<PAGE> 1
[NATIONS FUNDS LOGO]
Municipal
Bond
Funds
Annual Report For The
Year Ended March 31, 1998
[PICTURE OF TREE]
Investments For A Lifetime(SM)
Nations Short-Term
Municipal Income Fund
Nations Intermediate
Municipal Bond Fund
Nations Municipal
Income Fund
Nations FL Intermediate
Municipal Bond Fund
Nations FL Municipal
Bond Fund
Nations GA Intermediate
Municipal Bond Fund
Nations GA Municipal
Bond Fund
Nations MD Intermediate
Municipal Bond Fund
Nations MD Municipal
Bond Fund
Nations NC Intermediate
Municipal Bond Fund
Nations NC Municipal
Bond Fund
Nations SC Intermediate
Municipal Bond Fund
Nations SC Municipal
Bond Fund
Nations TN Intermediate
Municipal Bond Fund
Nations TN Municipal
Bond Fund
Nations TX Intermediate
Municipal Bond Fund
Nations TX Municipal
Bond Fund
Nations VA Intermediate
Municipal Bond Fund
Nations VA Municipal
Bond Fund
<PAGE> 2
[BACKGROUND DEPICTING BASKETS]
This Report is submitted for
the general information of
shareholders of Nations Funds.
This material must be preceded or
accompanied by a current Nations
Funds prospectus.
Nations Funds Distributor:
Stephens Inc. Stephens Inc., which
is not affiliated with NationsBank,
N.A., is not a bank, and securities
offered by it are not guaranteed by
any bank or insured by the FDIC.
Stephens Inc., member NYSE, SIPC.
Nations Funds Investment Adviser:
NationsBanc Advisors, Inc.
Nations Funds Investment Sub-
Advisers: TradeStreet Investment
Associates, Inc., Gartmore Global
Partners, Boatmen's Capital
Management, Inc. and Marsico
Capital Management, LLC.
- -----------------
[DOWNWARD ARROW]
NOT FDIC-
INSURED
- -----------------
May Lose Value
- -----------------
No Bank Guarantee
- -----------------
<PAGE> 3
PRESIDENTS'
MESSAGE
Dear Shareholder:
The past 12 months have been very rewarding for many
investors. Even with domestic markets feeling the
effects of the Asian financial crisis, the Standard &
Poor's 500 Composite Stock Price Index (S&P 500
Index) -- a widely known indicator of stock market
activity -- returned 47.98%.*
Even though the markets have experienced recent
success, the prudent investor realizes these conditions
cannot continue indefinitely. While the markets have
continued to perform well during the first three months
of 1998, we encourage you to consider:
-- BUILDING A DIVERSIFIED PORTFOLIO. A portfolio
comprised of different types of
investments -- stocks, bonds, money market
instruments -- has the potential to serve you best
in volatile markets.
-- CHOOSING AN INVESTMENT STRATEGY THAT COMPLEMENTS
YOUR LIFESTYLE AND FINANCIAL OBJECTIVES, and
maintaining that strategy as you pursue your
investment goals.
-- INVESTING FOR THE LONG TERM. If you can afford to
invest throughout inevitable market fluctuations,
you should benefit since historically, market prices
have generally gone up over the long term. This is
often a better strategy than attempting to "time"
the market.
-- INVESTING ON A REGULAR BASIS. This technique, known
as dollar-cost averaging, may enable you to buy more
shares when prices are lower and fewer when prices
are higher. Systematic investing generally provides
an easy, disciplined way to increase your assets.
Such a strategy does not assure a profit and does
not protect against loss in declining markets. Since
this strategy involves continuous investment in
securities regardless of fluctuating price levels,
you should carefully consider your financial ability
to continue your purchases through periods of
declining price levels.
Following these guidelines may help you create an
investment portfolio with the potential to make the
most of current market conditions, as well as those to
come.
With Nations Funds as a component of that portfolio,
your investment is part of over $33 billion in assets
under management. We are very pleased with the overall
performance of the Funds over the past 12 months.
Please refer to the individual fund commentary for
performance results.
NEW OPPORTUNITIES FOR YOUR DIVERSIFIED PORTFOLIO
We have continued to expand the Nations Funds family of
funds, including the addition of two new growth funds
managed by Tom Marsico, one of
* The S&P 500 Index is an unmanaged index of 500 widely
held common stocks. It is unavailable for investment.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
<PAGE> 4
PRESIDENTS'
MESSAGE CONTINUED...
the most respected portfolio managers in the industry.
Mr. Marsico is widely known in the investment community
for having managed the Janus Twenty Fund and Janus
Growth and Income Fund; during his tenure of nearly 10
years at Janus, these Funds grew from $7 million in
assets to more than $7 billion.
In addition, we created Nations Annuity Trust, which
consists of eight investment portfolios that serve as
underlying investment vehicles for annuity products.
One of those products, Nations Variable Annuity issued
by Hartford Life Insurance Company, is now available
for your long-term tax-deferred investing needs.
RECOGNITION FOR SUPERIOR SHAREHOLDER SERVICES
The Nations Funds product line and its performance,
however, lacks importance if it isn't backed by
helpful, professional services to its shareholders.
That's why, among all the Funds' accomplishments this
year, we are particularly proud of the recognition the
industry bestowed on Nations Funds.
In its first year as a participant in the annual survey
conducted by DALBAR, Inc. -- an independent research
firm that measures customer service and establishes
benchmarks in the financial services industry --
Nations Funds was honored with the Key Honors Award for
superior customer service. This award "designates those
firms that demonstrate their commitment to the
shareholder by providing consistently solid service."
NATIONS FUNDS PROVIDES INVESTMENTS FOR A LIFETIME
We want to thank you for your confidence in Nations
Funds, and for making them part of your investment
strategy. As we strive to provide an ever-diverse range
of investment products, we recognize that the
strongest, most important asset is you, the
shareholder.
Sincerely,
<TABLE>
<S> <C>
/s/ A. MAX WALKER /S/ ROBERT H. GORDON
A. MAX WALKER ROBERT H. GORDON
PRESIDENT AND CHAIRMAN PRESIDENT
OF THE BOARD NATIONSBANC ADVISORS, INC.
</TABLE>
March 31, 1998
P.S.: If you have any questions or comments on your
annual report or the information in it, please contact
us at 1-800-321-7854 or send us a message from the
Nations Funds Web Site at
WWW.NATIONSBANK.COM/NATIONSFUNDS.
<PAGE> 5
TABLE
OF
CONTENTS
<TABLE>
<S> <C>
NATIONS FUNDS SPECTRUM 2
ECONOMIC OVERVIEW 4
MUNICIPAL BOND MARKET OVERVIEW 6
PORTFOLIO MANAGER COMMENTARY
Nations Short-Term Municipal Income Fund 7
Nations Intermediate Municipal Bond Fund 11
Nations Municipal Income Fund 15
Nations FL Intermediate Municipal Bond Fund 19
Nations FL Municipal Bond Fund 23
Nations GA Intermediate Municipal Bond Fund 27
Nations GA Municipal Bond Fund 31
Nations MD Intermediate Municipal Bond Fund 35
Nations MD Municipal Bond Fund 39
Nations NC Intermediate Municipal Bond Fund 43
Nations NC Municipal Bond Fund 47
Nations SC Intermediate Municipal Bond Fund 51
Nations SC Municipal Bond Fund 55
Nations TN Intermediate Municipal Bond Fund 59
Nations TN Municipal Bond Fund 63
Nations TX Intermediate Municipal Bond Fund 67
Nations TX Municipal Bond Fund 71
Nations VA Intermediate Municipal Bond Fund 75
Nations VA Municipal Bond Fund 79
FINANCIAL STATEMENTS
Schedules of Investments 83
Statements of Assets and Liabilities 162
Statements of Operations 166
Statements of Changes in Net Assets 170
Schedules of Capital Stock Activity 178
Financial Highlights 198
Notes to Financial Statements 236
---------------------------------------------------------------------------------
NATIONS FUNDS [DALBAR HONORS COMMITMENT TO: INVESTORS 1997 LOGO]
RECOGNIZED FOR DALBAR, Inc., is a well-respected research firm
OUTSTANDING that measures customer service levels and
CUSTOMER SERVICE establishes benchmarks in the financial services
industry.
In recognition of our
commitment to retail
shareholders through
consistently providing
superior customer service,
Nations Funds was awarded
DALBAR Key Honors in 1997.
---------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
The
Nations Funds
Family At A Glance
STABILITY
- ---------------- CURRENT INCOME
- ----------------------------------------------------------------------------------
GROWTH & INCOME
-----------------------
MONEY SHORTER INTERMEDIATE LONGER TERM LARGE CAPITALIZATION
MARKET MATURITY MATURITY DOMESTIC VALUE FUNDS
FUNDS BOND FUNDS BOND FUNDS AND GLOBAL
BOND FUNDS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - Nations - Nations Short- - Nations - Nations Global - Nations
Prime Fund Intermediate Strategic Fixed Government Value Fund
Government Income Fund Income Fund
- - Nations Government Fund - Nations
Money Market - Nations - Nations Managed
Fund - Nations Government Diversified Value Index
Short-Term Securities Fund Income Fund Fund
- - Nations Income Fund
Treasury Fund - Nations - Nations - Nations
- - Nations Tax - Nations Short- Intermediate U.S. Government Equity Income
Exempt Fund Term Municipal Municipal Bond Fund Fund
Income Fund Bond Fund
- Nations - Nations
- Nations Municipal Balanced Assets
State-Specific Income Fund Fund
Intermediate
Municipal Bond - Nations
Funds State-Specific
Long-Term
Municipal Bond
Funds
</TABLE>
POTENTIAL RETURN
RISK (VARIABILITY)
2
<PAGE> 7
[NATIONS FUNDS LOGO]
Investments For A Lifetime(SM)
<TABLE>
<CAPTION>
GROWTH & INCOME
- -------------------------
GROWTH
- ----------------------------------------------------------
AGGRESSIVE GROWTH
-------------------------------------------------------------------------------
LARGE LARGE MID SMALL
CAPITALIZATION CAPITALIZATION INTERNATIONAL CAPITALIZATION CAPITALIZATION REGION-SPECIFIC
FUNDS GROWTH FUNDS EQUITY FUNDS FUNDS FUNDS INTERNATIONAL FUNDS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- - Nations - Nations - Nations - Nations - Nations - Nations
Marsico Marsico Focused International Emerging Small Company Emerging
Growth Equities Fund Growth Fund Growth Fund Growth Fund Markets Fund
& Income
Fund - Nations - Nations - Nations - Nations
Disciplined International Managed Pacific Growth
- - Nations Equity Fund Equity Fund SmallCap Fund
Managed Index Fund
Index Fund - Nations
Capital Growth - Nations
Fund Managed
SmallCap
Value Index
Fund
</TABLE>
The Nations Funds family also includes Nations Equity Index Fund, which seeks
investment results that correspond, before fees and expenses, to the total
return of the Standard and Poor's 500 Composite Stock Price Index.
LIFEGOAL PORTFOLIOS
- - LifeGoal Income and Growth Portfolio
- - LifeGoal Balanced Growth Portfolio
- - LifeGoal Growth Portfolio
3
<PAGE> 8
ECONOMIC
OVERVIEW
For the 12-month period ended March 31, 1998, economic
conditions in the United States were stellar, fueling a
steady rise in the financial markets and giving
investors plenty to cheer about.
Economic activity was robust, and the pace of growth
for the year was the fastest of the current expansion,
which is now entering its eighth year. With business
booming, corporate profits rose by more than 10%.
Nearly three million new jobs were created, sending the
national unemployment rate down to a 30-year low of
4.6%. What's more, in this high employment environment,
U.S. workers have enjoyed rising wages.
Fortunately, the inflationary impact of rising labor
costs has been more than offset by other strong forces.
In fact, overall inflation was almost nonexistent for
the reporting period, with the Consumer Price Index,
the most commonly used measure of inflation at the
retail level, up less than 2%. Meanwhile, wholesale
inflation actually dropped over the past 12 months.
What explains the economic balancing act that allows
for continual growth without the threat of inflation?
The answer is that the United States is benefiting from
a moderate economic expansion, driven by capital
spending that is expanding capacity rather than
pressuring it. Productivity gains have been impressive,
and inflation is being subdued by increasingly global
markets for labor and products, along with a freer
world trade environment. As long as these trends remain
in place, our economy should continue to grow while
experiencing stable prices for goods and services. We
remain bullish about long-term economic prospects in
the United States.
These ideal economic conditions have helped propel the
financial markets to new significant highs. During the
past 12 months, the Dow Jones Industrial Average* broke
through the 7,000 and 8,000 barriers, closing the
period at 8,799.81 -- up over 35%. Even more amazing is
that the Dow soared by over 20% for the third year in a
row, an unprecedented feat for the blue-chip average.
All other domestic stock indexes rose as well, some
higher than others. By all measures, the past year was
a rewarding one for stock investors.
* The Dow Jones Industrial Average is a price-weighted
index of 30 of the largest, most widely held stocks
traded on the New York Stock Exchange. It is unmanaged
and unavailable for investment.
Source for all statistical data -- TradeStreet
Investment Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
4
<PAGE> 9
ECONOMIC
OVERVIEW CONTINUED...
With news on the inflation front remaining positive,
the bond market also performed well during the period.
Interest rates drifted to lower levels and bond values
rose accordingly. This translated into attractive
results for bond funds, with total returns generally
ranging from 9% to 12% for the period.
Looking ahead, the next several months will likely be
dominated by news about the financial crisis in Asia
and its impact on U.S. companies. However, we do not
expect the so-called "Asian contagion" to cause U.S.
economic conditions to deteriorate. We believe the
positive cyclical themes of 1997 -- moderate growth,
low inflation and continued profit growth -- will
remain intact in the year ahead, and we remain
optimistic that the expansion will continue
uninterrupted.
The U.S. economy has climbed to a level envied by most
other countries in the world. For stock investors in
particular, the view from this lofty perch is
spectacular. Could our markets soar to even higher
levels? Yes, as long as favorable conditions remain in
place.
But investors must remember that stock markets do not
go up indefinitely. Today, our challenge is to fight
off the euphoria that can often accompany a bull market
and remind ourselves that investing is a long-term
endeavor. Historically, stocks have risen over time,
but there have been plenty of ups and downs along the
way. The next stock market correction may be out there,
even if we can't see any dark clouds yet.
On behalf of Nations Funds shareholders, we will keep
our eye on the horizon.
E. KEITH WIRTZ, CFA
CHIEF INVESTMENT OFFICER
TRADESTREET INVESTMENT ASSOCIATES, INC.
March 31, 1998
5
<PAGE> 10
MUNICIPAL BOND MARKET
OVERVIEW
During the 12-month period ended March 31, 1998, the
municipal bond market performed well overall, but
lagged the U.S. Treasury market, as interest rates
generally declined. The yield on the 10-year U.S.
Treasury bond fell 123 basis points during the period,
moving from 6.88% to 5.65%, while the 10-year municipal
bond yield dropped only 70 basis points, from 5.15% to
4.45%. (Bond yields typically move in the opposite
direction of bond prices, so that when yields go down,
prices go up.)
The supply of municipal debt increased during the
period. With interest rates falling, issuers re-entered
the municipal market to refinance outstanding debt and
take advantage of present-value interest savings.
Issuers also came to market with several new money
deals, seeking to benefit from the lower financing
costs that accompany a drop in interest rates. In
addition, helped by the strength of the U.S. economy
over the past year -- and by their own healthy balance
sheets -- issuers of municipal debt began to catch up
on some much-needed infrastructure improvements.
This increased supply dampened the performance of the
municipal bond market relative to U.S. Treasuries,
despite strong demand from property and casualty
insurance companies and institutional investors. The
trend of increased issuance should continue as long as
the absolute level of interest rates remains low, and
state and local finances continue to improve.
In spite of ongoing credit quality enhancements in most
sectors, municipal bond insurance was noticeably more
prevalent during the period. As this insurance becomes
increasingly affordable, issuers who would not have
considered purchasing it in the past are now doing so.
Municipal bond insurance is an attractive and
relatively inexpensive way for issuers to enhance their
security, liquidity and marketability in the eyes of
investors. For institutional investors, however, the
growing popularity of municipal bond insurance has made
the search for incremental value within the municipal
universe more difficult as the market becomes
overcrowded with a steady stream of AAA-rated insured
bonds (the highest quality).
MUNICIPAL FIXED INCOME
MANAGEMENT TEAM
TRADESTREET INVESTMENT ASSOCIATES, INC.
March 31, 1998
Source for all statistical data -- TradeStreet
Investment Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
6
<PAGE> 11
Nations
Short-Term Municipal Income
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS
SHORT-TERM MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT
OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Dawn Daggy-Mangerson aim to limit the Fund's exposure to any single credit or
was the Fund's portfolio market sector. In addition, we use a combination of
manager. investment strategies, including duration management
INVESTMENT OBJECTIVE (managing the Fund's sensitivity to interest rates), market
The Fund seeks high current sector selection and individual credit reviews. We also seek
income exempt from federal to limit the distribution of capital gains when appropriate.
income tax consistent with As a short-term portfolio, the Fund maintains an average
minimal fluctuation of dollar-weighted maturity of less than three years and a
principal. The Fund invests in duration between one and one-quarter and two and
investment-grade, short-term three-quarter years.
municipal securities. HOW DID THE FUND PERFORM DURING THE PERIOD?
PERFORMANCE REVIEW With a total return of 5.33%, the Fund (Primary A Shares)
For the 12-month period ended outperformed its peer group, the Lipper Short Municipal Debt
March 31, 1998, Nations Funds Universe,*** which returned 5.09% for the 12-month
Short-Term Municipal Income period ended March 31, 1998. Given the uncertain direction
Fund Primary A Shares provided of interest rates during the period, we believed it prudent
a total return of 5.33%.** to maintain a relatively neutral stance with regard to the
Fund's duration. With a longer duration than many of its
peers, the Fund benefited more fully from the declining
interest rate environment during the period. The Fund also
enjoyed an income advantage over many other funds in its
peer group.
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper Short
Municipal Debt Funds Universe invest in municipal debt
issues with dollar-weighted maturities of less than three
years.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
7
<PAGE> 12
Nations
Short-Term Municipal Income
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE FUND OUTPERFORMED ITS PEER WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN THE
GROUP FOR THE 12-MONTH PERIOD COMING YEAR?
