<PAGE> 1
SEMI-ANNUAL REPORT ARMADA
NOVEMBER 30, 1996 FUNDS
(UNAUDITED) MONEY
MARKET
SERIES
ARMADA MONEY MARKET FUND
ARMADA GOVERNMENT FUND
ARMADA TREASURY FUND
ARMADA TAX EXEMPT FUND
ARMADA PENNSYLVANIA TAX EXEMPT FUND
LOGO (ARMADA FUNDS)
<PAGE> 2
[LOGO] ARMADA FUNDS
MONEY MARKET SERIES
SEMI-ANNUAL REPORT - NOVEMBER 30, 1996
(unaudited)
<TABLE>
<S> <C>
TABLE OF CONTENTS
Chairman's Message .............................................. 1
PORTFOLIOS OF INVESTMENTS AND FINANCIAL HIGHLIGHTS
Armada Money Market Fund ........................................ 3
Armada Government Fund .......................................... 9
Armada Treasury Fund ............................................ 12
Armada Tax Exempt Fund .......................................... 14
Armada Pennsylvania Tax Exempt Fund ............................. 20
FINANCIAL STATEMENTS
Statement of Assets and Liabilities ............................. 25
Statement of Operations ......................................... 26
Statement of Changes in Net Assets .............................. 27
NOTES TO FINANCIAL STATEMENTS ..................................... 28
</TABLE>
- - SHARES OF THE ARMADA FUNDS ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED OR OTHERWISE SUPPORTED BY NATIONAL CITY BANK, ITS
AFFILIATES OR ANY BANK.
- - SHARES OF THE ARMADA FUNDS ARE NOT INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT, FDIC, OR ANY GOVERNMENTAL AGENCY OR STATE.
- - AN INVESTMENT IN THE ARMADA FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
- - PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE, AND THE INVESTMENT
RETURN WILL FLUCTUATE.
- - THERE CAN BE NO ASSURANCE THAT THE ARMADA MONEY MARKET, GOVERNMENT, TREASURY,
TAX EXEMPT OR PENNSYLVANIA TAX EXEMPT FUNDS WILL BE ABLE TO MAINTAIN A STABLE
NET ASSET VALUE OF $1 PER SHARE.
National City Bank and certain of its affiliates serve as investment advisers to
Armada Funds for which they receive an investment advisory fee. For more
complete information about the Armada Funds, including charges and expenses,
please contact your investment specialist or call 1-800-622-FUND (3863) for a
prospectus. Read it carefully before you invest or send money. Armada Funds are
distributed by 440 Financial Distributors, Inc., 4400 Computer Drive,
Westborough, MA 01581-5108. 440 Financial Distributors, Inc. is not affiliated
with National City Bank and is not a bank.
<PAGE> 3
LOGO CHAIRMAN'S MESSAGE
DEAR ARMADA FUNDS SHAREHOLDERS:
As the new Chairman of the Armada Board of
Trustees, I am pleased to bring you this six-month
update. I would like to extend our best wishes and
sincere appreciation to former Chairman Richard B.
Tullis for his many years of dedication and
invaluable service. His counsel will continue to be
available in his ongoing role as Trustee.
EQUITY FUND RATED AMONG TOP PERFORMERS
Have you been following the Lipper performance
rankings of the Armada Equity Fund in the Wall
Street Journal? If so, you have noticed a marked
improvement in its one-year total returns. In fact,
the Institutional and Retail shares of the Fund have
most recently been ranked in the upper 40% of their
peer group of large capitalization stock funds as
represented by an "A" or "B" rating.
A NEW INVESTMENT OBJECTIVE FOR THE ENHANCED INCOME
FUND HAS ENHANCED ITS PROSPECTS FOR GROWTH
In September, shareholders of Armada Enhanced
Income Fund agreed to a new investment objective
which seeks increased total return potential. (Total
return is a combination of income and price
appreciation over time.) By lengthening the Fund's
average maturity from two years or less to 1 1/2 to
four years, the Fund now can participate in full
market cycles and strive for better returns. Though
the change may increase the volatility of those
returns, the Fund Managers believe that this
increase will be outweighed by the potential
benefits of its enhanced return.
NEW PRODUCT OFFERINGS
To make investing easy, affordable and convenient,
Armada Funds offers these new investment
opportunities and information resources:
Four new portfolios have been added to the Armada
family: the Intermediate Government Fund, the GNMA
Fund, the Pennsylvania Municipal Fund, and the
Pennsylvania Tax Exempt Fund (a money market fund).
The addition of the two government bond funds means
that you can now further diversify your income
investments.
NATIONAL CITY SWEEP ACCOUNTS make investing
effortless. Sweeps now can be established between a
National City premium checking account
1
<PAGE> 4
LOGO CHAIRMAN'S MESSAGE
and an Armada money market fund. The automatic
"sweep" -- transfer of funds -- occurs when the
checking account exceeds a target balance.
FUTUREQUEST brings sophisticated investment
solutions to the individual investor. This
computer-aided process can help an investor
determine an appropriate strategy for allocating
assets among various mutual funds, including Armada
Funds. The recommended strategy is based on factors
such as an individual's investment time frame,
tolerance for risks, goals, assets and liabilities.
WWW.NATIONAL-CITY.COM is National City's
convenient new address on the World Wide Web.
Up-to-date information and highlights on the Armada
Funds are included and are just a few "clicks" away.
At National City's "Home Page," select Invest It!
and you and prospective investors can gain access to
quarterly performance information and the many
benefits of investing in the Armada Funds.
We hope you share our enthusiasm for these
positive changes. To receive more information about
your investment or any of the Armada Funds, please
call 1-800-622-FUND (3863). We look forward to
serving your investment needs and will continue to
ensure that your loyalty and confidence in the
Armada family is well placed.
Have a happy, healthy and prosperous 1997!
Sincerely,
/s/ Robert D. Neary
Robert D. Neary
Chairman
Armada Funds Board of Trustees
2
<PAGE> 5
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA MONEY MARKET FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
AGENCY OBLIGATIONS -- 24.4%
FEDERAL HOME LOAN BANK CONSOLIDATED
DISCOUNT NOTES -- 5.0%
5.70%........... 12/02/96 $ 4,000 $ 3,999,367
5.35%........... 01/28/97 20,000 19,827,611
5.23%........... 02/10/97 15,000 14,845,278
5.23%........... 02/14/97 20,000 19,782,083
5.22%........... 02/20/97 20,000 19,765,100
5.32%........... 02/26/97 20,000 19,742,867
-------------
97,962,306
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION
DISCOUNT NOTES -- 8.1%
5.40%........... 12/04/96 20,000 19,991,000
5.34%........... 12/13/96 10,000 9,982,200
5.19%........... 12/16/96 15,000 14,967,562
5.22%........... 02/03/97 20,000 19,814,400
5.24%........... 02/10/97 20,000 19,793,311
5.22%........... 02/11/97 20,000 19,791,200
5.23%........... 02/14/97 15,000 14,836,563
5.23%........... 02/18/97 20,000 19,770,461
5.22%........... 03/07/97 20,000 19,721,600
-------------
158,668,297
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
DISCOUNT NOTES -- 11.3%
5.43%........... 12/06/96 20,000 19,984,916
5.38%........... 12/13/96 20,000 19,964,133
5.23%........... 01/17/97 10,000 9,931,719
5.39%........... 01/21/97 25,000 24,809,104
5.23%........... 01/29/97 20,000 19,828,572
5.23%........... 02/18/97 25,000 24,713,076
5.23%........... 02/21/97 20,000 19,761,744
5.20%........... 02/24/97 25,000 24,693,056
5.22%........... 02/26/97 20,000 19,747,700
5.24%........... 03/18/97 20,000 19,688,511
5.25%........... 04/24/97 20,000 19,580,000
-------------
222,702,531
-------------
TOTAL AGENCY
OBLIGATIONS............................ 479,333,134
-------------
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
COMMERCIAL PAPER -- 62.6%
AGRICULTURE -- 3.0%
Canadian Wheat Board
(P1, A1)
5.25%........... 12/19/96 $ 23,295 $ 23,233,851
Cargill Financial
Services (P1, A1+)
5.29%........... 01/24/97 15,000 14,880,975
Cargill, Inc.
(P1, A1+)
5.43%........... 12/10/96 20,000 19,972,850
-------------
58,087,676
-------------
AUTOMOBILES -- 2.0%
Ford Motor Credit
Co. (P1, A1)
5.33%........... 01/14/97 15,000 14,902,283
5.32%........... 01/15/97 25,000 24,833,750
-------------
39,736,033
-------------
BUILDING & BUILDING SUPPLIES -- 1.3%
Weyerhaeuser Co.
(P1, A1)
5.30%........... 01/07/97 15,000 14,918,292
5.30%........... 01/10/97 5,000 4,970,556
5.29%........... 01/27/97 5,000 4,958,121
-------------
24,846,969
-------------
CHEMICALS -- 1.3%
E.I. duPont de Nemours & Co.
(P1, A1+)
5.25%........... 02/25/97 25,000 24,686,458
-------------
CONSUMER NON-DURABLES -- 2.5%
Clorox (P1, A1+)
5.40%........... 12/23/96 16,000 15,947,200
Colgate-Palmolive
Co. (P1, A1)
5.27%........... 12/30/96 5,400 5,377,076
Procter & Gamble Co.
(P1, A1+)
5.27%........... 02/06/97 9,000 8,911,728
</TABLE>
See Accompanying Notes
3
<PAGE> 6
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA MONEY MARKET FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
CONSUMER NON-DURABLES -- CONTINUED
Sara Lee Corp.
(P1, A1+)
5.28%........... 12/24/96 $ 20,000 $ 19,932,533
-------------
50,168,537
-------------
DIVERSIFIED -- 1.8%
General Electric Capital Corp.
(P1, A1+)
5.33%........... 12/20/96 20,000 19,943,739
5.32%........... 01/31/97 15,000 14,864,783
-------------
34,808,522
-------------
DRUGS & HEALTH CARE -- 2.6%
Schering-Plough
Corp. (P1, A1+)
5.28%........... 12/03/96 14,745 14,740,675
5.23%........... 12/18/96 15,950 15,910,608
5.28%........... 01/28/97 20,000 19,829,867
-------------
50,481,150
-------------
ELECTRONICS -- 2.0%
Vermont American
Corp. (P1, A1+)
5.30%........... 12/04/96 6,849 6,845,975
5.28%........... 12/20/96 17,000 16,952,627
5.24%........... 12/23/96 15,000 14,951,967
-------------
38,750,569
-------------
ENTERTAINMENT -- 0.5%
Walt Disney Company, Inc. (P1, A1)
5.38%........... 12/19/96 10,000 9,973,100
-------------
FINANCE-CONDUIT -- 11.5%
Ciesco, L.P. (P1, A1+)
5.42%........... 12/11/96 15,000 14,977,417
5.32%........... 01/09/97 15,000 14,913,550
5.30%........... 01/14/97 12,000 11,922,267
5.30%........... 01/17/97 20,000 19,861,611
5.28%........... 01/22/97 13,000 12,900,853
Corporate Asset
Funding Co., Inc.
(P1, A1+)
5.42%........... 12/09/96 10,000 9,987,956
5.35%........... 12/20/96 15,000 14,957,646
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
FINANCE-CONDUIT -- CONTINUED
5.30%........... 01/24/97 $ 10,000 $ 9,920,500
5.30%........... 01/30/97 10,000 9,911,667
5.28%........... 02/21/97 20,000 19,759,467
5.28%........... 02/27/97 10,000 9,870,933
Delaware Funding
Corp. (P1, A1+)
5.32%........... 01/10/97 20,000 19,881,778
5.31%........... 01/16/97 11,000 10,925,365
5.33%........... 01/23/97 10,000 9,921,531
Preferred
Receivables
Funding Corp.
(P1, A1)
5.25%........... 12/19/96 15,000 14,960,625
5.40%........... 01/09/97 13,000 12,923,950
5.32%........... 01/17/97 9,575 9,508,496
-------------
227,105,612
-------------
FINANCIAL SERVICES -- 1.3%
Transamerica
Financial Corp.
