<PAGE> 1
[LOGO]
ANNUAL REPORT Armada
MAY 31, 1997 Funds
Tax
Exempt
Series
ARMADA OHIO TAX EXEMPT FUND
ARMADA PENNSYLVANIA MUNICIPAL FUND
[ARMADA LOGO]
ARMADA
FUNDS
Financial Power Close at Hand
<PAGE> 2
LOGO ARMADA FUNDS
TAX EXEMPT SERIES
ANNUAL REPORT - MAY 31, 1997
<TABLE>
<S> <C> <C>
ARMADA TABLE OF CONTENTS
OHIO TAX Chairman's Message....................................... 1
EXEMPT FUND Tax Exempt Market Overview............................... 3
FUND OVERVIEWS
ARMADA Armada Ohio Tax Exempt Fund.............................. 4
PENNSYLVANIA Armada Pennsylvania Municipal Fund....................... 6
MUNICIPAL PORTFOLIOS OF INVESTMENTS AND FINANCIAL HIGHLIGHTS
FUND Armada Ohio Tax Exempt Fund.............................. 8
Armada Pennsylvania Municipal Fund....................... 13
FINANCIAL STATEMENTS
Statement of Assets and Liabilities...................... 17
Statement of Operations.................................. 18
Statement of Changes in Net Assets....................... 19
NOTES TO FINANCIAL STATEMENTS............................ 20
REPORT OF INDEPENDENT AUDITORS........................... 25
</TABLE>
- - SHARES OF 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 ARMADA FUNDS ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT,
FDIC, OR ANY GOVERNMENTAL AGENCY OR STATE.
- - AN INVESTMENT IN 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 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 SEI Investments Distribution Co. (SIDC), Oaks, PA 19456. SIDC is
not affiliated with National City Bank and is not a bank.
<PAGE> 3
LOGO CHAIRMAN'S MESSAGE
DEAR ARMADA FUNDS SHAREHOLDERS:
It is a pleasure to report to you that the total
assets in Armada Funds stand at $5.40 billion at May
31, 1997, an increase of 31% over the $4.12 billion
of a year ago. This growth resulted from additional
investments, sustained improvement in income, and
the transfer of the remaining Inventor Funds. The
accompanying annual report contains each fund's
audited financial statements and its specific
portfolio of investments.
INVESTMENT PERFORMANCE LEADERSHIP
In all our investment activity, we share one goal:
To seek to provide shareholders with a variety of
investment opportunities from a wide range of funds
that consistently outperform the benchmark indices
for each fund over time. Reflecting that objective,
Armada Funds is receiving recognition as a top
performer by the financial press. The funds have won
mentions in the Wall Street Journal's Mutual Fund
Scorecard on several occasions, as well as in
Investor's Business Daily. Performance for all funds
has been very competitive, reflecting the expertise
and dedication of our Armada Funds managers.
EXPANDED PRODUCT OFFERINGS
Developing new products and refining current
offerings are important functions of Armada Funds as
we strive to provide you with the highest quality
investment services. During the year, our
integration of the Inventor Funds allowed us to
offer you four new Armada portfolios: the
Intermediate Government Fund, the GNMA Fund, the
Pennsylvania Municipal Fund, and the Pennsylvania
Tax Exempt Fund (a money market fund). The Armada
Enhanced Income Fund adopted a new investment
objective which seeks increased total return
potential.
Armada Funds also serves as a mainstay for
National City's asset allocation program,
FutureQuest. For each FutureQuest investor, a
portfolio of mutual funds is created based on
individual goals, time-frame, and tolerance for
risk. That portfolio is then monitored and
rebalanced as necessary. The FutureQuest process
adds value by defining and maintaining the
investor's focus, while Armada Funds provides a
quality investment vehicle for deploying the assets.
1
<PAGE> 4
LOGO CHAIRMAN'S MESSAGE
Our communication with you, our shareholders, is a
crucial function of our business. Please call
1-800-622-FUND (3863) when you want more information
about your investment or any of the Armada Funds.
You'll find highly trained, licensed representatives
on the other end of the telephone who stand ready to
assist you.
You can also find a multitude of information about
Armada Funds on the National City World Wide Web
page at WWW.NATIONAL-CITY.COM. Click on Invest It!
and you and other prospective investors can access
performance information, view prospectuses and learn
more about the many benefits of investing with
Armada Funds.
We look forward to continuing to serve your
investment needs.
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
"THE DEREGULATION OF THE
ELECTRIC UTILITY INDUSTRY
COULD HAVE A MATERIAL EFFECT
ON THE MUNICIPAL MARKET OVER
THE NEXT FEW YEARS."
What a difference a year makes in both perception
and reality. In the spring of 1996, the fear in the
municipal market was of tax reform and the effect of
a "flat tax" on security issuance. Today, tax reform
has been replaced by the "balanced budget deal" and
changes to the tax code are adjustments, not
overhaul. Last May, municipals traded very cheap
relative to U. S. Treasuries. AA Five year
maturities traded at 75% of the five year Treasury
and ten year AA's traded at 80% of the ten year
Treasury. Today those ratios are 70% and 75%
respectively, levels that are historically expensive
when compared to the current tax structure.
The deregulation of the electric utility industry
could have a material effect on the municipal market
over the next few years. The excess electric utility
revenues relied on by many cities to support their
general fund as well as significant revenue from
property taxes assessed on investor owned utilities
is expected to be affected.
Besides affecting revenue, deregulation may hamper
the industry's ability to recover stranded costs,
currently estimated to range from $139 billion to
over $200 billion. Consumer Transition Charges will
have to be implemented to cover these costs,
consequently affecting the ability to price
competitively and ultimately to sell services.
The rating agencies recently downgraded several
major market utilities including The Intermountain
Power Agency, Los Angeles Department of Water and
Power, Northern California Power Agency and the
pollution control revenue bonds of Oglethorpe Power
in Georgia. We expect ratings volatility to
continue.
The yield curve has flattened, with the
intermediate (5-12 year) spread only 0.50% when
0.75% would be normal. The very long (twenty years
and longer) maturities offer less than 1.00% in
increased yield to the five year, where normally
investors earn 1.3% to 1.5% in additional yield. We
anticipate the demand for municipal bonds will
continue to outstrip supply in the coming months.
3
<PAGE> 6
LOGO ARMADA OHIO TAX EXEMPT FUND OVERVIEW
COMMENTS FROM THE MANAGER
PORTFOLIO MANAGER:
FIXED INCOME TEAM,
NATIONAL CITY'S
ASSET MANAGEMENT GROUP
FUND'S DATE OF INCEPTION:
JANUARY 5, 1990 (INSTITUTIONAL SHARES)
APRIL 15, 1991 (RETAIL SHARES)
ASSETS:
$91,366,272 (INSTITUTIONAL SHARES)
$ 3,534,526 (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.
RECENT PERFORMANCE
For the year ended May 31, 1997, the Armada Ohio
Tax Exempt Fund returned 6.37% to Institutional
shareholders and 6.38% (before sales charges) to
Retail shareholders. By comparison, the Lehman
Seven-Year Municipal Bond Index returned 6.83%.
In a fairly steady interest rate environment,
stronger credits, such as many in Ohio, lag the
overall market as many go to weaker credits in the
search for higher yield. General obligations (full
faith and credit of municipalities) have lagged
revenue issues for the past six months.
