<PAGE> 1
SEMI-ANNUAL REPORT ARMADA
NOVEMBER 30, 1996 FUNDS
(UNAUDITED) TAX
EXEMPT
SERIES
ARMADA OHIO TAX EXEMPT FUND
ARMADA PENNSYLVANIA MUNICIPAL FUND
LOGO (ARMADA FUNDS)
<PAGE> 2
[LOGO] ARMADA FUNDS
TAX EXEMPT SERIES
SEMI-ANNUAL REPORT - NOVEMBER 30, 1996
(UNAUDITED)
<TABLE>
<S> <C>
TABLE OF CONTENTS
Chairman's Message......................................... 1
Tax-Exempt Market Overview................................. 3
FUND OVERVIEWS
Armada Ohio Tax Exempt Fund.............................. 4
Armada Pennsylvania Municipal Fund....................... 6
PORTFOLIOS OF INVESTMENTS AND FINANCIAL HIGHLIGHTS
Armada Ohio Tax Exempt Fund.............................. 8
Armada Pennsylvania Municipal Fund....................... 13
FINANCIAL STATEMENTS
Statement of Assets and Liabilities...................... 18
Statement of Operations.................................. 19
Statement of Changes in Assets........................... 20
NOTES TO FINANCIAL STATEMENTS.............................. 21
</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.
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.
NEW INVESTMENT OBJECTIVE FOR THE ENHANCED INCOME
FUND
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 and an Armada
money market fund. The automatic "sweep" -- transfer
of funds -- occurs when the checking account exceeds
a target balance.
1
<PAGE> 4
LOGO CHAIRMAN'S MESSAGE
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] TAX-EXEMPT MARKET OVERVIEW
REMARKS FROM THE ADVISERS
DEMAND FOR MUNICIPALS IS
FAIRLY LIGHT BECAUSE THE
RECENT RALLY HAS PRODUCED
"YIELD SHOCK" TO INVESTORS
ACCUSTOMED TO 5% OR HIGHER
FOR TEN YEAR BONDS.
The continued effects of the current Federal
Reserve "steady as it goes" monetary policy also
lead to a bond rally in the tax-exempt market. Both
taxable and tax-exempt yields have recovered from
much of the tightening scare of the past six months.
Interestingly, our opinion is that the municipal
market will continue to track the taxable market at
least for the time being.
Market directional municipal trading has not
occurred since the large refunding cycle began in
1993. Outstanding municipal debt has slipped below
$1.3 trillion in spite of new issuance increasing
20% over last year. This is the lowest outstanding
number since 1991, and is reflective of the large
amount of bond calls that were executed this year.
It must be remembered that 1996 was the ten year
anniversary, and thus the end of call protection for
many bond issues which were sold prior to enactment
of the Tax Reform Act of 1986.
Demand for municipals is fairly light because the
recent rally has produced "yield shock" to investors
accustomed to 5% or higher for ten year bonds. Tax
loss swapping has disappeared because so few
holdings are at a loss. All in all, municipal bond
funds are reinvesting their coupon payments and
investors are putting any new money into the equity
market.
We continue to believe that municipals will
outperform taxables over the long term. One reason
for our belief is that the demographic shift to an
aging and more saving populace will heighten demand
while future legislative action will continue to
restrict the supply of tax-exempts.
Since 1990, the holdings of municipal bonds by
households has fallen by 29% according to a Federal
Reserve study. Mutual fund and trust holdings have
increased 47% during the same time period. This
shows that investors are opting to diversify through
funds instead of buying individual bonds. The
results of this trend is a more efficient market as
institutional buyers keep the buy/sell spreads
narrow. This also leads to a cleaner credit market
as buyers demand and receive updated and factual
financial statements.
3
<PAGE> 6
[LOGO] ARMADA OHIO TAX EXEMPT FUND OVERVIEW
COMMENTS FROM THE MANAGER
PORTFOLIO MANAGER:
ASSET MANAGEMENT
GROUP, FIXED INCOME
TEAM, NATIONAL CITY
FUND'S DATE OF INCEPTION:
JANUARY 5, 1990 (INSTITUTIONAL SHARES)
APRIL 15, 1991 (RETAIL SHARES)
ASSETS:
$85,326,843 (INSTITUTIONAL SHARES)
$ 5,200,993 (RETAIL SHARES)
INVESTMENT OBJECTIVE:
PROVIDE AS HIGH A LEVEL OF
INTEREST INCOME EXEMPT FROM
FEDERAL INCOME TAX AND, TO
THE EXTENT POSSIBLE, FROM OHIO
INCOME TAX, AS IS CONSISTENT
WITH CONSERVATION OF CAPITAL.
THE FUND NORMALLY INVESTS IN
TAX-EXEMPT OBLIGATIONS HAVING
AVERAGE REMAINING MATURITIES
OF TWO TO TEN YEARS.
The Armada Ohio Tax Exempt Fund (the "Fund")
returned to Institutional shareholders 5.05% for the
past six months and 4.77% for the year ended
November 30, 1996. Before sales charges, the Fund
returned to Retail shareholders 5.06% and 4.77%,
respectively, for the same time periods. By
comparison, the benchmark Lehman Brothers Seven Year
Municipal Bond Index (the "Index") had returns of
5.41% for the six months and 5.24% for the 12-month
period ended November 30, 1996.
The Ohio municipal market has lagged the overall
national market primarily because of higher credit
quality. Weaker credits have tightened to Ohio
because investors continue to stretch for higher
yields as interest rates decline. For example,
Louisiana ( Baa1/A-) has moved to within 0.30% of
Ohio where the average spread over the past year is
0.40%. This has affected total returns in that the
Ten Year Lehman Index has returned 5.66% over the
last 12 months while the Ten Year California Lehman
Index is up 6.15% for the same period. The spread
between general obligation and revenue issues has
also narrowed from five to ten basis points with
investors moving toward incrementally higher income.
This is common for this stage of the interest rate
cycle, and we believe that quality investing is its
own reward over the long term horizon.
The Armada Ohio Tax Exempt Fund has an average
maturity of 6.6 years and a duration of 5.6 years.
This compares to 7.0 average maturity and 5.61
duration for the Index. The Fund's average yield to
maturity is 4.5% and the overall credit quality is
AA average. General obligations are 55% of the Fund
with the remainder revenue issues such as higher
education, sewer and water. Hospital issues rated AA
or higher make up 9% of the Fund's holdings.
4
<PAGE> 7
LOGO ARMADA OHIO TAX EXEMPT FUND OVERVIEW
"THE OHIO MUNICIPAL MARKET
HAS LAGGED THE OVERALL NATIONAL
MARKET PRIMARILY BECAUSE OF
HIGHER CREDIT QUALITY."
