.
Certain states' municipal obligations may be obligations of issuers that rely in
whole or in part on state specific revenues, real property taxes and revenues
from health care institutions, as appropriate, or obligations secured by
mortgages on real property. Consequently, state law affecting these obligations
and the possible effects on these obligations of economic conditions in such
states must be considered.
Securities Transactions and Investment Income: Securities transactions are
accounted for on trade date. Realized gains and losses are computed based on the
specific identification of the securities sold. Interest income, adjusted for
accretion of discounts and amortization of premiums, is earned from settlement
date and is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date. Each Fund's investment income and realized and unrealized
gains and losses are allocated among its classes based upon the relative net
assets of each class of shares.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income is not accrued
until the settlement date. Each Fund instructs the custodian to segregate assets
with a current value at least equal to the amount of its when-issued purchase
commitments.
Dividends and Distributions to Shareholders: It is the policy of each Fund to
declare dividends daily from net investment income and pay such dividends
monthly. Each Fund will distribute net realized capital gains annually after the
fiscal year in which the capital gains were earned, unless offset by any
available capital loss carryforward. Additional distributions of net investment
income and capital gains may be made at the discretion of the Board of Trustees
in order to avoid application of the 4% non-deductible Federal excise tax.
Income distributions and capital gain distributions on a Fund level are
determined in accordance with Federal income tax regulations which may differ
from generally accepted accounting principles. These differences are primarily
due to timing differences and differing characterization of distributions made
by the Fund as a whole.
168
<PAGE> 173
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Reclassifications are made to each Funds' capital accounts to reflect income and
gains available for distribution (or available capital loss carryforwards) under
Federal income tax regulations. Certain reclassification adjustments are made
among undistributed net investment income, realized gain and loss and paid-in
capital due to different book and tax accounting for market discount and
amortization of organization costs.
Reclassifications for the year ended March 31, 1997 were as follows:
<TABLE>
<CAPTION>
INCREASE/(DECREASE) INCREASE/(DECREASE)
INCREASE/(DECREASE) UNDISTRIBUTED NET ACCUMULATED NET
PAID-IN CAPITAL INVESTMENT INCOME REALIZED GAIN/(LOSS)
----------------------------------------------------------------
<S> <C> <C> <C>
Nations Intermediate Municipal Bond Fund........ -- $ 35,496 $ (35,496)
Nations Municipal Income Fund................... 1 75,504 (75,505)
Nations Florida Intermediate Municipal Bond
Fund.......................................... $(3,525) 3,525 --
Nations Florida Municipal Bond Fund............. -- 6,940 (6,940)
Nations Georgia Intermediate Municipal Bond
Fund.......................................... (4,379) 14,312 (9,933)
Nations Georgia Municipal Bond Fund............. 1 7,741 (7,742)
Nations Maryland Municipal Bond Fund............ -- 4,603 (4,603)
Nations North Carolina Intermediate Municipal
Bond Fund..................................... 1 6,573 (6,574)
Nations North Carolina Municipal Bond Fund...... -- 7,337 (7,337)
Nations South Carolina Intermediate Municipal
Bond Fund..................................... -- 3,906 (3,906)
Nations South Carolina Municipal Bond Fund...... -- 5,658 (5,658)
Nations Tennessee Intermediate Municipal Bond
Fund.......................................... (487) 2,180 (1,693)
Nations Tennessee Municipal Bond Fund........... (681) 681 --
Nations Texas Intermediate Municipal Bond
Fund.......................................... (1,938) 3,075 (1,137)
Nations Texas Municipal Bond Fund............... (1,107) 6,637 (5,530)
Nations Virginia Intermediate Municipal Bond
Fund.......................................... (1) 6,969 (6,968)
Nations Virginia Municipal Bond Fund............ -- 3,290 (3,290)
</TABLE>
Federal Income Tax: It is the policy of each Fund to qualify as a regulated
investment company by complying with the requirements of the Internal Revenue
Code of 1986, as amended, applicable to regulated investment companies and by
distributing substantially all of its earnings to its shareholders. Therefore,
no Federal income or excise tax provision is applicable.
Expenses: General expenses of the Trust are allocated to the relevant Funds
based upon relative net assets. Operating expenses directly attributable to a
Fund or class of shares are charged to such Fund's or class's operations.