FUND STRUCTURE
The Armada Ohio Tax Exempt Fund has an average
maturity of 6.3 years and an effective duration of
5.3 years. Fifty-four percent of the fund is in
general obligations with the remainder in revenue
issues such as higher education, water and sewer.
Hospital issues rated AA or higher make up 10% of
the fund and the overall quality of the fund is AA.
Morningstar recently awarded the Armada Ohio
Tax-Exempt Fund a four star (out of five maximum)
rating for performance and safety.
LOOKING AHEAD
On March 24, the Ohio Supreme Court made a
sweeping decision against the present state school
funding program. Spending per pupil was found to be
unequal district to district with the state
foundation not equalizing for property value
differences between "rich and poor" districts. The
court remanded the case back to the original
jurisdiction of Perry County and gave the state only
one year to rectify the situation.
The effect to outstanding school issues should be
minimal for most districts as the state only allows
debt up to 9% of assessed value (effectively 3% on
full value). Roughly 80% of school spending is for
instruction and paid concurrently. This means that
district spending is not long term borrowed and
future spending will continue no matter the source
of revenue. Some weaker districts (Cleveland and
Youngstown for example) may even be improved. The
basic problem could be the State of Ohio itself,
which could be forced to use its "rainy day fund" as
well as raise income and sales taxes. We will be
following this very closely over the next year.
4
<PAGE> 7
LOGO ARMADA OHIO TAX EXEMPT FUND OVERVIEW
COMMENTS FROM THE MANAGER
"IN A FAIRLY STEADY INTEREST
RATE ENVIRONMENT, STRONGER
CREDITS, SUCH AS MANY IN OHIO,
LAG THE OVERALL MARKET AS MANY
GO TO WEAKER CREDITS IN THE
SEARCH FOR HIGHER YIELD."
<TABLE>
<CAPTION>
==================================================================================================================================
TOTAL RETURNS as of 5/31/97
- ---------------------------------------------------------------------------------------------------------------------------------
1-Year 3-Years(4) 5-Years(4) Since Inception (2,4)
<S> <C> <C> <C> <C>
Armada Ohio Tax Exempt Fund
Institutional Shares(1) 6.37% 5.78% 5.96% 5.88%
---------------------------------------------------------------------------------------------------------------------------------
Armada Ohio Tax Exempt Fund
Retail Shares With Sales Charge 3.19% 4.70% 5.31% 5.44%
Without Sales Charge 6.38% 5.79% 5.95% 5.88%
---------------------------------------------------------------------------------------------------------------------------------
Past performance is not predictive of future performance.
</TABLE>
GROWTH OF A $10,000 INVESTMENT (3)
<TABLE>
<CAPTION>
LEHMAN BROTHERS
MEASUREMENT PERIOD GOVERNMENT/CORPORATE RETAIL WITH SA LES
(FISCAL YEAR COVERED) BOND INDEX INSTITUTIONAL CHARGE
<S> <C> <C> <C>
MAY-1990 10188 10019.84 9718.58
NOV-1990 10711 10424.71 10111.26
MAY-1991 11207 10761.74 10438.15
NOV-1991 11743 11073.78 10740.81
MAY-1992 12215 11429.81 11088.02
NOV-1992 12854 11962.32 11594.14
MAY-1993 13496 12614.23 12227.46
NOV-1993 14052 13101.46 12700.41
MAY-1994 13941 12902.09 12507.28
NOV-1994 13705 12608.63 12234.02
MAY-1995 15078 13755.15 13337.53
NOV-1995 15801 14393.21 13957.60
MAY-1996 15777 14354.51 13918.25
NOV-1996 16631 15080.03 14623.20
MAY-1997 16858 15269.47 14806.36
</TABLE>
(1) Institutional shares are sold primarily to banks
and clients of National Asset Management
Corporation ("NAM"). 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.
5
<PAGE> 8
LOGO ARMADA PENNSYLVANIA MUNICIPAL FUND OVERVIEW
COMMENTS FROM THE MANAGER
PORTFOLIO MANAGER:
FIXED INCOME TEAM,
NATIONAL CITY'S
ASSET MANAGEMENT GROUP
FUND'S DATE OF INCEPTION:
AUGUST 10, 1994 (INSTITUTIONAL SHARES)
SEPTEMBER 11, 1996 (RETAIL SHARES)
ASSETS:
$36,769,200 (INSTITUTIONAL SHARES)
$ 80,928 (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.
RECENT PERFORMANCE
The Armada Pennsylvania Municipal Fund returned
1.51% for Institutional shares and 1.46% (before
sales charges) for Retail shares for the six month
period ended May 31, 1997. The Fund produced a total
return of 6.21% (Institutional shares) and 6.13%
(Retail shares before sales charge) for the 12 month
period ended May 31, 1997. These figures compare to
the Lehman Seven Year Municipal Bond Index returns
of 1.35% for the past six months and 6.83% for the
12 month period.
Over the last six months, yields on Pennsylvania
exempt municipals were equal to those available on
non-exempt, national names. This fact allowed
Pennsylvania residents the benefits of dual
exemption without having to pay for it. The
Pennsylvania economy has benefited from the overall
strength of the national economy but still lags the
nation in terms of most economic statistics.
FUND STRUCTURE
The Fund has maintained an average maturity of
approximately 6.25 years and a duration of
approximately 5.1 years over the past six months.
These figures are slightly shorter than those of its
index, protecting assets during a period of
generally rising rates.
The Fund's return relative to its index was
positively influenced by the narrowing spread of 10
year yields versus 5 year yields. Generally, the
municipal yield curve provides 50 basis points of
incremental yield between these two maturities. Over
the last few months, that spread narrowed to 30
basis points. The Fund, with 20% of its assets in 10
to 15 year maturities, benefited due to this yield
curve flattening versus its index that is
concentrated in 6 to 8 year municipals.
LOOKING AHEAD
Going forward, the Fund will continue to look to
security selection as a means of adding value
relative to its benchmark, while keeping a slightly
defensive posture in terms of its interest rate risk
exposure.
6
<PAGE> 9
LOGO ARMADA PENNSYLVANIA MUNICIPAL FUND OVERVIEW
COMMENTS FROM THE MANAGER
"OVER THE LAST SIX MONTHS, YIELDS
ON PENNSYLVANIA EXEMPT
MUNICIPALS WERE EQUAL TO THOSE
AVAILABLE ON NON-EXEMPT,
NATIONAL NAMES. THIS FACT
ALLOWED PENNSYLVANIA RESIDENTS
THE BENEFITS OF DUAL EXEMPTION
WITHOUT HAVING TO PAY FOR IT."
<TABLE>
<CAPTION>
===============================================================================================================================
TOTAL RETURNS as of 5/31/97(5)
- ---------------------------------------------------------------------------------------------------------------------------------
1-Year Since Inception(2,4)
--------------------------------------------------------------------
<S> <C> <C>
Armada Pennsylvania Municipal Fund
Institutional Shares(1) 6.21% 5.20%
--------------------------------------------------------------------------------------------------------------------------------
Armada Pennsylvania Municipal Fund
Retail Shares With Sales Charge 2.96% 4.04%
Without Sales Charge 6.13% 5.17%
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future performance.