ENDED MARCH 31, 1998. Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
</TABLE>
8
<PAGE> 13
Nations
Short-Term Municipal Income
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
<TABLE>
<S> <C> <C> <C>
23.49% Insured
4.98% Transportation
9.37% Education
9.53% Pre-Refunded
TOP TEN HOLDINGS
10.54% Power/Utilities (AS A % OF NET ASSETS AS OF 3/31/98)
Revenue ----------------------------------------------
1 Dauphin County, Pennsylvania, 5.0%
17.21% General Obligation General Authority, School District
Pooled Financing Program II, (AMBAC
13.82% Other Insured), 4.450% 09/01/32
----------------------------------------------
11.06% Pollution Control 2 Lawrence County, Mississippi, 4.6%
Revenue/Industrial Pollution Control Revenue, 4.300%
Development Revenue 12/01/00
----------------------------------------------
3 New York State Thruway Authority, 3.7%
PORTFOLIO HOLDINGS WERE CURRENT AS Service Contract Revenue, Local
OF MARCH 31, 1998, ARE SUBJECT TO Highways and Bridges, Refunding,
CHANGE AND MAY NOT BE REPRESENTATIVE 5.000% 04/01/01
OF CURRENT HOLDINGS. ----------------------------------------------
4 Washington State Revenue Refunding 3.7%
(Nuclear Project No. 2), Series A,
5.000% 07/01/00
----------------------------------------------
5 Panhandle-Plains, Texas, Higher 2.8%
Education Authority Inc, Student
Loan Revenue, Series E, (GTD STD
LNS), 5.550% 03/01/05
----------------------------------------------
6 Iowa Student Loan Liquidity 2.8%
Corporation, Student Loan Revenue,
Series B, 4.900% 12/01/05
----------------------------------------------
7 Grenada County, Mississippi, 2.7%
Revenue, (Refunding GA-Pacific
Corporation Project), 4.300%
09/01/00
----------------------------------------------
8 Houston, Texas, Water and Sewer 2.3%
System Revenue Refunding, Prior
Lien, Series B, 5.250% 12/01/99
----------------------------------------------
9 Greenville County, Virginia, 2.1%
Industrial Development Authority
Revenue,
4.100% 08/01/00
----------------------------------------------
10 McMinn County, Tennessee, 2.1%
Industrial Development Board, PCR,
Refunding, (Bowater Inc. Project),
6.850% 04/01/01
----------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
9
<PAGE> 14
Nations
Short-Term Municipal Income
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Measurement Period Short- Lehman 3-
(Fiscal Year Covered) Term Municipal Income $12,116 Year Municipal Bond Index $12,338
<S> <C> <C>
Oct. 7 1993 10000 10000
1993 10107 10113
10014 9978
10078 10087
10168 10181
1994 10153 10182
10448 10468
10671 10690
10808 10918
1995 10991 11085
11045 11147
11122 11237
11280 11385
1996 11451 11577
11503 11624
11663 11838
11845 12041
1997 11992 12211
Mar. 31 1998 12116 12338
</TABLE>
Investor B Shares (as of 3/31/98) [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 3-Year
Measurement Period Short-Term Municipal Municipal Bond Index
(Fiscal Year Covered) Income $11,925 $12,338
<S> <C> <C>
Oct. 12 1993 10000 10000
1993 10095 10113
9995 9978
10049 10087
10130 10181
1994 10106 10182
10391 10468
10603 10690
10730 10918
1995 10903 11085
10947 11147
11014 11237
11160 11385
1996 11319 11577
11361 11624
11509 11838
11678 12041
1997 11813 12211
Mar. 31 1998 11925 12338
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(10/7/93 through 3/31/98) 4.38%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Short-Term Municipal
Income Fund from the date each class of
shares was first offered. The Lehman
3-Year Municipal Bond Index is a
broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 2 to 3 years.
It is unavailable for investment. The
performance shown reflects the
performance of Primary A and Investor B
Shares. The performance of Investor A
and Investor C Shares may vary based on
the differences in sales loads and fees
paid by the shareholders investing in
each class.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE INCEPTION
(10/12/93 through 3/31/98) 4.02%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C>
Inception Date 10/7/93 11/2/93 10/12/93 5/19/94
- -------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 5.33% 5.12% 4.96% 4.99%
- -------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 5.06% 4.86% 4.70% 4.73%
Since Inception 4.38% 4.25% 4.02% 4.64%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
10
<PAGE> 15
Nations
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS
INTERMEDIATE MUNICIPAL BOND FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT
OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Mathew M. Kiselak was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal sector selection and individual credit reviews. We also seek
income tax consistent with to limit the distribution of capital gains when appropriate.
moderate fluctuation of As an intermediate-term portfolio, the Fund maintains an
principal. The Fund invests in average dollar-weighted maturity of between three and ten
investment-grade, years and a duration between five and six years.
intermediate-term municipal
securities. HOW DID THE FUND PERFORM DURING THE PERIOD?
PERFORMANCE REVIEW With a total return of 8.20%, the Fund (Primary A Shares)
For the 12-month period ended slightly underperformed its peer group, the Lipper
March 31, 1998, Nations Intermediate Municipal Debt Funds Universe,*** which
Intermediate Municipal Bond returned 8.22% for the 12-month period ended March 31, 1998.
Fund Primary A Shares provided Because of a higher weighting in shorter maturity securities
a total return of 8.20%.** than its peer group, the Fund did not benefit as fully from
the declining interest rate environment during the period.
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper
Intermediate Municipal Debt Funds Universe invest in
municipal debt issues with dollar-weighted maturities of
five to ten years.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
11
<PAGE> 16
Nations
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
BY MAINTAINING A WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN THE
WELL-DIVERSIFIED COMING YEAR?
PORTFOLIO, WE AIM TO Looking ahead, municipal bond market participants will have
LIMIT THE FUND'S to keep one eye focused on Washington, D.C., where proposed
EXPOSURE TO ANY federal legislation addressing electric utility deregulation
SINGLE CREDIT OR and the reimbursement of not-for-profit health care
MARKET SECTOR. providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
</TABLE>
12
<PAGE> 17
Nations
Intermediate Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
<TABLE>
<S> <C> <C> <C>
3.88% Power/Utilities Revenue
5.24% Housing Revenue TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
6.38% Pre-Refunded ------------------------------------------
1 Illinois State Sales Tax 1.5%
7.36% Pollution Control Revenue Refunding, Series S,
Revenue/Industrial 6.000% 06/15/03
Development Revenue ------------------------------------------
2 Massachusetts State, Refunding, 1.5%
28.39% General Obligation GO, Series C, (AMBAC Insured),
4.950% 08/01/05
7.35% Education ------------------------------------------
3 Washington State, GO, Series B 1.2%
28.18% Insured Series R-93-B, 5.125% 10/01/04
------------------------------------------
13.22% Other 4 Metropolitan Transit Authority, 1.1%
New York, Commuter Facilities
PORTFOLIO HOLDINGS WERE CURRENT AS Revenue, 5.250% 07/01/17
OF MARCH 31, 1998, ARE SUBJECT TO ------------------------------------------
CHANGE AND MAY NOT BE REPRESENTATIVE 5 Philadelphia, Pennsylvania, 1.1%
OF CURRENT HOLDINGS. Water and Wastewater Systems,
(FGIC Insured), 5.500% 06/15/03
------------------------------------------
6 Pennsylvania Housing Finance 1.1%
Agency, Single Family Mortgage,
Series 61A, 5.450% 10/01/21
------------------------------------------
7 Burke County, Georgia, 1.0%
Development Authority, PCR,
(Oglethorpe Power Corporation
Project), Series B, 4.900%
01/01/06
------------------------------------------
8 Springfield, Illinois, Airport 1.0%
Authority, Garrett Aviation
Services Project, 4.400%
02/01/08
------------------------------------------
9 Adams County, Mississippi, 1.0%
Pollution Control Revenue
Refunding, (International Paper
Company), Series A, 5.500%
12/01/05
------------------------------------------
10 Mecklenburg County, North 1.0%
Carolina, GO, Revenue
Refunding, 5.750% 03/01/03
------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
13
<PAGE> 18
Nations
Intermediate Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-
Measurement Period Year Municipal Bond
(Fiscal Year Covered) Intermediate Municipal Bond $12,866 Index $13,311
<S> <C> <C>
July 30 1993 10000 10000
10304 10289
1993 10435 10412
10015 10020
10076 10127
10119 10225
1994 9961 10125
10559 10656
10821 10958
11097 11271
1995 11432 11555
11364 11515
11430 11565
11649 11772
1996 11894 12062
11890 12033
12222 12448
12499 12824
1997 12769 13172
Mar. 31 1998 12866 13311
</TABLE>
Investor B Shares (as of 3/31/98)* [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-Year
Measurement Period Municipal Bond Index
(Fiscal Year Covered) Intermediate Municipal Bond $12,034 $12,850
<S> <C> <C>
Dec. 2 1993 10000 10000
1993 10150 10184
9730 9801
9776 9905
9806 10001
1994 9641 9903
10207 10423
10447 10718
10700 11024
1995 11010 11302
10930 11263
10981 11312
11177 11514
1996 11398 11797
11380 11784
11683 12110
11932 12433
1997 12166 12705
Mar. 31 1998 12034 12850
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(7/30/93 through 3/31/98) 5.55%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Intermediate
Municipal Bond Fund from the date each
class of shares was first offered. The
Lehman 7-Year Municipal Bond Index is a
broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 7 to 8 years.
It is unavailable for investment. The
performance shown reflects the
performance of Primary A and Investor B
Shares. The performance of Investor A
and Investor C Shares may vary based on
the differences in sales loads and fees
paid by the shareholders investing in
each class.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE
INCEPTION NAV CDSC*
(12/2/93 through 3/31/98)4.77% 4.37%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 7/30/93 8/17/93 12/2/93 11/3/94
NAV CDSC*
- -------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 8.20% 7.99% 7.50% 3.50% 7.62%
- -------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 6.81% 6.60% 6.22% 5.33% 6.24%
Since Inception 5.55% 5.14% 4.77% 4.37% 7.45%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
14
<PAGE> 19
Nations
Municipal Income
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS
MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Michele M. Poirier was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal sector selection and individual credit reviews. We also seek
income tax consistent with the to limit the distribution of capital gains when appropriate.
potential for principal As a long-term portfolio, the Fund maintains an average
fluctuation associated with dollar-weighted maturity of greater than ten years and a
investments in long-term duration between seven and one-half and nine and one-half
municipal securities. The Fund years.
invests in investment-grade,
long-term municipal securities. HOW DID THE FUND PERFORM DURING THE PERIOD?
PERFORMANCE REVIEW With a total return of 11.12%, the Fund (Primary A Shares)
For the 12-month period ended outperformed its peer group, the Lipper General Municipal
March 31, 1998, Nations Debt Funds Universe,*** which returned 10.61% for the
Municipal Income Fund Primary A 12-month period ended March 31, 1998. The Fund benefited
Shares provided a total return from an overweighting in the lower end of the investment-
of 11.12%.** grade credit spectrum (bonds rated "A" and "Baa/BBB"), which
gave the Fund an income advantage. These positions also
enjoyed higher total returns as the gap between yields of
lower- and higher-rated credits narrowed during the period.
(Prices of lower-quality securities rise as their yields
fall to levels that are closer to those of higher-quality
securities.)
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper
General Municipal Debt Funds Universe invest at least 65% of
their assets in municipal debt issues in the top four credit
ratings.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
15
<PAGE> 20
Nations
Municipal Income
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE FUND OUTPERFORMED ITS PEER WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET IN THE
GROUP FOR THE 12-MONTH PERIOD COMING YEAR?
ENDED MARCH 31, 1998. Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
</TABLE>
16
<PAGE> 21
Nations
Municipal Income
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
<TABLE>
<S> <C> <C>
3.24% Water TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
3.58% Education ----------------------------------------------
1 Polk County, Florida, Industrial 2.6%
3.66% Power/Utilities Revenue Development Authority, Solid Waste
Disposal Facilities Revenue, (Tampa
7.55% Hospital Electric Company Project), 5.850%
12/01/30
11.25% Other ----------------------------------------------
2 North Central Texas, Health 2.0%
35.22% Insured Facilities Development Corporation,
Hospital Revenue, (Presbyterian
15.45% General Obligation Healthcare), Series A, 5.000%
05/15/17
20.05% Pollution Control ----------------------------------------------
Revenue/Industrial 3 Murray City, Utah, Hospital Revenue 1.6%
Development Revenue Refunding, (IHC Health Services
Inc.), (MBIA Insured), 5.000%
PORTFOLIO HOLDINGS WERE CURRENT AS 05/15/22
OF MARCH 31, 1998, ARE SUBJECT TO ----------------------------------------------
CHANGE AND MAY NOT BE REPRESENTATIVE 4 Massachusetts State Port Authority, 1.6%
OF CURRENT HOLDINGS. Revenue Bonds, Special Facilities,
(Bosfuel Project), (MBIA Insured),
5.750% 07/01/39
----------------------------------------------
5 Courtland, Alabama, Industrial 1.5%
Development Board, Solid Waste
Disposal Revenue, 5.750% 11/01/27
----------------------------------------------
6 Pierce County, Washington, Economic 1.5%
Development Corporation, Solid
Waste Revenue, (Occidental
Petroleum), 5.800% 09/01/29
----------------------------------------------
7 Anchorage, Alaska, Electric 1.5%
Utilities Revenue Refunding, Senior
Lien, (MBIA Insured), Series B,
5.500% 02/01/26
----------------------------------------------
8 North Carolina State, Highway- 1.2%
Series A, 4.500% 05/01/07
----------------------------------------------
9 Washington State, GO, Refunding, 1.2%
Series A, 6.750% 02/01/15
----------------------------------------------
10 Adams County, Mississippi, 1.1%
Pollution Control, Revenue,
Refunded, (International Paper
Company), Series A, 5.500% 12/01/05
----------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
17
<PAGE> 22
Nations
Municipal Income
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Measurement Period Lehman Municipal Bond
(Fiscal Year Covered) Municipal Income $17,482 Index $17,369
<S> <C> <C>
Feb. 1 1991 10000 10000
10081 10090
10229 10306
10657 10707
1991 11084 11065
11050 11099
11500 11519
11766 11826
1992 12006 12041
12484 12488
12996 12897
13503 13333
1993 13629 13520
12729 12778
12841 12918
12855 13007
1994 12615 12821
13625 13727
13975 14058
14395 14462
1995 15075 15059
14839 14878
14986 14992
15391 15335
1996 15785 15726
15733 15688
16292 16229
16809 16718
1997 17292 17172
Mar. 31 1998 17482 17369
</TABLE>
Investor B Shares (as of 3/31/98)* [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Measurement Period Municipal Income Lehman Municipal Bond
(Fiscal Year Covered) $12,965 Index $13,693
<S> <C> <C>
June 7 1993 10000 10000
10146 10300
10522 10511
1993 10600 10658
9881 10073
9949 10184
9941 10254
1994 9737 10108
10498 10822
10747 11083
11050 11401
1995 11551 11872
11348 11729
11440 11819
11727 12090
1996 12005 12398
11943 12368
12344 12794
12712 13180
1997 13049 13537
Mar. 31 1998 12965 13693
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(2/1/91 through 3/31/98) 8.11%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Municipal Income Fund
from the date each class of shares was
first offered. The Lehman Municipal
Bond Index is a broad-based, unmanaged,
total return index composed of 8,000
investment-grade, long-term maturity
bonds. It is unavailable for
investment. The performance shown
reflects the performance of Primary A
and Investor B Shares. The performance
of Investor A and Investor C Shares may
vary based on the differences in sales
loads and fees paid by the shareholders
investing in each class.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE
INCEPTION NAV CDSC*
(6/7/93 through
3/31/98) 5.88% 5.54%
[CHART LEGEND]
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 2/1/91 2/1/91 6/7/93 6/17/92
NAV CDSC*
- -------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 11.12% 10.89% 10.23% 5.23% 10.37%
- -------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 8.66% 8.45% 7.84% 6.97% 7.99%
5 Years 6.97% 6.74% NA NA 6.23%
Since Inception 8.11% 7.95% 5.88% 5.54% 6.92%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
18
<PAGE> 23
Nations Florida
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS FLORIDA
INTERMEDIATE BOND FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Michele M. Poirier was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal sector selection and individual credit reviews. We also seek
income and the Florida state to limit the distribution of capital gains when appropriate.
intangibles taxes consistent As an intermediate-term portfolio, the Fund maintains an
with moderate fluctuation of average dollar-weighted maturity of between three and ten
principal. The Fund invests in years and a duration between five and six years.
investment-grade, HOW DID THE FUND PERFORM DURING THE PERIOD?
intermediate-term municipal With a total return of 8.55%, the Fund (Primary A Shares)
securities. outperformed its peer group, the Lipper Florida Intermediate
PERFORMANCE REVIEW Municipal Debt Funds Universe,*** which returned 8.14% for
For the 12-month period ended the 12-month period ended March 31, 1998. The Fund benefited
March 31, 1998, Nations Florida from an overweighting in uninsured bonds, which gave the
Intermediate Municipal Bond Fund an income advantage. These positions also enjoyed
Fund Primary A Shares provided higher total returns as the gap between yields of lower- and
a total return of 8.55%.** higher-rated credits narrowed during the period. (Prices of
lower-quality securities rise as their yields fall to levels
that are closer to those of higher-quality securities.)
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper
Florida Intermediate Municipal Debt Funds Universe invest at
least 65% of their assets in municipal debt issues which are
exempt from taxation in Florida with dollar-weighted
maturities of five to ten years.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
19
<PAGE> 24
Nations Florida
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE FUND OUTPERFORMED ITS PEER WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN FLORIDA?
GROUP FOR THE The state of Florida continued to achieve positive financial
12-MONTH PERIOD results through prudent financial management and ongoing
ENDED MARCH 31, 1998. economic expansion. As a result, Standard & Poor's
Corporation upgraded Florida's credit rating to "AA+" in
April 1997. In addition, Florida debt is rated "Aa2" by
Moody's Investors Service, Inc. and "AA" by Fitch IBCA, Inc.