TOTAL RETURNS as of 11/30/96
<TABLE>
<CAPTION>
Six Months 1-Year 3-Years (4) 5-Years (5) Since Inception (2, 4)
---------- ------ ----------- ----------- ----------------------
<S> <C> <C> <C> <C> <C>
Armada Ohio Tax Exempt Fund
Institutional Shares (1) 5.05% 4.77% 4.80% 6.37% 6.13%
Armada Ohio Tax Exempt Fund
Retail Shares
With Sales Charge 1.91% 1.61% 3.75% 5.71% 5.65%
Without Sales Charge 5.06% 4.77% 4.81% 6.37% 6.12%
<FN>
- --------------
Past performance is not predictive of future performance.
</TABLE>
GROWTH OF A $10,000 INVESTMENT (3)
<TABLE>
<CAPTION>
Lehman Brothers
7-Year
Measurement Period Muni Institutional Retail shares with
(Fiscal Year Covered) Bond Index Shares sales load
<S> <C> <C> <C>
Nov-1989 10,000.00(2) 10,000.00(1) 9,700.00(1)
May-1990 10,187.62 10,020.00 9,718.60
Nov-1990 10,710.37 10,424.70 10,111.10
May-1991 11,208.04 10,761.70 10,438.20
Nov-1991 11,742.98 11,073.80 10,741.00
May-1992 12,214.60 11,429.70 11,088.20
Nov-1992 12,853.96 11,962.40 11,594.40
May-1993 13,496.69 12,614.20 12,227.80
Nov-1993 14,052.78 13,101.40 12,700.80
May-1994 13,944.07 12,902.00 12,507.60
Nov-1994 13,708.78 12,608.70 12,234.40
May-1995 15,075.87 13,755.40 13,337.80
Nov-1995 15,798.91 14,393.40 13,957.70
May-1996 15,774.97 14,354.70 13,918.30
Nov-1996 16,628.90 15,080.03 14,623.20
<FN>
1 Institutional shares are sold primarily to Banks and clients of National Asset Management
Corporation ("NAM") customers. Certain account level charges may apply.
2 The Armada Ohio Tax Exempt Fund's date of inception was January 5, 1990 for Institutional
shares and April 15, 1991 for Retail shares.
3 The return and principal value of an investment will fluctuate. When redeemed, shares may be worth
more or less than their original cost.
4 Annualized.
</TABLE>
5
<PAGE> 8
[LOGO] ARMADA PENNSYLVANIA MUNICIPAL FUND OVERVIEW
COMMENTS FROM THE MANAGER
PORTFOLIO MANAGER:
ASSET MANAGEMENT GROUP,
FIXED INCOME TEAM,
NATIONAL CITY
FUND'S DATE OF INCEPTION:
AUGUST 10, 1994 (INSTITUTIONAL SHARES)
SEPTEMBER 11, 1996 (RETAIL SHARES)
ASSETS:
$37,110,783 (INSTITUTIONAL SHARES)
$ 85,461 (RETAIL SHARES)
INVESTMENT OBJECTIVE:
PROVIDE CURRENT INCOME EXEMPT
FROM BOTH REGULAR FEDERAL
INCOME AND PENNSYLVANIA
PERSONAL INCOME TAXES WHILE
PRESERVING CAPITAL. THE FUND
INVESTS PRIMARILY IN INVESTMENT
GRADE DEBT OBLIGATIONS ISSUED
BY OR ON BEHALF OF THE
COMMONWEALTH OF
PENNSYLVANIA.
The Armada Pennsylvania Municipal Fund (the
"Fund") returned 4.63% for Institutional shares and
4.61% (before sales charges) for Retail shares, for
the six months ended November 30, 1996. The Fund
also recorded a total return of 4.59% (Institutional
shares) and 4.57% Retail shares (before sales
charge) for the 12 months ended November 30, 1996.
This compares to the Lehman Seven Year Municipal
Bond Index returns of 5.41% for the past six months
and 5.24% for the 12 month period.
Municipal securities began the fiscal year at
abnormally attractive valuations relative to taxable
securities. This was due in large part to the focus
by Republican presidential candidates on various
income tax overhaul proposals. As the political
landscape cleared, municipal security valuations
moved toward a more normal relationship. This, in
turn, caused tax-exempt total returns to outpace
those seen in the U.S. Treasury market for a given
level of risk. The Pennsylvania market was driven by
the same forces that were at work on the municipal
market as a whole.
RECENT STRATEGY
Pennsylvania ranks sixth in the nation in terms of
new issuance thus far in 1996. This supply, while
great, was unable to meet demand, as evidenced by
Pennsylvania yields remaining below national levels
for most of the fiscal year. The Pennsylvania
economy has remained robust and has shown recent
gains in terms of improving unemployment rates
relative to the national average.
The Fund has maintained an average maturity of
approximately 6.5 years and a duration of
approximately 5.1 years for the past six months.
This stance has allowed the Fund to participate in
the recent bond market strength, while maintaining
the conservative mandate of its prospectus. The Fund
has an average credit rating of "AA".
LOOKING AHEAD
Going forward, the Fund will maintain its maturity
and duration targets. The Fund will continue to seek
excess returns by selecting securities based on
their relative value versus the market as a whole.
6
<PAGE> 9
LOGO ARMADA PENNSYLVANIA MUNICIPAL FUND OVERVIEW
"THE PENNSYLVANIA ECONOMY HAS
REMAINED ROBUST AND HAS
SHOWN RECENT GAINS IN TERMS OF
IMPROVING UNEMPLOYMENT RATES
RELATIVE TO THE NATIONAL
AVERAGE."
TOTAL RETURNS as of 11/30/96 (5)
<TABLE>
<CAPTION>
Six Months 1-Year Since Inception (2,4)
---------- -------- -------------------
<S> <C> <C> <C>
Armada Pennsylvania Municipal Fund
Institutional Shares (1) 4.63% 4.59% 5.67%
Armada Pennsylvania Municipal Fund
Retail Shares
With Sales Charge 1.49% 1.42% 4.28%
Without Sales Charge 4.61% 4.57% 5.66%
<FN>
- -----------------
Past performance is not predictive of future performance.