GROWTH OF A $10,000 INVESTMENT (3)
<TABLE>
<CAPTION>
LEHMAN BROTHERS
MEASUREMENT PERIOD GOVERNMENT/CORPORATE RETAIL WITH SA LES
(FISCAL YEAR COVERED) BOND INDEX INSTITUTIONAL CHARGE
<S> <C> <C> <C>
JUL-1994 1000 10048.96 9746.80
NOV-1994 9712 9818.75 9523.51
MAY-1995 10685 10518.74 10202.44
NOV-1995 11197 10861.94 10535.29
MAY-1996 11180 10857.95 10531.47
NOV-1996 11785 11360.85 11016.72
MAY-1997 11946 11531.98 11177.04
</TABLE>
(1) Institutional shares are sold primarily to banks
and clients of National Asset Management
Corporation ("NAM"). Certain account level
charges may apply.
(2) The Armada Pennsylvania Municipal Fund's 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.
7
<PAGE> 10
LOGO PORTFOLIO OF INVESTMENTS
MAY 31, 1997 ARMADA OHIO TAX EXEMPT FUND
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
MUNICIPAL BONDS -- 99.0%
OHIO -- 99.0%
Akron General Obligation
4.50%............... 12/01/05 $ 500 $ 476,250
Akron Waterworks Revenue
5.15%............... 03/01/01 500 510,625
4.90%............... 03/01/08 500 486,250
Allen County General Obligation
4.95%............... 12/01/04 500 506,250
Ashland Sanitation Sewer System
General Obligation
3.96%............... 03/19/98 750 750,292
Avon Lake Water Revenues
4.80%............... 10/01/03 345 346,294
Beavercreek Local School District
General Obligation
5.25%............... 12/01/07 1,130 1,156,837
Brown County General Obligation
5.20%............... 12/01/04 455 467,512
Butler County Sewer System
Revenue
6.00%............... 12/01/04 500 534,375
Cincinnati City School District
Revenue Anticipation Notes
5.60%............... 06/15/97 500 500,235
Cincinnati General Obligation
5.25%............... 12/01/97 400 402,796
5.375%.............. 12/01/97 250 251,897
5.25%............... 12/01/98 250 255,000
5.375%.............. 12/01/99 250 257,187
4.50%............... 12/01/01 500 500,625
Clear Fork Valley Local School
District Bond Anticipation
Notes
4.20%............... 09/25/97 500 500,585
Clermont County Waterworks
Revenue
5.30%............... 12/01/05 500 515,000
Cleveland Heights General
Obligation
5.40%............... 12/01/00 900 929,250
Cleveland Waterworks Revenue
6.50%............... 01/01/02 1,000 1,096,250
5.40%............... 01/01/06 500 517,500
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Columbus General Obligation
5.45%............... 01/01/98 $ 900 $ 908,388
5.25%............... 05/01/02 1,000 1,032,500
5.30%............... 05/01/03 1,000 1,035,000
5.70%............... 07/01/04 300 317,625
Columbus City School District
General Obligation
6.65%............... 12/01/02 900 1,005,750
Columbus Sewer Revenue
6.20%............... 06/01/04 1,500 1,625,625
Columbus Water System Revenue
5.80%............... 02/15/01 500 523,125
6.00%............... 11/01/02 330 355,162
Cuyahoga County Hospital Revenues
(Cleveland Clinic)
6.00%............... 11/15/03 890 951,187
6.125%.............. 11/15/04 840 906,150
Cuyahoga County Hospital Revenue
(University Hospital) Series A
5.25%............... 01/15/08 1,500 1,507,500
Dayton Bond Anticipation Notes
3.80%............... 12/16/97 1,000 999,810
Delaware City School District
General Obligation
5.25%............... 12/01/06 500 514,375
Delaware County General
Obligation
5.25%............... 12/01/06 500 503,125
Forest Hills Local School
District General Obligation
6.00%............... 12/01/08 1,210 1,308,312
6.00%............... 12/01/09 830 890,175
Franklin County General
Obligation
6.00%............... 12/01/01 500 538,750
6.375%.............. 12/01/01 500 545,000
5.05%............... 12/01/05 2,000 2,037,500
Franklin County Hospital Revenue
(U.S. Health)
4.50%............... 06/01/00 1,000 1,001,250
Gahanna-Jefferson City School
District General Obligation
5.40%............... 12/01/04 280 285,600
</TABLE>
See Accompanying Notes
8
<PAGE> 11
LOGO PORTFOLIO OF INVESTMENTS
MAY 31, 1997 ARMADA OHIO TAX EXEMPT FUND
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Granville Local School District
General Obligation
4.65%............... 12/01/05 $ 500 $ 488,125
Greene County Water Works Systems
Revenue
5.30%............... 12/01/05 500 515,000
Hamilton County General
Obligation
5.75%............... 12/01/01 250 261,875
5.00%............... 12/01/08 675 665,719
Hamilton County Sewer Revenue
6.20%............... 12/01/00 1,000 1,060,000
5.30%............... 12/01/06 1,000 1,028,750
Hilliard City Schools General
Obligation
5.30%............... 12/01/99 250 256,875
5.90%............... 12/01/04 1,000 1,055,000
Hudson Local School District
General Obligation
5.00%............... 12/15/02 500 510,625
Kenston Local School District
General Obligation
5.55%............... 12/01/03 500 512,500
Kent State University General
Receipts
6.15%............... 05/01/04 250 269,687
Kettering General Obligation
5.15%............... 12/01/05 550 556,187
Lake County General Obligation
5.30%............... 12/01/98 250 255,000
Lakewood General Obligation Bond
6.50%............... 12/01/12 1,500 1,625,625
Lebanon City Schools General
Obligation
4.65%............... 12/01/99 750 762,188
Loveland City School District
General Obligation
6.00%............... 12/01/00 250 260,313
Marysville Local School District
General Obligation
5.10%............... 12/01/04 500 507,500
Miami University General Receipts
5.40%............... 12/01/05 1,000 1,030,000
PAR
MATURITY (000) VALUE
-------- ------ -----------
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Miamisburg Sewer System Revenue
5.00%............... 11/15/08 $ 500 $ 496,250
Middleburg Heights Hospital
Revenue (Southwest General
Hospital)
6.75%............... 08/15/01 1,760 1,944,800
Montgomery County Solid Waste
Revenue
5.125%.............. 11/01/08 500 500,625
Newark General Obligation
5.45%............... 12/01/02 1,000 1,037,500
North Canton City School District
General Obligation
5.25%............... 12/01/01 500 515,000
Northeast Ohio Regional Sewer
Revenue
6.40%............... 11/15/01 250 272,188
6.50%............... 11/15/01 500 546,250
Ohio Higher Education Facility
(University of Dayton)
5.875%.............. 12/01/04 250 264,375
Ohio Public Facilities (Mental
Health)
5.00%............... 12/01/02 1,000 1,017,500
6.80%............... 12/01/02 2,000 2,135,000
Ohio State Higher Educational
Facility Revenue Bond
(John Carroll University)
5.75%............... 04/01/19 1,000 1,000,000
Ohio State Higher Educational
Facility
(Denison University Project)
5.26%............... 11/01/09 500 498,125
Ohio State Building Authority
5.20%............... 10/01/04.. 500 512,500
Ohio State Public Facilities
(Higher Education)
Series II-A
5.20%............... 05/01/07 1,000 1,013,750
4.25%............... 12/01/07 1,000 940,000
4.50%............... 11/01/08 1,000 948,750
</TABLE>
See Accompanying Notes
9
<PAGE> 12
LOGO PORTFOLIO OF INVESTMENTS
MAY 31, 1997 ARMADA OHIO TAX EXEMPT FUND
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Ohio State Public Facilities
(Higher Education)
Series II-B
5.70%............... 11/01/03 $1,000 $ 1,055,000
Ohio State Public Facilities
(Higher Education)
5.50%............... 12/01/00 500 515,625
4.80%............... 05/01/02 530 531,988
5.20%............... 05/01/06 500 508,125
Ohio State University General
Receipts
5.15%............... 12/01/00 250 256,875
5.40%............... 12/01/02 1,500 1,561,875
3.85%............... 12/01/06 520 520,000
Ohio State Water Development
Authority Pollution Control
Facilities
5.05%............... 06/01/07 500 501,250
Ohio State Water Development
Authority
5.00%............... 12/01/98 1,000 1,015,000
5.90%............... 06/01/00 500 520,000
5.50%............... 12/01/01 1,000 1,040,000
5.90%............... 12/01/02 320 338,800