As one of the country's leading vacation destinations,
Florida enjoyed strong economic growth, led by the services
sector. Service-based jobs, mostly tourist- and
retiree-related, grew at a rate of over 5% in 1997 and
accounted for 35% of Florida's non-farm employment.
Meanwhile, economic recovery in Latin America, which
accounts for 90% of Florida's merchandise exports, helped
strengthen and diversify Florida's economic base.
WHAT IS YOUR OUTLOOK FOR FLORIDA AND THE MUNICIPAL BOND
MARKET IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
With regard to Florida in particular, because it currently
has no income tax, the state depends on its sales tax for
70% of general fund operations. In the event of a general
economic slowdown, Florida's reliance on the sales tax could
potentially limit future financial flexibility, although the
steady migration of new residents into the state could
offset this.
</TABLE>
20
<PAGE> 25
Nations Florida
Intermediate Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENT AS OF 3/31/98)
[PIE CHART]
<TABLE>
<S> <C> <C>
4.23% Pre-Refunded TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
4.54% Water --------------------------------------------
1 Florida State Housing Finance 2.1%
4.61% Pollution Control Agency, Refunding, Multi-family
Revenue/Industrial Housing, (Altamonte Project),
Development Revenue Series C, 7.000% 12/01/24
--------------------------------------------
5.67% Housing Revenue 2 Jacksonville, Florida, Health 2.0%
Facilities Authority, Hospital
6.64% Hospital Revenue, Series B, 5.400%
08/15/18
8.34% Other --------------------------------------------
3 Florida State Board of 1.9%
11.14% General Obligation Education, GO, Capital Outlay,
Public Education, Unrefunded
54.83% Insured Balance, Series D, 5.200%
06/01/11
PORTFOLIO HOLDINGS WERE CURRENT AS --------------------------------------------
OF MARCH 31, 1998, ARE SUBJECT TO 4 Escambia County, Florida, PCR, 1.8%
CHANGE AND MAY NOT BE REPRESENTATIVE (Champion International
OF CURRENT HOLDINGS. Corporation Project), AMT,
6.400% 09/01/30
--------------------------------------------
5 Tampa, Florida, Sports Authority 1.6%
Revenue, (Stadium Project),
(MBIA Insured), 6.000% 01/01/07
--------------------------------------------
6 Hillsborough County, Florida, 1.6%
Aviation Authority Revenue
Refunding, (Tampa International
Airport Project), Series A,
(AMBAC Insured), 5.750% 10/01/07
--------------------------------------------
7 Orlando, Florida, Greater 1.6%
Orlando Aviation Authority,
Airport Facilities Revenue
Refunding, Series D, (AMBAC
Insured), 5.450% 10/01/01
--------------------------------------------
8 North Broward, Florida, Hospital 1.5%
Revenue, (MBIA Insured), 6.250%
01/01/06
--------------------------------------------
9 Broward County, Florida, GO, 1.5%
Series C, 6.200% 01/01/07
--------------------------------------------
10 Orlando, Florida, Utilities 1.5%
Commission, Water and
Electricity Revenue Refunding,
5.600% 10/01/03
--------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
21
<PAGE> 26
Nations Florida
Intermediate Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-
Measurement Period Year Municipal Bond
(Fiscal Year Covered) Florida Intermediate Municipal Bond $13,741 Index $14,234
<S> <C> <C>
Dec. 11 1992 10000 10000
1992 10030 10082
10374 10404
10686 10692
11017 11002
1993 11163 11134
10688 10715
10775 10829
10833 10933
1994 10703 10827
11329 11395
11607 11718
11877 12052
1995 12235 12356
12145 12313
12195 12367
12412 12588
1996 12692 12898
12658 12868
13005 13311
13332 13713
1997 13607 14085
Mar. 31 1998 13741 14234
</TABLE>
Investor B Shares (as of 3/31/98)* [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-Year
Measurement Period Florida Intermediate Municipal Bond Index
(Fiscal Year Covered) Municipal Bond $12,489 $13,379
<S> <C> <C>
June 7 1993 10000 10000
10124 10183
10425 10478
1993 10550 10604
10089 10205
10158 10313
10200 10413
1994 10065 10312
10640 10852
10888 11160
11128 11479
1995 11448 11768
11350 11727
11383 11778
11570 11989
1996 11817 12284
11771 12270
12078 12609
12360 12946
1997 12590 13228
Mar. 31 1998 12489 13379
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(12/11/92 through 3/31/98) 6.18%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Florida Intermediate
Municipal Bond Fund from the date each
class of shares was first offered. The
Lehman 7-Year Municipal Bond Index is a
broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 7 to 8 years.
It is unavailable for investment. The
performance shown reflects the
performance of Primary A and Investor B
Shares. The performance of Investor A
and Investor C Shares may vary based on
the differences in sales loads and fees
paid by the shareholders investing in
each class.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE
INCEPTION NAV CDSC*
(6/7/93 through 3/31/98) 5.07% 4.73%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 12/11/92 12/14/92 6/7/93 12/17/92
NAV CDSC*
- ------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 8.55% 8.34% 7.80% 3.80% 7.80%
- ------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 6.65% 6.43% 6.04% 5.15% 6.05%
5 Years 5.78% 5.58% NA NA 5.16%
Since Inception 6.18% 6.00% 5.07% 4.73% 5.58%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
22
<PAGE> 27
Nations Florida
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS FLORIDA
MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment- grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Michele M. Poirer was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal sector selection and individual credit reviews. We also seek
income and the Florida state to limit the distribution of capital gains when appropriate.
intangibles taxes with the As a long-term portfolio, the Fund maintains an average
potential for principal dollar-weighted maturity of greater than ten years and a
fluctuation associated with duration between seven and one-half and nine and one-half
investments in long-term years.
municipal securities. The Fund HOW DID THE FUND PERFORM DURING THE PERIOD?
invests in investment-grade, With a total return of 10.60%, the Fund (Primary A Shares)
long-term municipal securities. outperformed its peer group, the Lipper Florida Municipal
PERFORMANCE REVIEW Debt Funds Universe,*** which returned 10.25% for the
For the 12-month period ended 12-month period ended March 31, 1998. The Fund benefited
March 31, 1998, Nations Florida from an overweighting in uninsured bonds, which gave the
Municipal Bond Fund Primary A Fund an income advantage. These positions also enjoyed
Shares provided a total return higher total returns as the gap between yields of lower- and
of 10.60%.** higher-rated credits narrowed during the period. (Prices of
lower-quality securities rise as their yields fall to levels
that are closer to those of higher-quality securities.)
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper
Florida Municipal Debt Funds Universe limit their assets to
those securities that are exempt from taxation in Florida.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
23
<PAGE> 28
Nations Florida
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE FUND (PRIMARY A SHARES) WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN FLORIDA?
OUTPERFORMED ITS PEER GROUP FOR The state of Florida continued to achieve positive financial
THE 12-MONTH results through prudent financial management and ongoing
PERIOD ENDED economic expansion. As a result, Standard & Poor's
MARCH 31, 1998. Corporation upgraded Florida's credit rating to "AA+" in
April 1997. In addition, Florida debt is rated "Aa2" by
Moody's Investors Service, Inc. and "AA" by Fitch IBCA, Inc.
As one of the country's leading vacation destinations,
Florida enjoyed strong economic growth, led by the services
sector. Service-based jobs, mostly tourist- and
retiree-related, grew at a rate of over 5% in 1997 and
accounted for 35% of Florida's non-farm employment.
Meanwhile, economic recovery in Latin America, which
accounts for 90% of Florida's merchandise exports, helped
strengthen and diversify Florida's economic base.
WHAT IS YOUR OUTLOOK FOR FLORIDA AND THE MUNICIPAL BOND
MARKET IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
With regard to Florida in particular, because it currently
has no income tax, the state depends on its sales tax for
70% of general fund operations. In the event of a general
economic slowdown, Florida's reliance on the sales tax could
potentially limit future financial flexibility, although the
steady migration of new residents into the state could
offset this.
</TABLE>
24
<PAGE> 29
Nations Florida
Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
<TABLE>
<S> <C> <C>
6.53% Transportation TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
7.71% Housing Revenue --------------------------------------------
1 South Broward, Florida, Hospital 4.4%
7.76% General Obligation District Revenue Refunding (FSA
Insured), 5.500% 05/01/28
32.69% Insured --------------------------------------------
2 Florida State Department of 4.3%
9.02% Hospital Transportation Right of Way-A,
5.0000% 07/01/2017
9.30% Pre-Refunded --------------------------------------------
3 Palm Beach County, Florida, 3.6%
13.29% Other Health Facilities Authority
Revenue, (Good Samaritans Health
13.70% Pollution Control System), 6.200% 10/01/11
Revenue/Industrial --------------------------------------------
Development Revenue 4 Dade County, Florida, Water and 3.2%
Sewer System Revenue Refunding
PORTFOLIO HOLDINGS WERE CURRENT AS (FGIC Insured), 5.000% 10/01/13
OF MARCH 31, 1998, ARE SUBJECT TO --------------------------------------------
CHANGE AND MAY NOT BE REPRESENTATIVE 5 Jacksonville, Florida, Health 3.2%
OF CURRENT HOLDINGS. Facilities Authority, Hospital
Revenue: (Daughters Of Charity),
Series A, 5.000% 11/15/15
--------------------------------------------
6 Martin County, Florida, 2.5%
Industrial Development Authority
Revenue, (Indiantown Cogeneration
Project), Series A, AMT, 7.875%
12/15/25
--------------------------------------------
7 Hillsborough County, Florida, 2.5%
Industrial Development Authority,
PCR, (Tampa Electric Company
Project), 8.000% 05/01/22
--------------------------------------------
8 Escambia County, Florida, PCR, 2.4%
(Champion International
Corporation Project), AMT, 6.900%
08/01/22
--------------------------------------------
9 Florida State Municipal Power 2.4%
Agency Revenue, (Stanton II
Project), Pre-refunded, (AMBAC
Insured), 6.500% 10/01/20
--------------------------------------------
10 Florida State Housing Finance 2.4%
Agency, Refunding: Multi-family
Housing: (Altamonte Project),
Series C, 7.000% 12/01/24
--------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
25
<PAGE> 30
Nations Florida
Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20-
Measurement Period Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Florida Municipal Bond $12,590 Index $13,446 Index $13,118
<S> <C> <C> <C>
Dec. 13 1993 10000 10000 10000
1993 10056 10241 10211
9251 9532 9651
9330 9626 9757
9346 9677 9824
1994 9244 9490 9683
10003 10335 10368
10270 10557 10617
10531 10843 10923
1995 11082 11477 11374
10811 11221 11237
10915 11348 11323
11172 11672 11582
1996 11433 11987 11877
11383 11914 11849
11769 12417 12257
12133 12851 12626
1997 12454 13288 12969
Mar. 31 1998 12590 13446 13118
</TABLE>
Investor B Shares (as of 3/31/98)* [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20-
Measurement Period Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Florida Municipal Bond $11,963 Index $13,446 Index $13,003
<S> <C> <C> <C>
Oct. 22 1993 10000 10000 10000
1993 10034 10241 10121
9213 9532 9565
9274 9626 9671
9273 9677 9737
1994 9154 9490 9598
9888 10335 10276
10133 10557 10524
10371 10843 10826
1995 10894 11477 11273
10607 11221 11137
10690 11348 11223
10921 11672 11480
1996 11156 11987 11772
11086 11914 11744
11441 12417 12149
11770 12851 12515
1997 12057 13288 12855
Mar. 31 1998 11963 13446 13003
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(12/13/93 through 3/31/98) 5.50%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Florida Municipal
Bond Fund from the date each class of
shares was first offered. The Lehman
20-Year Municipal Bond Index is a
broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 18 to 22
years. It is unavailable for
investment. The Lehman Municipal Bond
Index is a broad-based, unmanaged,
total return index composed of 8,000
investment-grade, long-term maturity
bonds. It is unavailable for
investment. The performance shown
reflects the performance of Primary A
and Investor B Shares. The performance
of Investor A and Investor C Shares may
vary based on the differences in sales
loads and fees paid by the shareholders
investing in each class.
The annual reports for the fiscal year
ended March 31, 1997 and prior years
compared the Fund's performance to the
Lehman 20-Year Municipal Bond Index.
Fund management believes that the
Lehman Municipal Bond Index is a more
appropriate benchmark because the
maturities of the municipal debt
securities comprising the index more
closely resemble the maturities of the
securities acquired by the Fund.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE
INCEPTION NAV CDSC*
(10/22/93 through
3/31/98) 4.51% 4.12%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 12/13/93 12/10/93 10/22/93 11/3/94
NAV CDSC*
- -------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 10.60% 10.38% 9.71% 4.71% 9.83%
- -------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 7.97% 7.76% 7.14% 6.27% 7.29%
Since Inception 5.50% 5.15% 4.51% 4.12% 9.78%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
26
<PAGE> 31
Nations Georgia
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS GEORGIA
INTERMEDIATE MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT
OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Michele M. Poirier was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal and sector selection and individual credit reviews. We also seek
Georgia state income taxes to limit the distribution of capital gains when appropriate.
consistent with moderate As an intermediate-term portfolio, the Fund maintains an
fluctuation of principal. The average dollar-weighted maturity of between three and ten
Fund invests in investment- years and a duration between five and six years.
grade, intermediate-term HOW DID THE FUND PERFORM DURING THE PERIOD?
municipal securities. With a total return of 8.45%, the Fund (Primary A Shares)
PERFORMANCE REVIEW outperformed its peer group, the Lipper Other States
For the 12-month period ended Intermediate Municipal Debt Funds Universe,*** which
March 31, 1998, Nations Georgia returned 7.87% for the 12-month period ended March 31, 1998.
Intermediate Municipal Bond The Fund benefited from an overweighting in securities rated
Fund Primary A Shares provided "A", which enjoyed higher total returns as the gap between
a total return of 8.45%.** yields of lower- and higher-rated credits narrowed in
response to generally improved balance sheets on the part of
municipal bond issuers. (Prices of lower-quality securities
rise as their yields fall to levels that are closer to those
of higher-quality securities.)
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper Other
States Intermediate Municipal Debt Funds Universe invest in
municipal debt issues with dollar-weighted maturities of
five to ten years and are exempt from taxation on a
specified city or state basis.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
27
<PAGE> 32
Nations Georgia
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE STATE OF GEORGIA CONTINUED WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN GEORGIA?
TO ENJOY STRONG FINANCIAL Despite a slowdown in non-farm employment growth, the state
OVERSIGHT AND A RELATIVELY LOW of Georgia continued to enjoy strong financial oversight and
DEBT BURDEN. a relatively low debt burden. Georgia's fiscal strength was
rewarded with the highest possible ratings from several
agencies: a "Aaa" rating by Moody's Investors Service, Inc.,
an upgrade to "AAA" by Standard & Poor's Corporation in July
1997 and a "AAA" rating from Fitch IBCA, Inc. The textile
industry in Georgia continued to contract because of
low-cost products from overseas, while high-tech
manufacturing job growth remained strong. Overall, Georgia's
annual net job growth has generally been in line with the
national average of about 2%.
WHAT IS YOUR OUTLOOK FOR GEORGIA AND THE MUNICIPAL BOND
MARKET IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
With regard to Georgia in particular, wage inflation has
become a concern as more firms choose to call the state home
and find themselves competing for a declining number of
qualified employees. Rising demand for schools, highways and
essential services are just some of the challenges Georgia
faces in light of steady job creation and related increases
in urban center populations.
</TABLE>
28
<PAGE> 33
Nations Georgia
Intermediate Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
3.37% Pre-Refunded
3.37% Power/Utilities Revenue
4.05% Pollution Control
Revenue/Industrial
Development Revenue
5.06% Water
6.61% Hospital
8.57% Other
33.38% Insured
35.59% General Obligation
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <S> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
--------------------------------------------
1 Dalton, Georgia, Multiple 3.8%
Utility Revenue Refunding, (MBIA
Insured), 6.000% 01/01/06
--------------------------------------------
2 Atlanta, Georgia, Airport 3.0%
Facilities Revenue Refunding,
(AMBAC Insured), 7.250% 01/01/10
--------------------------------------------
3 Metropolitan Atlanta Rapid 2.3%
Transit Authority (MARTA),
Georgia, Sales Tax Revenue
Refunding, Series P, (AMBAC
Insured), 5.900% 07/01/03
--------------------------------------------
4 Bibb County, Georgia, GO, 5.50% 2.2%
01/01/08
--------------------------------------------
5 Georgia State, GO: Series C, 2.2%
6.500% 07/01/05
--------------------------------------------
6 Baldwin County, Georgia, School 2.1%
District, GO, (State Aid
Withholding), 4.500% 01/01/03
--------------------------------------------
7 Municipal Electric Authority, 1.8%
Georgia, (Project One), Series
A, (MBIA Insured), 5.375%
01/01/19
--------------------------------------------
8 Columbus, Georgia, Water and 1.7%
Sewer Authority Revenue
Refunding Series 1992, (FGIC
Insured), 6.000% 05/01/03
--------------------------------------------
9 Hall County, Georgia, School 1.6%
District, GO, (AMBAC Insured),
6.700% 12/01/14
--------------------------------------------
10 Cobb County, Georgia, School 1.5%
District, GO, Series B, 6.150%
02/01/03
--------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
29
<PAGE> 34
Nations Georgia
Intermediate Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-
Measurement Period Year Municipal Bond
(Fiscal Year Covered) Georgia Intermediate Municipal Bond $14,697 Index $15,215
<S> <C> <C>
Mar. 1 1992 10000 10000
10014 9966
10361 10319
10623 10603
1992 10813 10777
11196 11121
11521 11429
11909 11760
1993 12031 11901
11480 11453
11572 11575
11631 11687
1994 11476 11573
12116 12180
12424 12525
12715 12883
1995 13117 13207
12989 13161
13045 13219
13301 13455
1996 13597 13786
13551 13754
13918 14228
14271 14657
1997 14574 15055
Mar. 31 1998 14697 15215
</TABLE>
Investor B Shares (as of 3/31/98)* [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-
Measurement Period Year Municipal Bond
(Fiscal Year Covered) Georgia Intermediate Municipal Bond $12,409 Index $13,379
<S> <C> <C>
June 7 1993 10000 10000
10141 10183
10470 10478
1993 10563 10604
10067 10205
10135 10313
10174 10413
1994 10026 10312
10572 10852
10828 11160
11067 11479
1995 11403 11768
11278 11727
11312 11778
11520 11989
1996 11761 12284
11707 12270
12009 12609
12292 12946
1997 12528 13228
Mar. 31 1998 12409 13379
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(3/1/92 through 3/31/98) 6.54%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Georgia Intermediate
Municipal Bond Fund from the date each
class of shares was first offered. The
Lehman 7-Year Municipal Bond Index is a
broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 7 to 8 years.