Expenses of each Fund not directly attributable to the operations of any class
of shares are prorated among the classes based on the relative net assets of
each class of shares.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS.
The Trust has, on behalf of its Funds, entered into an investment advisory
agreement (the "Investment Advisory Agreement") with NationsBanc Advisors, Inc.
("NBAI"), a wholly-owned subsidiary of NationsBank, N.A. ("NationsBank"),
pursuant to which NBAI provides investment advisory services to the Funds. Under
the terms of this
169
<PAGE> 174
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Investment Advisory Agreement, NBAI is entitled to receive an advisory fee
calculated daily and payable monthly based on the following annual rates
multiplied by the daily net assets of each Fund:
<TABLE>
<CAPTION>
ANNUAL RATE
----------
<S> <C>
Nations Short-Term Municipal Income Fund, Nations Intermediate Municipal 0.50%
Bond Fund, Nations Florida Intermediate Municipal Bond Fund, Nations Georgia
Intermediate Municipal Bond Fund, Nations Maryland Intermediate Municipal
Bond Fund, Nations North Carolina Intermediate Municipal Bond Fund, Nations
South Carolina Intermediate Municipal Bond Fund, Nations Tennessee
Intermediate Municipal Bond Fund, Nations Texas Intermediate Municipal Bond
Fund and Nations Virginia Intermediate Municipal Bond Fund
Nations Municipal Income Fund, Nations Florida Municipal Bond Fund, Nations 0.60%
Georgia Municipal Bond Fund, Nations Maryland Municipal Bond Fund, Nations
North Carolina Municipal Bond Fund, Nations South Carolina Municipal Bond
Fund, Nations Tennessee Municipal Bond Fund, Nations Texas Municipal Bond
Fund and Nations Virginia Municipal Bond Fund
</TABLE>
The Trust has, on behalf of its Funds, entered into a sub-advisory agreement
(the "Sub-Advisory Agreement") with NBAI and TradeStreet Investment Associates,
Inc. ("TradeStreet"), a wholly-owned subsidiary of NationsBank. Under the terms
of the Sub-Advisory Agreement, TradeStreet is entitled to receive a sub-advisory
fee from NBAI for each Fund at the annual rate of 0.07% of such Fund's average
daily net assets.
Stephens Inc. ("Stephens") serves as the administrator of the Trust pursuant to
an administration agreement (the "Administration Agreement"). First Data
Investor Services Group, Inc. ("First Data"), a wholly-owned subsidiary of First
Data Corporation, serves as the co-administrator of the Trust pursuant to a
co-administration agreement (the "Co-Administration Agreement"). Pursuant to the
Administration and Co-Administration Agreements, Stephens and First Data are
entitled to receive a combined fee, computed daily and paid monthly, at the
annual rate of 0.10% of average daily net assets of the investment portfolios of
the Trust, Nations Fund, Inc. and Nations Fund Portfolios, Inc. (other
registered open-end investment companies that are a part of the Nations Funds
Family). NationsBank serves as the sub-administrator of the Trust pursuant to a
sub-administration agreement (the "Sub-Administration Agreement") with Stephens.
For the year ended March 31, 1997, Stephens earned $450,456 (net of fee waivers)
from the Funds for its administration services, of which $101,304 was paid to
NationsBank for its services as sub-administrator.