</TABLE>
GROWTH OF A $10,000 INVESTMENT (3)
<TABLE>
<CAPTION>
May-1994 Nov-1994 May-1995 Nov-1995 May-1996 Nov-1996
---------- --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lehman Brothers Seven-Year
Municipal Bond Index $10,000.00 $9,712.05 $10,682.68 $11,195.03 $11,176.93 $11,781.00
Armada Pennsylvania Municipal Fund
(Institutional shares) 10,000.00 9,818.75 10,518.74 11,176.93 10,857.95 11,360.85
Armada Pennsylvania Municipal Fund
(Retail Shares with sales charge) 9,725.00 9,523.51 10,202.44 11,781.00 10,531.47 11,016.72
<FN>
1 Institutional shares are sold primarily to Banks
and clients of National Asset Management
Corporation ("NAM") customers. Certain account
level charges may apply.
2 The Armada Pennsylvania Municipal Fund date of
inception was August 10, 1994 for Institutional
shares and September 11, 1996 for Retail shares.
3 The return and principal value of an investment
will fluctuate. When redeemed, shares may be worth
more or less than their original cost.
4 Annualized.
5 The performance history for the Predecessor Fund
has been carried over to both the Institutional
and Retail classes.
</TABLE>
7
<PAGE> 10
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA OHIO TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- -----------
<S> <C> <C> <C>
OHIO -- 98.8%
Akron General Obligation
4.50%............. 12/01/05 $ 500 $ 482,500
Akron Waterworks Revenue
5.15%............. 03/01/01 500 515,000
4.90%............. 03/01/08 500 490,000
Allen County General Obligation
4.95%............. 12/01/04 500 513,750
Avon Lake Water Revenues
4.80%............. 10/01/03 345 350,175
Beavercreek Local School
District
5.25%............. 12/01/07 1,130 1,169,550
Brown County General Obligation
5.20%............. 12/01/04 455 475,475
Butler County Sewer System
Revenue
6.00%............. 12/01/04 500 541,250
Cincinnati City School District
RANS
5.60%............. 06/15/97 500 504,925
Cincinnati General Obligation
5.25%............. 12/01/97 400 405,824
5.375%............ 12/01/97 250 253,945
5.25%............. 12/01/98 250 256,562
5.375%............ 12/01/99 250 259,688
4.50%............. 12/01/01 1,000 1,012,500
Clermont County Waterworks
Revenue
5.30%............. 12/01/05 500 525,000
Cleveland Heights General
Obligation
5.40%............. 12/01/00 900 941,625
Cleveland Waterworks
5.40%............. 01/01/06 500 525,625
Columbus General Obligation
5.45%............. 01/01/98 900 915,462
5.25%............. 05/01/02 1,000 1,050,000
5.30%............. 05/01/03 1,000 1,052,500
5.70%............. 07/01/04 300 322,875
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- -----------
<S> <C> <C> <C>
Columbus Ohio City School
District
6.65%............. 12/01/12 $ 900 $ 1,021,500
Columbus Sewer Revenue
6.20%............. 06/01/04 1,500 1,642,500
Columbus Water System Revenue
5.80%............. 02/15/01 500 531,250
6.00%............. 11/01/02 330 360,113
Cuyahoga County General
Obligation
4.50%............. 10/01/00 500 505,625
5.00%............. 10/01/05 1,610 1,638,175
Cuyahoga County Hospital
Revenues (Cleveland Clinic)
6.00%............. 11/15/03 890 961,200
6.125%............ 11/15/04 840 914,550
Cuyahoga County Hospital
University Series A
5.25%............. 01/15/08 1,500 1,522,500
Delaware County General
Obligation
5.25%............. 12/01/06 500 511,250
Delaware Ohio City School
District
5.25%............. 12/01/06 500 521,875
Franklin County General
Obligation
4.85%............. 12/01/03 1,500 1,543,125
6.00%............. 12/01/03 500 545,625
5.05%............. 12/01/05 2,000 2,072,500
6.375%............ 12/01/17 500 554,375
Franklin County Hospital
Revenue
4.50%............. 12/01/20 1,000 1,000,000
Franklin County Hospital
Revenue (Grant Medical
Center)
6.25%............. 12/01/97 500 510,000
Gahanna-Jefferson City School
District General Obligation
5.40%............. 12/01/04 280 290,500
</TABLE>
See Accompanying Notes
8
<PAGE> 11
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA OHIO TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- -----------
<S> <C> <C> <C>
OHIO (CONTINUED)
Granville Local School District
General Obligation
4.65%............. 12/01/05 $ 500 $ 495,625
Greene County Water Works
Systems Revenue
5.30%............. 12/01/05 500 519,375
Hamilton County General
Obligation
5.75%............. 12/01/01 250 265,938
5.00%............. 12/01/08 675 667,406
Hamilton County Sewer Revenue
6.20%............. 12/01/00 1,000 1,073,750
5.30%............. 12/01/06 1,000 1,046,250
Hilliard City Schools
General Obligation
5.30%............. 12/01/99 250 259,062
5.90%............. 12/01/04 1,000 1,068,750
Hudson Local School District
General Obligation
5.00%............. 12/15/02 500 517,500
Kenston Local School District
General Obligation
5.55%............. 12/01/03 500 520,625
Kent State University
General Receipts
6.15%............. 05/01/04 250 273,438
Kettering General Obligation
5.15%............. 12/01/05 550 565,125
Lake County General Obligation
5.30%............. 12/01/98 250 256,562
Lebanon City Schools
General Obligation
4.65%............. 12/01/99 750 767,812
Loveland City School District
General Obligation
6.00%............. 12/01/00 250 263,438
Marysville Exempted Local
School District General
Obligation
5.10%............. 12/01/04 500 515,625
Miami University General
Receipts