It is unavailable for investment. The
performance shown reflects the
performance of Primary A and Investor B
Shares. The performance of Investor A
and Investor C Shares may vary based on
the differences in sales loads and fees
paid by the shareholders investing in
each class.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE
INCEPTION NAV CDSC*
(6/7/93 through
3/31/98) 4.93% 4.59%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 3/1/92 5/4/92 6/7/93 6/17/92
NAV CDSC*
- -----------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 8.45% 8.24% 7.70% 3.70% 7.70%
- -----------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 6.65% 6.44% 6.05% 5.15% 6.05%
5 Years 5.59% 5.39% NA NA 5.00%
Since Inception 6.54% 6.41% 4.93% 4.59% 5.73%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
30
<PAGE> 35
Nations Georgia
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS GEORGIA
MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Michele M. Poirier was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal and sector selection and individual credit reviews. We also seek
Georgia state income taxes with to limit the distribution of capital gains when appropriate.
the potential for principal As a long-term portfolio, the Fund maintains an average
fluctuation associated with dollar-weighted maturity of greater than ten years and a
investments in long-term duration between seven and one-half and nine and one-half
municipal securities. The Fund years.
invests in investment-grade, HOW DID THE FUND PERFORM DURING THE PERIOD?
long-term municipal securities. With a total return of 10.43%, the Fund (Primary A Shares)
PERFORMANCE REVIEW underperformed its peer group, the Lipper Georgia Municipal
For the 12-month period ended Debt Funds Universe,*** which returned 10.64% for the
March 31, 1998, Nations Georgia 12-month period ended March 31, 1998. Given the uncertain
Municipal Bond Fund Primary A direction of interest rates during the period, we believed
Shares provided a total return it prudent to maintain a relatively neutral stance with
of 10.43%.** regard to the Fund's duration. Because the Fund had a
shorter duration than its peer group, it did not benefit as
fully from the declining interest rate environment during
the period.
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper
Georgia Municipal Debt Funds Universe limit their assets to
those securities which are exempt from taxation in Georgia.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
31
<PAGE> 36
Nations Georgia
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE STATE OF GEORGIA CONTINUED WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN GEORGIA?
TO ENJOY STRONG FINANCIAL Despite a slowdown in non-farm employment growth, the state
OVERSIGHT AND A RELATIVELY LOW of Georgia continued to enjoy strong financial oversight and
DEBT BURDEN. a relatively low debt burden. Georgia's fiscal strength was
rewarded with the highest possible ratings from several
agencies: a "Aaa" rating by Moody's Investors Service, Inc.,
an upgrade to "AAA" by Standard & Poor's Corporation in July
1997 and a "AAA" rating from Fitch IBCA, Inc. The textile
industry in Georgia continued to contract because of
low-cost products from overseas, while high-tech
manufacturing job growth remained strong. Overall, Georgia's
annual net job growth has generally been in line with the
national average of about 2%.
WHAT IS YOUR OUTLOOK FOR GEORGIA AND THE MUNICIPAL BOND
MARKET IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
With regard to Georgia in particular, wage inflation has
become a concern as more firms choose to call the state home
and find themselves competing for a declining number of
qualified employees. Rising demand for schools, highways and
essential services are just some of the challenges Georgia
faces in light of steady job creation and related increases
in urban center populations.
</TABLE>
32
<PAGE> 37
Nations Georgia
Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
5.57% Cash and Cash Equivalents
8.15% Water
8.38% Housing Revenue
24.49% Insured
10.98% Hospital
17.56% General Obligation
11.22% Pollution Control
Revenue/Industrial
Development Revenue
13.65% Other
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <S> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
--------------------------------------------
1 Georgia L. Smith II, Georgia, 5.8%
World Congress Center Authority,
Recreational Revenue, (Domed
Stadium Project), (LOC SunTrust
Bank), 7.875% 07/01/20
--------------------------------------------
2 Roswell, Georgia, GO, 5.600% 5.7%
02/01/10
--------------------------------------------
3 Fulco, Georgia, Hospital 5.7%
Authority Revenue, Revenue
Anticipation Certificates, St.
Joseph's Hospital, 5.500%
10/01/14
--------------------------------------------
4 White County, Georgia, Industrial 3.3%
Development Authority Revenue
Refunding, (Clark-Schwebel Fiber
and Glass Company Project),
6.850% 06/01/10
--------------------------------------------
5 Peach County, Georgia, School 3.1%
District, GO, (MBIA Insured),
6.500% 02/01/08
--------------------------------------------
6 Columbia County, Georgia, School 3.0%
District, Series B, (MBIA
Insured), 6.250% 04/01/13
--------------------------------------------
7 Fayette County, Georgia, School 2.9%
District, GO, 6.125% 03/01/15
--------------------------------------------
8 Union County, Georgia, Housing 2.9%
Authority, Multi-family Housing
Revenue Refunding, (Hidden Lake
Apartments), Series A, (FHA/FNMA
COLL), 7.125% 12/01/25
--------------------------------------------
9 Lawrenceville, Georgia, Housing 2.9%
Authority, Multi-family Housing
Revenue, (Knollwood Park
Apartments Project), (FNMA
Collateral), 6.25% 12/01/29
--------------------------------------------
10 Savannah, Georgia, Hospital 2.9%
Authority, Revenue Refunding and
Improvement, (Candler Hospital
Project), 7.000% 01/01/23
--------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
33
<PAGE> 38
Nations Georgia
Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20
Measurement Period Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Georgia Municipal Bond $12,417 Index $13,129 Index $12,847
<S> <C> <C> <C>
Jan. 13 1994 10000 10000 10000
9208 9307 9451
9288 9400 9555
9245 9449 9621
1994 9102 9266 9483
9829 10092 10153
10082 10309 10398
10373 10588 10697
1995 10893 11207 11138
10679 10957 11004
10745 11081 11088
11018 11397 11343
1996 11284 11705 11632
11244 11633 11604
11634 12125 12004
11945 12549 12365
1997 12274 12975 12701
Mar. 31 1998 12417 13129 12847
</TABLE>
Investor B Shares (as of 3/31/98)* [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20
Measurement Period Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Georgia Municipal Bond $11,967 Index $13,446 Index $13,003
<S> <C> <C> <C>
Oct. 21 1993 10000 10000 10000
1993 10072 10241 10121
9302 9532 9565
9365 9626 9671
9304 9677 9737
1994 9143 9490 9598
9856 10335 10276
10091 10557 10524
10362 10843 10826
1995 10861 11477 11273
10628 11221 11137
10674 11348 11223
10925 11672 11480
1996 11168 11987 11772
11107 11914 11744
11471 12417 12149
11754 12851 12515
1997 12052 13288 12855
Mar. 31 1998 11967 13446 13003
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(1/13/94 through 3/31/98) 5.27%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Georgia Municipal
Bond Fund from the date each class of
shares was first offered. The Lehman
20-Year Municipal Bond Index is a
broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 18 to 22
years. It is unavailable for
investment. The Lehman Municipal Bond
Index is a broad-based, unmanaged,
total return index composed of
investment-grade, long-term maturity
bonds. It is unavailable for
investment. The performance shown
reflects the performance of Primary A
and Investor B Shares. The performance
of Investor A and Investor C Shares may
vary based on the differences in sales
loads and fees paid by the shareholders
investing in each class.
The annual reports for the fiscal year
ended March 31, 1997 and prior years
compared the Fund's performance to the
Lehman 20-Year Municipal Bond Index.
Fund management believes that the
Lehman Municipal Bond Index is a more
appropriate benchmark because the
maturities of the municipal debt
securities comprising the index more
closely resemble the maturities of the
securities acquired by the Fund.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE INCEPTION NAV CDSC*
(10/21/93 through
3/31/98) 4.51% 4.12%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 1/13/94 12/30/93 10/21/93 11/3/94
NAV CDSC*
- -----------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 10.43% 10.22% 9.54% 4.54% 9.64%
- -----------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 8.10% 7.82% 7.27% 6.40% 7.42%
Since Inception 5.27% 5.12% 4.51% 4.12% 9.82%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
34
<PAGE> 39
Nations Maryland
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS MARYLAND
INTERMEDIATE MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT
OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Dawn Daggy-Mangerson aim to limit the Fund's exposure to any single credit or
was the Fund's portfolio market sector. In addition, we use a combination of
manager. investment strategies, including duration management
INVESTMENT OBJECTIVE (managing the Fund's sensitivity to interest rates), market
The Fund seeks high current sector selection and individual credit reviews. We also seek
income exempt from federal and to limit the distribution of capital gains when appropriate.
Maryland state income taxes As an intermediate-term portfolio, the Fund maintains an
consistent with moderate average dollar-weighted maturity of between three and ten
fluctuation of principal. The years and a duration between five and six years.
Fund invests in investment- HOW DID THE FUND PERFORM DURING THE PERIOD?
grade, intermediate-term With a total return of 7.83%, the Fund (Primary A Shares)
municipal securities. slightly underperformed its peer group, the Lipper Other
PERFORMANCE REVIEW States Intermediate Municipal Debt Funds Universe,*** which
For the 12-month period ended returned 7.87% for the 12-month period ended March 31, 1998.
March 31, 1998, Nations Because of a higher weighting in shorter-maturity securities
Maryland Intermediate Municipal than its peer group, the Fund did not benefit as fully from
Bond Fund Primary A Shares the declining interest rate environment during the period.
provided a total return of *The outlook for this Fund may differ from that presented
7.83%.** for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper Other
States Intermediate Municipal Debt Funds Universe invest in
municipal debt issues with dollar-weighted maturities of
five to ten years and are exempt from taxation on a
specified city or state basis.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
35
<PAGE> 40
Nations Maryland
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
WITH PER CAPITA PERSONAL INCOME WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN MARYLAND?
AT 113% OF THE NATIONAL With per capita personal income at 113% of the national
AVERAGE, MARYLAND CONTINUED TO average, Maryland continued to rank as one of the wealthiest
RANK AS ONE OF THE WEALTHIEST states in the country. Despite the contraction of government
STATES IN THE COUNTRY. and defense-related industries in the 1990s, Maryland was
able to maintain the highest possible credit ratings from
Moody's Investors Service, Inc., Standard & Poor's
Corporation and Fitch IBCA, Inc. through conservative
budgeting, flexible financial management and strict
oversight of general obligation debt. A 5.9% increase in
total revenue over the previous fiscal year reflected
Maryland's growing and diverse economy in 1997. The state's
moderately high debt burden is carefully controlled by a
constitutional provision for rapid amortization of
outstanding tax-supported debt.
WHAT IS YOUR OUTLOOK FOR MARYLAND AND THE MUNICIPAL BOND
MARKET IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
With regard to Maryland in particular, the challenge comes
from within, as the 1997 legislative session passed an
income tax cut that will phase in a 10% reduction in revenue
over the next five years. Maryland must continue to exhibit
fiscal restraint if it is to maintain its strong financial
performance.
</TABLE>
36
<PAGE> 41
Nations Maryland
Intermediate Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
3.58% Cash and Cash Equivalents
3.79% Pollution Control
Revenue/Industrial
Development Revenue
4.42% Transportation
6.15% Hospital
9.23% Pre-Refunded
33.63% Insured
11.20% Other
28.00% General Obligation
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <S> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
----------------------------------------------
1 Washington State Public Power 3.3%
Supply System Nuclear, Project No.
1, Revenue Series A, 7.000%
07/01/08
----------------------------------------------
2 Charles County, Maryland, 3.2%
Consolidated Public Improvement,
Revenue Refunding, GO, 4.400%
06/01/03
----------------------------------------------
3 Maryland State, Transportation 3.1%
Authority Revenue, GO, 4.375%
12/15/03
----------------------------------------------
4 Maryland State, State and Local 3.0%
Facilities Loan, GO, Third Series,
Pre-Refunded, 5.000% 10/15/06
----------------------------------------------
5 Maryland State, Transportation 2.3%
Authority, Special Obligation
Revenue, (Baltimore-Washington D.C.
International Airport Project),
Series A, AMT, (FGIC Insured),
6.400% 07/01/19
----------------------------------------------
6 Frederick County, Maryland, 2.0%
Consolidated Public Improvement,
Revenue Refunding, GO, (FGIC
Insured), 5.750% 12/01/01
----------------------------------------------
7 Prince Georges County, Maryland, 2.0%
Solid Waste Management Systems
Authority, Revenue Refunding, (FSA
Insured), 5.100% 06/15/05
----------------------------------------------
8 Calvert County, Maryland, 1.9%
Consolidated Public Improvement
Revenue Refunding, GO, 4.625%
07/15/05
----------------------------------------------
9 Baileyville, Maine Pollution 1.9%
Control Revenue, 4.750% 06/01/05
----------------------------------------------
10 Baltimore, Maryland, Port 1.8%
Facilities Revenue, Consolidated
Coal Sales, Series 85, 6.500%
12/01/10
----------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
37
<PAGE> 42
Nations Maryland
Intermediate Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7
Measurement Period Year Municipal Bond
(Fiscal Year Covered) Maryland Intermediate Municipal Bond $16,386 Index $17,714
<S> <C> <C>
Sept. 1 1990 10000 10000
10085 10015
1990 10407 10399
10643 10647
10810 10832
11123 11243
1991 11465 11612
11477 11603
11840 12014
12097 12345
1992 12285 12547
12641 12948
12992 13306
13407 13692
1993 13534 13856
12926 13335
13032 13476
13075 13607
1994 12922 13474
13648 14181
14019 14583
14343 14999
1995 14710 15377
14636 15324
14672 15391
14929 15666
1996 15245 16051
15196 16014
15591 16566
15946 17066
1997 16276 17528
Mar. 31 1998 16386 17714
</TABLE>
Investor B Shares (as of 3/31/98)* [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7
Measurement Period Year Municipal Bond
(Fiscal Year Covered) Maryland Intermediate Municipal Bond $12,249 Index $13,379
<S> <C> <C>
June 8 1993 10000 10000
10129 10183
10440 10478
1993 10525 10604
10040 10205
10109 10313
10130 10413
1994 9999 10312
10548 10852
10821 11160
11057 11479
1995 11326 11768
11255 11727
11268 11778
11451 11989
1996 11679 12284
11627 12270
11914 12609
12165 12946
1997 12390 13228
Mar. 31 1998 12249 13379
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(9/1/90 through 3/31/98) 6.73%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Maryland Intermediate
Municipal Bond Fund from the date each
class of shares was first offered. The
Lehman 7-Year Municipal Bond Index is a
broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 7 to 8 years.
It is unavailable for investment. The
performance shown reflects the
performance of Primary A and Investor B
Shares. The performance of Investor A
and Investor C Shares may vary based on
the differences in sales loads and fees
paid by the shareholders investing in
each class.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE
INCEPTION NAV CDSC*
(6/8/93 through 3/31/98) 4.66% 4.31%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 9/1/90 9/1/90 6/8/93 6/17/92
NAV CDSC*
- ------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 7.83% 7.61% 7.07% 3.07% 7.07%
- ------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 6.28% 6.07% 5.68% 4.78% 5.68%
5 Years 5.33% 5.11% NA NA 4.69%
Since Inception 6.73% 6.58% 4.66% 4.31% 5.22%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
38
<PAGE> 43
Nations Maryland
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS MARYLAND
MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Dawn Daggy-Mangerson aim to limit the Fund's exposure to any single credit or
was the Fund's portfolio market sector. In addition, we use a combination of
manager. investment strategies, including duration management
INVESTMENT OBJECTIVE (managing the Fund's sensitivity to interest rates), market
The Fund seeks high current sector selection and individual credit reviews. We also seek
income exempt from federal and to limit the distribution of capital gains when appropriate.
Maryland state income taxes As a long-term portfolio, the Fund maintains an average
with the potential for dollar-weighted maturity of greater than ten years and a
principal fluctuation duration between seven and one-half and nine and one-half
associated with investments in years.
long-term municipal securities. HOW DID THE FUND PERFORM DURING THE PERIOD?
The Fund invests in With a total return of 10.62%, the Fund (Primary A Shares)
investment-grade, long-term outperformed its peer group, the Lipper Maryland Municipal
municipal securities. Debt Funds Universe,*** which returned 9.94% for the
PERFORMANCE REVIEW 12-month period ended March 31, 1998. Given the uncertain
For the 12-month period ended direction of interest rates during the period, we believed
March 31, 1998, Nations it prudent to maintain a relatively neutral stance with
Maryland Municipal Bond Fund regard to the Fund's duration. With a longer duration than
Primary A Shares provided a many of its peers, the Fund benefited more fully from the
total return of 10.62%.** declining interest rate environment during the period.
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper
Maryland Municipal Debt Funds Universe limit their assets to
those securities which are exempt from taxation in Maryland.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
39
<PAGE> 44
Nations Maryland
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE FUND (PRIMARY A SHARES) WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN MARYLAND?
OUTPERFORMED ITS PEER GROUP FOR With per capita personal income at 113% of the national
THE 12-MONTH PERIOD ENDED MARCH average, Maryland continued to rank as one of the wealthiest
31, 1998. states in the country. Despite the contraction of government
and defense-related industries in the 1990s, Maryland was
WITH PER CAPITA PERSONAL INCOME able to maintain the highest possible credit ratings from
AT 113% OF THE NATIONAL Moody's Investors Service, Inc., Standard & Poor's
AVERAGE, MARYLAND CONTINUED TO Corporation and Fitch IBCA, Inc. through conservative
RANK AS ONE OF THE WEALTHIEST budgeting, flexible financial management and strict
STATES IN THE COUNTRY. oversight of general obligation debt. A 5.9% increase in
total revenue over the previous fiscal year reflected
Maryland's growing and diverse economy in 1997. The state's
moderately high debt burden is carefully controlled by a
constitutional provision for rapid amortization of
outstanding tax-supported debt.