5.55%............... 06/01/04 1,000 1,043,750
5.75%............... 12/01/05 500 526,250
5.60%............... 06/01/07 1,500 1,569,375
5.00%............... 12/01/07 1,000 998,750
Perry Local School District
General Obligation
4.35%............... 06/01/99 750 748,125
Portage County General Obligation
6.00%............... 12/01/03 915 949,313
Richland County General
Obligation
+4.85%.............. 12/01/04 200 200,500
+5.25%.............. 12/01/05 165 168,919
5.20%............... 12/01/08 515 515,000
Solon General Obligation
5.30%............... 12/01/03 210 216,825
5.50%............... 12/01/04 220 228,250
PAR
MATURITY (000) VALUE
-------- ------ -----------
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Springfield Local School District
General Obligation
6.10%............... 12/01/03 $ 250 $ 266,250
State of Ohio General Obligation
5.70%............... 05/15/98 500 508,460
5.00%............... 05/15/99 1,000 1,018,750
5.00%............... 08/01/00 500 510,000
5.15%............... 09/01/01 500 513,125
4.70%............... 05/15/02 2,000 2,012,500
4.70%............... 08/01/03 1,000 1,002,500
5.40%............... 10/01/07 1,000 1,026,250
5.20%............... 08/01/08 1,000 1,012,500
State of Ohio Highways General
Obligation
4.75%............... 05/15/02 1,000 1,006,250
Strongville City School District
General Obligation
5.15%............... 12/01/08 1,000 1,012,500
5.90%............... 12/01/15 1,575 1,616,344
University of Cincinnati General
Receipts
5.70%............... 06/01/03 250 261,250
4.75%............... 06/01/04 500 495,000
5.80%............... 06/01/04 200 210,250
5.70%............... 06/01/12 1,240 1,249,300
Upper Arlington City School
District General Obligation
6.00%............... 12/01/05 670 723,600
Upper Arlington General
Obligation
6.20%............... 12/01/01 270 288,563
Vandalia Ohio General Obligation
5.35%............... 12/01/09 505 510,050
West Clermont Local School
District General Obligation
5.65%............... 12/01/08 1,030 1,082,788
Westerville General Obligation
5.60%............... 12/01/01 325 339,625
Westlake General Obligation
5.30%............... 12/01/03 500 511,250
Westlake City School District
General Obligation
6.20%............... 12/01/06 625 684,375
</TABLE>
See Accompanying Notes
10
<PAGE> 13
LOGO PORTFOLIO OF INVESTMENTS
MAY 31, 1997 ARMADA OHIO TAX EXEMPT FUND
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
MUNICIPAL BONDS -- CONTINUED
OHIO -- CONTINUED
Worthington City School District
General Obligation
5.80%............... 12/01/01 $1,200 $ 1,260,000
5.85%............... 12/01/02 500 528,750
Wright State University General
Receipts
4.90%............... 05/01/05 500 500,625
Youngstown City School District
Revenue Anticipation Notes
5.35%............... 06/15/99 1,000 1,017,500
5.40%............... 06/15/98 1,000 1,008,340
-----------
TOTAL MUNICIPAL BONDS...................... 92,722,791
-----------
(Cost $91,368,899)
NUMBER
OF
SHARES
------
TEMPORARY INVESTMENT -- 1.0%
Ohio Municipal Cash Trust.... 929,597 929,597
-----------
(Cost $929,597)
TOTAL INVESTMENTS -- 100.0% $93,652,388
===========
(Cost $92,298,496*)
</TABLE>
- ---------------
* Also cost for Federal income tax purposes.
<TABLE>
<S> <C>
The gross unrealized appreciation (depreciation) for
Federal Income Tax purposes is as follows:
Gross appreciation...................... $1,573,631
Gross depreciation...................... (219,739)
----------
$1,353,892
----------
+ When-issued security.
</TABLE>
See Accompanying Notes
11
<PAGE> 14
LOGO FINANCIAL HIGHLIGHTS
ARMADA OHIO TAX EXEMPT
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31
----------------------------------------------------------------------------------------------
1997 1996 1995 1994
---------------------- ---------------------- ---------------------- -------------
INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL
------------- ------ ------------- ------ ------------- ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................. $ 10.70 $10.66 $ 10.74 $10.70 $ 10.57 $10.53 $ 10.84
------- ------ ------- ------ ------- ------ -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income.............. 0.51 0.51 0.50 0.50 0.50 0.50 0.52
Net gain/(loss) on securities
(realized and unrealized)........ 0.16 0.16 (0.04) (0.04) 0.17 0.17 (0.26)
------- ------ ------- ------ ------- ------ -------
Total from investment
operations..................... 0.67 0.67 0.46 0.46 0.67 0.67 0.26
------- ------ ------- ------ ------- ------ -------
LESS DISTRIBUTIONS
Dividends from net investment
income........................... (0.51) (0.51) (0.50) (0.50) (0.50) (0.50) (0.52)
Dividends in excess of net
investment income................ (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Dividends in excess of net realized
capital gains.................... (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.01)
------- ------ ------- ------ ------- ------ -------
Total distributions.............. (0.51) (0.51) (0.50) (0.50) (0.50) (0.50) (0.53)
------- ------ ------- ------ ------- ------ -------
Net asset value, end of period...... $ 10.86 $10.82 $ 10.70 $10.66 $ 10.74 $10.70 $ 10.57
======= ====== ======= ====== ======= ====== =======
TOTAL RETURN........................ 6.37% 6.38%(3) 4.36% 4.35%(3) 6.61% 6.64%(3) 2.28%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
000's)............................. $91,366 $3,535 $82,886 $2,869 $71,996 $3,168 $63,133
Ratio of expenses to average net
assets............................. 0.24%(1) 0.24%(2) 0.26%(1) 0.26%(2) 0.24%(1) 0.24%(2) 0.33%(1)
Ratio of net investment income to
average net assets................. 4.71%(1) 4.71%(2) 4.68%(1) 4.68%(2) 4.82%(1) 4.82%(2) 4.54%(1)
Portfolio turnover rate............. 23% 23% 10% 10% 3% 3% 2%
<CAPTION>
1993
----------------------
RETAIL INSTITUTIONAL RETAIL
------ ------------- ------
<S> <C> <C> <C>
Net asset value, beginning of
period............................. $10.80 $ 10.33 $10.30
------ ------- ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income.............. 0.52 0.51 0.51
Net gain/(loss) on securities
(realized and unrealized)........ (0.26) 0.56 0.54
------ ------- ------
Total from investment
operations..................... 0.26 1.07 1.05
------ ------- ------
LESS DISTRIBUTIONS
Dividends from net investment
income........................... (0.52) (0.51) (0.51)
Dividends in excess of net
investment income................ (0.00) (0.05) (0.04)
Dividends in excess of net realized
capital gains.................... (0.01) (0.00) (0.00)
------ ------- ------
Total distributions.............. (0.53) (0.56) (0.55)
------ ------- ------
Net asset value, end of period...... $10.53 $ 10.84 $10.80
====== ======= ======
TOTAL RETURN........................ 2.29%(3) 10.36% 10.27%(3)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
000's)............................. $2,725 $40,080 $1,466
Ratio of expenses to average net
assets............................. 0.33%(2) 0.09%(1) 0.09%(2)
Ratio of net investment income to
average net assets................. 4.54%(2) 5.00%(1) 5.00%(2)
Portfolio turnover rate............. 2% 11% 11%
</TABLE>
(1)The operating expense ratio and the net investment income ratio before fee
waivers by the Investment Advisers for the Institutional class for the year
ended May 31, 1997 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 and 1993 would have been
.88% and 3.99%, and .64% and 4.45%, 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 year ended
May 31, 1997 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 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 and 1993 would have been .88% and 3.99%, and .64%
and 4.45%, respectively.