170
<PAGE> 175
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The investment adviser, sub-adviser, administrator, co-administrator and
custodian may, from time to time, voluntarily reduce their fees payable by each
Fund. For the year ended March 31, 1997, the investment adviser, administrator
and custodian voluntarily waived fees as follows:
<TABLE>
<CAPTION>
FEES WAIVED BY FEES
------------------------------------ REIMBURSED
ADVISER ADMINISTRATOR CUSTODIAN BY ADVISER
------------------------------------------------
<S> <C> <C> <C> <C>
Nations Short-Term Municipal Income Fund........................... $294,153 $ 7,479 $ 6,825 --
Nations Intermediate Municipal Bond Fund........................... 277,372 9,878 -- --
Nations Municipal Income Fund...................................... 305,497 10,434 -- --
Nations Florida Intermediate Municipal Bond Fund................... 161,773 5,513 -- --
Nations Florida Municipal Bond Fund................................ 117,651 3,824 4,627 --
Nations Georgia Intermediate Municipal Bond Fund................... 165,879 5,977 -- --
Nations Georgia Municipal Bond Fund................................ 61,249 1,497 2,819 --
Nations Maryland Intermediate Municipal Bond Fund.................. 227,212 8,519 -- --
Nations Maryland Municipal Bond Fund............................... 67,979 1,408 2,572 --
Nations North Carolina Intermediate Municipal Bond Fund............ 121,064 3,971 -- --
Nations North Carolina Municipal Bond Fund......................... 92,926 2,857 3,548 --
Nations South Carolina Intermediate Municipal Bond Fund............ 197,205 7,071 -- --
Nations South Carolina Municipal Bond Fund......................... 67,297 1,846 2,664 --
Nations Tennessee Intermediate Municipal Bond Fund................. 79,715 1,869 -- --
Nations Tennessee Municipal Bond Fund.............................. 47,192 847 2,012 $ 3,159
Nations Texas Intermediate Municipal Bond Fund..................... 104,929 3,130 -- --
Nations Texas Municipal Bond Fund.................................. 69,111 1,724 3,841 --
Nations Virginia Intermediate Municipal Bond Fund.................. 520,946 22,264 -- --
Nations Virginia Municipal Bond Fund............................... 71,879 2,043 3,399 --
</TABLE>
NationsBank of Texas, N.A. ("NationsBank of Texas") acts as the custodian for
the Funds and, for the year ended March 31, 1997, earned $136,281 (excluding fee
waivers) for providing such services. On October 18, 1996, The Bank of New York
("BONY") was appointed sub-custodian for the Funds.
First Data also serves as the transfer agent for the Funds' shares. NationsBank
of Texas also acts as the sub-transfer agent for the Primary Shares of the Funds
and, for the year ended March 31, 1997, earned approximately $108,023 for
providing such services.
Stephens also serves as distributor of the Funds' shares. For the year ended
March 31, 1997, the Funds were informed that the distributor received $696,072
in contingent deferred sales charges from shares which were subject to such
charges. A substantial portion of these fees are paid to affiliates of
NationsBank and NBAI.
No officer, director or employee of NationsBank, NBAI, TradeStreet, Stephens,
First Data or any affiliate thereof, receives any compensation from the Trust
for serving as a trustee or officer of the Trust. The Trust pays each
unaffiliated Trustee an annual fee of $1,000 ($3,000 for the Chairman of the
Board), plus $500 per Fund and an additional $1,000 for each in-person board
meeting, and $500 for each telephonic board meeting attended. The Trust also
reimburses expenses incurred by each unaffiliated Trustee in attending such
meetings.
The Trust's eligible Trustees may participate in a non-qualified deferred
compensation and retirement plan which may be terminated at any time. All
benefits provided under these plans are unfunded and any payments to plan
participants are paid solely out of the Funds' assets. Income earned on each
plan participant's deferral account is tied to the rate of return of the
eligible mutual funds selected by the participants or, if no funds are selected,
to the rate of return of Nations Treasury Fund, a fund of Nations Fund, Inc. The
expense for the deferred compensation and retirement plan is included in
"Trustees' fees and expenses" in the Statements of Operations.
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS.
The Trust has adopted a shareholder servicing and distribution plan pursuant to
Rule 12b-1 under the 1940 Act for Investor A Shares of each Fund ("Investor A
Plan"); a shareholder servicing plan ("Servicing Plan") for Investor C Shares
and Investor N Shares of each Fund; and a distribution plan ("Distribution
Plan") pursuant to Rule 12b-1 for Investor C Shares and Investor N Shares of
each Fund (collectively, the "Plans"). The Investor A Plan permits the Funds to
compensate (i) servicing agents for services provided to their customers that
own Investor A Shares and
171
<PAGE> 176
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(ii) Stephens for distribution-related expenses incurred in connection with
Investor A Shares. The Servicing Plan permits the Funds to compensate servicing
agents and selling agents that have entered into a servicing agreement with the
Funds for services provided to their customers that own Investor A Shares of
Nations Short-Term Municipal Income Fund, Investor C Shares and Investor N
Shares, respectively. The Distribution Plan permits the Funds to compensate or
reimburse Stephens for any activities or expenses primarily intended to result
in the sale of the Funds' Investor C Shares or Investor N Shares, respectively.