5.40%............. 12/01/05 1,000 1,040,000
Miamisburg Sewer System Revenue
5.00%............. 11/15/08 500 500,000
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- -----------
<S> <C> <C> <C>
Montgomery County Solid Waste
Revenue
5.125%............ 11/01/08 $ 500 $ 505,000
Newark General Obligation
5.45%............. 12/01/02 1,000 1,052,500
North Canton City School
District General Obligation
5.25%............. 12/01/01 500 521,875
Northeast Ohio Regional Sewer
Revenue
6.40%............. 11/15/03 250 276,250
6.50%............. 11/15/16 500 555,000
Ohio Higher Education Facility
(University of Dayton)
5.875%............ 12/01/04 250 266,563
Ohio Public Facilities
(Mental Health)
5.00%............. 12/01/02 1,000 1,035,000
Ohio St Pub Facs Commn Mental
Health Facs -- Ser A
6.80%............. 12/01/02 2,000 2,177,500
Ohio State Building Authority
5.20%............. 10/01/04 500 516,250
Ohio State Capital Facilities
General Obligation Series A
5.40%............. 10/01/07 1,000 1,036,250
Ohio State Higher Educational
Facility Denison University
Project
5.25%............. 11/01/09 500 501,250
Ohio State Public Facilities
(Higher Education)
5.50%............. 12/01/00 500 520,000
4.625%............ 12/01/01 500 508,125
4.80%............. 05/01/02 530 537,288
5.20%............. 05/01/06 500 516,875
Ohio State Public Facilities
Commission Higher Education
Capital Facilities Series
II-A
5.20%............. 05/01/07 1,000 1,027,500
4.25%............. 12/01/07 1,000 940,000
4.50%............. 11/01/08 1,000 950,000
</TABLE>
See Accompanying Notes
9
<PAGE> 12
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA OHIO TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- -----------
<S> <C> <C> <C>
OHIO (CONTINUED)
Ohio State University General
Receipt Bond Series A2
5.15%............. 12/01/00 $ 250 $ 258,750
Ohio State University General
Receipts
5.40%............. 12/01/02 1,500 1,580,625
4.70%............. 12/01/05 1,000 996,250
Ohio State Water Development
Authority
5.00%............. 12/01/98 1,500 1,535,625
5.90%............. 06/01/00 500 525,000
5.50%............. 12/01/01 1,000 1,057,500
5.90%............. 12/01/02 320 342,400
5.55%............. 06/01/04 1,000 1,065,000
5.75%............. 12/01/05 500 539,375
5.60%............. 06/01/07 1,500 1,595,625
5.00%............. 12/01/07 1,000 1,005,000
Ohio State Water Development
Authority Pollution Control
Facilities
5.05%............. 06/01/07 500 502,500
Perry Local School District
General Obligation
4.35%............. 06/01/99 750 749,062
Portage County General
Obligation
6.00%............. 12/01/03 915 965,325
Richland County General
Obligation
5.20%............. 12/01/08 515 520,150
Solon General Obligation
5.30%............. 12/01/03 210 220,238
5.50%............. 12/01/04 220 232,100
Springfield Local School
District General Obligation
6.10%............. 12/01/03 250 271,250
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- -----------
<S> <C> <C> <C>
State of Ohio General
Obligation
5.00%............. 05/15/97 $ 500 $ 503,250
5.70%............. 05/15/98 500 513,750
5.00%............. 05/15/99 1,000 1,026,250
5.00%............. 08/01/00 500 516,250
4.60%............. 05/15/01 500 509,375
5.15%............. 09/01/01 500 521,250
4.70%............. 05/15/02 2,000 2,045,000
4.70%............. 08/01/03 1,000 1,017,500
State of Ohio Highways
4.80%............. 05/15/99 1,000 1,020,000
4.75%............. 05/15/02 2,000 2,040,000
Strongsville Ohio
5.90%............. 12/01/15 1,575 1,624,218
Strongsville Ohio City School
District
5.15%............. 12/01/08 1,000 1,026,250
University of Cincinnati
General Receipts
5.70%............. 06/01/03 250 263,750
4.75%............. 06/01/04 500 498,125
5.80%............. 06/01/04 200 212,250
University of Cincinnati
General Receipts Series W
5.70%............. 06/01/12 1,240 1,267,900
Upper Arlington City School
District General Obligation
6.00%............. 12/01/05 670 737,000
Upper Arlington
General Obligation
6.20%............. 12/01/01 270 293,625
Vandalia Ohio
5.35%............. 12/01/09 505 515,100
West Clermont Local School
District
5.65%............. 12/01/08 1,030 1,095,663
Westerville General Obligation
5.60%............. 12/01/01 325 344,500
Westlake General Obligation
5.30%............. 12/01/03 500 520,000
Worthington City School
District General Obligation
5.80%............. 12/01/01 1,200 1,278,000
5.85%............. 12/01/02 500 536,875
</TABLE>
See Accompanying Notes
10
<PAGE> 13
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA OHIO TAX EXEMPT FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- -----------
<S> <C> <C> <C>
OHIO (CONTINUED)
Wright State University General
Receipts
4.90%............. 05/01/05 $ 500 $ 505,000
Youngstown Public Housing
Authority -- U.S. Government
Backed
5.25%............. 07/01/98 670 679,211
Youngstown School District
Revenue
5.40%............. 06/15/98 1,000 1,011,470
------------
TOTAL MUNICIPAL BONDS
(Cost $87,039,488)..................... 89,353,738
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- -----------
<S> <C> <C> <C>
TEMPORARY INVESTMENT -- 1.2%
Ohio Municipal Cash Trust
(Cost $1,074,072)............ 1,074,072 $ 1,074,072
-----------
TOTAL INVESTMENTS -- 100.0% $90,427,810
(Cost $88,113,560*) ===========
<FN>
- ---------------
* Also cost for Federal income tax purposes.