(3)Total Return excludes sales charge.
See Accompanying Notes
12
<PAGE> 15
LOGO PORTFOLIO OF INVESTMENTS
MAY 31, 1997 ARMADA PENNSYLVANIA MUNICIPAL FUND
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ ----------
<S> <C> <C> <C>
MUNICIPAL BONDS -- 99.9%
PENNSYLVANIA -- 99.9%
Allegheny County Higher Education
Building Authority Revenue Bond
(Duquesne University Project),
(AMBAC Insured)
6.50%................ 03/01/10 $ 380 $ 422,750
Allegheny County Hospital
Development Authority Revenue
Bond (Magee Woman's Hospital
Project), Series O, Escrowed to
Maturity
10.125%.............. 10/01/02 145 165,844
Allegheny County Industrial
Development Authority Revenue
Bond (LOC Mellon Bank)
5.25%................ 12/01/00 685 696,131
Allegheny County Sanitation
Authority Sewer Revenue Bond,
(FGIC Insured)
0.00%................ 12/01/08 2,750 1,498,750
Bradford Area School District
General Obligation, (FGIC
Insured)
5.25%................ 10/01/07 1,000 1,021,250
Bucks County Community College
Authority College Building
Revenue Bond
5.30%................ 06/15/10 100 99,375
Butler County Sewer Authority
Revenue Prerefunded Bond
7.25%................ 01/01/04 120 132,000
Cumberland County Revenue Bond
(Messiah College Project),
(AMBAC Insured)
5.00%................ 10/01/07 1,000 996,250
Dauphin County General Authority
Revenue Bond (Health Center
Project), (AMBAC Insured)
5.40%................ 12/01/05 800 815,000
Delaware County General Obligation
5.00%................ 11/15/07 1,000 997,500
Delaware River Port Authority
Revenue Bond (Pa & NJ Bridges),
(AMBAC Insured)
7.375%............... 01/01/07 1,500 1,595,625
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ ----------
<S> <C> <C> <C>
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Delaware River Port Authority
Revenue Bond (Pa & NJ Bridges),
(AMBAC Insured)
Escrowed to Maturity
6.00%................ 01/15/10 $ 625 $ 653,125
East Pennsboro Area School
District General Obligation,
(FGIC Insured)
0.00%................ 09/01/05 100 58,125
Erie County Prison Authority Lease
Prerefunded Revenue Bond, Series
1991, (MBIA Insured)
6.60%................ 11/01/01 1,000 1,081,250
Greene County Industrial
Development Authority Pollution
Control Revenue Bond
6.10%................ 02/01/07 125 125,465
Lower Providence Township General
Obligation, (MBIA Insured)
5.00%................ 05/01/07 215 211,775
Middletown Township, Bucks County
Special Obligation, Escrowed to
Maturity
6.10%................ 10/01/00 335 346,306
Monroeville Hospital Authority
Prerefunded Revenue Bond (East
Suburban Health Center Project)
7.60%................ 07/01/04 1,030 1,148,450
Montgomery County Hospital
Authority Revenue Bond (Suburban
General Hospital Project),
Escrowed to Maturity
7.75%................ 05/01/02 135 144,956
Northampton County Higher
Education Authority Revenue Bond
(Moravian College Project),
(AMBAC Insured)
5.50%................ 07/01/07 900 931,500
Penn Hills Township General
Obligation, (AMBAC Insured)
5.50%................ 12/01/04 1,000 1,047,500
</TABLE>
See Accompanying Notes
13
<PAGE> 16
LOGO PORTFOLIO OF INVESTMENTS
MAY 31, 1997 ARMADA PENNSYLVANIA MUNICIPAL FUND
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ ----------
<S> <C> <C> <C>
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Pennsbury School District General
Obligation Revenue Bond,
Series A
5.10%................ 07/15/99 $ 500 $ 500,230
Pennsylvania State General
Obligation, Series 1
6.20%................ 09/15/04 900 960,750
Pennsylvania State Higher
Education Authority Revenue Bond
(Student Loan), Series A, (FGIC
Insured)
6.80%................ 12/01/00 685 728,669
Pennsylvania State Higher
Education Facilities Authority
Revenue Bond (University of
Pennsylvania Project)
Series A
6.50%................ 09/01/04 250 275,312
5.55%................ 09/01/09 1,300 1,326,000
Series B
5.25%................ 01/01/07 100 101,125
Pennsylvania State Higher
Educational Facilities Authority
Revenue Bonds (Drexel University
Project) (LOC PNC Bank)
4.25%................ 08/01/98 175 175,219
4.50%................ 08/01/99 185 185,000
4.65%................ 08/01/00 200 200,750
4.85%................ 08/01/01 225 225,844
Pennsylvania State Housing Finance
Agency Revenue Bond (Single
Family Mortgage),
Series P
7.20%................ 04/01/00 50 51,517
Series Z
7.00%................ 10/01/02 50 52,688
Pennsylvania State Housing Finance
Agency Revenue Bonds (Rental
Housing Project)
5.00%................ 01/01/98 450 451,881
5.15%................ 07/01/03 400 405,000
PAR
MATURITY (000) VALUE
-------- ------ ----------
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Pennsylvania State Industrial
Development Authority Revenue
Economic Development Bonds
Series 1994 (AMBAC Insured)
5.80%................ 07/01/09 $ 450 $ 473,063
Pennsylvania State Infrastructure
Investment Authority Revenue
Bond (Pennvest), Subseries B
6.45%................ 09/01/04 1,500 1,636,875
Pennsylvania State
Intergovernmental Co-Op
Authority Special Tax Revenue
Prerefunded Bond (City of
Philadelphia Funding)
6.80%................ 06/15/02 500 548,125
Pennsylvania State Turnpike
Commission Revenue Bond, Series
K, (FGIC Insured) Escrowed to
Maturity
7.25%................ 12/01/99 500 534,375
Series O, (FGIC Insured)
5.25%................ 12/01/01 1,010 1,040,300
Philadelphia Children's Hospital &
Higher Educational Facilities
Authority Revenue Prerefunded
Bond, Series A
6.50%................ 02/15/02 200 218,750
Philadelphia Gas Works Revenue
Bond, Series 14, (FSA Insured)