Payments under the Plans are accrued daily and paid monthly at a rate set, from
time to time, by the distributor. Fees incurred pursuant to the Plans are
charged as expenses of each Fund directly to the Investor A Shares, Investor C
Shares and Investor N Shares, respectively.
For the year ended March 31, 1997, the effective rates incurred by the Funds, as
a percentage of average daily net assets, pursuant to the Plans were as follows:
<TABLE>
<CAPTION>
INVESTOR C INVESTOR C INVESTOR N INVESTOR N
INVESTOR A DISTRIBUTION SERVICING DISTRIBUTION SERVICING
FUND PLAN PLAN PLAN PLAN PLAN
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nations Short-Term Municipal Income Fund*................... 0.20% 0.10% 0.25% 0.10% 0.25%
Nations Intermediate Municipal Bond Fund.................... 0.20 0.25 0.25 0.25 0.25
Nations Municipal Income Fund............................... 0.20 0.25 0.25 0.50 0.25
Nations Florida Intermediate Municipal Bond Fund............ 0.20 0.25 0.25 0.25 0.25
Nations Florida Municipal Bond Fund......................... 0.20 0.25 0.25 0.50 0.25
Nations Georgia Intermediate Municipal Bond Fund............ 0.20 0.25 0.25 0.25 0.25
Nations Georgia Municipal Bond Fund......................... 0.20 0.25 0.25 0.50 0.25
Nations Maryland Intermediate Municipal Bond Fund........... 0.20 0.25 0.25 0.25 0.25
Nations Maryland Municipal Bond Fund........................ 0.20 0.25 0.25 0.50 0.25
Nations North Carolina Intermediate Municipal Bond Fund..... 0.20 0.25 0.25 0.25 0.25
Nations North Carolina Municipal Bond Fund.................. 0.20 0.25 0.25 0.50 0.25
Nations South Carolina Intermediate Municipal Bond Fund..... 0.20 0.25 0.25 0.25 0.25
Nations South Carolina Municipal Bond Fund.................. 0.20 0.25 0.25 0.50 0.25
Nations Tennessee Intermediate Municipal Bond Fund.......... 0.20 0.25 0.25 0.25 0.25
Nations Tennessee Municipal Bond Fund....................... 0.20 0.25 0.25 0.50 0.25
Nations Texas Intermediate Municipal Bond Fund.............. 0.20 0.25 0.25 0.25 0.25
Nations Texas Municipal Bond Fund........................... 0.20 0.25 0.25 0.50 0.25
Nations Virginia Intermediate Municipal Bond Fund........... 0.20 0.25 0.25 0.25 0.25
Nations Virginia Municipal Bond Fund........................ 0.20 0.25 0.25 0.50 0.25
</TABLE>
* In addition, a shareholder servicing plan has been adopted for the Investor A
Shares of the Nations Short-Term Municipal Income Fund. For the year ended
March 31, 1997, no fees were incurred by the Fund pursuant to the plan.
A substantial portion of the fees paid pursuant to the Plans described above are
paid to affiliates of NationsBank and NBAI.
172
<PAGE> 177
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. PURCHASES AND SALES OF SECURITIES.