</TABLE>
<TABLE>
<S> <C>
The gross unrealized appreciation
(depreciation) for Federal income tax
purposes is as follows:
Gross appreciation......................... $ 2,393,285
Gross depreciation......................... (79,035)
-----------
$ 2,314,250
-----------
</TABLE>
RAN -- Revenue Anticipation Note
See Accompanying Notes
11
<PAGE> 14
[LOGO] FINANCIAL HIGHLIGHTS
ARMADA OHIO TAX EXEMPT FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED
NOVEMBER 30, 1996 FOR THE YEAR FOR THE YEAR
(UNAUDITED) ENDED MAY 31, 1996 ENDED MAY 31, 1995
------------------------ ------------------------ ------------------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL
------------- ------ ------------- ------ ------------- ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 10.70 $10.66 $ 10.74 $10.70 $ 10.57 $10.53
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income... .25 .25 .50 .50 .50 .50
Net gain/(loss) on
securities (realized
and unrealized)....... .28 .28 (.04) (.04) .17 .17
------ ------ ------ ------ ------ ------
Total from investment
operations........... .53 .53 .46 .46 .67 .67
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net
investment income..... (.25) (.25) (.50) (.50) (.50) (.50)
Dividends in excess of
net investment
income................ (.00) (.00) (.00) (.00) (.00) (.00)
Dividends in excess of
net realized capital
gains................. (.00) (.00) (.00) (.00) (.00) (.00)
------ ------ ------ ------ ------ ------
Total distributions... (.25) (.25) (.50) (.50) (.50) (.50)
------ ------ ------ ------ ------ ------
Net asset value, end of
period.................. $ 10.98 $10.94 $ 10.70 $10.66 $ 10.74 $10.70
=============== ======= =============== ======= =============== =======
TOTAL RETURN............. 10.33%(4) 10.36%(4,5) 4.36% 4.35%(5) 6.61% 6.64%(5)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's).............. $ 85,327 $5,201 $ 82,886 $2,869 $71,996 $3,168
Ratio of expenses to
average net assets...... .24%(1,4) .24%(2,4) .26%(1) .26%(2) .24%(1) .24%(2)
Ratio of net investment
income to average net
assets.................. 4.71%(1,4) 4.66%(2,4) 4.68%(1) 4.68%(2) 4.82%(1) 4.82%(2)
Portfolio turnover
rate.................... 8% 8% 10% 10% 3% 3%
<CAPTION>
FOR THE YEAR
ENDED MAY 31, 1994 FOR THE YEAR FOR THE YEAR
ENDED MAY 31, 1993 ENDED MAY 31, 1992
-------------------------------- ------------------------ ------------------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL(3)
------------- ------ ------------- ------ ------------- ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 10.84 $10.80 $ 10.33 $10.30 $ 10.14 $10.14
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income... .52 .52 .51 .51 .19 .46
Net gain/(loss) on
securities (realized
and unrealized)....... (.26) (.26) .56 .54 .15 .16
------ ------ ------ ------ ------ ------
Total from investment
operations........... .26 .26 1.07 1.05 .34 .62
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net
investment income..... (.52) (.52) (.51) (.51) (.15) (.46)
Dividends in excess of
net investment
income................ (.00) (.00) (.05) (.04) (.00) (.00)
Dividends in excess of
net realized capital
gains................. (.01) (.01) (.00) (.00) (.00) (.00)
------ ------ ------ ------ ------ ------
Total distributions... (.53) (.53) (.56) (.55) (.15) (.46)
------ ------ ------ ------ ------ ------
Net asset value, end of
period.................. $ 10.57 $10.53 $ 10.84 $10.80 $ 10.33 $10.30
=============== ======= =============== ======= =============== =======
TOTAL RETURN............. 2.28% 2.29%(5) 10.36% 10.27%(5) 8.23% 6.22%(5)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's).............. $63,133 $2,725 $40,080 $1,466 $10,453 $ 437
Ratio of expenses to
average net assets...... .33%(1) .33%(2) .09%(1) .09%(2) .73%(1) .93%(2)
Ratio of net investment
income to average net
assets.................. 4.54%(1) 4.54%(2) 5.00%(1) 5.00%(2) 4.56%(1) 4.49%(2)
Portfolio turnover
rate.................... 2% 2% 11% 11% 1% 1%
<FN>
(1)The operating expense ratio and the 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 .79% and 4.16%, respectively. The
operating expense ratio and the 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 .83% and 4.11%, and
.80% and 4.26%, respectively. The operating expense ratio and the 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 .88% and 3.99%, .64% and 4.45%, and 1.28% and 4.01%, respectively.
(2)The operating expense ratio and the 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 .78% and 4.11%, respectively. The operating
expense ratio and the 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 .83% and 4.11%, and .78% and 4.27%,
respectively. The operating expense ratio and the net investment income ratio
before fee waivers by the Investment Advisers for the Retail class for the
years ended May 31, 1994, 1993 and for the period ended May 31, 1992 would
have been .88% and 3.99%, .64% and 4.45%, and 1.48% and 3.94%, respectively.
(3)Retail class commenced operations on April 15, 1991.
(4)Annualized.
(5)Total Return excludes sales charge.
</TABLE>
See Accompanying Notes
12
<PAGE> 15
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA PENNSYLVANIA MUNICIPAL FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
PENNSYLVANIA -- 99.9%
Allegheny County Higher
Education Building
Authority Revenue Bond
(Duquesne University
Project), AMBAC Insured
6.50%........... 03/01/10 $ 380 $ 438,900
Allegheny County Hospital
Development Authority
Revenue Bond (Magee Woman's
Hospital Project), Series
O, Escrowed
10.125%......... 10/01/02 145 168,200
Allegheny County Industrial
Development Authority
Revenue Bond
5.25%........... 12/01/00 705 705,000
Allegheny County Sanitation
Authority Sewer Revenue
Bond, FGIC Insured
0.00%........... 12/01/08 2,750 1,505,624
Bradford Area School District
General Obligation, FGIC
Insured
5.25%........... 10/01/07 1,000 1,030,000
Bucks County Water & Sewer
Authority Revenue Bond,
FGIC Insured
6.15%........... 12/01/05 455 490,263
Butler County Sewer Authority
Revenue Prerefunded Bond
7.25%........... 01/01/04 120 133,050
Cumberland County Revenue
Bond (Messiah College
Project), AMBAC Insured
5.00%........... 10/01/07 1,000 1,002,500
Dauphin County General
Authority Revenue Bonds
(Health Center Project)
AMBAC Insured
5.15%........... 01/01/97 1,000 1,000,440
5.40%........... 06/01/02 800 800,000