6.25%................ 07/01/08 300 322,500
Philadelphia Gas Works Revenue
Prerefunded Bond, Series 13
7.70%................ 06/15/01 460 520,950
Philadelphia Hospital & Higher
Education Facilities Authority
Revenue Bond (Children's
Hospital Project), Series A
5.10%................ 02/15/03 500 510,625
Philadelphia Hospital Revenue Bond
(Graduate Hospital Project),
Escrowed to Maturity
7.00%................ 07/01/10 415 458,575
</TABLE>
See Accompanying Notes
14
<PAGE> 17
LOGO PORTFOLIO OF INVESTMENTS
MAY 31, 1997 ARMADA PENNSYLVANIA MUNICIPAL FUND
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ ----------
<S> <C> <C> <C>
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Philadelphia School District General
Obligation, Series A, (MBIA Insured)
5.80%................ 07/01/04 $ 465 $ 483,600
Philadelphia Thomas Jefferson
University Hospital Revenue
Bond,
Escrowed to Maturity
7.00%................ 07/01/08 205 224,988
Philadelphia Water & Waste Water
Revenue Bonds, (MBIA Insured)
5.50%................ 06/15/07 1,500 1,560,000
6.75%................ 08/01/03 200 221,750
Pittsburgh & Allegheny County
Auditorium Authority Revenue
Bond (AMBAC Insured)
6.40%................ 12/01/01 800 806,600
Pittsburgh General Obligation
Series A, (MBIA Insured)
5.50%................ 09/01/06 955 983,650
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 1,033,750
Southeastern Pennsylvania
Transportation Authority Revenue
Bond (Lease Project)
5.75%................ 12/01/07 775 783,153
St. Mary Hospital Authority
(Franciscan Health System
Project) Series 1985C (LOC
Toronto Dominion)
2.85%................ 06/07/97 100 100,000
Swarthmore Borough College
Authority Revenue Bond
6.00%................ 09/15/06 855 911,644
Tyrone School District General
Obligation, (MBIA Insured)
5.70%................ 09/15/08 1,250 1,278,125
PAR
MATURITY (000) VALUE
-------- ------ ----------
MUNICIPAL BONDS -- CONTINUED
PENNSYLVANIA -- CONTINUED
Union County Higher Educational
Facilities Financing Authority
Revenue Bond (Bucknell
University Project), (MBIA
Insured)
6.20%................ 04/01/06 $1,000 $1,061,250
Westmoreland County Municipal
Authority Revenue Bond, (FGIC
Insured) Escrowed to Maturity
0.00%................ 07/01/08 500 281,875
----------
TOTAL MUNICIPAL BONDS..................... 36,415,441
----------
(Cost $35,624,200)
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES
---------
<S> <C> <C> <C>
TEMPORARY INVESTMENT -- 0.1%
Investors Pennsylvania
Municipal Bond Fund....... 30,324 30,324
-----------
(Cost $30,324)
TOTAL INVESTMENTS -- 100.0% $36,445,765
===========
(Cost $35,654,524*)
</TABLE>
- ---------------
* Also cost for Federal income tax purposes.
<TABLE>
<S> <C> <C> <C>
The gross unrealized appreciation
(depreciation) for Federal income tax
purposes is as follows:
Gross appreciation..................... $ 822,072
Gross depreciation..................... (30,831)
-----------
$ 791,241
-----------
</TABLE>
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Federal Guaranty Insurance Corporation
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Insurance Association
LOC -- Letter of Credit
See Accompanying Notes
15
<PAGE> 18
LOGO FINANCIAL HIGHLIGHTS
ARMADA PENNSYLVANIA MUNICIPAL FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED FOR THE FOR THE FOR THE
MAY 31, 1997(5) PERIOD ENDED YEAR ENDED PERIOD ENDED
-------------------------- MAY 31, APRIL 30, APRIL 30,
INSTITUTIONAL RETAIL(6) 1996(5) 1996(5) 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.......... 0.44 0.31 0.04 0.43 0.29
Net gain/(loss) on securities
(realized and unrealized).... 0.17 0.12 (0.04) 0.08 0.04
------- ------ ------- ------- -------
Total from investment
operations................. 0.61 0.43 0.00 0.51 0.33
------- ------ ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment
income....................... (0.44) (0.31) (0.04) (0.43) (0.29)
Dividends from net realized
capital gains................ (0.02) (0.02) (0.00) (0.00) (0.00)
Dividends in excess of net
realized capital gains....... (0.01) (0.01) (0.00) (0.00) (0.00)
------- ------ ------- ------- -------
Total distributions.......... (0.47) (0.34) (0.04) (0.43) (0.29)
------- ------ ------- ------- -------
Net asset value, end of period... $ 10.22 $ 10.22 $ 10.08 $ 10.12 $ 10.04
======= ====== ======= ======= =======
TOTAL RETURN..................... 6.21% 6.13%(7) (.03)%(4,7) 5.06%(7) 3.38%(4,7)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
000's)......................... $ 36,769 $ 81 $ 38,733 $ 38,809 $ 34,638
Ratio of expenses to average net
assets......................... .87%(1) .99%(2,3) .85%(1,3) .85%(1) .85%(1,3)
Ratio of net investment income to
average net assets............. 4.35%(1) 4.26%(2,3) 4.32%(1,3) 4.16%(1) 4.05%(1,3)
Portfolio turnover rate.......... 42% 42% 0% 22% 4%
</TABLE>
(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 year ended May 31, 1997, for the period ended
May 31, 1996, for the year ended April 30, 1996, and for the period ended
April 30, 1995 would have been 1.02% and 4.20%, 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
May 31, 1997 would have been 1.00% and 4.25%, respectively.
(3) Annualized.
(4) Not Annualized.
(5) Activity for the period presented includes that of the Predecessor Fund
through September 6, 1996. The Predecessor Fund commenced operations on
August 10, 1994. During 1996, the Predecessor Fund changed its fiscal
year-end from April 30 to May 31.
(6) Retail class commenced operations on September 11, 1996.
(7) Total Return excludes sales charge.