The aggregate cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the year ended March 31, 1997 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
---------------------------
<S> <C> <C>
Nations Short-Term Municipal Income Fund............................................ $65,763,952 $55,624,200
Nations Intermediate Municipal Bond Fund............................................ 45,704,726 19,351,361
Nations Municipal Income Fund....................................................... 26,102,475 30,846,993
Nations Florida Intermediate Municipal Bond Fund.................................... 15,749,948 8,438,563
Nations Florida Municipal Bond Fund................................................. 8,740,187 9,280,692
Nations Georgia Intermediate Municipal Bond Fund.................................... 8,290,635 5,055,471
Nations Georgia Municipal Bond Fund................................................. 4,248,555 2,710,937
Nations Maryland Intermediate Municipal Bond Fund................................... 8,464,170 12,482,899
Nations Maryland Municipal Bond Fund................................................ 3,134,981 2,427,933
Nations North Carolina Intermediate Municipal Bond Fund............................. 11,357,117 10,134,409
Nations North Carolina Municipal Bond Fund.......................................... 7,744,241 12,476,323
Nations South Carolina Intermediate Municipal Bond Fund............................. 10,031,884 8,862,947
Nations South Carolina Municipal Bond Fund.......................................... 8,042,149 5,239,857
Nations Tennessee Intermediate Municipal Bond Fund.................................. 5,072,868 5,152,791
Nations Tennessee Municipal Bond Fund............................................... 3,802,723 2,490,606
Nations Texas Intermediate Municipal Bond Fund...................................... 10,622,696 12,060,073
Nations Texas Municipal Bond Fund................................................... 8,870,577 10,889,632
Nations Virginia Intermediate Municipal Bond Fund................................... 44,521,136 63,139,268
Nations Virginia Municipal Bond Fund................................................ 7,722,987 7,264,540
</TABLE>
At March 31, 1997, aggregate gross unrealized appreciation and unrealized
depreciation for tax purposes were as follows:
<TABLE>
<CAPTION>
TAX BASIS TAX BASIS
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION
--------------------------
<S> <C> <C>
Nations Short-Term Municipal Income Fund............................................. $ 571,269 $ 85,587
Nations Intermediate Municipal Bond Fund............................................. 1,970,405 445,139
Nations Municipal Income Fund........................................................ 4,998,678 406,653
Nations Florida Intermediate Municipal Bond Fund..................................... 1,193,738 198,867
Nations Florida Municipal Bond Fund.................................................. 1,100,698 311,485
Nations Georgia Intermediate Municipal Bond Fund..................................... 1,530,280 246,781
Nations Georgia Municipal Bond Fund.................................................. 277,414 158,495
Nations Maryland Intermediate Municipal Bond Fund.................................... 1,968,876 602,337
Nations Maryland Municipal Bond Fund................................................. 317,585 88,538
Nations North Carolina Intermediate Municipal Bond Fund.............................. 1,124,094 60,845
Nations North Carolina Municipal Bond Fund........................................... 663,310 100,510
Nations South Carolina Intermediate Municipal Bond Fund.............................. 1,600,053 344,846
Nations South Carolina Municipal Bond Fund........................................... 304,936 160,856
Nations Tennessee Intermediate Municipal Bond Fund................................... 303,529 22,085
Nations Tennessee Municipal Bond Fund................................................ 236,033 40,612
Nations Texas Intermediate Municipal Bond Fund....................................... 483,081 67,373
Nations Texas Municipal Bond Fund.................................................... 610,879 66,010
Nations Virginia Intermediate Municipal Bond Fund.................................... 6,428,686 791,578
Nations Virginia Municipal Bond Fund................................................. 457,673 111,926
</TABLE>
5. SHARES OF BENEFICIAL INTEREST.
As of March 31, 1997, an unlimited number of shares without par value were
authorized for the Trust. The Trust's Declaration of Trust authorizes the Board
of Trustees to classify or reclassify any authorized but unissued shares into
one or more additional classes or series of shares. See Schedule of Capital
Stock Activity.
6. ORGANIZATION COSTS.
The Funds bear all costs in connection with their organization, including the
fees and expenses of registering and qualifying their shares for distribution
under Federal and state securities regulations. All such costs are being
amortized on
173
<PAGE> 178
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
a straight-line basis over a period of five years from commencement of
operations. In the event that any of the shares issued by the Funds to their
sponsor prior to the commencement of the Funds' public offering ("initial
shares") are redeemed during such amortization period by any holder thereof, the
Funds will be reimbursed by the holder for any unamortized organization costs in
the same proportion as the number of initial shares redeemed bears to the number
of initial shares outstanding at the time of redemption. All such costs for
Nations Municipal Income Fund, Nations Maryland Intermediate Municipal Bond Fund
and Nations Virginia Intermediate Municipal Bond Fund have been fully amortized.
7. LINE OF CREDIT.
The Trust participates in an uncommitted line of credit provided by BONY under a
line of credit agreement dated February 28, 1997 (the "Agreement"). Advances
under the Agreement are taken primarily for temporary or emergency purposes,
including the meeting of redemption requests that otherwise might require the
untimely disposition of securities. Under the Agreement, each Fund may borrow up
to the lesser of $25 million or 25% of its net assets. Interest on borrowings is
payable at the Federal Funds Rate plus 0.50% on an annualized basis. The
Agreement requires, among other things, that each participating Fund maintain a
ratio of no less than 4 to 1 net assets (not including funds borrowed pursuant
to the Agreement) to the aggregate amount of indebtedness pursuant to the
Agreement. Prior to executing the Agreement with BONY, the Trust participated in
a line of credit agreement with Mellon Bank N.A.