(P1, A1)
5.25%........... 12/12/96 10,000 9,983,958
5.29%........... 02/27/97 15,000 14,806,033
-------------
24,789,991
-------------
FOOD & BEVERAGE -- 7.8%
Coca-Cola Co. (P1, A1+)
5.23%........... 12/11/96 20,000 19,970,944
Heinz (H.J.) Co. (P1, A1)
5.25%........... 12/17/96 9,200 9,178,533
5.25%........... 12/24/96 11,000 10,963,104
Hershey Foods Corp.
(P1, A1+)
5.22%........... 12/12/96 24,000 23,961,720
Kellogg Co. (P1, A1+)
5.27%........... 12/30/96 14,900 14,836,745
Nestle Capital Corp.
(P1, A1+)
5.23%........... 12/06/96 15,000 14,989,104
5.40%........... 12/13/96 20,000 19,964,000
</TABLE>
See Accompanying Notes
4
<PAGE> 7
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA MONEY MARKET FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
FOOD & BEVERAGE -- CONTINUED
Pepsico, Inc.
(P1, A1)
5.30%........... 01/24/97 $ 20,000 $ 19,841,000
Sysco Corp.
(P1, A1+)
5.27%........... 01/14/97 20,000 19,871,178
-------------
153,576,328
-------------
INSURANCE -- 4.6%
American General
Capital Services
(P1, A1+)
5.33%........... 12/18/96 20,000 19,949,661
American General
Corp. (P1, A1+)
5.30%........... 01/21/97 15,000 14,887,375
Chubb Capital Corp.
(P1, A1+)
5.23%........... 12/05/96 20,000 19,988,378
5.25%........... 12/09/96 17,000 16,980,167
5.25%........... 12/30/96 20,000 19,915,417
-------------
91,720,998
-------------
MACHINERY & HEAVY EQUIPMENT -- 1.0%
John Deere Capital
Corp. (P1, A1)
5.40%........... 12/16/96 20,000 19,955,000
-------------
OFFICE & BUSINESS EQUIPMENT -- 1.3%
Xerox Credit Corp. (P1, A1)
5.30%........... 01/23/97 25,000 24,804,931
-------------
PRINTING & PUBLISHING -- 3.1%
Donnelley (R.R.) &
Sons Co. (P1, A1)
5.29%........... 12/10/96 15,000 14,980,163
5.24%........... 12/17/96 10,000 9,976,711
Dow Jones & Co.
(Private)
(P1, A1+)
5.25%........... 12/09/96 12,000 11,986,000
Gannett Co., Inc.
(P1, A1)
5.25%........... 12/16/96 25,000 24,945,313
-------------
61,888,187
-------------
<Caption
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
TECHNOLOGY -- 3.0%
Hewlett-Packard Co.
(P1, A1+)
5.42%........... 12/03/96 $ 20,000 $ 19,993,978
IBM Credit Corp.
(P1, A1)
5.31%........... 01/22/97 20,000 19,846,600
5.32%........... 01/27/97 20,000 19,831,533
-------------
59,672,111
-------------
TELECOMMUNICATIONS -- 2.8%
BellSouth
Telecommunications,
Inc. (P1, A1+)
5.25%........... 12/06/96 11,000 10,991,979
5.35%........... 12/11/96 14,000 13,979,194
5.27%........... 02/25/97 15,000 14,811,158
Motorola Credit
Corp. (P1, A1+)
5.25%........... 12/19/96 14,842 14,803,040
-------------
54,585,371
-------------
UTILITIES-ELECTRIC -- 2.0%
Southern California
Edison Co. (P1, A1)
5.26%........... 12/12/96 10,000 9,983,928
5.42%........... 12/19/96 12,000 11,967,480
5.32%........... 01/10/97 5,000 4,970,444
5.27%........... 01/16/97 13,000 12,912,459
-------------
39,834,311
-------------
UTILITIES-GAS -- 1.9%
Northern Illinois
Gas Co. (P1, A1+)
5.35%........... 12/04/96 10,000 9,995,542
5.25%........... 12/11/96 6,100 6,091,104
5.29%........... 01/08/97 14,700 14,617,917
5.30%........... 01/09/97 6,600 6,562,105
-------------
37,266,668
-------------
</TABLE>
See Accompanying Notes
5
<PAGE> 8
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA MONEY MARKET FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
UTILITIES-GAS & ELECTRIC -- 2.0%
National Rural Utilities
Cooperative Finance Corp.
(P1, A1+)
5.31%........... 01/10/97 $ 10,000 $ 9,941,000
5.31%........... 01/28/97 15,000 14,871,675
5.31%........... 01/29/97 15,000 14,869,463
-------------
39,682,138
-------------
UTILITIES-TELEPHONE -- 3.3%
Ameritech Capital
Corp. (P1, A1+)
5.24%........... 12/17/96 9,700 9,677,410
Ameritech Corp. (P1, A1+)
5.28%........... 01/17/97 15,000 14,896,600
Southwestern Bell
Capital Corp.
(P1, A1)
5.29%........... 01/27/97 20,000 19,832,483
Southwestern Bell
Telephone Co.
(P1, A1+)
5.28%........... 01/31/97 20,000 19,821,067
-------------
64,227,560
-------------
TOTAL COMMERCIAL
PAPER.................................. 1,230,648,220
-------------
MASTER DEMAND NOTES -- 2.3%
Metropolitan Life
Insurance Co. (A)
5.6263%......... 12/01/96 20,000 20,000,000
PACCAR Financial (A)
(P1, A1+)
5.29%........... 12/03/96 25,000 25,000,000
TOTAL MASTER
DEMAND NOTES........................... 45,000,000
-------------
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS -- 9.6%
First Boston
5.38%........... 12/02/96 $ 100,000 $ 100,000,000
(Agreement dated on 11/27/96 to be
repurchased at $100,074,722 on
12/2/96, collateralized by
$50,000,000 Federal Home Loan
Mortgage Corp., 7.00% due 11/01/26;
$50,000,000 Federal Home Loan
Mortgage Corp., 7.00% due 11/01/26;
$2,645,000 Federal Home Loan Mortgage
Corp., 7.00% due 11/01/26. The market
value of the collateral is
$102,003,469.)
Smith Barney Capital Corp.
5.37%........... 12/02/96 85,000 85,000,000
(Agreement dated 11/27/96 to be
repurchased at $85,063,396 on
12/02/96, collateralized by
$8,490,000 Federal National Mortgage
Association, 7.125% due 10/06/03;
$15,000,000 Federal National Mortgage
Association, 7.700% due 8/10/04;
$20,000,000 Federal Home Loan
Mortgage Corp. 8.22% due 6/19/06;
$20,000,000 Federal National Mortgage
Association, 7.27% due 07/27/26;
$20,000,000 Federal National Mortgage
Association, 8.00% due 09/25/26. The
market value of the collateral is
$87,457,862.)
Smith Barney Capital Corp.
5.78%........... 12/02/96 5,000 5,000,000
(Agreement dated 11/29/96 to be
repurchased at $5,002,408 on 12/2/96,
collateralized by $5,015,000 U.S.
Treasury Note, 6.00% due 08/31/97.
The market value of the collateral is
$5,109,783)
TOTAL REPURCHASE
AGREEMENTS............................. 190,000,000
-------------
</TABLE>
See Accompanying Notes
6
<PAGE> 9
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA MONEY MARKET FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES
----------
<S> <C> <C> <C>
TEMPORARY INVESTMENT -- 1.1%
Financial Square Prime
Obligation Portfolio... 21,500,727 $ 21,500,727
--------------
TOTAL INVESTMENTS -- 100.0% $1,966,482,081
(Cost $1,966,482,081*) ==============
<FN>
- ---------------
* Also cost for Federal income tax purposes.
(A) Variable rate securities. Interest rates vary periodically based on current
market rates. Rates shown represent interest rates of the security in effect
as of November 30, 1996. Dates shown represent the latter of the demand date
or the next interest rate change date, which is considered the maturity date
for financial reporting purposes.
</TABLE>
See Accompanying Notes
7
<PAGE> 10
[LOGO] FINANCIAL HIGHLIGHTS
ARMADA MONEY MARKET FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED NOVEMBER 30, FOR THE YEAR
1996 FOR THE YEAR FOR THE YEAR ENDED MAY 31,
(UNAUDITED) ENDED MAY 31, 1996 ENDED MAY 31, 1995 1994
-------------------------- -------------------------- -------------------------- -------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL
------------- -------- ------------- -------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- -------- ------------- -------- ------------- -------- ------
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income............ .03 .02 .05 .05 .05 .05 .03
LESS DISTRIBUTIONS
Dividends from net
investment
income............ (.03) (.02) (.05) (.05) (.05) (.05) (.03)
------------- -------- ------------- -------- ------------- -------- ------
Net asset value,
end of period....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============== ======== =============== ======== =============== ======== ===============
TOTAL RETURN......... 5.18%(3) 5.07%(3) 5.45% 5.35% 5.11% 5.01% 2.91%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of
period (in 000's)... $ 1,614,166 $343,516 $ 1,344,414 $343,087 $ 1,083,243 $175,192 $ 743,377
Ratio of expenses to
average net
assets.............. .36%(1,3) .46%(2,3) .37%(1) .47%(2) .37%(1) .47%(2) .43%(1)
Ratio of net
investment income to
average net assets.. 5.06%(1,3) 4.96%(2,3) 5.30%(1) 5.18%(2) 5.07%(1) 5.12%(2) 2.94%(1)
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED MAY 31, 1993 ENDED MAY 31, 1992
-------------------------- --------------------------
RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL
-------- ------------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------ -------- ------ --------
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income............ .03 .03 .03 .05 .04
LESS DISTRIBUTIONS
Dividends from net
investment
income............ (.03) (.03) (.03) (.05) (.04)
-------- ------ -------- ------ --------
Net asset value,
end of period....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== =============== ======== =============== ========
TOTAL RETURN......... 2.81% 2.93% 2.82% 4.59% 4.50%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of
period (in 000's)... $ 67,229 $ 399,191 $ 57,710 $ 352,578 $ 28,497
Ratio of expenses to
average net
assets.............. .53%(2) .43% .53% .43% .53%
Ratio of net
investment income to
average net assets.. 2.78%(2) 2.89% 2.79% 4.51% 4.41%
<FN>
(1) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers for the Institutional class for the
period ended November 30, 1996 would have been .46% and 4.96%, respectively.
The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers and Custodian for the Institutional class
for the years ended May 31, 1996 and 1995 would have been .48% and 5.19%,
and .48% and 4.96%, respectively. The operating expense ratio and net
investment income ratio before fee waiver by the Investment Advisers for the
Institutional class for the year ended May 31, 1994 would have been .45% and
2.92%, respectively.
(2) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers for the Retail class for the period ended
November 30, 1996 would have been .56% and 4.86%, respectively. The
operating expense ratio and net investment income ratio before fee waivers
by the Investment Advisers and Custodian for the Retail class for the years
ended May 31, 1996 and 1995 would have been .58% and 5.07%, and .58% and
5.01%, respectively. The operating expense ratio and net investment income
ratio before fee waiver by the Investment Advisers for the Retail class for
the year ended May 31, 1994 would have been .55% and 2.76%, respectively.
(3) Annualized.