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
Delaware River Port Authority
Revenue Bond (PA & NJ
Bridges), AMBAC Insured
7.375%.......... 01/01/99 $ 1,500 $ 1,616,250
Delaware River Port Authority
Revenue Bond (PA & NJ
Bridges), Escrowed To
Maturity
6.00%........... 01/15/10 655 680,381
East Pennsboro Area School
District General Obligation
Unlimited, FGIC Insured
0.00%........... 09/01/98 100 56,875
Erie County Prison Authority
Lease Prerefunded Revenue
Bond, Series 1991, MBIA
Insured
6.60%........... 11/01/01 1,000 1,098,750
Greene County Industrial
Development Authority
Pollution Control Revenue
Bond
6.10%........... 02/01/07 125 125,483
Lancaster County General
Obligation FGIC Insured
5.90%........... 12/04/96 500 500,830
6.10%........... 07/01/97 100 100,127
Lower Providence Township
General Obligation, MBIA
Insured
5.00%........... 05/01/07 215 213,656
Middletown Township, Bucks
County Special Obligation,
Escrowed To Maturity
6.10%........... 10/01/00 335 343,794
Monroeville Hospital
Authority Revenue Bond
(East Suburban Health
Center Project)
7.60%........... 07/01/04 1,030 1,158,750
</TABLE>
See Accompanying Notes
13
<PAGE> 16
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA PENNSYLVANIA MUNICIPAL FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
Montgomery County Hospital
Authority Revenue Bond
(Suburban General Hospital
Project), Escrowed To Maturity
7.75%........... 05/01/02 $ 155 $ 168,175
Northampton County Higher
Education Authority Revenue
Bond (Lehigh University
Project)
5.50%........... 09/01/98 1,030 1,054,462
Pennsbury School District
General Obligation Revenue
Bond, Series A
5.10%........... 07/15/99 500 501,920
Pennsylvania State General
Obligation, Series 1
6.20%........... 03/15/04 900 982,125
Pennsylvania State Higher
Education Authority Revenue
Bond (Student Loan), Series
A, FGIC Insured
6.80%........... 12/01/00 200 215,250
Pennsylvania State Higher
Education Facilities
Authority Revenue Bonds
(University of Pennsylvania
Project)
6.50%........... 09/01/04 250 279,688
5.25%........... 01/01/06 100 102,125
Pennsylvania State Higher
Education Facilities
Authority Revenue Bond
(University of
Pennsylvania), Series A
5.55%........... 09/01/09 1,300 1,334,124
Pennsylvania State Higher
Educational Facilities
Authority Revenue Bonds
(Drexel University Project)
4.25%........... 08/01/98 175 175,656
4.50%........... 08/01/99 185 185,925
4.65%........... 08/01/00 200 201,750
4.85%........... 08/01/01 225 227,531
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
Pennsylvania State Housing
Finance Agency Revenue Bond
(Single Family Mortgage),
Series P
7.20%........... 04/01/00 $ 50 $ 52,183
Pennsylvania State Housing
Finance Agency Revenue Bond
(Single Family Mortgage),
Series Z
7.00%........... 10/01/02 50 53,063
Pennsylvania State Housing
Finance Agency Revenue
Bonds (Rental Housing
Project)
5.00%........... 01/01/98 450 453,821
5.15%........... 07/01/03 400 407,000
Pennsylvania State Industrial
Development Authority
Revenue Bond (Economic
Development Project) AMBAC
Insured
5.80%........... 07/01/09 450 480,938
Pennsylvania State
Infrastructure Investment
Authority Revenue Bond
(Pennvest), Subseries B
6.45%........... 09/01/04 1,500 1,661,250
Pennsylvania State
Intergovernmental Co-Op
Authority Special Tax
Revenue Prerefunded Bond
(City of Philadelphia
Funding Project)
6.80%........... 06/15/02 500 556,875
Pennsylvania State Turnpike
Commission Revenue Bond,
Series K, FGIC Insured
Escrowed to Maturity
7.25%........... 12/01/99 1,230 1,336,087
Pennsylvania State Turnpike
Commission Revenue Bond,
Series O, FGIC Insured
5.25%........... 12/01/01 1,010 1,050,400
</TABLE>
See Accompanying Notes
14
<PAGE> 17
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA PENNSYLVANIA MUNICIPAL FUND
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
Philadelphia Children's
Hospital & Higher Educational
Facilities Authority Revenue
Prerefunded Bond, Series A
6.50%........... 02/15/02 $ 200 $ 222,000
Philadelphia Gas Works
Revenue Prerefunded Bond,
Series 13
7.70%........... 06/15/01 460 530,150
Philadelphia Gas Works
Revenue Bond, Series 14,
FSA Insured
6.25%........... 07/01/08 300 331,875
Philadelphia Hospital &
Higher Education Facilities
Authority Revenue Bond
(Children's Hospital
Project), Series A
5.10%........... 02/15/03 500 514,375
Philadelphia Hospital Revenue
Bond (Graduate Hospital
Project), Escrowed To
Maturity
7.00%........... 07/01/10 400 442,000
Philadelphia School District
General Obligation, Series
A, MBIA Insured
5.80%........... 07/01/08 465 492,319
Philadelphia Thomas Jefferson
University Hospital Revenue
Bond, Escrowed To Maturity
7.00%........... 07/01/08 205 225,500
Philadelphia Water &
Waste Authority
Revenue Bonds,
MBIA Insured
6.75%........... 08/01/03 200 226,000
5.50%........... 06/15/07 1,500 1,578,749
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ---------- --------------
<S> <C> <C> <C>
Pittsburgh & Allegheny County
Auditorium Authority
Revenue Bond
6.40%........... 12/01/01 $ 800 $ 807,528
Pittsburgh General Obligation
Series A, MBIA Insured
5.50%........... 09/01/06 955 996,781
Scranton-Lackawanna Health &
Welfare Authority Revenue
Bond, Escrowed To Maturity
6.625%.......... 07/01/09 545 592,006
Seneca Valley School District
General Obligation, Series
A, FGIC Insured
5.70%........... 07/01/06 1,000 1,045,000
Southeastern Pennsylvania
Transportation Authority
Revenue Bond (Lease
Project)
5.75%........... 12/01/04 775 783,758
Swarthmore Borough College
Authority Revenue Bond
6.00%........... 09/15/06 855 920,194
Tyrone School District
General Obligation, MBIA
Insured
5.70%........... 09/15/08 1,250 1,282,813
Union City Higher Educational
Facilities Financing
Authority Revenue Bond
(Bucknell University
Project), MBIA Insured
6.20%........... 04/01/04 1,000 1,073,750
--------------
TOTAL MUNICIPAL BONDS 36,714,019
--------------
(Cost $35,643,992)
</TABLE>
See Accompanying Notes
15
<PAGE> 18
[LOGO] PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 ARMADA PENNSYLVANIA MUNICIPAL FUND
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------- --------------
<S> <C> <C>
TEMPORARY INVESTMENT -- 0.1%
Federated Investors
Pennsylvania Municipal
Bond Fund
(Cost $38,566) 38,566 $ 38,566
--------------
TOTAL INVESTMENTS -- 100.0%
(Cost $35,682,558*) $ 36,752,585
=============
<FN>
- ---------------
* Also cost for Federal income tax purposes.