WHAT IS YOUR OUTLOOK FOR MARYLAND AND THE MUNICIPAL BOND
MARKET IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
With regard to Maryland in particular, the challenge comes
from within, as the 1997 legislative session passed an
income tax cut that will phase in a 10% reduction in revenue
over the next five years. Maryland must continue to exhibit
fiscal restraint if it is to maintain its strong financial
performance.
</TABLE>
40
<PAGE> 45
Nations Maryland
Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
5.53% Pollution Control
Revenue/Industrial
Development Revenue
7.84% Pre-Refunded
8.13% Education
27.35% Insured
10.13% General Obligation
14.79% Housing
12.27% Hospital
13.96% Other
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
----------------------------------------------
1 District of Columbia, Washington 4.9%
Suburban Sanitation District MD,
5.800% 06/01/2003
----------------------------------------------
2 Maryland State, Community 4.7%
Development Administration,
Department of Housing and Community
Development, Single Family Program
-First Series, (MHF/FHA Insured),
5.600% 04/01/18
----------------------------------------------
3 University of Maryland, System 4.6%
Auxiliary Facility and Tuition
Revenue, Series A, 5.125% 04/01/13
----------------------------------------------
4 Maryland State, Health and Higher 4.6%
Education, 4.600% 11/01/2026
----------------------------------------------
5 Illinois Metropolitan Pier & 3.6%
Exposition Authority, Illinois
Dedicated State Tax Revenue,
Capital Appreciation, (McCormick
Place Exposition), Series A, (FGIC
Insured),
6.750% 6/15/20
----------------------------------------------
6 Bel Air, Maryland, Industrial 2.9%
Development Revenue, (May
Department Stores Company Project),
6.375% 10/01/99
----------------------------------------------
7 Government of Guam, GO, Series A, 2.8%
5.200% 11/15/08
----------------------------------------------
8 Maryland State, Transportation 2.7%
Authority Revenue, (Transportation
Facilities Project), Refunded,
6.800% 07/01/16
----------------------------------------------
9 Puerto Rico Electric Power 2.6%
Authority, Power Revenue Refunding,
Series Y, (MBIA Insured), 6.500%
07/01/06
----------------------------------------------
10 Prince Georges County, Maryland, 2.5%
PCR Refunding, (Potomac Electric
Power Project), 5.750% 03/15/10
----------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
41
<PAGE> 46
Nations Maryland
Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20-
Measurement Period Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Maryland Municipal Bond $13,290 Index $13,895 Index $13,354
<S> <C> <C> <C>
Sept. 20 1994 10000 10000 10000
9948 9736 9822
1994 9785 9807 9857
10581 10680 10554
10823 10910 10808
11105 11205 11118
1995 11672 11860 11577
11421 11596 11438
11499 11727 11526
11765 12062 11790
1996 12048 12388 12090
12015 12312 12061
12391 12832 12477
12783 13281 12853
1997 13157 13732 13202
Mar. 31 1998 13290 13895 13354
</TABLE>
Investor B Shares (as of 3/31/98)* [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Maryland Lehman 20-Year Lehman Municipal
Measurement Period Municipal Bond Municipal Bond Bond Index
(Fiscal Year Covered) $11,809 Index $13,446 $13,003
<S> <C> <C> <C>
Oct. 21 1993 10000 10000 10000
1993 10046 10241 10121
9235 9532 9565
9264 9626 9671
9232 9677 9737
1994 9064 9490 9598
9783 10335 10276
9988 10557 10524
10229 10843 10826
1995 10731 11477 11273
10481 11221 11137
10533 11348 11223
10757 11672 11480
1996 10994 11987 11772
10944 11914 11744
11266 12417 12149
11598 12851 12515
1997 11913 13288 12855
Mar. 31 1998 11809 13446 13003
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(9/20/94) through 3/31/98) 8.40%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Maryland Municipal
Bond Fund from the date each class of
shares was first offered. The Lehman
20-Year Municipal Bond Index is a
broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 18 to 22
years. It is unavailable for
investment. The Lehman Municipal Bond
Index is a broad-based, unmanaged,
total return index composed of 8,000
investment-grade, long-term maturity
bonds. It is unavailable for
investment. The performance shown
reflects the performance of Primary A
and Investor B Shares. The performance
of Investor A and Investor C Shares may
vary based on the differences in sales
loads and fees paid by the shareholders
investing in each class.
The annual reports for the fiscal year
ended March 31, 1997 and prior years
compared the Fund's performance to the
Lehman 20-Year Municipal Bond Index.
Fund management believes that the
Lehman Municipal Bond Index is a more
appropriate benchmark because the
maturities of the municipal debt
securities comprising the index more
closely resemble the maturities of the
securities acquired by the Fund.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE INCEPTION NAV CDSC*
(10/21/93 through 3/31/98) 4.20% 3.81%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 9/20/94 11/4/93 10/21/93 11/3/94
NAV CDSC*
- -----------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 10.62% 10.40% 9.72% 4.72% 9.88%
- -----------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 7.90% 7.68% 7.07% 6.19% 7.24%
Since Inception 8.40% 5.30% 4.20% 3.81% 9.50%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
42
<PAGE> 47
Nations North Carolina
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS NORTH
CAROLINA INTERMEDIATE MUNICIPAL INCOME FUND'S
PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 1998
AND THEIR CURRENT OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Mathew M. Kiselak was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal and sector selection and individual credit reviews. We also seek
North Carolina state income to limit the distribution of capital gains when appropriate.
taxes consistent with moderate As an intermediate-term portfolio, the Fund maintains an
fluctuation of principal. The average dollar-weighted maturity of between three and ten
Fund invests in investment- years and a duration between five and six years.
grade, intermediate-term HOW DID THE FUND PERFORM DURING THE PERIOD?
municipal securities. With a total return of 8.39%, the Fund (Primary A Shares)
PERFORMANCE REVIEW outperformed its peer group, the Lipper Other States
For the 12-month period ended Intermediate Municipal Debt Funds Universe,*** which
March 31, 1998, Nations North returned 7.87% for the 12-month period ended March 31, 1998.
Carolina Intermediate Municipal Given the uncertain direction of interest rates during the
Bond Fund Primary A Shares period, we believed it prudent to maintain a relatively
provided a total return of neutral stance with regard to the Fund's duration. With a
8.39%.** longer duration than many of its peers, the Fund benefited
more fully from the declining interest rate environment
during the period.
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper Other
States Intermediate Municipal Debt Funds Universe invest in
municipal debt issues with dollar-weighted maturities of
five to ten years and are exempt from taxation on a
specified city or state basis.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
43
<PAGE> 48
Nations North Carolina
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE FUND (PRIMARY A SHARES) WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN NORTH
OUTPERFORMED ITS PEER GROUP FOR CAROLINA?
THE 12-MONTH PERIOD ENDED MARCH With the highest possible credit ratings from Moody's
31, 1998. Investors Service, Inc., Standard & Poor's Corporation and
Fitch IBCA, Inc., North Carolina benefited from an
increasingly diverse economy, a conservative debt policy and
a continuing trend of sound financial management. Non-farm
employment grew 2.9% in fiscal 1997 and has exceeded the
national average over the past four years. In addition, with
1997 total revenue rising 8.4% over fiscal 1996, combined
with a debt per capita of only $237, North Carolina enjoyed
a level of financial flexibility that should help the state
weather any future economic slowdown that might occur.
WHAT IS YOUR OUTLOOK FOR NORTH CAROLINA AND THE MUNICIPAL
BOND MARKET IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
With regard to North Carolina in particular, the state
unemployment rate is only 3.6%. This tight labor market has
not gone unnoticed by businesses seeking to enter the state.
However, North Carolina is still an attractive alternative
for business relocation because it remains the banking hub
of the South and is home to several prestigious
universities.
</TABLE>
44
<PAGE> 49
Nations North Carolina
Intermediate Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
3.47% Water
4.76% Other
28.18% General Obligation
6.33% Pollution Control
Revenue/Industrial
Development Revenue
9.10% Education
9.26% Pre-Refunded
16.03% Hospital
22.87% Insured
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <S> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
----------------------------------------------
1 North Carolina State, GO, Series 2.1%
A, 5.100% 03/01/06
----------------------------------------------
2 North Carolina, Medicare Care, 2.1%
Community Health Care Facility
Revenue, (Stanley Memorial
Hospital Project), (AMBAC
Insured), 5.250% 10/01/16
----------------------------------------------
3 Martin County, North Carolina, 2.0%
Industrial Facilities and
Pollution Control Financing
Authority Revenue, (Wayerhaeuser
Company Project), 8.500% 06/15/99
----------------------------------------------
4 University of North Carolina, 1.9%
University, Revenue Refunding,
Utilities Systems, 5.200% 08/01/06
----------------------------------------------
5 Fayetteville, North Carolina, 1.7%
Public Works Commission, (FSA
Insured), 5.125% 03/01/17
----------------------------------------------
6 North Carolina, Medicare Care, 1.7%
Community Health Care Facility
Revenue, (Stanley Memory Hospital
Project), (AMBAC Insured), 6.250%
06/01/17
----------------------------------------------
7 Charlotte, North Carolina, 1.6%
Refunding, GO, 5.000% 06/01/05
----------------------------------------------
8 North Carolina, Medicare Care, 1.6%
Community Health Care Facility
Revenue, (Stanley Memorial
Hospital Project), (AMBAC
Insured), 5.500% 10/01/14
----------------------------------------------
9 North Carolina Municipal Power 1.6%
Agency, Refunding #1, Catawba
Electric Revenue Refunding, (FGIC
Insured),
5.200% 01/01/00
----------------------------------------------
10 Cleveland County, North Carolina, 1.3%
GO, (FGIC Insured), 5.100%
06/01/02
----------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
45
<PAGE> 50
Nations North Carolina
Intermediate Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-
Measurement Period Year Municipal Bond
(Fiscal Year Covered) North Carolina Intermediate Municipal Bond $13,636 Index $14,234
<S> <C> <C>
Dec. 11 1992 10000 10000
1992 10187 10082
10374 10404
10681 10692
11013 11002
1993 11090 11134
10643 10715
10705 10829
10761 10933
1994 10636 10827
11257 11395
11529 11718
11826 12052
1995 12141 12356
12044 12313
12110 12367
12345 12588
1996 12608 12898
12581 12868
12934 13311
13245 13713
1997 13518 14085
Mar. 31 1998 13636 14234
</TABLE>
Investor B Shares (as of 3/31/98)* [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-
Measurement Period Year Municipal Bond
(Fiscal Year Covered) North Carolina Intermediate Municipal Bond $12,410 Index $13,379
<S> <C> <C>
June 7 1993 10000 10000
10134 10183
10435 10478
1993 10495 10604
10060 10205
10106 10313
10145 10413
1994 10015 10312
10587 10852
10829 11160
11094 11479
1995 11375 11768
11271 11727
11319 11778
11524 11989
1996 11755 12284
11715 12270
12029 12609
12297 12946
1997 12525 13228
Mar. 31 1998 12410 13379
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(12/11/92 through 3/31/98) 6.02%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations North Carolina
Intermediate Municipal Bond Fund from
the date each class of shares was first
offered. The Lehman 7-Year Municipal
Bond Index is a broad-based, unmanaged,
total return index composed of
investment-grade bonds with maturities
of 7 to 8 years. It is unavailable for
investment. The performance shown
reflects the performance of Primary A
and Investor B Shares. The performance
of Investor A and Investor C Shares may
vary based on the differences in sales
loads and fees paid by the shareholders
investing in each class.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE
INCEPTION NAV CDSC*
(6/7/93 through 3/31/98) 4.94% 4.59%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 12/11/92 12/14/92 6/7/93 12/16/92
NAV CDSC*
- ----------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 8.39% 8.17% 7.64% 3.64% 7.64%
- ----------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 6.60% 6.39% 6.00% 5.10% 6.00%
5 Years 5.62% 5.42% NA NA 4.98%
Since Inception 6.02% 5.81% 4.94% 4.59% 5.41%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waiver by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
46
<PAGE> 51
Nations North Carolina
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS NORTH
CAROLINA MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT
OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Mathew M. Kiselak was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal and sector selection and individual credit reviews. We also seek
North Carolina state income to limit the distribution of capital gains when appropriate.
taxes with the potential for As a long-term portfolio, the Fund maintains an average
principal fluctuation dollar-weighted maturity of greater than ten years and a
associated with investments in duration between seven and one-half and nine and one-half
long-term municipal securities. years.
The Fund invests in HOW DID THE FUND PERFORM DURING THE PERIOD?
investment-grade, long-term With a total return of 10.86%, the Fund (Primary A Shares)
municipal securities. outperformed its peer group, the Lipper North Carolina
PERFORMANCE REVIEW Municipal Debt Funds Universe,*** which returned 10.42% for
For the 12-month period ended the 12-month period ended March 31, 1998. Given the
March 31, 1998, Nations North uncertain direction of interest rates during the period, we
Carolina Municipal Bond Fund believed it prudent to maintain a relatively neutral stance
Primary A Shares provided a with regard to the Fund's duration. With a longer duration
total return of 10.86%.** than many of its peers, the Fund benefited more fully from
the declining interest rate environment during the period.
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included within the Lipper
North Carolina Municipal Debt Funds Universe limit their
assets to those securities which are exempt from taxation in
North Carolina.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
47
<PAGE> 52
Nations North Carolina
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE FUND OUTPERFORMED ITS PEER WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN NORTH
GROUP FOR THE 12-MONTH PERIOD CAROLINA?
ENDED MARCH 31, 1998. With the highest possible credit ratings from Moody's
Investors Service, Inc., Standard & Poor's Corporation and
Fitch IBCA, Inc., North Carolina benefited from an
increasingly diverse economy, a conservative debt policy and
a continuing trend of sound financial management. Non-farm
employment grew 2.9% in fiscal year 1997 and has exceeded
the national average over the past four years. In addition,
with 1997 total revenue rising 8.4% over fiscal year 1996,
combined with a debt per capita of only $237, North Carolina
enjoyed a level of financial flexibility that should help
the state weather any future economic slowdown that might
occur.
WHAT IS YOUR OUTLOOK FOR NORTH CAROLINA AND THE MUNICIPAL
BOND MARKET IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
With regard to North Carolina in particular, the state
unemployment rate is only 3.6%. This tight labor market has
not gone unnoticed by businesses seeking to enter the state.
However, North Carolina is still an attractive alternative
for business relocation because it remains the banking hub
of the South and is home to several prestigious
universities.
</TABLE>
48
<PAGE> 53
Nations North Carolina
Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
4.87% Cash and Cash
Equivalents
9.97% Other
4.56% Education
6.02% Housing
22.81% Pollution Control
Revenue/Industrial
Development Revenue
13.32% General Obligation
21.97% Insured
16.48% Hospital
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <S> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
--------------------------------------------
1 Mecklenburg County, North 6.3%
Carolina, Industrial Facilities
and Pollution Control Finance
Authority Revenue Refunding,
(Fluor Corporation Project),
5.250% 12/01/09
--------------------------------------------
2 Martin County, North Carolina, 6.3%
Industrial Facilities and
Pollution Control Financing
Authority Revenue, Solid Waste
Disposal, AMT, (Weyerhaeuser
Company), 5.650% 12/01/23
--------------------------------------------
3 Charlotte, North Carolina, 6.1%
Health Care Systems Revenue
Refunding, Mecklenburg Hospital
Authority, 5.125% 01/15/22
--------------------------------------------
4 Onslow County, North Carolina, 5.1%
Combined Enterprise System
Revenue, (MBIA Insured), 5.875%
06/01/09
--------------------------------------------
5 University North Carolina, 4.5%
Chapel Hill, Hospital Revenue,
5.000% 02/15/29
--------------------------------------------
6 North Carolina Medical Care 3.7%
Commission, Hospital Revenue
Refunding, (AMBAC-TCRS Insured),
5.250% 02/15/07
--------------------------------------------
7 Mecklenburg County, North 3.5%
Carolina, Refunding, GO, 6.000%
04/01/11
--------------------------------------------
8 North Carolina Medical Care 3.4%
Commission, Hospital Revenue
Refunding, (Rex Hospital
Project), 6.250% 06/01/17
--------------------------------------------
9 New Hanover County, North 3.4%
Carolina, Industrial Facilities
and Pollution Control Financing
Authority, (Solid Waste
Disposal, Occidental Petroleum
Corporation Project), AMT,
6.500% 08/01/14
--------------------------------------------
10 North Carolina Municipal Power 3.4%
Agency, Refunding #1, Catawba
Electric Revenue Refunding, (FSA
Insured), 6.200% 01/01/18
--------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
49
<PAGE> 54
Nations North Carolina
Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20-
Measurement Period North Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Carolina Municipal Bond $12,365 Index $13,129 Index $12,847
<S> <C> <C> <C>
Jan. 11 1994 10000 10000 10000
9192 9307 9451
9209 9400 9555
9205 9449 9621
1994 9063 9266 9483
9829 10092 10153
10060 10309 10398
10316 10588 10697
1995 10910 11207 11138
10639 10957 11004
10693 11081 11088
10953 11397 11343
1996 11206 11705 11632
11154 11633 11604
11529 12125 12004
11895 12549 12365
1997 12222 12975 12701
Mar. 31 1998 12365 13129 12847
</TABLE>
Investor B Shares (as of 3/31/98)* [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20-
Measurement Period Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) North Carolina Municipal Bond $11,955 Index $13,446 Index $13,003
<S> <C> <C> <C>
Oct. 21 1993 10000 10000 10000
1993 10119 10241 10121
9317 9532 9565
9316 9626 9671
9295 9677 9737
1994 9134 9490 9598
9888 10335 10276
10101 10557 10524
10339 10843 10826
1995 10914 11477 11273
10623 11221 11137
10657 11348 11223
10896 11672 11480
1996 11127 11987 11772
11054 11914 11744
11404 12417 12149
11743 12851 12515
1997 12040 13288 12855
Mar. 31 1998 11955 13446 13003
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(1/11/94 through 3/31/98) 5.16%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations North Carolina
Municipal Bond Fund from the date each
class of shares was first offered. The
Lehman 20-Year Municipal Bond Index is
a broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 18 to 22
years. It is unavailable for
investment. The Lehman Municipal Bond
Index is a broad-based, unmanaged,
total return index composed of 8,000
investment-grade, long-term maturity
bonds. It is unavailable for
investment. The performance shown
reflects the performance of Primary A
and Investor B Shares. The performance
of Investor A and Investor C Shares may
vary based on the differences in sales
loads and fees paid by the shareholders
investing in each class.