</TABLE>
See Accompanying Notes
8
<PAGE> 11
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA GOVERNMENT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
AGENCY OBLIGATIONS -- 84.2%
FEDERAL FARM CREDIT BANK
DISCOUNT NOTES -- 17.6%
5.22%........... 12/05/96 $ 11,000 $ 10,993,620
5.36%........... 12/05/96 5,000 4,997,022
5.18%........... 12/09/96 10,130 10,118,339
5.18%........... 12/10/96 18,290 18,266,314
5.36%........... 12/11/96 8,200 8,187,791
5.20%........... 12/13/96 5,000 4,991,334
5.20%........... 12/16/96 6,500 6,485,917
5.27%........... 12/18/96 5,000 4,987,557
5.21%........... 12/23/96 4,125 4,111,866
5.22%........... 12/27/96 16,000 15,939,680
5.23%........... 12/30/96 7,000 6,970,509
5.26%........... 01/03/97 5,000 4,975,892
5.24%........... 01/06/97 10,000 9,947,600
5.24%........... 01/08/97 5,000 4,972,344
5.21%........... 01/16/97 10,335 10,266,198
5.22%........... 01/21/97 10,525 10,447,168
5.26%........... 01/27/97 5,000 4,958,358
5.21%........... 01/28/97 10,000 9,916,061
5.20%........... 02/11/97 10,000 9,896,000
5.22%........... 02/24/97 4,300 4,247,003
5.235%.......... 03/07/97 10,000 9,860,400
--------------
175,536,973
--------------
FEDERAL FARM CREDIT BANK
INTEREST BEARING NOTES -- 0.5%
5.32%........... 02/03/97 5,000 5,000,000
--------------
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
FEDERAL HOME LOAN BANK
DISCOUNT BONDS -- 19.3%
5.24%........... 12/04/96 $ 10,000 $ 9,995,633
5.21%........... 12/19/96 7,150 7,131,374
5.21%........... 01/02/97 10,000 9,953,689
5.21%........... 01/02/97 4,715 4,693,164
5.22%........... 01/02/97 17,300 17,219,728
5.19%........... 01/03/97 9,000 8,957,183
5.21%........... 01/09/97 10,000 9,943,558
5.235%.......... 01/09/97 15,000 14,914,931
5.44%........... 01/14/97 13,080 12,993,033
5.20%........... 01/15/97 15,000 14,902,500
5.20%........... 01/16/97 15,000 14,900,333
5.23%........... 01/17/97 18,905 18,775,916
5.22%........... 01/21/97 8,270 8,208,843
5.21%........... 01/23/97 11,240 11,153,786
5.20%........... 02/13/97 20,000 19,786,222
5.22%........... 02/20/97 10,000 9,882,550
--------------
193,412,443
--------------
FEDERAL HOME LOAN MORTGAGE CORPORATION
DISCOUNT NOTES -- 22.4%
5.17%........... 12/03/96 10,000 9,997,128
5.40%........... 12/04/96 10,000 9,995,500
5.21%........... 12/06/96 9,765 9,757,934
5.28%........... 12/06/96 5,000 4,996,333
5.21%........... 12/11/96 10,000 9,985,528
5.34%........... 12/13/96 10,812 10,792,755
5.21%........... 12/26/96 15,000 14,945,729
5.23%........... 01/07/97 10,000 9,946,247
5.215%.......... 01/24/97 20,000 19,843,550
5.21%........... 01/27/97 7,000 6,942,256
5.21%........... 01/31/97 25,000 24,779,299
5.22%........... 02/03/97 15,000 14,860,800
5.215%.......... 02/06/97 20,000 19,805,886
5.22%........... 02/12/97 13,000 12,862,395
5.23%........... 02/14/97 15,000 14,836,563
5.23%........... 02/18/97 15,000 14,827,846
5.22%........... 02/19/97 15,000 14,826,000
--------------
224,001,749
--------------
</TABLE>
See Accompanying Notes
9
<PAGE> 12
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA GOVERNMENT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION
DISCOUNT NOTES -- 19.1%
5.36%........... 12/12/96 $ 20,000 $ 19,967,244
5.37%........... 12/12/96 20,000 19,967,183
5.18%........... 12/19/96 7,825 7,804,733
5.22%........... 12/20/96 10,000 9,972,450
5.21%........... 12/27/96 10,000 9,962,372
5.22%........... 12/30/96 10,000 9,957,950
5.225%.......... 01/22/97 10,000 9,924,528
5.21%........... 01/23/97 10,000 9,923,297
5.22%........... 01/24/97 5,000 4,960,850
5.25%........... 01/30/97 15,000 14,868,750
5.24%........... 02/04/97 15,000 14,858,083
5.21%........... 02/10/97 20,000 19,794,494
5.22%........... 02/26/97 10,000 9,873,850
5.20%........... 02/27/97 20,000 19,745,778
5.24%........... 03/18/97 10,000 9,844,256
--------------
191,425,818
--------------
STUDENT LOAN MARKETING
ASSOCIATION DISCOUNT NOTES -- 5.3%
5.19%........... 12/16/96 20,000 19,956,750
5.22%........... 12/18/96 10,000 9,975,350
5.27%........... 12/18/96 10,000 9,975,114
5.21%........... 12/20/96 13,000 12,964,254
--------------
52,871,468
--------------
TOTAL AGENCY
OBLIGATIONS............................ 842,248,451
--------------
REPURCHASE AGREEMENTS -- 15.0%
First Boston
5.38%........... 12/02/96 100,000 100,000,000
(Agreement dated 11/27/96 to be
repurchased at $100,074,722 on
12/2/96; collateralized by
$102,645,000 Federal Home Loan
Mortgage Corporation, 7.00% on
11/1/26. The market value of the
Collateral is $102,003,469.)
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS -- CONTINUED
Smith Barney Capital Corp.
5.37%........... 12/02/96 $ 35,000 $ 35,000,000
(Agreement dated 11/27/96 to be
repurchased at $35,026,104 on
12/2/96; collateralized by
$20,000,000 Federal National Mortgage
Association, due 12/5/96; $15,800,000
Federal Home Loan Mortgage Corp.,
6.405% due 11/13/00. The market value
of the collateral is $36,029,080.)
Smith Barney Capital Corp.
5.78%........... 12/02/96 15,000 15,000,000
(Agreement dated 11/29/96 to be
repurchased at $15,007,225 on
12/2/96; collateralized by
$10,180,000 U.S. Treasury Bond,
13.75% due 8/15/04. The market value
of the collateral is $15,300,031.)
TOTAL REPURCHASE
AGREEMENTS........................... 150,000,000
--------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
----------
<S> <C> <C> <C>
TEMPORARY INVESTMENT -- 0.8%
Goldman Sachs
Financial Square
Government Fund........ 7,756,959 7,756,959
--------------
TOTAL INVESTMENTS -- 100.0% $1,000,005,410
(Cost $1,000,005,410*) ==============
<FN>
- ---------------
* Also cost for Federal income tax purposes.
</TABLE>
See Accompanying Notes
10
<PAGE> 13
[LOGO] FINANCIAL HIGHLIGHTS
ARMADA GOVERNMENT FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE YEAR
ENDED NOVEMBER 30, 1996 FOR THE YEAR FOR THE YEAR ENDED MAY 31,
(UNAUDITED) ENDED MAY 31, 1996 ENDED MAY 31, 1995 1994
-------------------------- -------------------------- -------------------------- -------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL
------------- -------- ------------- -------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ -------- ------ -------- ------ -------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income.............. .03 .02 .05 .05 .05 .05 .03
LESS DISTRIBUTIONS
Dividends from net
investment income..... (.03) (.02) (.05) (.05) (.05) (.05) (.03)
------ -------- ------ -------- ------ -------- ------
Net asset value,
end of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ======== =========== ======== =========== ======== ===========
TOTAL RETURN........... 5.14%(3) 5.03%(3) 5.41% 5.31% 4.97% 4.87% 2.91%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of
period (in 000's)..... $ 839,571 $155,960 $ 741,894 $131,194 $ 618,058 $ 19,174 $ 768,337
Ratio of expenses to
average net assets.... .36%(1,3) .46%(2,3) .36%(1) .46%(2) .39%(1) .51%(2) .42%(1)
Ratio of net investment
income to average
net assets............ 5.02%(1,3) 4.92%(2,3) 5.27%(1) 5.13%(2) 4.83%(1) 5.01%(2) 2.92%(1)
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED MAY 31, 1993 ENDED MAY 31, 1992
-------------------------- --------------------------
RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL
-------- ------------- -------- ------------- --------
<S> <C><C> <C> <C> <C> <C>
Net asset value,
beginning of period... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------ -------- ------ --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income.............. .03 .03 .03 .05 .04
LESS DISTRIBUTIONS
Dividends from net
investment income..... (.03) (.03) (.03) (.05) (.04)
-------- ------ -------- ------ --------
Net asset value,
end of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== =========== ======== =========== ========
TOTAL RETURN........... 2.80% 2.91% 2.81% 4.65% 4.55%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of
period (in 000's)..... $ 6,945 $ 272,809 $ 11,050 $ 148,389 $ 2,234
Ratio of expenses to
average net assets.... .52%(2) .45%(1) .55%(2) .45%(1) .55%(2)
Ratio of net investment
income to average
net assets............ 2.75%(2) 2.84%(1) 2.74%(2) 4.49%(1) 4.39%(2)
<FN>
(1) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers for the Institutional class for the
period ended November 30, 1996 would have been .46% and 4.92%, respectively.
The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers and Custodian for the Institutional class
for the years ended May 31, 1996 and 1995 would have been .47% and 5.16%,
and .50% and 4.72%, respectively. The operating expense ratio and net
investment income ratio before fee waivers by the Investment Advisers for
the Institutional class for the years ended May 31, 1994, 1993, and 1992
would have been .44% and 2.90%, .46% and 2.82%, and .46% and 4.48%,
respectively.
(2) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers for the Retail class for the period ended
November 30, 1996 would have been .56% and 4.82%, respectively. The
operating expense ratio and net investment income ratio before fee waivers
by the Investment Advisers and Custodian for the Retail class for the years
ended May 31, 1996 and 1995 would have been .57% and 5.02%, and .63% and
4.90%, respectively. The operating expense ratio and net investment income
ratio before fee waivers by the Investment Advisers for the Retail class for
the years ended May 31, 1994, 1993, and 1992 would have been .54% and 2.73%,
.56% and 2.72%, and .56% and 4.38%, respectively.
(3) Annualized.
</TABLE>
See Accompanying Notes
11
<PAGE> 14
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA TREASURY FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -- 92.3%
U.S. TREASURY BILLS
5.10%........... 12/05/96 $ 10,000 $ 9,994,333
5.055%.......... 12/12/96 10,000 9,984,554
5.07%........... 12/12/96 15,000 14,976,763
5.11%........... 12/12/96 10,000 9,984,386
4.90%........... 12/19/96 15,000 14,963,250
5.125%.......... 12/19/96 5,000 4,987,188
5.13%........... 12/19/96 10,000 9,974,350
5.165%.......... 12/19/96 10,000 9,974,175
4.92%........... 01/02/97 15,000 14,934,400
5.04%........... 01/02/97 5,000 4,977,600
5.065%.......... 01/02/97 25,000 24,887,444
5.09%........... 01/02/97 20,000 19,909,511
5.06%........... 01/09/97 20,000 19,890,367
4.98%........... 01/16/97 15,000 14,904,550
4.99%........... 01/23/97 20,000 19,853,072
5.015%.......... 02/06/97 10,000 9,906,665
5.03%........... 02/06/97 10,000 9,906,386
5.025%.......... 02/13/97 10,000 9,896,708
5.005%.......... 02/20/97 10,000 9,887,388
5.0275%......... 02/27/97 25,000 24,692,764
5.055%.......... 03/06/97 10,000 9,866,604
5.00%........... 03/20/97 15,000 14,772,917
5.065%.......... 04/17/97 15,000 14,710,873
--------------
TOTAL U.S. TREASURY
OBLIGATIONS............................ 307,836,248
--------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- --------------
<S> <C> <C> <C>
TEMPORARY INVESTMENTS -- 7.7%
Federated Investors U.S.
Treasury Cash Reserves..... 14,238,171 $ 14,238,171
Goldman Sachs Treasury
Instruments Portfolio.... 11,540,122 11,540,122
--------------
TOTAL TEMPORARY
INVESTMENTS.......................... 25,778,293
--------------
TOTAL INVESTMENTS -- 100.0% $ 333,614,541
(Cost $333,614,541*) ==============
<FN>
- ---------------
* Also cost for Federal income tax purposes.