Borrowings for the year ended March 31, 1997 by the Funds under the Agreements
are disclosed below:
<TABLE>
<CAPTION>
AMOUNT AVERAGE
OUTSTANDING MAXIMUM AVERAGE DEBT INTEREST
AT MARCH 31, AMOUNT AMOUNT AVERAGE PER RATE INTEREST
FUND 1997 OUTSTANDING OUTSTANDING SHARES SHARE HIGH LOW EXPENSE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nations Short-Term Municipal
Income Fund.................... -- $1,800,000 $53,151 7,183,001 $0.0074 7.50% 5.38% $3,072
Nations Intermediate Municipal
Bond Fund...................... -- 600,000 9,863 9,333,411 0.0011 5.70% 5.45% 547
Nations Municipal Income Fund.... -- 1,700,000 74,795 9,649,380 0.0078 6.00% 5.45% 4,181
Nations Florida Intermediate
Municipal Bond Fund............ -- 500,000 8,219 5,104,893 0.0016 5.60% 5.40% 455
Nations Florida Municipal Bond
Fund........................... -- 700,000 24,932 4,026,395 0.0062 6.30% 5.35% 1,395
Nations Georgia Intermediate
Municipal Bond Fund............ -- 400,000 6,849 5,482,677 0.0012 5.57% 5.40% 379
Nations Georgia Municipal Bond
Fund........................... -- 500,000 11,233 1,542,378 0.0073 6.00% 5.38% 635
Nations Maryland Intermediate
Municipal Bond Fund............ -- 400,000 7,397 7,938,782 0.0009 5.70% 5.45% 422
Nations Maryland Municipal Bond
Fund........................... -- 300,000 1,644 1,473,086 0.0011 5.50% 5.45% 91
Nations North Carolina
Intermediate Municipal Bond
Fund........................... -- 1,400,000 9,589 3,810,668 0.0025 5.60% 5.45% 539
Nations North Carolina Municipal
Bond Fund...................... -- 700,000 12,329 3,044,183 0.0041 5.95% 5.45% 694
Nations South Carolina
Intermediate Municipal Bond
Fund........................... -- 700,000 10,411 6,653,315 0.0016 6.00% 5.40% 600
Nations South Carolina Municipal
Bond Fund...................... -- 400,000 3,562 1,824,830 0.0020 5.60% 5.45% 198
Nations Tennessee Intermediate
Municipal Bond Fund............ -- 500,000 4,932 1,867,473 0.0026 5.50% 5.40% 273
Nations Tennessee Municipal Bond
Fund........................... -- 100,000 4,932 864,681 0.0057 6.00% 5.45% 284
Nations Texas Intermediate
Municipal Bond Fund............ -- 500,000 18,356 3,115,001 0.0059 7.50% 5.40% 1,074
</TABLE>
174
<PAGE> 179
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
AMOUNT AVERAGE
OUTSTANDING MAXIMUM AVERAGE DEBT INTEREST
AT MARCH 31, AMOUNT AMOUNT AVERAGE PER RATE INTEREST
FUND 1997 OUTSTANDING OUTSTANDING SHARES SHARE HIGH LOW EXPENSE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nations Texas Municipal Bond
Fund........................... -- $ 200,000 $ 8,767 1,817,787 $0.0048 6.07% 5.45% $ 501
Nations Virginia Intermediate
Municipal Bond Fund............ -- 2,000,000 50,411 21,300,098 0.0024 6.30% 5.35% 2,828
Nations Virginia Municipal Bond
Fund........................... -- 700,000 3,562 2,145,813 0.0017 6.00% 5.45% 201
</TABLE>
The average amount outstanding was calculated by adding the borrowings at the
end of each day and dividing the sum by the number of days in the year ended
March 31, 1997.