The annual reports for the fiscal year
ended March 31, 1997 and prior years
compared the Fund's performance to the
Lehman 20-Year Municipal Bond Index.
Fund management believes that the
Lehman Municipal Bond Index is a more
appropriate benchmark because the
maturities of the municipal debt
securities comprising the index more
closely resemble the maturities of the
securities acquired by the Fund.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE INCEPTION NAV CDSC*
(10/21/93 through 3/31/98) 4.49% 4.10%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 1/11/94 11/1/93 10/21/93 11/3/94
NAV CDSC*
- ------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 10.86% 10.64% 9.96% 4.96% 10.07%
- ------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 7.95% 7.73% 7.12% 6.25% 7.27%
Since Inception 5.16% 5.18% 4.49% 4.10% 9.82%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
50
<PAGE> 55
Nations South Carolina
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS SOUTH
CAROLINA INTERMEDIATE MUNICIPAL INCOME FUND'S
PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 1998
AND THEIR CURRENT OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Michele M. Poirier was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manger. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal and sector selection and individual credit reviews. We also seek
South Carolina state income to limit the distribution of capital gains when appropriate.
taxes consistent with moderate As an intermediate-term portfolio, the Fund maintains an
fluctuation of principal. The average dollar-weighted maturity of between three and ten
Fund invests in investment- years and a duration between five and six years.
grade, intermediate-term HOW DID THE FUND PERFORM DURING THE PERIOD?
municipal securities. With a total return of 7.88%, the Fund (Primary A Shares)
PERFORMANCE REVIEW slightly outperformed its peer group, the Lipper Other
For the 12-month period ended States Intermediate Municipal Debt Funds Universe,*** which
March 31, 1998, Nations South returned 7.87% for the 12-month period ended March 31, 1998.
Carolina Intermediate Municipal Given the uncertain direction of interest rates during the
Bond Fund Primary A Shares period, we believed it prudent to maintain a relatively
provided a total return of neutral stance with regard to the Fund's duration. Because
7.88%.** it had a shorter duration than its peer group, the Fund did
not benefit as fully from the declining interest rate
environment during the period.
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper Other
States Intermediate Municipal Debt Funds Universe invest in
municipal debt issues with dollar-weighted maturities of
five to ten years and are exempt from taxation on a
specified city or state basis.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
51
<PAGE> 56
Nations South Carolina
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE EXPANSION OF MANUFACTURING WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN SOUTH
IMPROVED SOUTH CAROLINA'S CAROLINA?
RISING INCOME LEVELS AND With the highest possible credit ratings from Moody's
PROVIDED A MUCH-NEEDED INFUSION Investors Service, Inc., Standard & Poor's Corporation and
OF NEW JOBS. Fitch IBCA, Inc., South Carolina continued to enjoy a very
low debt burden, rising income levels and an expanding
economy. South Carolina's net tax-supported debt stood at
roughly $1.1 billion, or 1.6% of personal income, below the
national median of 2.1%. The expansion of manufacturing,
especially of automobiles and related parts, improved South
Carolina's low but rising income levels and provided a
much-needed infusion of new jobs. South Carolina's economy
also continued to grow more diverse.
WHAT IS YOUR OUTLOOK FOR SOUTH CAROLINA AND THE MUNICIPAL
BOND MARKET IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
With regard to South Carolina in particular, as production
in the state's textile industry declines because of low-cost
products from overseas, growth in tourism and
service-related jobs has helped fill the void. However, more
than most states, South Carolina is still tied to the
cyclical nature of the broader U.S. economy.
</TABLE>
52
<PAGE> 57
Nations South Carolina
Intermediate Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
3.30% Other
4.05% Pre-Refunded
5.04% Housing Revenue
8.03% Water
42.39% Insured
9.23% Pollution Control
Revenue/Industrial
Development Revenue
9.73% Hospital
18.23% General Obligation
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <S> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
-----------------------------------------
1 Piedmont Municipal Power 3.4%
Agency, South Carolina,
Revenue Bonds, (MBIA
Insured), Series B, 5.250%
01/01/09
-----------------------------------------
2 South Carolina State, Jobs 2.4%
Economic Development
Authority Hospital Facilities
Revenue, 5.450% 08/01/15
-----------------------------------------
3 Columbia, South Carolina, 2.3%
Waterworks and Sewer System,
Revenue Refunding, 5.500%
02/01/09
-----------------------------------------
4 South Carolina State, Capital 2.1%
Improvement, GO, Series A,
3.500% 07/01/06
-----------------------------------------
5 South Carolina State, Housing 1.9%
Finance and Development
Authority, (United Dominion
Project), 6.500% 05/01/24
-----------------------------------------
6 South Carolina State, Housing 1.8%
Finance and Development
Authority, Series A, (FNMA
Insured), 6.800% 11/15/11
-----------------------------------------
7 Lexington County, South 1.8%
Carolina, Health Service
District, (FSA Insured),
5.125% 11/01/21
-----------------------------------------
8 Medical University of South 1.7%
Carolina, Hospital
Facilities, Refunding, 7.000%
07/01/02
-----------------------------------------
9 Richland County, South 1.7%
Carolina, School District,
No. 1, GO, (State Aid
Withholding), 4.625% 03/01/22
-----------------------------------------
10 Richland County, South 1.5%
Carolina, PCR, (Union Camp
Corporation Project), Series
C,
5.875% 11/01/02
-----------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
53
<PAGE> 58
Nations South Carolina
Intermediate Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-
Measurement Period Year Municipal Bond
(Fiscal Year Covered) South Carolina Intermediate Municipal Bond $14,634 Index $15,256
<S> <C> <C>
Jan. 6 1992 10000 10000
10060 9993
10361 10347
10591 10632
1992 10746 10806
11104 11151
11383 11460
11709 11792
1993 11833 11933
11423 11484
11495 11606
11580 11718
1994 11486 11604
12087 12213
12390 12559
12672 12918
1995 13056 13243
12955 13197
13014 13255
13286 13492
1996 13573 13824
13565 13791
13910 14267
14196 14697
1997 14501 15096
Mar. 31 1998 14634 15256
</TABLE>
Investor B Shares (as of 3/31/98)* [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-
Measurement Period Year Municipal Bond
(Fiscal Year Covered) South Carolina Intermediate Municipal Bond $12,460 Index $13,379
<S> <C> <C>
June 8 1993 10000 10000
10103 10183
10380 10478
1993 10476 10604
10101 10205
10151 10313
10214 10413
1994 10118 10312
10634 10852
10887 11160
11122 11479
1995 11444 11768
11342 11727
11379 11778
11602 11989
1996 11838 12284
11817 12270
12102 12609
12330 12946
1997 12569 13228
Mar. 31 1998 12460 13379
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(1/6/92 through 03/31/98) 6.30%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations South Carolina
Intermediate Municipal Bond Fund from
the date each class of shares was first
offered. The Lehman 7-Year Municipal
Bond Index is a broad-based, unmanaged,
total return index composed of
investment-grade bonds with maturities
of 7 to 8 years. It is unavailable for
investment. The performance shown
reflects the performance of Primary A
and Investor B Shares. The performance
of Investor A and Investor C Shares may
vary based on the differences in sales
loads and fees paid by the shareholders
investing in each class.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE
INCEPTION NAV CDSC*
(6/8/93 through 3/31/98) 5.02% 4.68%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 1/6/92 5/5/92 6/8/93 6/17/92
NAV CDSC*
- -------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 7.88% 7.67% 7.13% 3.13% 7.13%
- -------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 6.58% 6.37% 5.98% 5.09% 5.99%
5 Years 5.68% 5.48% NA NA 5.06%
Since Inception 6.30% 6.22% 5.02% 4.68% 5.63%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
54
<PAGE> 59
Nations South Carolina
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS SOUTH
CAROLINA MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT
OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Michele M. Poirier was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal and sector selection and individual credit reviews. We also seek
South Carolina state income to limit the distribution of capital gains when appropriate.
taxes with the potential for As a long-term portfolio, the Fund maintains an average
principal fluctuation dollar-weighted maturity of greater than ten years and a
associated with investments in duration between seven and one-half and nine and one-half
long-term municipal securities. years.
The Fund invests in HOW DID THE FUND PERFORM DURING THE PERIOD?
investment-grade, long-term With a total return of 10.04%, the Fund (Primary A Shares)
municipal securities. underperformed its peer group, the Lipper South Carolina
PERFORMANCE REVIEW Municipal Debt Funds Universe,*** which returned 10.30% for
For the 12-month period ended the 12-month period ended March 31, 1998. Given the
March 31, 1998, Nations South uncertain direction of interest rates during the period, we
Carolina Municipal Bond Fund believed it prudent to maintain a relatively neutral stance
Primary A Shares provided a with regard to the Fund's duration. Because it had a shorter
total return of 10.04%.** duration than its peer group, the Fund did not benefit as
fully from the declining interest rate environment during
the period.
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper South
Carolina Municipal Debt Funds Universe limit their assets to
those securities which are exempt from taxation in South
Carolina.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
55
<PAGE> 60
Nations South Carolina
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN SOUTH
CAROLINA?
With the highest possible credit ratings from Moody's
Investors Service, Inc., Standard & Poor's Corporation and
Fitch IBCA, Inc., South Carolina continued to enjoy a very
low debt burden, rising income levels and an expanding
economy. South Carolina's net tax-supported debt stood at
roughly $1.1 billion, or 1.6% of personal income, below the
national median of 2.1%. The expansion of manufacturing,
especially of automobiles and related parts, improved South
Carolina's low but rising income levels and provided a
much-needed infusion of new jobs. South Carolina's economy
also continued to grow more diverse.
THE EXPANSION OF MANUFACTURING WHAT IS YOUR OUTLOOK FOR SOUTH CAROLINA AND THE MUNICIPAL
IMPROVED SOUTH CAROLINA'S BOND MARKET IN THE COMING YEAR?
RISING INCOME LEVELS AND Looking ahead, municipal bond market participants will have
PROVIDED A MUCH-NEEDED INFUSION to keep one eye focused on Washington, D.C., where proposed
OF NEW JOBS. federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
With regard to South Carolina in particular, as production
in the state's textile industry declines because of low-cost
products from overseas, growth in tourism and
service-related jobs has helped fill the void. However, more
than most states, South Carolina is still tied to the
cyclical nature of the broader U.S. economy.
</TABLE>
56
<PAGE> 61
Nations South Carolina
Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
2.58% Pre-Refunded
3.91% Other
3.92% Hospital
4.97% Housing Revenue
5.10% Water
9.34% General Obligation
36.53% Insured
33.65% Pollution Control
Revenue/Industrial
Development Revenue
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <S> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
-------------------------------------------------
1 Chester County, South Carolina, 5.1%
Industrial Development Authority,
Revenue Refunding, (Springs Industries
Inc. Project), 7.350% 02/01/14
-------------------------------------------------
2 Columbia, South Carolina, Waterworks & 5.0%
Sewer System Revenue, 5.500% 02/01/09
-------------------------------------------------
3 Puerto Rico, Housing, Bank and Finance 4.9%
Agency, Single-family Mortgage
Revenue, (Affordable Housing
Mortgage-Portfolio I), AMT,
(GNMA/FNMA/FHLMC Collateral), 6.250%
04/01/29
-------------------------------------------------
4 Piedmont Municipal Power Agency, South 4.9%
Carolina, Electric Revenue Bonds,
Series B, (MBIA Insured), 5.250%
01/01/09
-------------------------------------------------
5 South Carolina, State Educational 4.8%
Facilities Authority, (Furman
University Project), Series A, (MBIA
Insured), 5.500% 10/01/26
-------------------------------------------------
6 York County, South Carolina, PCR 4.5%
Refunding (Bowater Inc. Project),
Series B, 6.850% 04/01/01
-------------------------------------------------
7 Richland County, South Carolina, 4.3%
School District No. 1, GO, (SCSDE),
4.625% 03/01/22
-------------------------------------------------
8 Berkeley County, South Carolina, PCR, 3.8%
(South Carolina Electric and Gas
Company), 6.500% 10/01/14
-------------------------------------------------
9 Darlington County, South Carolina, 3.6%
Industrial Development Revenue, (Nucor
Corporation Project), Series A, 5.750%
08/01/23
-------------------------------------------------
10 Georgetown County, South Carolina, 3.5%
PCR, (International Paper Company
Project), 5.600% 12/01/21
-------------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
57
<PAGE> 62
Nations South Carolina
Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20
Measurement Period South Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Carolina Municipal Bond $12,775 Index $13,129 Index $12,847
<S> <C> <C> <C>
Dec. 27 1993 10000 10000 10000
9451 9307 9451
9499 9400 9555
9507 9449 9621
1994 9408 9266 9483
10153 10092 10153
10411 10309 10398
10706 10588 10697
1995 11255 11207 11138
11023 10957 11004
11117 11081 11088
11386 11397 11343
1996 11646 11705 11632
11610 11633 11604
11993 12125 12004
12309 12549 12365
1997 12654 12975 12701
Mar. 31 1998 12775 13129 12847
</TABLE>
Investor B Shares (as of 3/31/98)* [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20
Measurement Period South Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Carolina Municipal Bond $12,285 Index $13,446 Index $13,003
<S> <C> <C> <C>
Oct. 21 1993 10000 10000 10000
1993 10110 10241 10121
9522 9532 9565
9552 9626 9671
9542 9677 9737
1994 9426 9490 9598
10153 10335 10276
10392 10557 10524
10666 10843 10826
1995 11193 11477 11273
10942 11221 11137
11014 11348 11223
11260 11672 11480
1996 11495 11987 11772
11439 11914 11744
11794 12417 12149
12080 12851 12515
1997 12392 13288 12855
Mar. 31 1998 12285 13446 13003
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(12/27/93 through 3/31/98) 5.92%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations South Carolina
Municipal Bond Fund from the date each
class of shares was first offered. The
Lehman 20-Year Municipal Bond Index is
a broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 18 to 22
years. It is unavailable for
investment. The Lehman Municipal Bond
Index is a broad-based, unmanaged,
total return index composed of 8,000
investment-grade, long-term maturity
bonds. It is unavailable for
investment. The performance shown
reflects the performance of Primary A
and Investor B Shares. The performance
of Investor A and Investor C Shares may
vary based on the differences in sales
loads and fees paid by the shareholders
investing in each class.
The annual reports for the fiscal year
ended March 31, 1997 and prior years
compared the Fund's performance to the
Lehman 20-Year Municipal Bond Index.
Fund management believes that the
Lehman Municipal Bond Index is a more
appropriate benchmark because the
maturities of the municipal debt
securities comprising the index more
closely resemble the maturities of the
securities acquired by the Fund.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE INCEPTION NAV CDSC*
(10/21/93 through
3/31/98) 5.12% 4.74%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 12/27/93 11/8/93 10/21/93 11/3/94
NAV CDSC*
- ------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 10.04% 9.82% 9.15% 4.15% 9.29%
- ------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 7.96% 7.74% 7.14% 6.26% 7.27%
Since Inception 5.92% 6.06% 5.12% 4.74% 9.64%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
58
<PAGE> 63
Nations Tennessee
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS
TENNESSEE INTERMEDIATE MUNICIPAL INCOME FUND'S
PERFORMANCE FOR THE 12-MONTH PERIOD ENDED MARCH 31, 1998
AND THEIR CURRENT OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Mathew M. Kiselak was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal sector selection and individual credit reviews. We also seek
income tax and the Tennessee to limit the distribution of capital gains when appropriate.
Hall Income Tax on unearned As an intermediate-term portfolio, the Fund maintains an
income consistent with moderate average dollar-weighted maturity of between three and ten
fluctuation of principal. The years and a duration between five and six years.
Fund invests in investment- HOW DID THE FUND PERFORM DURING THE PERIOD?
grade, intermediate-term With a total return of 7.99%, the Fund (Primary A Shares)
municipal securities. outperformed its peer group, the Lipper Other States
PERFORMANCE REVIEW Intermediate Municipal Debt Funds Universe,*** which
For the 12-month period ended returned 7.87% for the 12-month period ended March 31, 1998.
March 31, 1998, Nations Given the uncertain direction of interest rates during the
Tennessee Intermediate period, we believed it prudent to maintain a relatively
Municipal Bond Fund Primary A neutral stance with regard to the Fund's duration. Because
Shares provided a total return it had a shorter duration than its peer group, the Fund did
of 7.99%.** not benefit as fully from the declining interest rate
environment during the period.
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper Other
States Intermediate Municipal Debt Funds Universe invest in
municipal debt issues with dollar-weighted maturities of
five to ten years and are exempt from taxation on a
specified city or state basis.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
59
<PAGE> 64
Nations Tennessee
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE FUND (PRIMARY A SHARES) WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN TENNESSEE?
OUTPERFORMED ITS PEER GROUP FOR Tennessee's very low debt burden, pay-as-you-go financing
THE 12-MONTH PERIOD ENDED MARCH and conservative financial policies all combined to give the
31, 1998. state a "Aaa" rating from Moody's Investors Service, Inc., a
"AA+" from Standard & Poor's Corporation and a "AAA" from
Fitch IBCA, Inc. Tennessee continues its transition from
being reliant on the textile industry -- which saw
employment decline roughly 7.5% in 1997 -- to being reliant
on automotive manufacturing, which posted employment gains
of 2.2% over the same period. Exports, which account for
over 7% of gross state product, continued to grow as more
diverse products were added to the mix.
WHAT IS YOUR OUTLOOK FOR TENNESSEE AND THE MUNICIPAL BOND
MARKET IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
In Tennessee, as in other southeastern states, overall
growth has been restrained by a shortage of qualified
workers and the contraction of the textile industry. As a
result, the pace of economic growth in Tennessee is less
than half the national average. Nevertheless, Tennessee
remains attractive as a pro-business state with a low cost
of living and affordable housing.