See Accompanying Notes
16
<PAGE> 19
LOGO FINANCIAL STATEMENTS
MAY 31, 1997 ARMADA FUNDS TAX EXEMPT SERIES
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
OHIO PENNSYLVANIA
TAX EXEMPT FUND MUNICIPAL FUND
--------------- --------------
<S> <C> <C>
ASSETS
Investments at value (cost $92,298,496 and $35,654,524, respectively)...... $93,652,388 $ 36,445,765
Interest and dividends receivable.......................................... 1,840,604 702,519
Receivable for Fund shares sold............................................ 160,000 0
Prepaid expenses........................................................... 79 5,925
----------- -----------
TOTAL ASSETS............................................................... 95,653,071 37,154,209
----------- -----------
LIABILITIES
Dividends Payable -- Institutional class................................... 350,210 136,696
Dividends Payable -- Retail class.......................................... 6,371 221
Payable for Fund shares redeemed........................................... 1,033 105,936
Payable for investments purchased.......................................... 368,600 0
Accrued expenses........................................................... 26,059 61,228
----------- -----------
TOTAL LIABILITIES.......................................................... 752,273 304,081
----------- -----------
NET ASSETS................................................................. $94,900,798 $ 36,850,128
=========== ===========
NET ASSETS CONSIST OF:
Paid-in capital............................................................ $93,546,902 $ 36,020,503
Undistributed net realized gain on investments sold........................ 4 38,384
Net unrealized appreciation on investments................................. 1,353,892 791,241
----------- -----------
$94,900,798 $ 36,850,128
=========== ===========
Net Assets -- Institutional class.......................................... $91,366,272 $ 36,769,200
Shares outstanding -- Institutional class.................................. 8,411,463 3,599,156
Net asset value, Offering and Redemption price per share -- Institutional
class.................................................................... $ 10.86 $ 10.22
=========== ===========
Net Assets -- Retail class................................................. $ 3,534,526 $ 80,928
Shares outstanding -- Retail class......................................... 326,554 7,922
Net asset value and Redemption price per share -- Retail class............. $ 10.82 $ 10.22
=========== ===========
Maximum sales charge -- Retail class....................................... 3.00% 3.00%
Maximum Offering price per Retail share.................................... $ 11.15 $ 10.54
=========== ===========
</TABLE>
See Accompanying Notes
17
<PAGE> 20
LOGO FINANCIAL STATEMENTS
ARMADA FUNDS TAX EXEMPT SERIES
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MAY 31, 1997
<TABLE>
<CAPTION>
PENNSYLVANIA
OHIO MUNICIPAL
TAX EXEMPT FUND FUND(1)
--------------- --------------
<S> <C> <C>
INVESTMENT INCOME:
Interest................................................................. $ 4,413,507 $ 1,947,807
---------- ----------
EXPENSES:
Investment Advisory fees................................................. 490,179 220,753
Administration fees...................................................... 89,124 45,644
12b-1 fees............................................................... 35,649 28,191
Transfer Agent fees...................................................... 29,920 20,088
Custodian fees........................................................... 17,996 5,618
Legal fees............................................................... 9,604 449
Distribution fees........................................................ 8,683 5,245
Audit fees............................................................... 5,610 15,051
Printing and shareholder reports......................................... 5,492 2,840
Miscellaneous............................................................ 4,850 26,906
Registration and filing fees............................................. 4,582 3,639
Trustees' fees........................................................... 1,885 2,052
Insurance................................................................ 1,507 602
Amortization of organization costs....................................... 0 3,323
Shareholder servicing fees -- Retail class only.......................... 0 59
Fees waived.............................................................. 0 (26,110)
Fees waived by Investment Adviser........................................ (490,179) (29,097)
---------- ----------
Total expenses......................................................... 214,902 325,253
---------- ----------
NET INVESTMENT INCOME...................................................... 4,198,605 1,622,554
---------- ----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments sold.................................... 7,711 68,280
Net change in unrealized appreciation on investments .................... 1,308,094 567,567
---------- ----------
Net gain on investments.................................................. 1,315,805 635,847
---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....................... $ 5,514,410 $ 2,258,401
========== ==========
</TABLE>
(1) Activity for the year ended May 31, 1997 includes that of the Predecessor
Fund through September 6, 1996.
See Accompanying Notes
18
<PAGE> 21
LOGO FINANCIAL STATEMENTS
ARMADA FUNDS TAX EXEMPT SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PENNSYLVANIA MUNICIPAL FUND
OHIO TAX EXEMPT FUND -------------------------------------------
--------------------------- FOR THE FOR THE FOR THE
FOR THE FOR THE YEAR ENDED PERIOD YEAR ENDED
YEAR ENDED YEAR ENDED MAY 31, ENDED APRIL 30,
MAY 31, 1997 MAY 31, 1996 1997(1) MAY 31, 1996(2) 1996(2)
------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income.................. $ 4,198,605 $ 3,786,923 $ 1,622,554 $ 142,421 $ 1,572,781
Net realized gain on investments
sold................................. 7,711 82,782 68,280 7,631 74,461
Net change in unrealized appreciation/
(depreciation) on investments........ 1,308,094 (647,617) 567,567 (159,492) 179,469
------------ ------------ ------------ ------------- ------------
Net increase/(decrease) in net assets
resulting from operations.............. 5,514,410 3,222,088 2,258,401 (9,440) 1,826,711
------------ ------------ ------------ ------------- ------------
Distributions to shareholders from net
investment income...................... (4,198,605) (3,786,923) (1,622,554) (142,421) (1,572,781)
Distributions to shareholders from net
realized capital gains................. 0 0 (68,280) 0 0
Distributions to shareholders in excess
of net realized capital gains.......... 0 0 (43,698) 0 0
Increase/(decrease) in net assets derived
from capital share transactions........ 7,830,355 11,155,681 (2,406,814) 75,690 3,917,267
------------ ------------ ------------ ------------- ------------
Total increase/(decrease) in net
assets................................. 9,146,160 10,590,846 (1,882,945) (76,171) 4,171,197
------------ ------------ ------------ ------------- ------------
NET ASSETS:
Beginning of period.................... 85,754,638 75,163,792 38,733,073 38,809,244 34,638,047
------------ ------------ ------------ ------------- ------------
End of period.......................... $94,900,798 $85,754,638 $36,850,128 $38,733,073 $38,809,244
============ ============ ============= ============== =============
</TABLE>
(1) Activity for the year ended May 31, 1997 includes that of the Predecessor
Fund through September 6, 1996.
(2) Activity for the periods ended May 31, 1996 and April 30, 1996 is that of
the Predecessor Fund.
See Accompanying Notes
19
<PAGE> 22
LOGO NOTES TO FINANCIAL STATEMENTS
1. FUND ORGANIZATION
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 Growth 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"). A new investment advisory agreement
between Inventor and affiliates of National City received shareholder approval
in May 1996.
On February 15 and March 18, 1996, the respective Boards of Trustees/Directors
of the Trust and Inventor each approved the Agreement and Plan of Reorganization
between the Trust and Inventor (the "Agreement"). Subsequently, a shareholder
meeting was held to approve the Agreement, the unaudited
20
<PAGE> 23
LOGO NOTES TO FINANCIAL STATEMENTS
result of which for the Inventor Pennsylvania Municipal Bond Fund is listed
below:
<TABLE>
<CAPTION>
SHARES VOTED
---------------------------- PERCENT
FOR AGAINST ABSTAIN VOTED
---------- ------- ------- -------
<S> <C> <C> <C> <C>
Inventor Pennsylvania
Municipal Bond Fund... 3,386,184 -- 3,300 88%
</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, including net unrealized
appreciation on investment securities of $344,245 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 year ended May 31, 1997 include those of the
Predecessor Fund.
In accordance with provisions of the Agreement, 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 recognized approximately $200,000 in costs
connected with the Reorganization, which has been allocated among the various
funds in the Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
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.
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.
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 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. Any net realized
capital gains will be distributed at least annually.
FEDERAL INCOME TAXES: Each of the Funds is classified as a separate taxable
entity for Federal
21
<PAGE> 24
LOGO NOTES TO FINANCIAL STATEMENTS
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.
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.