</TABLE>
See Accompanying Notes
12
<PAGE> 15
[LOGO] FINANCIAL HIGHLIGHTS
ARMADA TREASURY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED NOVEMBER 30, 1996 FOR THE YEAR FOR THE PERIOD
(UNAUDITED) ENDED MAY 31, 1996 ENDED MAY 31, 1995
-------------------------- -------------------------- -------------------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL(3) RETAIL(4)
------------- -------- ------------- -------- ------------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- -------- ------------- -------- ------------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income .02 .02 .05 .05 .05 .02
LESS DISTRIBUTIONS
Dividends from net investment
income (.02) (.02) (.05) (.05) (.05) (.02)
------------- -------- ------------- -------- ------------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ========= ============ ========= ============ =======
TOTAL RETURN 4.90%(5) 4.80%(5) 5.07% 4.97% 4.86%(5) 5.41%(5)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
000's) $ 326,807 $ 5,397 $ 312,255 $ 4,355 $ 142,877 $ 366
Ratio of expenses to average net
assets .37%(1,5) .47%(2,5) .41%(1) .52%(2) .43%(1,5) .56%(2,5)
Ratio of net investment income to
average net assets 4.79%(1,5) 4.69%(2,5) 4.88%(1) 4.77%(2) 4.78%(1,5) 5.35%(2,5)
<FN>
(1) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers for the Institutional class for the
period ended November 30, 1996 would have been .42% and 4.74%, respectively.
The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers and Custodian for the Institutional class
for the year ended May 31, 1996 and for the period ended May 31, 1995 would
have been .47% and 4.82%, and .49% and 4.72%, respectively.
(2) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers for the Retail class for the period ended
November 30, 1996 would have been .52% and 4.64%, respectively. The
operating expense ratio and net investment income ratio before fee waivers
by the Investment Advisers and Custodian for the Retail class for the year
ended May 31, 1996 and for the period ended May 31, 1995 would have been
.58% and 4.71%, and .63% and 5.28%, respectively.
(3) Institutional class commenced operations on June 16, 1994.
(4) Retail class commenced operations on December 22, 1994.
(5) Annualized.
</TABLE>
See Accompanying Notes
13
<PAGE> 16
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
MUNICIPAL BONDS -- 99.2%
ALABAMA -- 0.3%
Montgomery Pollution Control
& Solid Waste Disposal
(General Electric Company
Project P-1, A-1+)
3.40%........... 02/03/97 $ 1,000 $ 1,000,000
--------------
ALASKA -- 4.3%
Valdez Marine Terminal
Revenue Bond (Arco
Transportation Alaska, Inc.
Project)
Series 1994-A (VMIG-1, A-1)
3.65%........... 01/29/97 5,000 5,000,000
3.65%........... 01/31/97 5,000 5,000,000
Series 1994-B (VMIG-1, A-1) (A)
3.70%........... 12/07/96 6,000 6,000,000
--------------
16,000,000
--------------
ARIZONA -- 3.8%
Maricopa County Industrial
Development Authority,
Series 1985-B2 Samaritan
Health Service Systems
(MBIA) (VMIG-1, A-1) (A)
4.00%........... 12/01/96 2,500 2,500,000
Maricopa County Pollution
Control Revenue Bonds
(Southern California
Edison)
Series D (P-1, A-1)
3.65%........... 12/12/96 1,600 1,600,000
3.70%........... 01/14/97 2,650 2,650,000
3.70%........... 01/24/97 2,000 2,000,000
Series E (P-1, A-1)
3.65%........... 12/12/96 1,850 1,850,000
3.50%........... 12/17/96 2,000 2,000,000
Series F (P-1, A-1)
3.50%........... 12/17/96 1,600 1,600,000
--------------
14,200,000
--------------
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
COLORADO -- 1.3%
University of Colorado Regents Enterprise
System Adjustable Tender Revenue Bond
Series 1996-A (VMIG-1, A-1+) (A)
3.50%........... 12/07/96 $ 5,000 $ 5,000,000
--------------
FLORIDA -- 6.5%
Gainesville Utilities System
Series C (P-1, NR)
3.65%........... 12/09/96 1,126 1,126,000
3.60%........... 12/16/96 1,000 1,000,000
3.65%........... 12/16/96 1,505 1,505,000
3.50%........... 02/14/97 5,507 5,507,000
3.55%........... 02/20/97 1,000 1,000,000
Hillsborough County Industrial
Development Authority Pollution Control
Revenue Bond (Tampa Electric Company
Project) Series 1990 (Aa2, Aa) (A)
4.15%........... 12/01/96 6,005 6,005,000
Jacksonville Pollution Control Revenue
Refunding Bonds (Florida Power & Light
Company Project) (VMIG-1, A-1+) (A)
3.65%........... 01/10/97 3,000 3,000,000
3.55%........... 02/19/97 3,200 3,200,000
3.55%........... 02/28/97 1,700 1,700,000
--------------
24,043,000
--------------
GEORGIA -- 3.0%
Downtown Savannah Parking Authority
(VMIG-1, A-1+) (A)
3.55%........... 12/07/96 2,000 2,000,000
Georgia Municipal Gas Authority Gas
Revenue Bond (Southern Portfolio I)
(LOC Wachovia) (NR, A-1+)
3.50%........... 03/10/97 2,000 2,000,000
Georgia Tech Foundation Facility,
Series 1992-A (NR, A-1+) (A)
3.50%........... 12/07/96 3,900 3,900,000
Series 1992-B (NR, A-1+) (A)
3.50%........... 12/07/96 3,100 3,100,000
--------------
11,000,000
--------------
</TABLE>
See Accompanying Notes
14
<PAGE> 17
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
ILLINOIS -- 2.1%
Illinois Educational Facility Authority
Revenue Bond (Northwestern University)
Series 1988 (VMIG-1, A-1+) (A)
3.60%........... 12/07/96 $ 7,836 $ 7,836,000
--------------
INDIANA -- 8.6%
Evansville Economic Development Bond
(Ball Corp Project) (LOC Wachovia) (NR,
A-1+) (A)
3.60%........... 12/07/96 1,500 1,500,000
Indiana Health Facility Finance Authority
Capital Access Designated Pool, Series
1989-B (LOC Bank One
Indianapolis)
(VMIG-1, A-1+) (A)
3.65%........... 12/07/96 1,900 1,900,000
Series 1990 (LOC Bank One Indianapolis)
(VMIG-1, A-1+) (A)
3.65%........... 12/07/96 3,915 3,915,000
Indiana Hospital Equipment Finance
Authority Revenue Bond, Series 1985-A
(MBIA) (VMIG-1, A-1+) (A)
3.65%........... 12/07/96 7,800 7,800,000
Mt. Vernon Pollution Contro1 and Solid
Waste Disposal (General Electric)
Series A (P-1, A-1+)
3.60%........... 12/18/96 2,935 2,935,000
Purdue University Trustees Student Fee
Bond
Series E (VMIG-1, A-1+) (A)
3.50%........... 12/07/96 900 900,000
Series H (VMIG-1, A-1+) (A)
3.45%........... 12/07/96 6,000 6,000,000
Series L (VMIG-1, A-1+) (A)
3.45%........... 12/07/96 7,000 7,000,000
--------------
31,950,000
--------------
KANSAS -- 3.8%
Kansas Department of Highways Revenue
Bond Series B (VMIG-1, A-1+) (A)
3.40%........... 12/07/96 14,000 14,000,000
--------------
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
LOUISIANA -- 6.0%
East Baton Rouge Pollution Control
Revenue Bond (Exxon Project)
(VMIG-1, A-1+) (A)
4.00%........... 12/01/96 $ 6,500 $ 6,500,000
Plaquemines Port Harbor Terminal Coal
Transfer
Series A (A-1, A-1+)
3.70%........... 12/05/96 2,000 2,000,000
3.75%........... 12/05/96 3,000 3,000,000
3.65%........... 02/06/97 2,000 2,000,000
Series C (P-1, A-1+)
3.65%........... 12/05/96 2,000 2,000,000
3.70%........... 02/05/97 1,400 1,400,000
3.65%........... 02/06/97 2,600 2,600,000
St. Charles Pollution Control Revenue
Bonds (Shell Oil Company Project)
Series 1985 (NR, A-1+) (A)
3.35%........... 12/07/96 2,850 2,850,000
--------------
22,350,000
--------------
MICHIGAN -- 1.2%
Kalamazoo Michigan Tax Anticipation Note
(MIG-1)
3.75%........... 12/31/96 4,501 4,500,667
--------------
MINNESOTA -- 6.6%
Becker Pollution Control Revenue Bond
(Northern States Power)
Series 1992-A (P-1, A-1+)
3.60%........... 12/04/96 3,000 3,000,000
3.65%........... 01/08/97 2,000 2,000,000
3.60%........... 01/10/97 1,400 1,400,000
Series 1993 (VMIG-1, A-1+)
3.60%........... 12/17/96 1,000 1,000,000
Series A
3.50%........... 03/13/97 1,000 1,000,000
Series B (VMIG-1, A-1+)
3.55%........... 03/03/97 2,200 2,200,000
University of Minnesota Regents
Commercial Paper
Series A (P-1, A-1+)
3.55%........... 12/03/96 2,000 2,000,000
3.55%........... 12/05/96 2,525 2,525,000
</TABLE>
See Accompanying Notes
15
<PAGE> 18
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
MINNESOTA -- CONTINUED
Series B (P-1, A-1+)
3.45%........... 12/05/96 $ 1,500 $ 1,500,000
Series J (VMIG-1, A-1+)
3.65%........... 01/31/97 1,000 1,000,000
3.55%........... 02/19/97 2,100 2,100,000
3.60%........... 02/25/97 1,765 1,765,000
Series 1985-H (VMIG-1, A-1+)
3.60%........... 12/13/96 3,050 3,050,000
--------------
24,540,000
--------------
MISSISSIPPI -- 2.5%
Forest Industrial Development Revenue
Bond (Sara Lee Corp Project) Series
1992 (NR, A-1+) (A)
3.60%........... 12/07/96 8,000 8,000,000
Jackson County General Obligation Bond
Water System (Chevron Project) Series
1994 (VMIG-1, NR)
3.70%........... 02/03/97 1,200 1,200,000
--------------
9,200,000
--------------
MISSOURI -- 2.4%
Missouri Health & Educational Facility
Authority (Sisters of Mercy)
Series C (VMIG-1, A-1+) (A)
3.40%........... 12/07/96 2,100 2,100,000
Series D (VMIG-1, A-1+) (A)
3.40%........... 12/07/96 2,000 2,000,000
Missouri Health & Educational Facility
Authority Revenue Bonds (Washington
University Project)
Series A (VMIG-1, A-1+) (A)
3.60%........... 12/07/96 4,000 4,000,000
Series D (VMIG-1, A-1+) (A)
3.95%........... 12/01/96 1,000 1,000,000
--------------
9,100,000
--------------
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
MONTANA -- 1.8%
Forsyth Pollution Control Revenue Bond
(Portland General Electric Co.)