</TABLE>
<TABLE>
<S> <C>
The gross unrealized appreciation
(depreciation) for Federal income tax
purposes is as follows:
Gross appreciation....................... $ 1,090,537
Gross depreciation....................... (20,510)
--------------
$ 1,070,027
--------------
</TABLE>
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Federal Guaranty Insurance Corporation
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Insurance Association
See Accompanying Notes
16
<PAGE> 19
[LOGO] FINANCIAL HIGHLIGHTS
ARMADA PENNSYLVANIA MUNICIPAL FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
NOVEMBER 30, 1996(9) FOR THE FOR THE PERIOD
(UNAUDITED) PERIOD ENDED FOR THE YEAR ENDED
-------------------------- MAY 31, ENDED APRIL 30,
INSTITUTIONAL RETAIL(6) 1996(8) APRIL 30, 1996 1995(5)
------------- -------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $ 10.08 $ 10.13 $ 10.12 $ 10.04 $ 10.00
------------- -------- ------------ -------------- --------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income.......... .22 .10 .04 .43 .29
Net gain/(loss) on securities
(realized and unrealized).... .24 .19 (.04) .08 .04
------------- -------- ------------ -------------- --------------
Total from investment
operations................. .46 .29 .00 .51 .33
------------- -------- ------------ -------------- --------------
LESS DISTRIBUTIONS
Dividends from net investment
income....................... (.22) (.10) (.04) (.43) (.29)
------------- -------- ------------ -------------- --------------
Total distributions.......... (.22) (.10) (.04) (.43) (.29)
------------- -------- ------------ -------------- --------------
Net asset value, end of period... $ 10.32 $ 10.32 $ 10.08 $ 10.12 $ 10.04
============ ========= ============= ============= =============
TOTAL RETURN..................... 9.45%(3) 9.40%(3,7) (.03)%(4,7) 5.06%(7) 3.38%(4,7)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
000's)....................... $ 37,111 $ 85 $ 38,733 $ 38,809 $ 34,638
Ratio of expenses to average
net assets................... .88%(1,3) 1.01%(2,3) .85%(1,3) .85%(1) .85%(1,3)
Ratio of net investment income
to average net assets........ 4.35%(1,3) 4.24%(2,3) 4.32%(1,3) 4.16%(1) 4.05%(1,3)
Portfolio turnover rate........ 21% 21% 0% 22% 4%
<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 1.16% and 4.07%, 1.31% and 3.86%, 1.24% and 3.77%, and
1.36% and 3.54%, 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 1.02% and 4.23%, respectively.
(3) Annualized.
(4) Not Annualized.
(5) Predecessor Fund commenced operations on August 10, 1994.
(6) Retail class commenced operations on September 11, 1996.
(7) Total Return excludes sales charge.
(8)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.
(9)Activity for the six months ended November 30, 1996 includes that of the
Predecessor Fund through September 6, 1996.
</TABLE>
See Accompanying Notes
17
<PAGE> 20
[LOGO] FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996
(unaudited)
<TABLE>
<CAPTION>
OHIO PENNSYLVANIA
TAX EXEMPT FUND MUNICIPAL FUND
--------------- --------------
<S> <C> <C>
ASSETS
Investments at value (Cost $88,113,560 and $35,682,558, respectively)......... $90,427,810 $ 36,752,585
Interest and dividends receivable............................................. 1,751,331 692,648
Receivable for Fund shares sold............................................... 210,000 --
Prepaid expenses.............................................................. 1,013 9,747
----------- -----------
TOTAL ASSETS.................................................................. 92,390,154 37,454,980
----------- -----------
LIABILITIES
Dividends Payable -- Institutional class...................................... 312,456 131,390
Dividends Payable -- Retail class............................................. 14,026 227
Payable for Fund shares redeemed.............................................. -- 65,705
Payable for investments purchased............................................. 1,500,134 --
Accrued expenses.............................................................. 35,702 61,414
----------- -----------
TOTAL LIABILITIES............................................................. 1,862,318 258,736
----------- -----------
NET ASSETS.................................................................... $90,527,836 $ 37,196,244
=========== ===========
NET ASSETS CONSIST OF:
Paid-in capital............................................................... $88,195,859 $ 35,996,626
Undistributed net realized gain on investments sold........................... 17,727 129,591
Net unrealized appreciation on investments.................................... 2,314,250 1,070,027
----------- -----------
$90,527,836 $ 37,196,244
=========== ===========
Net Assets -- Institutional class............................................. $85,326,843 $ 37,110,783
Shares outstanding -- Institutional class..................................... 7,773,694 3,595,630
Net asset value, Offering price and Redemption price per
share -- Institutional class................................................ $ 10.98 $ 10.32
=========== ===========
Net Assets -- Retail class.................................................... $ 5,200,993 $ 85,461
Shares outstanding -- Retail class............................................ 475,557 8,280
Net asset value and Redemption price per share -- Retail class................ $ 10.94 $ 10.32
=========== ===========
Maximum sales charge -- Retail class.......................................... 3.00% 3.00%
Maximum offering price per Retail share....................................... $ 11.28 $ 10.64
=========== ===========
</TABLE>
See Accompanying Notes
18
<PAGE> 21
[LOGO] FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1996
(unaudited)
<TABLE>
<CAPTION>
PENNSYLVANIA
OHIO MUNICIPAL
TAX EXEMPT FUND FUND(1)
--------------- --------------
<S> <C> <C>
INVESTMENT INCOME:
Interest.................................................................... $ 2,141,184 $ 985,846
---------- ----------
EXPENSES:
Investment Advisory fees.................................................... 238,180 119,353
Administration fees......................................................... 43,305 27,207
12b-1 fees.................................................................. 17,322 26,951
Transfer Agent fees......................................................... 10,280 11,899
Custodian fees.............................................................. 8,727 1,891
Miscellaneous............................................................... 8,165 10,623
Registration and filing fees................................................ 4,418 1,738
Legal fees.................................................................. 3,792 977
Printing and shareholder reports............................................ 3,038 3,316
Distribution fees........................................................... 2,533 501
Audit fees.................................................................. 1,370 11,028
Trustees' fees.............................................................. 1,260 1,160
Insurance................................................................... 487 189
Shareholder servicing fees -- Retail class only............................. -- 19
Amortization of organization costs.......................................... -- 1,811
Fees waived................................................................. -- (26,110)
Fees waived by Investment Adviser........................................... (238,180) (27,254)
---------- ----------
Total expenses.............................................................. 104,697 165,299
---------- ----------
NET INVESTMENT INCOME......................................................... 2,036,487 820,547
---------- ----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments sold....................................... 25,434 47,509
Net change in unrealized appreciation on investments........................ 2,268,452 846,353
---------- ----------
Net gain on investments..................................................... 2,293,886 893,862
---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $ 4,330,373 $ 1,714,409
========== ==========
<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
19
<PAGE> 22
[LOGO] FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PENNSYLVANIA MUNICIPAL FUND
OHIO TAX EXEMPT FUND -------------------------------------
--------------------------------- FOR THE
FOR THE SIX MONTHS ENDED
SIX MONTHS ENDED FOR THE NOVEMBER 30, FOR THE PERIOD
NOVEMBER 30, 1996 YEAR ENDED 1996(1) MAY 1, 1996
(UNAUDITED) MAY 31, 1996 (UNAUDITED) TO MAY 31, 1996
----------------- ------------ ------------------ ---------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income.................. $ 2,036,487 $ 3,786,923 $ 820,547 $ 142,421
Net realized gain on investments
sold................................. 25,434 82,782 47,509 7,631
Net change in unrealized appreciation
on investments....................... 2,268,452 (647,617) 846,353 (159,492)
----------------- ------------ ------------------ ---------------
Net increase/(decrease) in net assets
resulting from operations.............. 4,330,373 3,222,088 1,714,409 (9,440)
----------------- ------------ ------------------ ---------------
Distributions to shareholders from net
investment income...................... (2,036,487) (3,786,923) (820,547) (142,421)
Increase/(decrease) in net assets derived
from capital share transactions........ 2,479,312 11,155,681 (2,430,691) 75,690
----------------- ------------ ------------------ ---------------
Total increase/(decrease) in net
assets................................. 4,773,198 10,590,846 (1,536,829) (76,171)
----------------- ------------ ------------------ ---------------
NET ASSETS:
Beginning of period...................... 85,754,638 75,163,792 38,733,073 38,809,244
----------------- ------------ ------------------ ---------------
End of period............................ $90,527,836 $85,754,638 $ 37,196,244 $38,733,073
=================== ============= ==================== ===============
<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
20
<PAGE> 23
[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
21
<PAGE> 24
[LOGO] NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
approve the components of the Agreement was executed, the results of which for
each of the Inventor Funds are listed below:
<TABLE>
<CAPTION>
SHARES VOTED
------------------------------ 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
Municipal Bond Fund (the "Predecessor Fund") transferred all of its assets and
liabilities with an approximate value of $36,673,181 in exchange for shares of
Armada Pennsylvania Municipal 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 Municipal 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.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Ohio Tax Exempt and Pennsylvania Municipal Funds (the "Funds") in preparation of
their financial statements.