</TABLE>
60
<PAGE> 65
Nations Tennessee
Intermediate Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
3.28% Water
27.90% General Obligation
7.56% Hospital
8.05% Power/Utilities Revenue
9.46% Other
10.81% Housing Revenue
21.22% Insured
11.72% Pollution Control
Revenue/Industrial
Development Revenue
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <S> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
------------------------------------------
1 Dickson County, Tennessee, 4.4%
(FGIC Insured),
5.000% 04/01/18
------------------------------------------
2 McMinn County, Tennessee, 3.9%
Industrial Development Board,
PCR, Refunding, (Bowater Inc.,
Project), 6.850% 04/01/01
------------------------------------------
3 Chattanooga-Hamilton County, 3.6%
Tennessee, Hospital Authority
Revenue, GO, (Erlanger Medical
Center), (FSA Insured), 5.375%
10/01/04
------------------------------------------
4 Hamilton County, Tennessee, GO, 3.6%
5.000% 07/01/01
------------------------------------------
5 Knox County, Tennessee, Health, 3.3%
Educational and Housing
Facilities Board, Hospital
Facilities Revenue, Refunding
and Improvement, (Baptist
Health System of East
Tennessee, Inc. Project),
(CONNIE LEE Insured), 5.500%
04/15/11
------------------------------------------
6 Maury County, Tennessee, 3.3%
Industrial Development Board,
PCR, Multi-Modal Refunding,
(Saturn Corporation Project),
General Motors Guaranty
Agreement, 6.500% 09/01/24
------------------------------------------
7 Memphis, Tennessee, Water 3.2%
Revenue, 5.900% 01/01/04
------------------------------------------
8 Rutherford County, Tennessee, 3.0%
Public Improvements, 6.000%
04/01/06
------------------------------------------
9 West Plains, Missouri, 2.6%
Industrial Development
Authority, 5.250% 11/15/07
------------------------------------------
10 Williamson County, Tennessee, 2.4%
5.000% 05/01/07
------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
61
<PAGE> 66
Nations Tennessee
Intermediate Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-
Measurement Period Year Municipal Bond
(Fiscal Year Covered) Tennessee Intermediate Municipal Bond $12,981 Index $13,681
<S> <C> <C>
April 13 1993 10000 10000
10168 10277
10485 10575
1993 10613 10701
10168 10299
10242 10408
10290 10509
1994 10139 10407
10729 10952
10985 11263
11233 11584
1995 11574 11876
11499 11835
11560 11887
11763 12099
1996 12028 12397
12021 12368
12328 12794
12603 13180
1997 12861 13538
Mar. 31 1998 12981 13681
</TABLE>
Investor B Shares (as of 3/31/98)* [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-
Measurement Period Year Municipal Bond
(Fiscal Year Covered) Tennessee Intermediate Municipal Bond $12,385 Index $13,503
<S> <C> <C>
June 10 1993 10000 10000
10114 10277
10416 10575
1993 10530 10701
10076 10299
10136 10408
10171 10509
1994 10009 10407
10578 10952
10817 11263
11048 11584
1995 11369 11876
11282 11835
11328 11887
11512 12099
1996 11757 12397
11735 12383
12020 12725
12266 13065
1997 12492 13350
Mar. 31 1998 12385 13503
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(4/13/93 through 3/31/98) 5.40%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Tennessee
Intermediate Municipal Bond Fund from
the date each class of shares was first
offered. The Lehman 7-Year Municipal
Bond Index is a broad-based, unmanaged,
total return index composed of
investment-grade bonds with maturities
of 7 to 8 years. It is unavailable for
investment. The performance shown
reflects the performance of Primary A
and Investor B Shares. The performance
of Investor A and Investor C Shares may
vary based on the differences in sales
loads and fees paid by the shareholders
investing in each class.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE
INCEPTION NAV CDSC*
(6/10/93 through 3/31/98) 4.90% 4.55%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 4/13/93 4/2/93 6/10/93 11/3/94
NAV CDSC*
- ----------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 7.99% 7.77% 7.24% 3.24% 7.29%
- ----------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 6.56% 6.35% 5.96% 5.06% 6.00%
Since Inception 5.40% 5.30% 4.90% 4.55% 7.34%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
62
<PAGE> 67
Nations Tennessee
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS
TENNESSEE MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT
OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Mathew M. Kiselak was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal sector selection and individual credit reviews. We also seek
income tax and the Tennessee to limit the distribution of capital gains when appropriate.
Hall Income Tax on unearned As a long-term portfolio, the Fund maintains an average
income with the potential for dollar-weighted maturity of greater than ten years and a
principal fluctuation duration between seven and one-half and nine and one-half
associated with investments in years.
long-term municipal securities. HOW DID THE FUND PERFORM DURING THE PERIOD?
The Fund invests in With a total return of 10.45%, the Fund (Primary A Shares)
investment-grade, long-term outperformed its peer group, the Lipper Tennessee Municipal
municipal securities. Debt Funds Universe,*** which returned 9.82% for the
PERFORMANCE REVIEW 12-month period ended March 31, 1998. Given the uncertain
For the 12-month period ended direction of interest rates during the period, we believed
March 31, 1998, Nations it prudent to maintain a relatively neutral stance with
Tennessee Municipal Bond Fund regard to the Fund's duration. With a longer duration than
Primary A Shares provided a many of its peers, the Fund benefited more fully from the
total return of 10.45%.** declining interest rate environment during the period.
WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN TENNESSEE?
Tennessee's very low debt burden, pay-as-you-go financing
and conservative financial policies all combined to give the
state a "Aaa" rating from
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper
Tennessee Municipal Debt Funds Universe limit their assets
to those securities which are exempt from taxation in
Tennessee.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
63
<PAGE> 68
Nations Tennessee
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE FUND OUTPERFORMED ITS Moody's Investors Service, Inc., a "AA+" from Standard &
PEER GROUP FOR Poor's Corporation and a "AAA" from Fitch IBCA, Inc.
THE 12-MONTH Tennessee continues its transition from being reliant on the
PERIOD ENDED textile industry -- which saw employment decline roughly
MARCH 31, 1998. 7.5% in 1997 -- to automotive manufacturing, which posted
employment gains of 2.2% over the same period. Exports,
which account for over 7% of gross state product, continued
to grow as more diverse products were added to the mix.
WHAT IS YOUR OUTLOOK FOR TENNESSEE AND THE MUNICIPAL BOND
MARKET IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
In Tennessee, as in other southeastern states, overall
growth has been restrained by a shortage of qualified
workers and the contraction of the textile industry. As a
result, the pace of economic growth in Tennessee is less
than half the national average. Nevertheless, Tennessee
remains attractive as a pro-business state with a low cost
of living and affordable housing.
</TABLE>
64
<PAGE> 69
Nations Tennessee
Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
3.49% Cash and Cash Equivalents
5.15% Other
6.20% Power/Utilities Revenue
6.32% Housing
27.70% Insured
7.59% Hospital
15.90% Pollution Control
Revenue/Industrial
Development Revenue
27.65% General Obligation
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <S> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
--------------------------------------------
1 Tennessee State, GO, Series A, 5.9%
7.000% 03/01/05
--------------------------------------------
2 Metropolitan Government, 5.1%
Nashville and Davidson County,
Tennessee, Health and Educational
Facilities Board Revenue,
Refunding and Improvement,
(Meharry Medical College
Project), (AMBAC Insured), 6.000%
12/01/16
--------------------------------------------
3 Humphreys County, Tennessee, 5.1%
Industrial Development Board,
Solid Waste Disposal Revenue, (du
Pont (E.I.) de Nemours & Company
Project), AMT, 6.700% 05/01/24
--------------------------------------------
4 Puerto Rico, Industrial, Tourist, 5.0%
Educational, Medical and
Environmental Control Facilities
Financing Authority, (Ryder
Memorial Hospital Project),
Series A, 6.600% 05/01/14
--------------------------------------------
5 Memphis, Tennessee, GO, 4.5%
5.000% 07/01/17
--------------------------------------------
6 Williamson County Tennessee, 3.8%
Refunding, GO, 5.000% 05/01/07
--------------------------------------------
7 Knox County, Tennessee, Health, 3.8%
Educational and Housing
Facilities Board, Hospital
Facilities Revenue, Refunding and
Improvement, (Baptist Health
System of East Tennessee, Inc.
Project), (CONNIE LEE Insured),
5.500% 04/15/11
--------------------------------------------
8 Dickson County Tennessee, GO, 3.6%
(FGIC Insured), 5.000%, 04/01/18
--------------------------------------------
9 Tennessee Housing Development 3.4%
Agency AMT, GO, 4.950% 07/01/04
--------------------------------------------
10 Metropolitan Government, 3.4%
Nashville and Davidson County,
Tennessee, Electric Revenue,
Series A, 5.625% 05/15/14
--------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
65
<PAGE> 70
Nations Tennessee
Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20-
Measurement Period Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Tennessee Municipal Bond $13,144 Index $13,363 Index $13,040
<S> <C> <C> <C>
Mar. 2 1994 10000 10000 10000
9647 9473 9593
9718 9567 9698
9746 9617 9765
1994 9633 9431 9625
10402 10271 10305
10635 10492 10554
10927 10776 10857
1995 11506 11406 11305
11308 11152 11169
11376 11278 11255
11639 11600 11513
1996 11940 11914 11806
11900 11840 11778
12305 12341 12184
12690 12772 12551
1997 13045 13206 12891
Mar. 31 1998 13144 13363 13040
</TABLE>
Investor B Shares (as of 3/31/98)* [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20-
Measurement Period Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Tennessee Municipal Bond $12,212 Index $13,446 Index $13,003
<S> <C> <C> <C>
Oct. 21 1993 10000 10000 10000
1993 10049 10241 10121
9392 9532 9565
9443 9626 9671
9453 9677 9737
1994 9326 9490 9598
10052 10335 10276
10258 10557 10524
10520 10843 10826
1995 11057 11477 11273
10847 11221 11137
10892 11348 11223
11122 11672 11480
1996 11388 11987 11772
11329 11914 11744
11693 12417 12149
12034 12851 12515
1997 12345 13288 12855
Mar. 31 1998 12212 13446 13003
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(3/2/94 through 3/31/98) 6.93%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Tennessee Municipal
Bond Fund from the date each class of
shares was first offered. The Lehman
20-Year Municipal Bond Index is a
broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 18 to 22
years. It is unavailable for
investment. The Lehman Municipal Bond
Index is a broad-based, unmanaged,
total return index composed of 8,000
investment-grade, long-term maturity
bonds. It is unavailable for
investment. The performance shown
reflects the performance of Primary A
and Investor B Shares. The performance
of Investor A and Investor C Shares may
vary based on the differences in sales
loads and fees paid by the shareholders
investing in each class.
The annual reports for the fiscal year
ended March 31, 1997 and prior years
compared the Fund's performance to the
Lehman 20-Year Municipal Bond Index.
Fund management believes that the
Lehman Municipal Bond Index is a more
appropriate benchmark because the
maturities of the municipal debt
securities comprising the Index more
closely resemble the maturities of the
securities acquired by the Fund.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE INCEPTION NAV CDSC*
(10/21/93 through
3/31/98) 4.98% 4.60%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 3/2/94 11/2/93 10/21/93 11/3/94
NAV CDSC*
- ------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 10.45% 10.23% 9.56% 4.56% 9.65%
- ------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 8.11% 7.89% 7.28% 6.41% 7.43%
Since Inception 6.93% 5.89% 4.98% 4.60% 9.85%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
66
<PAGE> 71
Nations Texas
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS TEXAS
INTERMEDIATE MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT
OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Mathew M. Kiselak was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal sector selection and individual credit reviews. We also seek
income tax consistent with to limit the distribution of capital gains when appropriate.
moderate fluctuation of As an intermediate-term portfolio, the Fund maintains an
principal. The Fund invests in average dollar-weighted maturity of between three and ten
investment-grade, years and a duration between five and six years.
intermediate-term municipal HOW DID THE FUND PERFORM DURING THE PERIOD?
securities. With a total return of 8.09%, the Fund (Primary A Shares)
PERFORMANCE REVIEW outperformed its peer group, the Lipper Other States
For the 12-month period ended Intermediate Municipal Debt Funds Universe,*** which
March 31, 1998, Nations Texas returned 7.87% for the 12-month period ended March 31, 1998.
Intermediate Municipal Bond Given the uncertain direction of interest rates during the
Fund Primary A Shares provided period, we believed it prudent to maintain a relatively
a total return of 8.09%.** neutral stance with regard to the Fund's duration. With a
slightly longer duration than many of its peers, the Fund
benefited more fully from the declining interest rate
environment during the period.
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper Other
States Intermediate Municipal Debt Funds Universe invest in
municipal debt issues with dollar weighted maturities of
five to ten years and are exempt from taxation on a
specified city or state basis.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
67
<PAGE> 72
Nations Texas
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE FUND WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN TEXAS?
OUTPERFORMED ITS PEER GROUP FOR Despite budget deficits in the mid-1980s, Texas has
THE 12-MONTH historically taken a conservative approach to financial
PERIOD ENDED MARCH 31, 1998. management. With low debt levels and a very strong economy
that continues to expand, Texas was able to maintain its
"Aa2" rating from Moody's Investors Service, Inc., "AA" from
Standard & Poor's Corporation and "AA+" from Fitch IBCA,
Inc. In 1997, unemployment in Texas fell below 5% for the
first time in the 1990s, but wage inflation was kept in
check as the state's income levels remained at only 91% of
the national average. At $312 per capita, Texas' debt burden
was below the national average, with the majority of its
outstanding debt self-supporting.
WHAT IS YOUR OUTLOOK FOR TEXAS AND THE MUNICIPAL BOND MARKET
IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
In Texas, sales tax revenue accounted for 28% of total
revenue in 1997. This proportion should continue to increase
marginally as Texas maintains one of the strongest economies
in the country. In addition, Texas should receive additional
revenues of approximately $14.5 billion over the next 25
years as a result of its victory in a lawsuit against the
tobacco industry.
</TABLE>
68
<PAGE> 73
Nations Texas
Intermediate Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
0.71% Pollution Control
Revenue/Industrial
Development Revenue
0.71% Housing Revenue
2.63% Other
5.01% Water
5.05% Education
7.92% Pre-Refunded
36.51% Insured
41.56% General Obligation
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <S> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
------------------------------------------
1 Texas Municipal Power Agency, 4.0%
Revenue Refunding: (MBIA
Insured), 5.250% 09/01/05
------------------------------------------
2 Lower Colorado River Authority, 3.2%
Texas, Revenue Refunding,
Junior Lien Revenue, (AMBAC
Insured), 5.300% 01/01/06
------------------------------------------
3 Texas State College, Texas, 3.1%
Student Loan Authority Revenue,
GO, AMT, 5.000% 10/01/00
------------------------------------------
4 Texas State, Turnpike 2.6%
Authority, Dallas North Tollway
Revenue: President George Bush
Turnpike, (FGIC Insured),
5.250% 01/01/23
------------------------------------------
5 Dallas, Texas, GO, 1.8%
5.500% 02/15/00
------------------------------------------
6 University of Texas Permanent 1.8%
University Fund, (PUFG), 5.250%
07/01/12
------------------------------------------
7 Harris County, Texas, Toll 1.8%
Road, Sr. Lien, (FGIC Insured),
5.000% 08/15/16
------------------------------------------
8 Houston, Texas, Water and Sewer 1.7%
Systems Revenue, Unrefunded
Balance, Prior Lien, Series B,
5.900% 12/01/03
------------------------------------------
9 Texas Municipal Power Agency, 1.7%
Revenue Refunding, (MBIA
Insured), 5.900% 09/01/04
------------------------------------------
10 Austin, Texas, GO, 1.6%
5.500% 09/01/04
------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
69
<PAGE> 74
Nations Texas
Intermediate Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98 [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7
Measurement Period Year Municipal Bond
(Fiscal Year Covered) Texas Intermediate Municipal Bond $13,358 Index $13,934
<S> <C> <C>
Jan. 12 1993 10000 10000
10286 10319
10528 10605
10820 10913
1993 10925 11043
10490 10628
10605 10740
10681 10845
1994 10561 10739
11082 11302
11311 11623
11576 11954
1995 11926 12256
11840 12213
11881 12266
12113 12486
1996 12361 12793
12358 12778
12674 13132
12984 13482
1997 13242 13777
Mar. 31 1998 13358 13934
</TABLE>
Investor B Shares (as of 3/31/98)* [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7
Measurement Period Year Municipal Bond
(Fiscal Year Covered) Texas Intermediate Municipal Bond $12,228 Index $13,139
<S> <C> <C>
June 22 1993 10000 10000
10050
10315 10290
1993 10402 10413
9975 10021
10073 10128
10131 10226
1994 10005 10126
10486 10657
10690 10959
10927 11272
1995 11243 11556
11148 11516
11173 11566
11377 11773
1996 11595 12063
11578 12049
11860 12382
12128 12713
1997 12344 12991
Mar. 31 1998 12228 13139
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(1/12/93 through 3/31/98) 5.71%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Texas Intermediate
Municipal Bond Fund from the date each
class of shares was first offered. The
Lehman 7-Year Municipal Bond Index is a
broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 7 to 8 years.
It is unavailable for investment. The
performance shown reflects the
performance of Primary A and Investor B
Shares. The performance of Investor A
and Investor C Shares may vary based on
the differences in sales loads and fees
paid by the shareholders investing in
each class.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE
INCEPTION NAV CDSC*
(6/22/93 through 3/31/98) 4.66% 4.30%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 1/12/93 2/4/93 6/22/93 11/3/94
NAV CDSC*
- ------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 8.09% 7.87% 7.34% 3.34% 7.34%
- ------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 6.43% 6.21% 5.83% 4.93% 5.83%
5 Years 5.37% 5.16% NA NA NA
Since Inception 5.71% 5.20% 4.66% 4.30% 7.07%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
70
<PAGE> 75
Nations Texas
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS TEXAS
MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub- adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Mathew M. Kiselak was aim to limit the Fund's exposure to any single credit or
the Fund's portfolio manager. market sector. In addition, we use a combination of
INVESTMENT OBJECTIVE investment strategies, including duration management
The Fund seeks high current (managing the Fund's sensitivity to interest rates), market
income exempt from federal sector selection and individual credit reviews. We also seek
income tax with the potential to limit the distribution of capital gains when appropriate.
for principal fluctuation As a long-term portfolio, the Fund maintains an average
associated with investments in dollar- weighted maturity of greater than ten years and a
long-term municipal securities. duration between seven and one-half and nine and one-half
The Fund invests in years.
investment-grade, long- term HOW DID THE FUND PERFORM DURING THE PERIOD?
municipal securities. With a total return of 11.12%, the Fund (Primary A Shares)
PERFORMANCE REVIEW outperformed its peer group, the Lipper Texas Municipal Debt
For the 12-month period ended Funds Universe,*** which returned 10.35% for the 12-month
March 31, 1998, Nations Texas period ended March 31, 1998. Given the uncertain direction
Municipal Bond Fund Primary A of interest rates during the period, we believed it prudent
Shares provided a total return to maintain a relatively neutral stance with regard to the
of 11.12%.** Fund's duration. With a longer duration than many of its
peers, the Fund benefited more fully from the declining
interest rate environment during the period.