Series 1983-B (P-1, A-1+) (A)
3.50%........... 12/07/96 $ 6,800 $ 6,800,000
--------------
NEVADA -- 1.9%
Clark County Airport Improvement Revenue
Bond Series 1995-A (LOC Toronto
Dominion) (VMIG-1, A-1+) (A)
3.50%........... 12/07/96 6,900 6,900,000
--------------
NEW MEXICO -- 1.9%
Hurley Pollution Control Revenue Bond
(Kennecott Santa Fe Corp Project)
Series 1985 (P-1, A-1+) (A)
4.20%........... 12/01/96 7,000 7,000,000
--------------
NORTH CAROLINA -- 2.9%
North Carolina Educational Facility
Authority (Bowman Gray School of
Medicine) (LOC Wachovia)
(VMIG-1, NR) (A)
3.40%........... 12/07/96 10,600 10,600,000
--------------
OHIO -- 11.9%
Akron Sanitation & Sewer System Revenue
Bond Series 1994 (LOC Credit Suisse)
(VMIG-1, NR) (A)
3.55%........... 12/07/96 890 890,000
Brecksville & Broadview Heights City
School District Ohio School Improvement
Notes
Series 1996 (VMIG-1, NR)
3.90%........... 01/17/97 5,903 5,902,506
Cuyahoga County Hospital Revenue Bond
(Cleveland Clinic Foundation) Series
1996-B (VMIG-1, A-1+) (A)
3.55%........... 12/04/96 5,800 5,800,000
</TABLE>
See Accompanying Notes
16
<PAGE> 19
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
OHIO -- CONTINUED
Cuyahoga County Ohio Hospital Revenue
(Cleveland Clinic Foundation)
(LOC Morgan Guaranty)
(VMIG-1, A-1+) (A)
3.55%........... 12/07/96 $ 3,000 $ 3,000,000
Ohio State University General Receipts,
Series 1985-B (VMIG-1, A-1+) (A)
3.50%........... 12/07/96 500 500,000
Series 1986-B (VMIG-1, A-1+) (A)
3.30%........... 12/07/96 13,265 13,265,000
State of Ohio Higher Education Facility
Authority (Oberlin College), (LOC Bank
of Tokyo) (VMIG-1, A-1+) (A)
3.55%........... 12/07/96 4,450 4,450,000
Summit County Bond Anticipation Note
Series C (MIG-1)
4.375%.......... 11/20/97 1,727 1,726,592
University of Cincinnati General Receipts
Bond Anticipation Note
Series AA (VMIG-1, SP1+)
3.89%........... 03/20/97 1,001 1,000,835
Series N (MIG-1, SP-1)
3.75%........... 03/20/97 3,505 3,504,507
Series T (MIG-1, SP1+)
4.25%........... 08/28/97 4,213 4,213,907
--------------
44,253,347
--------------
PENNSYLVANIA -- 0.6%
College Township Industrial Development
Authority (Ball Corp Project) Series
1993 (LOC Wachovia Bank) (NR, A-1) (A)
3.60%........... 12/07/96 2,200 2,200,000
--------------
TENNESSEE -- 2.3%
Vanderbilt University Health & Education
(Nashville & Davidson) (VMIG-1, A-1+)
3.60%........... 12/11/96 3,700 3,700,000
3.60%........... 01/23/97 5,010 5,010,000
--------------
8,710,000
--------------
PAR
MATURITY (000) VALUE
-------- ---------- --------------
TEXAS -- 10.5%
Angelina and Neches River Authority IDC
Solid Waste Disposal (TEEC, Inc.
Temple-Inland) Series B (LOC Credit
Suisse) (VMIG-1, NR) (A)
4.10%........... 12/01/96 $ 2,200 $ 2,200,000
Series C (LOC Credit Suisse)
(VMIG-1, NR) (A)
4.10%........... 12/01/96 4,600 4,600,000
Series D (LOC Credit Suisse)
(VMIG-1, NR) (A)
4.10%........... 12/01/96 3,700 3,700,000
Series E (LOC Credit Suisse)
(VMIG-1, NR) (A)
4.10%........... 12/01/96 5,200 5,200,000
Harris County Health Facilities
Development Corporation Revenue Bond
(Methodist Hospital) Series 1994 (LOC
Morgan Guaranty Trust) (NR, A-1+) (A)
4.10%........... 12/01/96 1,500 1,500,000
Red River Authority of Texas, Pollution
Control Revenue Bond (Southwestern
Public Service Company Project)
(VMIG-1, A-1+) (A)
3.45%........... 12/07/96 16,600 16,600,000
Texas Tax & Revenue Anticipation Note
(MIG-1, SP1+)
4.75%........... 08/29/97 5,031 5,030,873
--------------
38,830,873
--------------
UTAH -- 1.3%
Emery County Pollution Control Revenue
Bond (Pacificorp Project)
(VMIG-1, A-1+) (A)
3.65%........... 12/07/96 1,000 1,000,000
Intermountain Power Agency Power Supply
Series F-2 (VMIG-1, A-1+)
3.50%........... 02/24/97 4,000 4,000,000
--------------
5,000,000
--------------
</TABLE>
See Accompanying Notes
17
<PAGE> 20
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
VERMONT -- 1.3%
Vermont State General Obligation
Commercial Paper Revenue Anticipation
Note Series I (NR, A-1+)
3.60%........... 12/17/96 $ 3,000 $ 3,000,000
Series J (NR, A-1+)
3.45%........... 04/03/97 2,000 2,000,000
--------------
5,000,000
--------------
VIRGINIA -- 3.3%
Commonwealth of Virginia General
Obligation Bond Anticipation Note
Series 1996 (P-1, A-1+)
3.55%........... 02/21/97 2,500 2,500,000
3.60%........... 02/27/97 3,000 3,000,000
3.50%........... 02/28/97 3,000 3,000,000
Lynchburg Industrial Development
Authority, VHA, Series G (AMBAC) (NR,
A-1+) (A)
3.60%........... 12/07/96 1,000 1,000,000
Peninsula Port Authority Coal Terminal
Revenue Bond (Dominion Terminal
Association Project) Series 1987-B
(P-1, A-1+)
3.40%........... 12/05/96 2,355 2,355,000
Peninsula Port Authority of Virginia
(Shell Oil) (Aa2, AAA) (A)
4.00%........... 12/01/96 400 400,000
--------------
12,255,000
--------------
WASHINGTON -- 1.0%
Washington Health Care Facility Authority
(Fred Hutchinson Cancer Research
Center) Series 1991-A (LOC Morgan
Guaranty) (VMIG-1, NR) (A)
4.10%........... 12/01/96 3,750 3,750,000
--------------
WISCONSIN -- 3.3%
Milwaukee Revenue Bond Anticipation Note
3.50%........... 02/27/97 8,987 8,987,187
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
WISCONSIN -- CONTINUED
Oak Creek (Wisconsin Electric Power
Company Project) Series 1991-C
(P-1, NR) (A)
3.65%........... 12/07/96 $ 3,300 $ 3,300,000
--------------
12,287,187
--------------
WYOMING -- 2.8%
Gillette Pollution Control Revenue Bond
(Pacificorp Project) (P-1, A-1+) (A)
3.60%........... 01/13/97 2,000 2,000,000
Sweetwater County Wyoming Pollution
Control Revenue Bond (Pacificorp 84)
(A)
4.05%........... 12/02/96 8,300 8,300,000
--------------
10,300,000
--------------
TOTAL MUNICIPAL
BONDS.................................. 368,606,074
--------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
----------
<S> <C> <C> <C>
TEMPORARY INVESTMENT -- 0.8%
Goldman Sachs Financial
Square Government Fund..... 3,000,000 3,000,000
--------------
TOTAL INVESTMENTS -- 100.0% $ 371,606,074
(Cost $371,606,074*)
- ---------------
<FN>
* Also cost for Federal income tax purposes.
AMBAC -- American Municipal Bond Assurance Corporation
LOC -- Letter of Credit
MBIA -- Municipal Bond Insurance Association
Interest rates presented reflect the coupon rate of the security unless
otherwise noted.
(A) Variable rate securities. Interest rates vary periodically based on current
market rates. Rates shown represent interest rates of the security in
effect as of November 30, 1996. Dates shown represent the latter of the
demand date or the next interest rate change date, which is considered the
maturity date for financial reporting purposes.
</TABLE>
See Accompanying Notes
18
<PAGE> 21
[LOGO] FINANCIAL HIGHLIGHTS
ARMADA TAX EXEMPT FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE YEAR
ENDED NOVEMBER 30, 1996 FOR THE YEAR FOR THE YEAR ENDED MAY 31,
(UNAUDITED) ENDED MAY 31, 1996 ENDED MAY 31, 1995 1994
-------------------------- -------------------------- -------------------------- -------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL
------------- -------- ------------- -------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ -------- ------ -------- ------ -------- ------
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income .02 .02 .03 .03 .03 .03 .02
LESS DISTRIBUTIONS
Dividends from net
investment income (.02) (.02) (.03) (.03) (.03) (.03) (.02)
------ -------- ------ -------- ------ -------- ------
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============== ======== =============== ======== =============== ======== ===============
TOTAL RETURN 3.19%(3) 3.09%(3) 3.40% 3.29% 3.14% 3.04% 2.06%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of
period (in 000's) $ 300,575 $ 70,735 $ 261,808 $ 85,928 $ 172,643 $ 51,916 $ 139,015
Ratio of expenses to
average net assets .29%(1,3) .39%(2,3) .30%(1) .40%(2) .35%(1) .46%(2) .33%(1)
Ratio of net
investment income to
average net assets 3.15%(1,3) 3.04%(2,3) 3.33%(1) 3.23%(2) 3.15%(1) 3.17%(2) 2.05%(1)
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED MAY 31, 1993 ENDED MAY 31, 1992
-------------------------- --------------------------
RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL
-------- ------------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------ -------- ------ --------
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income .02 .02 .02 .04 .03
LESS DISTRIBUTIONS
Dividends from net
investment income (.02) (.02) (.02) (.04) (.03)
-------- ------ -------- ------ --------
Net asset value,
end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== =============== ======== =============== ========
TOTAL RETURN 1.96% 2.18% 2.07% 3.57% 3.47%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of
period (in 000's) $ 17,819 $ 58,928 $ 17,791 $ 60,079 $ 10,745
Ratio of expenses to
average net assets .43%(2) .36%(1) .46%(2) .28%(1) .38%(2)
Ratio of net
investment income to
average net assets 1.94%(2) 2.16%(1) 2.06%(2) 3.45%(1) 3.35%(2)
<FN>
(1) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers for the Institutional class for the
period ended November 30, 1996 would have been .49% and 2.95%, respectively.
The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers and Custodian for the Institutional class
for the years ended May 31, 1996 and 1995 would have been .51% and 3.12%,
and .56% and 2.94%, respectively. The operating expense ratio and net
investment income ratio before fee waivers by the Investment Advisers for
the Institutional class for the years ended May 31, 1994, 1993, and 1992
would have been .53% and 1.85%, .56% and 1.96%, and .54% and 3.20%,
respectively.
(2) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers for the Retail class for the period ended
November 30, 1996 would have been .59% and 2.84%, respectively. The
operating expense ratio and net investment income ratio before fee waivers
by the Investment Advisers and Custodian for the Retail class for the years
ended May 31, 1996 and 1995 would have been .61% and 3.02%, and .67% and
2.96%, respectively. The operating expense ratio and net investment income
ratio before fee waivers by the Investment Advisers for the Retail class for
the years ended May 31, 1994, 1993, and 1992 would have been .63% and 1.74%,
.66% and 1.86%, and .64% and 3.10%, respectively.
(3) Annualized.