8. CAPITAL LOSS CARRYFORWARD.
At March 31, 1997, the following Funds had available for Federal income tax
purposes the following unused capital losses expiring March 31:
<TABLE>
<CAPTION>
2002 2003 2004 2005
NAME OF FUND
- ------------ -----------------------------------------------
<S> <C> <C> <C> <C>
Nations Short-Term Municipal Income Fund.......................... $269,453 $ 373,533 -- --
Nations Intermediate Municipal Bond Fund.......................... -- 51,519 -- --
Nations Municipal Income Fund..................................... 913,512 2,394,822 -- --
Nations Florida Intermediate Municipal Bond Fund.................. 216,636 752,907 -- $ 22,078
Nations Florida Municipal Bond Fund............................... 531,197 354,485 -- 133,293
Nations Georgia Intermediate Municipal Bond Fund.................. -- 278,109 -- --
Nations Georgia Municipal Bond Fund............................... 137,330 222,938 -- --
Nations Maryland Intermediate Municipal Bond Fund................. -- 983,734 -- --
Nations Maryland Municipal Bond Fund.............................. 31,592 4,504 -- 49,878
Nations North Carolina Intermediate Municipal Bond Fund........... -- 274,366 -- --
Nations North Carolina Municipal Bond Fund........................ 358,960 425,261 -- 206,767
Nations South Carolina Intermediate Municipal Bond Fund........... -- 223,578 -- --
Nations Tennessee Intermediate Municipal Bond Fund................ 254,343 53,285 -- 1,009
Nations Tennessee Municipal Bond Fund............................. 30,632 174,808 -- --
Nations Texas Intermediate Municipal Bond Fund.................... 531,242 474,023 -- --
Nations Texas Municipal Bond Fund................................. 604,685 131,901 -- --
Nations Virginia Intermediate Municipal Bond Fund................. -- 742,427 -- --
Nations Virginia Municipal Bond Fund.............................. 514,704 77,074 $12,358 62,619
</TABLE>
Under the current tax law, capital losses realized after October 31, may be
deferred and treated as occurring on the first day of the following fiscal year.
For the year ended March 31, 1997, the following Funds have elected to defer
losses occurring between November 30, 1996 and March 31, 1997 under these rules:
<TABLE>
<CAPTION>
POST-OCTOBER CAPITAL
SHORT TERM LONG TERM
LOSS DEFERRAL (GAIN)/LOSS DEFERRAL
-----------------------------------
<S> <C> <C>
Nations Intermediate Municipal Bond Fund............................... $36,615 $ 55,281
Nations Florida Intermediate Municipal Bond Fund....................... 16,498 (7,678)
Nations Florida Municipal Bond Fund.................................... 3,655 110,133
Nations North Carolina Intermediate Municipal Bond Fund................ 52,850 19,948
Nations Tennessee Intermediate Municipal Bond Fund..................... -- 24
Nations Texas Intermediate Municipal Bond Fund......................... -- 5,897
</TABLE>
175
<PAGE> 180
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
9. REORGANIZATION.
On September 27, 1996, Nations Georgia Intermediate Municipal Bond Fund (the
"Acquiring Fund"), acquired the assets and certain liabilities of Peachtree
Georgia Tax-Free Income Fund (the "Acquired Fund"), listed below, in a tax-free
exchange for shares of the Acquiring Fund, pursuant to a plan of reorganization
approved by the Acquired Fund's shareholders. The total shares issued by the
Acquiring Fund, the value of the shares issued by the Acquiring Fund, the total
net assets of the Acquired Fund and the Acquiring Fund, and any unrealized
appreciation included in the Acquired Fund's total net assets at the acquisition
date were as follows:
<TABLE>
<CAPTION>
VALUE OF
SHARES SHARES TOTAL NET TOTAL NET TOTAL NET ASSETS
ISSUED BY ISSUED BY ASSETS OF ASSETS OF OF ACQUIRING
ACQUIRING ACQUIRED ACQUISITION ACQUIRING ACQUIRING ACQUIRED ACQUIRING FUND AFTER
FUND FUND DATE FUND FUND FUND FUND ACQUISITION
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Nations
Georgia Peachtree
Intermediate Georgia Tax-
Municipal Free Income
Bond Fund Fund 09/27/96 120,237 $1,278,074 $1,278,074 $56,411,252 $ 57,689,326
<CAPTION>
ACQUIRED
FUND'S
ACQUIRING ACQUIRED UNREALIZED
FUND FUND APPRECIATION
- ------------------------------------------
<S> <C> <C>
Nations Peachtree
Georgia Georgia Tax-
Intermediate Free Income
Municipal Fund
Bond Fund $ 28,589
</TABLE>
10. SUBSEQUENT EVENT.
The Trust is a party to an Agreement and Plan of Reorganization with The Pilot
Funds (which are advised by Boatmen's Trust Company, an affiliate of NationsBank
Corporation since January 7, 1997) pursuant to which certain Nations Funds
portfolios will acquire the assets of The Pilot Funds portfolios. The
shareholders of The Pilot Funds voted to approve the proposed reorganizations on
or before May 14, 1997. As of March 31, 1997, net assets of the fourteen funds
comprising The Pilot Funds were approximately $6.5 billion. The reorganization
involves the following Funds:
<TABLE>
<CAPTION>
NATIONS FUNDS PILOT FUNDS
- ------------------------------------------------------------------------------------------------------
<S> <C>
Intermediate Municipal Bond Fund Intermediate Municipal Fund
Municipal Income Fund Municipal Bond Fund
</TABLE>
176
<PAGE> 181
NATIONS FUNDS
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES OF NATIONS FUND TRUST
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments (except for bond ratings), 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
each of the nineteen Tax-Exempt Income Funds that constitute part of Nations
Fund Trust ("the Trust") at March 31, 1997, and the results of each of their
operations, the changes in each of their net assets, and their financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Trust'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 March 31, 1997 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
May 15, 1997
177
<PAGE> 182
NATIONS FUNDS
- --------------------------------------------------------------------------------
TAX INFORMATION (UNAUDITED)
For the year ended March 31, 1997, all of the distributions made from investment
income of the Nations Municipal Bond Funds, are tax exempt for regular Federal
income tax purposes. A portion of this income may be subject to Federal
Alternative Minimum Tax.
178
<PAGE> 183
THE NATIONS FUNDS FAMILY
EQUITY FUNDS
GROWTH
Nations Emerging Markets Fund
Nations Pacific Growth Fund
Nations International Equity Fund
Nations Managed Smallcap Index Fund
Nations Emerging Growth Fund
Nations Disciplined Equity Fund
Nations Capital Growth Fund
GROWTH AND INCOME
Nations Value Fund
Nations Managed Index Fund
Nations Equity Index Fund
Nations Equity Income Fund
Nations Balanced Assets Fund
LIFEGOAL PORTFOLIOS
LifeGoal Growth Portfolio
LifeGoal Balanced Growth Portfolio
LifeGoal Income and Growth Portfolio
BOND FUNDS
INCOME
Nations Global Government Income Fund
Nations Diversified Income Fund
Nations Strategic Fixed Income Fund
Nations Government Securities Fund
Nations Short-Intermediate Government Fund
Nations Short-Term Income Fund
TAX-EXEMPT INCOME
Nations Municipal Income Fund
Nations Intermediate Municipal Bond Fund
Nations Short-Term Municipal Income Fund
Nations Florida Municipal Bond Fund
Nations Florida Intermediate Municipal Bond Fund
Nations Georgia Municipal Bond Fund
Nations Georgia Intermediate Municipal Bond Fund
Nations Maryland Municipal Bond Fund
Nations Maryland Intermediate Municipal Bond Fund
Nations North Carolina Municipal Bond Fund
Nations North Carolina Intermediate Municipal Bond Fund
Nations South Carolina Municipal Bond Fund
Nations South Carolina Intermediate Municipal Bond Fund
Nations Tennessee Municipal Bond Fund
Nations Tennessee Intermediate Municipal Bond Fund
Nations Texas Municipal Bond Fund
Nations Texas Intermediate Municipal Bond Fund
Nations Virginia Municipal Bond Fund
Nations Virginia Intermediate Municipal Bond Fund
MONEY MARKET FUNDS
Nations Prime Fund
Nations Government Money Market Fund
Nations Treasury Fund
Nations Tax Exempt Fund
For more complete information on Nations Funds mutual funds, including charges
and expenses, please contact Nations Funds or your Investment Representative for
a current prospectus. Please read the prospectus carefully before you invest or
send money.
<PAGE> 184
This report is submitted for the general information of shareholders of Nations
Funds. This material must be preceded or accompanied by a current Nations Funds
prospectus.
<PAGE> 185
[NATIONS FUNDS LOGO] ----------------
P.O. Box 34602 | BULK RATE |
Charlotte, NC 28234-4602 | U.S. POSTAGE |
Toll Free 1-800-982-2271 | PAID |
| N READING, MA|
| PERMIT NO. |
| 105 |
----------------
AR4 IN-96119-397