PORTFOLIO VALUATION: Securities for which market quotations are readily
available are valued at their market values determined on the basis of the mean
between their current available bid and asked prices in the principal market
(closing sales prices if the principal market is an exchange) in which such
securities are normally traded. Securities and other assets for which quotations
are not readily available are valued at their fair market value under procedures
approved by the Board of Trustees. Short-term investments having maturities of
60 days or less are generally valued on the basis of amortized cost.
The Ohio Tax Exempt and Pennsylvania Municipal Funds each follow an investment
policy of investing primarily in municipal obligations of one state. Economic
changes affecting each state and related public bodies and municipalities may
affect the ability of issuers within the state to pay interest on, or repay
principal of, municipal obligations held by the Funds.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
recorded on the trade date. Realized gains and losses on investments sold are
recorded on the identified cost basis. Interest income is accrued on a daily
basis.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the Funds to
declare dividends daily
22
<PAGE> 25
[LOGO] NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
from net investment income and to pay such dividends no later than five business
days after the end of the month. Net investment income of the Funds consists of
interest accrued and 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 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 realized net capital gains exceed amounts reported in the financial
statements, such amounts are reported separately.
2. INVESTMENT ADVISERS, DISTRIBUTION FEES 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 .55%
of each Fund's average daily net assets. Prior to the Reorganization, Integra
Trust Company served as investment adviser to the Pennsylvania Municipal 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 Fund. For the period ended November 30, 1996, the Advisers have
earned and waived the following fees:
<TABLE>
<CAPTION>
EARNED WAIVED
-------- --------
<S> <C> <C>
Ohio Tax Exempt Fund... $238,180 $238,180
Pennsylvania Municipal
Fund................ 119,353 27,254
</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 Municipal Fund effective August 5, 1996. National
City Bank has earned custodian fees for the period ended November 30, 1996
totaling $8,727 for the Ohio Tax Exempt Fund and $1,636 for the Pennsylvania
Municipal Fund.
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 Trust's
Distribution Agreement and related Distribution Plan adopted under Rule 12b-1 of
the Investment Company Act of 1940, the Trust 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 daily net assets of the Trust,
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 Municipal 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.
23
<PAGE> 26
[LOGO] NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 investment funds and are
allocated accordingly. No person who is an officer, director, trustee, or
employee of the Investment 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.
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. PURCHASES AND SALES OF SECURITIES
During the six months ended November 30, 1996, purchases and sales of
securities, other than short-term investments or U.S. government obligations
aggregated $10,324,102 and $7,164,931, respectively, for the Ohio Tax Exempt
Fund and aggregated $7,662,429 and $9,048,718 for the Pennsylvania Municipal
Fund. There were no purchases or sales of U.S. government securities during the
period for either of the Funds.
4. 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. Transactions in capital shares are summarized below for the Ohio Tax
Exempt and the Pennsylvania Municipal Funds.
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1996
----------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
--------------------------- -------------------------
(UNAUDITED) (UNAUDITED)
SHARES VALUE SHARES VALUE
---------- ----------- -------- -----------
<S> <C> <C> <C> <C>
OHIO TAX EXEMPT FUND
Shares sold............................................. 949,346 $10,241,355 292,450 $ 3,096,003
Shares reinvested....................................... 4,737 51,191 8,552 91,864
Shares repurchased...................................... (930,121) (9,983,823) (94,697) (1,017,278)
---------- ----------- -------- -----------
Net increase............................................ 23,962 $ 308,723 206,305 $ 2,170,589
========== ============ ========= ===========
PENNSYLVANIA MUNICIPAL FUND
Shares sold............................................. 158,069 $ 1,604,303 8,249 $ 83,564
Shares reinvested....................................... 69 703 31 319
Shares repurchased...................................... (405,637) (4,119,580) 0 0
---------- ----------- -------- -----------
Net increase/(decrease)................................. (247,499) $(2,514,574) 8,280 $ 83,883
========== ============ ========= ===========
</TABLE>
24
<PAGE> 27
[LOGO] NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31, 1996
----------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
--------------------------- -------------------------
SHARES VALUE SHARES VALUE
---------- ----------- -------- -----------
<S> <C> <C> <C> <C>
OHIO TAX EXEMPT FUND
Shares sold............................................. 2,191,806 $23,827,182 76,941 $ 836,692
Shares reinvested....................................... 9,411 102,340 13,782 149,184
Shares repurchased...................................... (1,151,939) (12,499,876) (117,369) (1,259,841)
---------- ----------- -------- -----------
Net increase/(decrease)................................. 1,049,278 $11,429,646 (26,646) $ (273,965)
========== ============ ========= ===========
</TABLE>
<TABLE>
<CAPTION>
FOR THE ONE MONTH
PERIOD ENDED
MAY 31, 1996
------------------------
SHARES VALUE
------- ---------
<S> <C> <C>
PENNSYLVANIA MUNICIPAL FUND
Shares sold......................................................................... 31,343 $ 315,950
Shares reinvested................................................................... 21 210
Shares repurchased.................................................................. (23,796) (240,575)
------- ---------
Net increase........................................................................ 7,568 $ 75,585
======= ==========
</TABLE>
25
<PAGE> 28
[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> 29
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> 30
(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-206 (1/97)