</TABLE>
See Accompanying Notes
19
<PAGE> 22
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA PENNSYLVANIA TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
PENNSYLVANIA -- 98.2%
Allegheny County Higher
Education Authority Revenue
Bond (Duquesne University
Project), AMBAC Insured
3.35%........... 03/01/97 $ 640 $ 640,000
Athens School District Tax &
Revenue Anticipation Note
4.10%........... 06/30/97 1,200 1,200,328
Beaver County Industrial
Development Authority
Duquesne Light & Power
Commercial Paper
3.65%........... 12/12/96 1,500 1,500,000
3.50%........... 01/29/97 1,000 1,000,000
Berks County, Industrial
Development Authority
Industrial Project (Elf
Aquitaine) (A)
3.575%.......... 12/07/96 1,700 1,700,000
Blair County General
Obligation Bond
3.80%........... 08/01/97 475 475,000
Bucks County Industrial
Development Authority Bond
(USX Corp.) (A)
3.55%........... 4/01/97 1,000 1,000,000
Bucks County Industrial
Development Authority
Revenue Bond (Edgecomb
Metals Project) (A)
3.55%........... 12/07/96 1,000 1,000,000
Bucks County Industrial
Development Revenue Bond
(CPC International
Project), Series 1985 (A)
4.04%........... 12/07/96 2,000 2,000,000
Chester County Health &
Education Facilities
Authority (Barclay Friends
Project) Series A (A)
3.55%........... 12/07/96 2,000 2,000,000
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
PENNSYLVANIA -- CONTINUED
City of York General
Obligation Bond (A)
3.50%........... 12/07/96 $ 3,200 $ 3,200,000
Clarks Summit-South Abington
Sewer Authority Revenue
Bond
8.125%.......... 01/01/97 500 501,906
Cumberland Valley School
District Revenue Bond
Series B
5.75%........... 09/01/97 720 729,182
Delaware County Industrial
Development Authority
Revenue Bond (British
Petroleum Project), Series
1995 (A)
4.10%........... 12/01/96 1,800 1,800,000
Delaware County Industrial
Development Authority
Revenue Bond (Henderson
Radnor Joint Venture
Project) (A)
3.80%........... 12/07/96 1,150 1,150,000
Delaware County Industrial
Development Authority
Revenue Bond (Philadelphia
Electric Project)
3.50%........... 01/29/97 1,100 1,100,000
Delaware Valley Regional
Finance Authority Local
Government, Series D (A)
3.60%........... 12/07/96 800 800,000
Delaware Valley Regional
Finance Authority Local
Government Revenue Bond (A)
3.60%........... 12/07/96 2,200 2,200,000
Easton General Obligation
Bond, Series A, FGIC
Insured
4.50%........... 12/01/96 300 300,000
</TABLE>
See Accompanying Notes
20
<PAGE> 23
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA PENNSYLVANIA TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
PENNSYLVANIA -- CONTINUED
Emmaus General Obligation Local
Government Revenue Pooled Bond
(A)
3.65%........... 12/07/96 $ 3,000 $ 3,000,000
Erie County Hospital
Authority Revenue Bond
(Union City Memorial
Hospital) (A)
3.65%........... 12/07/96 1,100 1,100,000
Geisinger Authority Health
System Revenue Bond
(Geisinger Project) Series
1992B (A)
4.00%........... 12/01/96 1,000 1,000,000
Greater Johnstown School
District Authority General
Obligation Bond, MBIA
Insured, Escrowed To
Maturity
6.35%........... 02/01/97 100 100,504
Lancaster Higher Education
Authority Revenue Bond
(Franklin & Marshall
College) (A)
3.65%........... 12/07/96 1,550 1,550,000
Lehigh County Water & Sewer
Revenue Bond,
Series 1985-B (A)
3.50%........... 12/07/96 430 430,000
Montgomery County Higher
Education & Health
Authority Hospital Revenue
Bond (Frankford Hospital
Project) (A)
3.65%........... 12/07/96 2,800 2,800,000
7.875%.......... 01/01/97 1,000 1,023,392
Montgomery County Industrial
Development Authority (One
Valley Square) (A)
3.55%........... 12/07/96 1,000 1,000,000
PAR
MATURITY (000) VALUE
-------- ---------- --------------
PENNSYLVANIA -- CONTINUED
Montgomery County Industrial
Development Authority
Revenue Bond (Plymouth
Woods Project) (A)
3.65%........... 12/07/96 $ 500 $ 500,000
Montgomery County Industrial
Development Authority
(Valley Square Associates
Project) Series 1987 (A)
3.55%........... 12/07/96 1,400 1,400,000
Montgomery County Industrial
Development Authority
Pollution Control Revenue
Bond, (PECO Energy Company
Project)
3.50%........... 02/11/97 1,000 1,000,000
Montgomery County Industrial
Development (Ikea Property
Project) (A)
3.65%........... 12/07/96 500 500,000
Montgomery County Industrial
Development Authority
Revenue Bond (Merck &
Company Project) (A)
4.05%........... 12/07/96 1,000 1,000,000
Moon Township Revenue Bond
Executive (Office
Association Project) (A)
3.65%........... 12/07/96 1,500 1,500,000
North Umberland County, Atlas
(Development Association) (A)
3.65%........... 12/07/96 840 840,000
Northeastern Pennsylvania
Hospital & Education
Authority Allhealth Pooled
Financing Program,
Series 1996 (A)
3.70%........... 12/07/96 3,000 3,000,000
</TABLE>
See Accompanying Notes
21
<PAGE> 24
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA PENNSYLVANIA TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
PENNSYLVANIA -- CONTINUED
Pennsylvania State Certificate
Participation, AMBAC Insured
4.60%........... 06/01/97 $ 100 $ 100,188
Pennsylvania State Higher
Education Facility
Authority (Thomas Jefferson
University Project), Series B(A)
3.70%........... 2/26/97 2,750 2,750,000
Pennsylvania State Higher
Education Revenue Bond
(Allegheny College Project)(A)
3.55%........... 12/07/96 1,000 1,000,000
Pennsylvania State General
Obligation Bond, Series A,
MBIA Insured
6.00%........... 11/01/97 2,000 2,040,520
Philadelphia Gas Works
Revenue Bond 11th Series C
6.70%........... 01/01/97 100 100,243
Philadelphia Hospitals &
Higher Education Revenue
Bonds (The Children's
Hospital of Philadelphia)(A)
4.00%........... 12/01/96 200 200,000
Philadelphia Industrial
Development Authority
Revenue Bond, (Multi-Family
Housing For Harbor View
Towers Project)(A)
3.95%........... 12/07/96 2,580 2,580,000
Philadelphia Redevelopment
Authority Revenue Bond
Pennsylvania School For The
Deaf(A)
3.65%........... 12/07/96 405 405,000
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
PENNSYLVANIA -- CONTINUED
Philadelphia School District
Authority General
Obligation Tax & Revenue
Anticipation Note
4.50%........... 06/30/97 3,000 3,008,622
Philadelphia Redevelopment
Authority Revenue Bond
Multi-Family Housing
(Rivers Edge Project)(A)
3.95%........... 12/07/96 $ 1,000 $ 1,000,000
Pittsburgh School District,
Series B
5.25%........... 8/01/97 250 252,579
Sayre Health Care Facilities
Authority Hospital Revenue
Bond (Capital Assets
Finance Project)(A)
3.60%........... 12/07/96 100 100,000
Sayre Health Care Facilities
Authority Hospital Revenue
Bond (VHA of Pennsylvania
Capital Asset Finance)(A)
3.60%........... 12/07/96 100 100,000
Schuylkill County Industrial
Development Resource
Recovery Revenue Bond
(Gilberton Power Project)(A)
3.55%........... 12/07/96 1,900 1,900,000
Schuylkill County Industrial
Development Resource
Recovery Revenue Bond
(Westwood Energy Project)(A)
4.25%........... 12/01/96 900 900,000
Scranton -- Lackawanna Health
and Welfare Authority
Revenue Bond (University of
Scranton Project)(A)
3.80%........... 5/01/97 1,800 1,800,000
</TABLE>
See Accompanying Notes
22
<PAGE> 25
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA PENNSYLVANIA TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
PENNSYLVANIA -- CONTINUED
Shaler Township Tax & Revenue
Anticipation Note
3.81%........... 12/31/96 $ 1,200 $ 1,200,200
Stroudsburg Area School
District General Obligation
Refunding Bond
5.15%........... 10/01/97 330 331,670
Temple University of the
Commonwealth, System of
Higher Education University
Funding Revenue Bond,
Series 1996
4.625%.......... 05/20/97 2,500 2,510,381
West York Area School
District Tax & Revenue
Anticipation Note
4.375%.......... 06/30/97 800 801,442
Westmoreland County
Industrial Development
Authority Revenue Bond
(Kinder Care) Series D (A)
3.90%........... 12/07/96 755 755,000
Whitehall Township, Tax &
Revenue Anticipation Note
3.93%........... 12/31/96 700 700,122
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
PENNSYLVANIA -- CONTINUED
<S> <C> <C> <C>
York County Industrial
Development Authority
Revenue Bond (New Edgecomb
Corp. Project) (A)
3.55%........... 12/07/96 1,250 1,250,000
Yough School District General
Obligation Bond, MBIA
Insured
4.30%........... 10/01/97 240 240,772
--------------
TOTAL MUNICIPAL
BONDS.................................. 72,067,051
--------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- --------------
<S> <C> <C> <C>
TEMPORARY INVESTMENT -- 1.8%
Pennsylvania Municipal Cash
Trust 1,334,449 $ 1,334,449
--------------
TOTAL INVESTMENTS -- 100.0%
(Cost $73,401,500*) $ 73,401,500
=============
<FN>
* Also cost for Federal income tax purposes.
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Federal Guaranty Insurance Corporation
MBIA -- Municipal Bond Insurance Association
(A) Variable rate securities. Interest rates vary periodically based on current
market rates. Rates shown represent interest rates of the security in
effect as of November 30, 1996. Dates shown represent the latter of the
demand date or the next interest rate change date, which is considered the
maturity date for financial reporting purposes.
</TABLE>
See Accompanying Notes
23
<PAGE> 26
[LOGO] FINANCIAL HIGHLIGHTS
ARMADA PENNSYLVANIA TAX EXEMPT FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED NOVEMBER 30, 19968 FOR THE
(UNAUDITED) PERIOD FOR THE YEAR FOR THE PERIOD
-------------------------- ENDED MAY ENDED APRIL ENDED APRIL
INSTITUTIONAL RETAIL(6) 31, 1996(7) 30, 1996 30, 1995(5)
------------- -------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- -------- ------------ -------------- --------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income .02 .01 .00 .03 .02
LESS DISTRIBUTIONS
Dividends from net investment
income (.02) (.01) (.00) (.03) (.02)
------------- -------- ------------ -------------- --------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ========= ============= ============= =============
TOTAL RETURN 3.13%(3) 3.09%(3) 0.28%(4) 3.36% 2.32%(4)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
000's) $ 69,170 $ 4,509 $ 68,472 $ 70,422 $ 56,668
Ratio of expenses to average net
assets 0.47%(1,3) 0.47%(2,3) 0.55%(1,3) 0.55%1 0.55%(1,3)
Ratio of net investment income to
average net assets 3.08%(1,3) 3.19%(2,3) 3.24%(1,3) 3.29%1 3.21%(1,3)
<FN>
(1) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers and other service providers for the
Institutional class for the periods ended November 30, 1996 and May 31,
1996, for the year ended April 30, 1996, and for the period ended April 30,
1995 would have been .87% and 2.68%, .97% and 2.82%, .96% and 2.88%, and
1.04% and 2.72%, respectively.
(2) The operating expense ratio and net investment income ratio before fee
waivers by the Investment Advisers for the Retail class for the period ended
November 30, 1996 would have been .72% and 2.94%, respectively.
(3) Annualized.
(4) Not Annualized.
(5) Predecessor Fund commenced operations on August 8, 1994.
(6) Retail class commenced operations on September 11, 1996.
(7) As the Predecessor Fund changed its fiscal year end from April 30 to May 31,
the results of the operations of the Predecessor Fund from May 1, 1996 to
May 31, 1996 are presented here.
(8) Activity for the six months ended November 30, 1996 includes that of the
Predecessor Fund through September 6, 1996.