3. 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 year ended May 31, 1997, the Advisers have earned
and waived the following fees:
<TABLE>
<CAPTION>
EARNED WAIVED
-------- --------
<S> <C> <C>
Ohio Tax Exempt Fund.... $490,179 $490,179
Pennsylvania Municipal
Fund................. 220,753 29,097
</TABLE>
The Trust maintains a Shareholder Services Plan (the "Services Plan") with
respect to the Retail shares in the Pennsylvania Municipal Fund, and in the
future may implement the service plan with respect to the Retail shares of the
Ohio Tax Exempt Fund. Pursuant to the Services Plan, the Trust enters into
shareholder servicing agreements with certain financial institutions under which
they agree to provide shareholder administrative services to their customers who
beneficially own Retail shares in consideration for the payment of up to .10% on
an annualized basis of the net asset value of the Retail shares of the Fund. For
the year ended May 31, 1997, fees paid by the Pennsylvania Municipal Fund under
the Services Plan to NatCity Investments, Inc., a wholly-owned subsidiary of
National City Corporation, amounted to $272.
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 year ended May 31, 1997 totaling
$17,996 for the Ohio Tax Exempt Fund and $4,947 for the Pennsylvania Municipal
Fund.
Pursuant to Board of Trustees' approval, SEI Investments Distribution Co., a
wholly-owned subsidiary of SEI Investments Company ("SEI" or "Distributor"),
began serving as the Trust's Distributor on March 10, 1997. Each Fund pays a fee
to the Distributor for distributing its shares. Under the Trust's Distribution
Agreement and related Distribution Plan adopted pursuant to Rule 12b-1 under the
1940 Act, the Trust compensates the Distributor for
22
<PAGE> 25
LOGO NOTES TO FINANCIAL STATEMENTS
services provided and expenses assumed in providing 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 base fee of
$1,250,000, plus incentive fees related to asset growth, which are allocated
among the investment funds with respect to which the Distributor is distributing
shares.
440 Financial Distributors, Inc., ("440"), a wholly-owned subsidiary of The
Shareholder Services Group, Inc., and an indirect wholly-owned subsidiary of
First Data Corp., served as the Trust's distributor until March 7, 1997. Each
Fund reimbursed 440 for direct and indirect expenses incurred in performing
distribution services, up to a maximum of .10% per annum of the average net
assets of the Fund, inclusive of an annual fee of $250,000, which was allocated
among the investment funds for which 440 was distributing shares.
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.
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 year ended May 31, 1997 include legal fees paid to Drinker
Biddle & Reath LLP. A partner of that firm is Secretary of the Trust.
PFPC Inc. ("PFPC") serves as Administrator and Accounting Agent to the Trust.
As compensation for services performed, each Fund pays PFPC an asset-based fee
plus reimbursement of reasonable out-of-pocket expenses. An officer of PFPC
serves as Treasurer to the Trust.
4. PURCHASES AND SALES OF SECURITIES
During the fiscal year ended May 31, 1997, purchases and sales of securities,
other than short-term investments or U.S. government obligations, aggregated
$28,074,924 and $20,479,442, respectively, for the Ohio Tax Exempt Fund and
aggregated $15,253,890 and $16,406,940, respectively, for the Pennsylvania
Municipal Fund. There were no purchases or sales of U.S. government securities
during the period for either of the Funds.
5. 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.
23
<PAGE> 26
LOGO NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31, 1997
---------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
-------------------------- --------------------------
SHARES VALUE SHARES VALUE
---------- ----------- --------- ------------
<S> <C> <C> <C> <C>
OHIO TAX EXEMPT FUND
Shares sold............................................ 2,121,364 $22,999,558 298,675 $ 3,163,301
Shares reinvested...................................... 10,218 110,652 12,739 137,134
Shares repurchased..................................... (1,469,851) (15,839,960) (254,112) (2,740,330)
----------- ------------ --------- -----------
Net increase........................................... 661,731 $ 7,270,250 57,302 $ 560,105
=========== ============ ========= ===========
PENNSYLVANIA MUNICIPAL FUND
Shares sold............................................ 501,185 $ 5,097,413 9,160 $ 92,853
Shares reinvested...................................... 340 3,460 78 796
Shares repurchased..................................... (745,498) (7,587,820) (1,316) (13,516)
----------- ------------ --------- -----------
Net increase/(decrease)................................ (243,973) $(2,486,947) 7,922 $ 80,133
=========== ============ ========= ===========
</TABLE>
<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 FOR THE YEAR ENDED
ENDED MAY 31, 1996* APRIL 30, 1996*
--------------------------- --------------------------
SHARES VALUE SHARES VALUE
----------- ----------- --------- ------------
<S> <C> <C> <C> <C>
PENNSYLVANIA MUNICIPAL FUND
Shares sold........................................... 31,343 $ 315,950 646,951 $ 6,603,530
Shares reinvested..................................... 21 210 215 2,204
Shares repurchased.................................... (23,796) (240,470) (262,673) (2,688,465)
-------- --------- -------- ---------
Net increase.......................................... 7,568 $ 75,690 384,493 $ 3,917,267
======== ========= ======== =========
</TABLE>
*Formerly Inventor Pennsylvania Municipal Bond Fund.
24
<PAGE> 27
LOGO REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees and
Shareholders of Armada Funds
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of the Armada Ohio Tax Exempt Fund and
Armada Pennsylvania Municipal Fund (the "Funds") as of May 31, 1997, and the
related statements of operations for the year then ended. We have also audited
the statements of changes in net assets and financial highlights for each of the
periods presented for the Armada Ohio Tax Exempt Fund and for the year ended May
31, 1997 for the Armada Pennsylvania Municipal Fund. These financial statements
and financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The statements of changes in net
assets for the year ended April 30, 1996 and the one month period ended May 31,
1996 and the financial highlights for the periods ended April 30, 1995 through
May 31, 1996 for the Armada Pennsylvania Municipal Fund were audited by other
auditors whose report dated July 26, 1996 expressed an unqualified opinion on
those statements and financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included verification by
examination of securities held by the custodian, as of May 31, 1997, and
confirmation of securities not held by the custodian, by correspondence with
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the 1997 financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Armada Ohio Tax Exempt Fund and the Armada Pennsylvania
Municipal Fund at May 31, 1997, the results of their operations for the year
then ended, and for the Armada Ohio Tax Exempt Fund, the changes in its net
assets and financial highlights for each of the periods presented herein, and
for the Armada Pennsylvania Municipal Fund, the changes in its net assets and
financial highlights for the year ended May 31, 1997, in conformity with
generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Philadelphia, PA
July 3, 1997
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
Leigh Carter
Retired President and Chief Operating
Officer, B.F. Goodrich Company
Director, Adams Express Company
Director, Acromed Corporation
Director, Petroleum & Resources Corp.
Director, Morrison Products
John F. Durkott
President and Chief Operating Officer,
Kittle's Home Furnishings Center, Inc.
Richard W. Furst, Dean
Professor of Finance and Dean,
Carol Martin Gatton College of Business
and Economics, University of Kentucky
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 NOTES
<PAGE> 30
[ARMADA LOGO] --------------------
ARMADA | BULK RATE |
FUNDS | U.S. POSTAGE |
| PAID |
Oaks, Pennsylvania 19456 | CLEVELAND, OH |
*Address Correction Requested | PERMIT NO. 1535 |
--------------------
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 Baank of Kentucky
101 South Fifth Street
Louisville, Kentucky 40202