</TABLE>
See Accompanying Notes
24
<PAGE> 27
[LOGO] FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996
(unaudited)
<TABLE>
<CAPTION>
PENNSYLVANIA
MONEY MARKET GOVERNMENT TREASURY TAX EXEMPT TAX EXEMPT
FUND FUND FUND FUND FUND
-------------- -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments at value (Cost $1,966,482,081,
$1,000,005,410, $333,614,541,
$371,606,074, and $73,401,500,
respectively)............................ $1,966,482,081 $1,000,005,410 $333,614,541 $371,606,074 $73,401,500
Interest receivable........................ 642,632 156,575 102,609 2,254,910 532,920
Prepaid expenses........................... 52,987 3,290 16,048 3,781 8,575
-------------- -------------- ------------ ------------ ------------
TOTAL ASSETS............................... 1,967,177,700 1,000,165,275 333,733,198 373,864,765 73,942,995
-------------- -------------- ------------ ------------ ------------
LIABILITIES
Dividends payable -- Institutional class... 6,757,870 3,354,615 1,253,262 788,215 183,778
Dividends payable -- Retail class.......... 1,394,642 628,098 21,677 180,157 8,706
Payable for investments purchased.......... -- -- -- 1,000,000 --
Accrued expenses........................... 1,343,540 650,790 253,806 586,332 71,219
-------------- -------------- ------------ ------------ ------------
TOTAL LIABILITIES.......................... 9,496,052 4,633,503 1,528,745 2,554,704 263,703
-------------- -------------- ------------ ------------ ------------
NET ASSETS................................. $1,957,681,648 $ 995,531,772 $332,204,453 $371,310,061 $73,679,292
============== ============== ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital............................ $1,957,689,962 $ 995,533,646 $332,190,046 $371,311,520 $73,682,519
Accumulated net realized gain/(loss) on
investments sold......................... (8,314) (1,874) 14,407 (1,459) (3,227)
-------------- -------------- ------------ ------------ ------------
$1,957,681,648 $ 995,531,772 $332,204,453 $371,310,061 $73,679,292
============== ============== ============ ============ ============
Net Assets -- Institutional class.......... $1,614,166,081 $ 839,571,298 $326,807,210 $300,574,773 $69,170,100
Shares outstanding -- Institutional
class.................................... 1,614,170,605 839,572,790 326,792,928 300,576,182 69,173,327
Net asset value, Offering price and
Redemption price per share --
Institutional class...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============ ============ ============
Net Assets -- Retail class................. $ 343,515,567 $ 155,960,474 $ 5,397,243 $ 70,735,288 $ 4,509,192
Shares outstanding -- Retail class......... 343,519,357 155,960,856 5,397,118 70,735,338 4,509,192
Net asset value, Offering price and
Redemption price per share -- Retail
class.................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============ ============ ============
</TABLE>
See Accompanying Notes
25
<PAGE> 28
[LOGO] FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PENNSYLVANIA
MONEY MARKET GOVERNMENT TREASURY TAX EXEMPT TAX EXEMPT
FUND FUND FUND FUND FUND(1)
-------------- -------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest.................................. $ 50,759,105 $ 24,838,544 $ 8,110,834 $ 6,223,454 $ 1,254,560
-------------- -------------- ------------ ------------ -----------
EXPENSES:
Investment Advisory fees.................. 3,279,239 1,616,702 471,313 634,728 150,706
12b-1 fees................................ 374,770 184,766 62,842 72,540 54,143
Administration fees....................... 240,614 118,613 40,375 83,325 35,826
Shareholder servicing fees -- Retail class
only.................................... 169,305 73,106 2,480 34,284 706
Custodian fees............................ 87,925 49,728 20,831 23,274 5,769
Legal fees................................ 73,119 36,043 9,554 14,753 1,772
Registration and filing fees.............. 56,301 9,183 21,998 9,520 200
Distribution fees......................... 51,501 24,353 8,598 10,325 983
Miscellaneous............................. 45,906 20,721 2,558 11,009 11,309
Printing and shareholder reports.......... 25,151 15,507 741 1,730 3,593
Audit fees................................ 24,638 10,997 3,435 4,964 22,024
Trustees' fees............................ 24,065 10,094 3,148 4,553 2,713
Transfer Agent fees....................... 13,101 15,152 11,712 10,392 12,641
Insurance................................. 8,868 4,077 1,010 1,715 343
Amortization of organization costs........ -- -- 2,066 -- 1,809
Fees waived............................... -- -- -- -- (47,649)
Fees waived by Investment Advisers........ (936,925) (461,914) (78,552) (362,702) (91,654)
-------------- -------------- ------------ ------------ -----------
Total expenses............................ 3,537,578 1,727,128 584,109 554,410 165,234
-------------- -------------- ------------ ------------ -----------
NET INVESTMENT INCOME....................... 47,221,527 23,111,416 7,526,725 5,669,044 1,089,326
-------------- -------------- ------------ ------------ -----------
Net Realized Gain on Investments Sold..... -- -- 2,703 -- --
-------------- -------------- ------------ ------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................ $ 47,221,527 $ 23,111,416 $ 7,529,428 $ 5,669,044 $ 1,089,326
============== ============== ============ ============ ===========
<FN>
(1) Activity for the six months ended November 30, 1996 includes that of the
Predecessor Fund through September 6, 1996.
</TABLE>
See Accompanying Notes
26
<PAGE> 29
[LOGO] FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TAX EXEMPT
MONEY MARKET FUND GOVERNMENT FUND TREASURY FUND FUND
-------------------------------- ---------------------------- ---------------------------- ------------
FOR THE SIX FOR THE SIX FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED MONTHS ENDED MONTHS ENDED
NOVEMBER 30, FOR THE NOVEMBER 30, FOR THE NOVEMBER 30, FOR THE NOVEMBER 30,
1996 YEAR ENDED 1996 YEAR ENDED 1996 YEAR ENDED 1996
(UNAUDITED) MAY 31, 1996 (UNAUDITED) MAY 31, 1996 (UNAUDITED) MAY 31, 1996 (UNAUDITED)
-------------- -------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net increase in
net assets
resulting from
net investment
income and
amount of
income
distributions
to
shareholders... $ 47,221,527 $ 77,770,161 $ 23,111,416 $ 34,801,218 $ 7,526,725 $ 10,303,862 $ 5,669,044
============== ============== ============ ============ ============ ============ ============
Increase/(decrease)
in net assets
derived from
Fund share
transactions... 270,181,040 429,065,507 122,444,272 235,854,984 15,591,310 173,356,407 23,573,743
Net realized
gain/(loss) on
investments
sold........... -- -- -- 603 2,703 11,704 --
NET ASSETS:
Beginning of
period......... 1,687,500,608 1,258,435,101 873,087,500 637,231,913 316,610,440 143,242,329 347,736,318
-------------- -------------- ------------ ------------ ------------ ------------ ------------
End of period... $1,957,681,648 $1,687,500,608 $995,531,772 $873,087,500 $332,204,453 $316,610,440 $371,310,061
============== ============== ============ ============ ============ ============ ============
<CAPTION>
PENNSYLVANIA
TAX EXEMPT FUND
----------------------------
FOR THE SIX
MONTHS ENDED
FOR THE NOVEMBER 30, FOR THE
YEAR ENDED 1996(1) PERIOD ENDED
MAY 31, 1996 (UNAUDITED) MAY 31, 1996
------------ ------------ ------------
<S> <<C> <C> <C>
Net increase in
net assets
resulting from
net investment
income and
amount of
income
distributions
to
shareholders... $ 9,807,133 $ 1,089,326 $ 193,868
============ =========== ===========
Increase/(decrea
in net assets
derived from
Fund share
transactions... 123,177,844 5,207,202 (1,946,457)
Net realized
gain/(loss) on
investments
sold........... -- -- (3,610)
NET ASSETS:
Beginning of
period......... 224,558,474 68,472,090 70,422,157
----------- ----------- -----------
End of period... $347,736,318 $73,679,292 $68,472,090
============ =========== ===========
<FN>
(1) Activity for the six months ended November 30, 1996 includes that of the
Predecessor Fund through September 6, 1996.
</TABLE>
See Accompanying Notes
27
<PAGE> 30
[LOGO] NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Armada Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company. The Trust was
organized as a Massachusetts business trust on January 28, 1986. The Trust is a
series fund which is authorized to issue thirty-two classes of shares of
beneficial interest, each of which evidences an interest in one of 16 investment
funds:
Money Market Fund
(Class A "Institutional" shares and Class A-Special Series 1 "Retail" shares)
Government Fund
(Class B "Institutional" shares and Class B-Special Series 1 "Retail" shares)
Treasury Fund
(Class C "Institutional" shares and Class C-Special Series 1 "Retail" shares)
Tax Exempt Fund
(Class D "Institutional" shares and Class D-Special Series 1 "Retail" shares)
Equity Fund
(Class H "Institutional" shares and Class H-Special Series 1 "Retail" shares)
Fixed Income Fund
(Class I "Institutional" shares and Class I-Special Series 1 "Retail" shares)
Ohio Tax Exempt Fund
(Class K "Institutional" shares and Class K-Special Series 1 "Retail" shares)
National Tax Exempt Fund
(Class L "Institutional" shares and Class L-Special Series 1 "Retail" shares)
Equity Income Fund
(Class M "Institutional" Shares and Class M-Special Series 1 "Retail" shares)
Mid Cap Regional Fund
(Class N "Institutional" shares and Class N-Special Series 1 "Retail" shares)
Enhanced Income Fund
(Class O "Institutional" shares and Class O-Special Series 1 "Retail" shares)
Total Return Advantage Fund
(Class P "Institutional" shares and Class P-Special Series 1 "Retail" shares)
Pennsylvania Tax Exempt Fund
(Class Q "Institutional" shares and Class Q-Special Series 1 "Retail" shares)
Intermediate Government Fund
(Class R "Institutional" shares and Class R-Special Series 1 "Retail" shares)
GNMA Fund
(Class S "Institutional" shares and Class S-Special Series 1 "Retail" shares)
Pennsylvania Municipal Fund
(Class T "Institutional" shares and Class T-Special Series 1 "Retail" shares)
As of the date of this report, the National Tax Exempt Fund has not commenced
operations.
FUND REORGANIZATION: On May 3, 1996, Integra Financial Corporation ("Integra
Financial") merged into National City Corporation ("National City"). Integra
Trust Company, an affiliate of Integra Financial, served as Investment Adviser
to Inventor Funds, Inc ("Inventor"). On May 2, 1996, the execution of new
investment advisory agreements between Inventor and affiliates of National City
received shareholder approval.
On February 15 and March 18, 1996, the respective Boards of Trustees of the
Trust and Inventor each approved the Agreement and Plan of Reorganization
between the Trust and Inventor (the "Agreement"). Subsequently, a proxy
solicitation to approve the components of the Agreement was
28
<PAGE> 31
[LOGO] NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
executed, the results of which for each of the Inventor Funds are listed below:
SHARES VOTED
<TABLE>
<CAPTION>
PERCENT
FOR AGAINST ABSTAIN VOTED
------------ ------- -------- -------
<S> <C> <C> <C> <C>
Inventor Pennsylvania Tax-
Exempt Money Market
Fund..................... 36,822,578 95,225 267,862 54%
Inventor Pennsylvania
Municipal Bond Fund...... 3,386,184 -- 3,300 88%
Inventor Intermediate
Government Securities
Fund..................... 8,128,329 2,217 12,189 91%
Inventor GNMA Securities
Fund..................... 5,504,614 7,087 14,280 92%
Inventor Equity Growth
Fund..................... 4,185,300 6,923 2,554 92%
</TABLE>
The Reorganization was executed on September 9, 1996.
As part of the Reorganization, on September 9, 1996, the Inventor Pennsylvania
Tax-Exempt Money Market Fund (the "Predecessor Fund") transferred all of its
assets and liabilities with an approximate value of $74,142,677 in exchange for
shares of the Armada Pennsylvania Tax Exempt Fund. The Reorganization was
executed as a tax-free reorganization in accordance with Section 368(a)(1)(F) of
the Internal Revenue Code of 1986 (the "Internal Revenue Code"), as amended. The
results of operations, changes in net assets and financial highlights of the
Armada Pennsylvania Tax Exempt Fund for the six months ended November 30, 1996
include those of the Predecessor Fund.
In accordance with Agreement provisions, the Trust and Inventor were each
responsible for the payment of their own expenses incurred in connection with
the Reorganization to the extent not borne by their respective Investment
Advisers. Accordingly, the Trust absorbed approximately $200,000 in costs
connected with the Reorganization, which has been allocated among the various
Funds in the Trust. No such costs were borne by Inventor.
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 Pennsylvania Tax Exempt Fund has invested substantially all of its assets
in the municipal obligations of that state. The Tax Exempt Fund has invested a
significant amount of its assets in municipal obligations in two states.
Economic changes affecting the states and certain of their public bodies and
municipalities may affect the ability of issuers within each state to pay
interest on, or repay principal of, municipal obligations held by the Funds.
The following is a summary of significant accounting policies followed by the
Money Market, Government, Treasury, Tax Exempt, and Pennsylvania Tax Exempt
Funds (the "Funds") in preparation of their financial statements.
PORTFOLIO VALUATION: Securities in the Money Market, Government, Treasury, and
Pennsylvania Tax Exempt Funds are valued as of 1:00 P.M. and as of the close of
trading on the New York Stock Exchange (the "Exchange") (generally 4:00 P.M.
Eastern Time) and 12:00 noon and as of the close of trading on the Exchange for
the Tax Exempt Fund on each business day except those holidays which the
Exchange or banks and trust companies which are affiliated with National City
Corporation observe. Investment securities are valued on the basis of amortized
cost which has been determined by the Board of Trustees to represent the fair
value of the Funds' investments. Amortized cost valuation involves valuing an
instrument at its cost initially and, thereafter, assuming a constant
amortization to maturity of any applicable discount or premium.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
recorded on the trade date. Realized gains and losses on investments sold are
29
<PAGE> 32
[LOGO] NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
recorded on the identified cost basis. Interest income is accrued on a daily
basis.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Each Fund declares dividends
daily from net investment income and pays such dividends no later than five
business days after the end of the month. Net investment income of the Money
Market, Government, and Treasury Funds consists of interest accrued and discount
earned (including both original issue and market discount), less amortization of
any market premium and accrued expenses. Net investment income of the Tax Exempt
and Pennsylvania Tax Exempt Funds consists of interest accrued, original issue
discount earned, less amortization of any market premium and accrued expenses.
FEDERAL INCOME TAXES: Each of the Funds is classified as a separate taxable
entity for Federal income tax purposes. Each of the Funds intends to qualify as
a separate "regulated investment company" under the Internal Revenue Code and
make the requisite distributions to its shareholders that will be sufficient to
relieve it from Federal income tax and Federal excise tax. Therefore, no Federal
tax provision is required. To the extent that distributions from net investment
income and net realized capital gains exceed amounts in the financial
statements, such amounts are reported separately.
REPURCHASE AGREEMENTS: Repurchase agreements are considered loans under the
Investment Company Act of 1940, as amended. In connection therewith, the Trust's
Custodian receives and holds collateral of not less than 102% of the repurchase
price plus accrued interest. If the value of the collateral falls below this
amount, the Trust will require the seller to deposit additional collateral by
the next business day. If the request for additional collateral is not met or
the seller defaults on its repurchase obligation, the Trust maintains the right
to sell the underlying securities at market value and may claim any resulting
loss against the seller.
ORGANIZATIONAL COSTS: The Trust bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
shares for distribution under Federal and State securities regulations. All
organization expenses are being amortized on the straight-line method over a
period of five years from the date of commencement of operations.
2. INVESTMENT ADVISERS, DISTRIBUTION FEE AND OTHER RELATED PARTY TRANSACTIONS
Fees paid by the Trust pursuant to the Advisory Agreements with National City
Bank, National City Bank of Columbus and National City Bank of Kentucky
(collectively, the "Adviser" or "Advisers"), wholly-owned subsidiaries of
National City Corporation, are payable monthly based on an annual rate of .35%
of the average daily net assets of each of the Money Market, Government and Tax
Exempt Funds, .30% of average daily net assets of the Treasury Fund, and .40% of
the average daily net assets of the Pennsylvania Tax Exempt Fund. Prior to the
Reorganization, Integra Trust Company served as investment adviser to the
Pennsylvania Tax Exempt Fund and Weiss, Peck & Greer LLC (the "Sub-Adviser")
served as sub-adviser to Integra Trust Company. Subsequent to the
Reorganization, the Sub-Adviser continues to serve under an agreement with
National City Bank and is entitled to earn a fee pursuant to such agreement. The
Advisers may from time to time waive their fees payable by the Funds. For the
period ended November 30, 1996, the Advisers have earned and waived the
following fees:
<TABLE>
<CAPTION>
EARNED WAIVED
---------- --------
<S> <C> <C>
Money Market Fund $3,279,239 $936,925
Government Fund 1,616,702 461,914
Treasury Fund 471,313 78,552
Tax Exempt Fund 634,728 362,702
Pennsylvania Tax Exempt Fund 150,706 91,654
</TABLE>
30
<PAGE> 33
[LOGO] NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
At November 30, 1996, Advisory fees accrued and unpaid amounted to:
<TABLE>
<S> <C>
Money Market Fund $404,860
Government Fund 199,178
Treasury Fund 66,660
Tax Exempt Fund 45,699
Pennsylvania Tax Exempt Fund 8,264
</TABLE>
Fees paid by the Trust, under a Shareholder Servicing Plan (the "Plan") to
NatCity Investments, Inc. and National City Bank of Columbus, both wholly-owned
subsidiaries of National City Corporation, are payable monthly, based on an
aggregate annual rate of up to .10% of the average daily net assets of the
Retail class of the Money Market, Government, Treasury, Tax Exempt, and
Pennsylvania Tax Exempt Funds. NatCity Investments, Inc. and National City Bank
of Columbus were paid fees for the period ended November 30, 1996 in the
following amounts:
<TABLE>
<CAPTION>
NATIONAL CITY NATCITY
BANK OF COLUMBUS INVESTMENTS INC.
---------------- ----------------
<S> <C> <C>
Money Market Fund $ 33,995 $ 63,669
Government Fund 63,135 5,719
Treasury Fund 30 1,164
Tax Exempt Fund 188 19,781
Pennsylvania Tax
Exempt Fund -- --
</TABLE>
National City Bank, a wholly-owned subsidiary of National City Corporation,
serves as the Funds' Custodian. National City Bank commenced services as
custodian to the Pennsylvania Tax Exempt Fund effective August 5, 1996. For the
period ended November 30, 1996, National City Bank earned custodian fees as
follows:
<TABLE>
<S> <C>
Money Market Fund $87,925
Government Fund 49,728
Treasury Fund 20,831
Tax Exempt Fund 23,274
Pennsylvania Tax Exempt Fund 3,826
</TABLE>
440 Financial Distributors, Inc., a wholly-owned subsidiary of The Shareholder
Services Group, Inc. and an indirect wholly-owned subsidiary of First Data Corp.
(the "Distributor"), serves as the Trust's Distributor. Under the Fund's
Distribution Agreement and related Distribution Plan adopted under Rule 12b-1 of
the Investment Company Act of 1940, the Fund reimburses the Distributor monthly
for the direct and indirect expenses incurred by the Distributor in providing
Fund advertising, marketing, prospectus printing and other distribution services
up to a maximum of .10% per annum of the average net assets of each Fund,
inclusive of an annual distribution fee of $250,000 which is payable monthly and
accrued daily among the investment funds with respect to which the Distributor
is distributing shares.
SEI Financial Services Company, a wholly-owned subsidiary of SEI Corporation
("SEI"), served as Distributor to the Pennsylvania Tax Exempt Fund prior to the
Reorganization. Under a Rule 12b-1 Distribution Plan, SEI earned and waived fees
at an annual rate of up to .25% of the average daily net assets of the
Predecessor Fund's Class A shares.
Pursuant to the Board of Trustees approval on November 15, 1996, SEI has been
appointed as the Trust's Distributor and will commence services as such in 1997.
Each Trustee receives an annual fee of $7,500 plus $2,500 for each Board
meeting attended and reimbursement of out-of-pocket expenses. The Chairman of
the Board receives an additional $2,500 per annum for services in such capacity.
Such fees are paid for services rendered to all of the Funds and are allocated
accordingly. No person who is an officer, director, trustee, or employee of the
Advisers, Distributor, or of any parent or subsidiary thereof, who serves as an
officer, trustee, or employee of the Trust receives any compensation from the
Trust.
31
<PAGE> 34
[LOGO] NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Expenses for the period ended November 30, 1996 include legal fees paid to
Drinker Biddle & Reath. A partner of that firm is Secretary of the Trust.
3. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Board of Trustees to issue an
unlimited number of shares of beneficial interest and to classify or reclassify
any unissued shares of the Trust into one or more additional classes of shares
and to classify or reclassify any class of shares into one or more series of
shares. Since the Funds have each sold and redeemed shares only at a constant
net asset value of $1.00 per share, the number of shares represented by such
sales, reinvestments, and redemptions is the same as the amounts shown on the
following page for such transactions.
32
<PAGE> 35
[LOGO] NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED FOR THE YEAR ENDED
NOVEMBER 30, 1996 MAY 31, 1996
------------------------------------- ---------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS INSTITUTIONAL CLASS RETAIL CLASS
------------------- ------------- ------------------- ---------------
(UNAUDITED)
<S> <C> <C> <C> <C>
MONEY MARKET FUND
Shares sold........................... $ 2,346,352,909 $ 919,141,366 $ 3,557,289,942 $ 1,296,339,643
Shares reinvested..................... 8,564 6,626,611 19,278 11,706,196
Shares repurchased.................... (2,076,609,387) (925,339,023) (3,296,137,841) (1,140,151,711)
--------------- ------------ --------------- ---------------
Net increase.......................... $ 269,752,086 $ 428,954 $ 261,171,379 $ 167,894,128
=============== ============ =============== ===============
GOVERNMENT FUND
Shares sold........................... $ 1,454,122,832 $ 228,515,758 $ 2,479,104,729 $ 196,026,437
Shares reinvested..................... 270,265 478,539 357,397 1,033,637
Shares repurchased.................... (1,356,715,388) (204,227,734) (2,355,628,345) (85,038,871)
--------------- ------------ --------------- ---------------
Net increase.......................... $ 97,677,709 $ 24,766,563 123,833,781 $ 112,021,203
=============== ============ =============== ===============
TREASURY FUND
Shares sold........................... $ 504,260,205 $ 6,622,906 $ 963,946,179 $ 9,707,933
Shares reinvested..................... 353 95,165 -- 59,062
Shares repurchased.................... (489,711,152) (5,676,167) (794,579,391) (5,777,376)
--------------- ------------ --------------- ---------------
Net increase.......................... $ 14,549,406 $ 1,041,904 $ 169,366,788 $ 3,989,619
=============== ============ =============== ===============
TAX EXEMPT FUND
Shares sold........................... $ 282,359,089 $ 213,120,219 $ 576,468,463 $ 241,105,254
Shares reinvested..................... -- 1,046,553 1,724 2,069,874
Shares repurchased.................... (243,592,602) (229,359,516) (487,304,635) (209,162,836)
--------------- ------------ --------------- ---------------
Net increase (decrease)............... $ 38,766,487 $ (15,192,744) $ 89,165,552 $ 34,012,292
=============== ============ =============== ===============
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
ENDED
MAY 31, 1996
---------------
<S> <C> <C> <C> <C>
PENNSYLVANIA TAX EXEMPT FUND
Shares sold........................... $ 133,726,050 $ 12,290,073 $ 6,077,845
Shares reinvested..................... 22,121 3,855 4,537
Shares repurchased.................... (133,050,161) (7,784,736) (8,028,839)
------------------- ------------- ---------------
Net increase (decrease)............... $ 698,010 $ 4,509,192 $ (1,946,457)
=============== ============= ===============
</TABLE>
33
<PAGE> 36
[LOGO] ARMADA FUNDS
BOARD OF TRUSTEES Robert D. Neary
Chairman and President
Retired Co-Chairman, Ernst & Young
Director, Cold Metal Products, Inc.
Director, Zurn Industries, Inc.
Thomas R. Benua, Jr.
Chairman, EBCO Manufacturing Company
and Subsidiaries
Vice President and Executive Committee Member,
Ebtech Corp.
Leigh Carter
Retired President and Chief Operating
Officer, B.F. Goodrich Company
Director, Adams Express Company
Director, Lamson & Sessions Company
Director, Petroleum & Resources Corp.
Director, Morrison Products
John F. Durkott
President and Chief Operating Officer,
Kittle's Home Furnishings Center, Inc.
Partner, Kittle's Bloomington Property Company
Partner, KK&D
Richard W. Furst, Dean
Professor of Finance and Dean,
Carol Martin Gatton College of Business
and Economics, University of Kentucky
Director, Studio Plus Hotels, Inc.
Director, The Seed Corporation
Director, Foam Design, Inc.
J. William Pullen
President and Chief Executive Officer,
Whayne Supply Company
President and Chief Executive Officer,
American Contractors Rentals & Sales
Richard B. Tullis
Chairman Emeritus, Harris Corporation
Director, NACCO Materials Handling Group, Inc.
Director, Hamilton Beach/Proctor-Silex, Inc.
Director, Waste-Quip, Inc.
<PAGE> 37
(LOGO) ARMADA FUNDS
BULK RATE
4400 Computer Drive U.S. POSTAGE
Westborough, Massachusetts 01581 PAID
CLEVELAND, OH
PERMIT NO. 1
INVESTMENT ADVISERS
AFFILIATES OF
NATIONAL CITY
CORPORATION
National City Bank
1900 East Ninth Street
Cleveland, Ohio 44114
National City Bank of Columbus
155 East Broad Street
Columbus, Ohio 43251
National City Bank of Kentucky
101 South Fifth Street
Louisville, Kentucky 40202
NC-203 (1/97)