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper Texas
Municipal Debt Funds Universe limit their assets to those
securities which are exempt from taxation in Texas.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
71
<PAGE> 76
Nations Texas
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE FUND OUTPERFORMED ITS PEER WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN TEXAS?
GROUP FOR THE 12-MONTH PERIOD Despite budget deficits in the mid-1980s, Texas has
ENDED MARCH 31, 1998. historically taken a conservative approach to financial
management. With low debt levels and a very strong economy
that continues to expand, Texas was able to maintain its
"Aa2" rating from Moody's Investors Service, Inc., "AA" from
Standard & Poor's Corporation and "AA+" from Fitch IBCA,
Inc. In 1997, unemployment in Texas fell below 5% for the
first time in the 1990s, but wage inflation was kept in
check as the state's income levels remained at only 91% of
the national average. At $312 per capita, Texas' debt burden
was below the national average, with the majority of its
outstanding debt self-supporting.
WHAT IS YOUR OUTLOOK FOR TEXAS AND THE MUNICIPAL BOND MARKET
IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
In Texas, sales tax revenue accounted for 28% of total
revenue in 1997. This proportion should continue to increase
marginally as Texas maintains one of the strongest economies
in the country. In addition, Texas should receive additional
revenues of approximately $14.5 billion over the next 25
years as a result of its victory in a lawsuit against the
tobacco industry.
</TABLE>
72
<PAGE> 77
Nations Texas
Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
4.69% Other
6.22% Hospital
6.41% Transportation
27.16% General Obligation
8.98% Education
10.52% Pre-Refunded
19.98% Insured
16.04% Pollution Control
Revenue/Industrial
Development Revenue
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
----------------------------------------------
1 Tarrant County, Texas, Health 6.6%
Facilities Development Corporation,
Health System Revenue, (Harris
Methodist Health System), (MBIA
Insured),
6.000% 09/01/10
----------------------------------------------
2 Lucas County, Ohio, Hospital 6.6%
Revenue, (Flower Hospital Project),
Prerefunded, 6.125% 12/01/13
----------------------------------------------
3 Red River Authority, Texas, PCR, 6.5%
(Hoechst Celanese Corporation
Project), AMT, 6.875% 04/01/17
----------------------------------------------
4 Arapahoe County, Colorado, Capital 6.4%
Improvements Highway Revenue,
Capital Appreciation, Series E,
7.200% 08/31/05
----------------------------------------------
5 Trinity River Authority, Texas, 6.3%
PCR, (Texas Instruments Inc.
Project), 6.200% 03/01/20
----------------------------------------------
6 Waller, Texas, Consolidated 6.0%
Independent School District, GO,
(PSFG Insured), 5.250% 02/15/21
----------------------------------------------
7 Pflugerville, Texas, Independent 5.2%
School District, (PSFG Insured),
5.750% 08/15/10
----------------------------------------------
8 Dallas-Fort Worth, Texas, Regional 4.8%
Airport Revenue Refunding, Series
A, (MBIA Insured), 6.000% 11/01/09
----------------------------------------------
9 Santa Fe, Texas, Independent School 4.6%
District, (PSFG Insured), 5.000%
02/15/07
----------------------------------------------
10 Sherman, Texas, Independent School 3.9%
District, GO, (PSFG Insured),
6.500% 02/15/20
----------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
73
<PAGE> 78
Nations Texas
Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20-
Measurement Period Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Texas Municipal Bond $12,437 Index $12,966 Index $12,702
<S> <C> <C> <C>
Feb. 3 1994 10000 10000 10000
9159 9192 9344
9215 9283 9447
9207 9331 9512
1994 9056 9151 9376
9783 9966 10039
10036 10181 10280
10312 10456 10576
1995 10852 11067 11013
10660 10821 10880
10772 10943 10963
10987 11255 11214
1996 11265 11560 11500
11193 11488 11473
11559 11974 11868
11942 12393 12226
1997 12282 12814 12557
Mar. 31 1998 12437 12966 12702
</TABLE>
Investor B Shares (as of 3/31/98)* [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20-
Measurement Period Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Texas Municipal Bond $12,004 Index $13,446 Index $13,003
<S> <C> <C> <C>
Oct. 21 1993 10000 10000 10000
1993 10006 10241 10121
9266 9532 9565
9306 9626 9671
9280 9677 9737
1994 9110 9490 9598
9823 10335 10276
10059 10557 10524
10316 10843 10826
1995 10836 11477 11273
10625 11221 11137
10717 11348 11223
10909 11672 11480
1996 11164 11987 11772
11072 11914 11744
11413 12417 12149
11768 12851 12515
1997 12078 13288 12855
Mar. 31 1998 12004 13446 13003
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(2/3/94 through 3/31/98) 5.39%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Texas Municipal Bond
Fund from the date each class of shares
was first offered. The Lehman 20-Year
Municipal Bond Index is a broad-based,
unmanaged, total return index composed
of investment-grade bonds with
maturities of 18 to 22 years. It is
unavailable for investment. The Lehman
Municipal Bond Index is a broad-based,
unmanaged, total return index composed
of 8,000 investment-grade, long- term
maturity bonds. It is unavailable for
investment. The performance shown
reflects the performance of Primary A
and Investor B Shares. The performance
of Investor A and Investor C Shares may
vary based on the differences in sales
loads and fees paid by the shareholders
investing in each class.
The annual reports for the fiscal year
ended March 31, 1997 and prior years
compared the Fund's performance to the
Lehman 20-Year Municipal Bond Index.
Fund management believes that the
Lehman Municipal Bond Index is a more
appropriate benchmark because the
maturities of the municipal debt
securities comprising the index more
closely resemble the maturities of the
securities acquired by the Fund.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE INCEPTION NAV CDSC*
(10/21/93 through 3/31/98) 4.58% 4.20%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 2/3/94 12/17/93 10/21/93 11/3/94
NAV CDSC*
- -------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 11.12% 10.90% 10.23% 5.23% 10.31%
- -------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 8.33% 8.11% 7.50% 6.63% 7.63%
Since Inception 5.39% 5.40% 4.58% 4.20% 9.91%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
74
<PAGE> 79
Nations Virginia
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS VIRGINIA
INTERMEDIATE MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT
OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub-adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Dawn Daggy-Mangerson aim to limit the Fund's exposure to any single credit or
was the Fund's portfolio market sector. In addition, we use a combination of
manager. investment strategies, including duration management
INVESTMENT OBJECTIVE (managing the Fund's sensitivity to interest rates), market
The Fund seeks high current sector selection and individual credit reviews. We also seek
income exempt from federal and to limit the distribution of capital gains when appropriate.
Virginia state income taxes As an intermediate-term portfolio, the Fund maintains an
consistent with moderate average dollar-weighted maturity of between three and ten
fluctuation of principal. The years and a duration between five and six years.
Fund invests in HOW DID THE FUND PERFORM DURING THE PERIOD?
investment-grade, With a total return of 8.12%, the Fund (Primary A Shares)
intermediate-term municipal outperformed its peer group, the Lipper Virginia
securities. Intermediate Municipal Debt Funds Universe,*** which
PERFORMANCE REVIEW returned 7.87% for the 12-month period ended March 31, 1998.
For the 12-month period ended Given the uncertain direction of interest rates during the
March 31, 1998, Nations period, we believed it prudent to maintain a relatively
Virginia Intermediate Municipal neutral stance with regard to the Fund's duration. With a
Bond Fund Primary A Shares longer duration than many of its peers, the Fund benefited
provided a total return of more fully from the declining interest rate environment
8.12%.** during the period.
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper
Virginia Intermediate Municipal Debt Funds Universe invest
at least 65% of their assets in municipal debt issues which
are exempt from taxation in Virginia with dollar-weighted
maturities of five to ten years.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
75
<PAGE> 80
Nations Virginia
Intermediate Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued...
<TABLE>
<S> <C>
THE FUND OUTPERFORMED ITS PEER WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN VIRGINIA?
GROUP FOR THE 12-MONTH PERIOD The Commonwealth of Virginia has earned the highest possible
ENDED MARCH 31, 1998. credit ratings from Moody's Investors Service, Inc.,
Standard & Poor's Corporation and Fitch IBCA, Inc., by
having a conservative fiscal plan, above-average per capita
income and strong growth in service-sector jobs. Virginia's
level of general obligation debt grew as the state increased
its commitment to invest in highways and universities. At
$494, Virginia's debt per capita was somewhat higher than
the national average of $422. Personal income levels fell
slightly but were still at 103% of the national average.
Compensating for an 8.6% drop in federal employment between
1992 and 1996, jobs in the services sector have filled the
void, increasing by 19.8% over the same period. The services
sector accounted for over 29% of Virginia's non-farm
employment.
WHAT IS YOUR OUTLOOK FOR VIRGINIA AND THE MUNICIPAL BOND
MARKET IN THE COMING YEAR?
Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
In Virginia, a major challenge for the future will be
contending with the
loss of revenue attributed to the governor's planned
elimination of the
state's tax on automobiles. Lost revenues could approach $3
billion by the
year 2003.
</TABLE>
76
<PAGE> 81
Nations Virginia
Intermediate Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
5.67% Pollution Control
Revenue/Industrial
Development Revenue
6.66% Education
7.59% Pre-Refunded
32.54% General Obligation
8.19% Transportation
9.54% Water
12.98% Other
16.83% Insured
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT
TO CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
--------------------------------------------
1 Chesapeake, Virginia, Revenue 2.7%
Refunding, GO, 5.125% 12/01/05
--------------------------------------------
2 Virginia State Transportation 2.4%
Board Authority, Contract
Revenue, Route 58, Series A,
5.500% 05/15/09
--------------------------------------------
3 Newport News, Virginia, Public 2.2%
Improvement, Series B, 5.200%
11/01/04
--------------------------------------------
4 Southeastern Public Service 2.2%
Authority, Virginia, Series A,
(MBIA Insured), 5.100% 07/01/08
--------------------------------------------
5 Virginia State, Public Building 2.2%
Authority, Series A, (ST AID
WITHHLDG), 5.000% 08/01/07
--------------------------------------------
6 Hanover County, Virginia, 2.2%
Industrial Development Authority
Revenue, (MBIA Insured),
(Memorial Regional Medical Center
Project), 5.500% 08/15/25
--------------------------------------------
7 Augusta County, Virginia, 1.6%
Industrial Development Authority
Hospital Revenue (Augusta
Hospital Corporate Project),
7.000% 09/01/21
--------------------------------------------
8 Henrico County, Virginia, 1.5%
Industrial Development Authority
Revenue: Solid Waste, (Browning-
Ferris Industries Inc. Project),
5.300% 12/01/11
--------------------------------------------
9 Virginia State, Refunding, GO, 1.5%
Series B, 4.800% 06/01/07
--------------------------------------------
10 Roanoke, Virginia, Public 1.5%
Improvement, GO, Series B, 6.000%
08/01/03
--------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
77
<PAGE> 82
Nations Virginia
Intermediate Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [Line Chart]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-
Measurement Period Year Municipal Bond
(Fiscal Year Covered) Virginia Intermediate Municipal Bond $17,139 Index $18,760
<S> <C> <C>
Sept. 20 1989 10000 10000
1989 10175 10389
10296 10434
10470 10674
10556 10746
1990 10942 11158
11160 11425
11319 11623
11632 12064
1991 11999 12459
11986 12451
12367 12891
12643 13246
1992 12834 13463
13187 13893
13599 14278
13987 14692
1993 14127 14868
13553 14308
13651 14460
13681 14600
1994 13521 14458
14229 15217
14610 15648
14927 16095
1995 15331 16500
15255 16443
15323 16515
15567 16810
1996 15917 17223
15852 17204
16285 17679
16648 18152
1997 17004 18548
Mar. 31 1998 17139 18760
</TABLE>
Investor B Shares (as of 3/31/98)* [Line Graph]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 7-
Measurement Period Year Municipal Bond
(Fiscal Year Covered) Virginia Intermediate Municipal Bond $12,260 Index $13,379
<S> <C> <C>
June 7 1993 10000 10000
10143 10183
10419 10478
1993 10509 10604
10069 10205
10130 10313
10140 10413
1994 10009 10312
10521 10852
10788 11160
11009 11479
1995 11293 11768
11222 11727
11259 11778
11424 11989
1996 11666 12284
11604 12270
11906 12609
12150 12946
1997 12386 13228
Mar. 31 1998 12260 13379
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(9/20/89 through 3/31/98) 6.52%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Virginia Intermediate
Municipal Bond Fund from the date each
class of shares was first offered. The
Lehman 7-Year Municipal Bond Index is a
broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 7 to 8 years.
It is unavailable for investment. The
Lehman 7-Year Municipal Bond Index
measures the performance of the
municipal bonds comprising the index
for the 7-year period beginning on
12/31/89. Please note, however, that
Primary A Shares commenced operations
on 9/20/89. Therefore, the 7-year
performance illustrated by the Lehman
7-Year Municipal Bond Index includes
the performance of the Lehman 10-Year
Municipal Bond Index for the
three-month period preceding 12/31/89.
The performance shown reflects the
performance of Primary A and Investor B
shares. The performance of Investor A
and Investor C Shares may vary based on
the differences in sales loads and fees
paid by the shareholders investing in
each class.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE INCEPTION NAV CDSC*
(6/7/93 through 3/31/98) 4.67% 4.32%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 9/20/89 12/5/89 6/7/93 6/17/92
NAV CDSC*
- ----------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 8.12% 7.91% 7.37% 3.37% 7.37%
- ----------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 6.40% 6.19% 5.80% 4.90% 5.80%
5 Years 5.38% 5.17% NA NA 4.77%
Since Inception 6.52% 6.37% 4.67% 4.32% 5.27%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
78
<PAGE> 83
Nations Virginia
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary*
EFFECTIVE MARCH 1998, THE MUNICIPAL FIXED INCOME
MANAGEMENT TEAM OF TRADESTREET INVESTMENT ASSOCIATES,
INC. ASSUMED THE DAILY PORTFOLIO MANAGEMENT
RESPONSIBILITIES OF THE FUND. IN THE FOLLOWING
INTERVIEW, THE TEAM SHARES ITS VIEWS ON NATIONS VIRGINIA
MUNICIPAL INCOME FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 1998 AND THEIR CURRENT OUTLOOK.
<TABLE>
<S> <C>
PORTFOLIO MANAGER BRIEFLY DESCRIBE YOUR OVERALL INVESTMENT PHILOSOPHY AND THE
The Fund is managed by the INVESTMENT APPROACH OF THE FUND.
Municipal Fixed Income The Fund balances its investments between high quality,
Management Team of TradeStreet investment-grade issues through which it seeks to reduce
Investment Associates, Inc., credit and liquidity risk, and lower quality,
investment sub- adviser to the investment-grade issues, for their additional yield
Fund. During the reporting potential. By maintaining a well-diversified portfolio, we
period, Dawn Daggy- Mangerson aim to limit the Fund's exposure to any single credit or
was the Fund's portfolio market sector. In addition, we use a combination of
manager. investment strategies, including duration management
INVESTMENT OBJECTIVE (managing the Fund's sensitivity to interest rates), market
The Fund seeks high current sector selection and individual credit reviews. We also seek
income exempt from federal and to limit the distribution of capital gains when appropriate.
Virginia state income taxes As a long-term portfolio, the Fund maintains an average
with the potential for dollar- weighted maturity of greater than ten years and a
principal fluctuation duration between seven and one-half and nine and one-half
associated with investments in years.
long- term municipal HOW DID THE FUND PERFORM DURING THE PERIOD?
securities. The Fund invests in With a total return of 11.11%, the Fund (Primary A Shares)
investment-grade, long- term outperformed its peer group, the Lipper Virginia Municipal
municipal securities. Debt Funds Universe,*** which returned 10.69% for the
PERFORMANCE REVIEW 12-month period ended March 31, 1998. Given the uncertain
For the 12-month period ended direction of interest rates during the period, we believed
March 31, 1998, Nations it prudent to maintain a relatively neutral stance with
Virginia Municipal Bond Fund regard to the Fund's duration. With a longer duration than
Primary A Shares provided a many of its peers, the Fund benefited more fully from the
total return of 11.11%.** declining interest rate environment during the period.
WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE IN VIRGINIA?
The Commonwealth of Virginia has earned the highest possible
credit ratings from Moody's Investors Service, Inc.,
Standard & Poor's Corporation and Fitch IBCA, Inc., by
having a conservative fiscal plan, above-average per capita
income and strong growth in service-sector jobs. Virginia's
level of general obligation debt grew as the state increased
its
*The outlook for this Fund may differ from that presented
for other Nations Funds mutual funds.
**The performance shown includes the effect of fee waivers
by the investment adviser and the administrator, which have
the effect of increasing total return.
***Lipper Analytical Services, Inc., an independent mutual
fund performance monitor. Funds included in the Lipper
Virginia Municipal Debt Funds Universe limit their assets to
those securities which are exempt from taxation in Virginia.
Source for all statistical data -- TradeStreet Investment
Associates, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</TABLE>
79
<PAGE> 84
Nations Virginia
Municipal Bond
Fund Municipal Fixed Income
Management Team Commentary continued ...
<TABLE>
<S> <C>
commitment to invest in highways and universities. At $494,
Virginia's debt per capita was somewhat higher than the
national average of $422. Personal income levels fell
slightly but were still at 103% of the national average.
Compensating for an 8.6% drop in federal employment between
1992 and 1996, jobs in the services sector have filled the
void, increasing by 19.8% over the same period. The services
sector accounted for over 29% of Virginia's non-farm
employment.
THE FUND OUTPERFORMED ITS PEER WHAT IS YOUR OUTLOOK FOR VIRGINIA AND THE MUNICIPAL BOND
GROUP FOR THE 12-MONTH PERIOD MARKET IN THE COMING YEAR?
ENDED MARCH 31, 1998. Looking ahead, municipal bond market participants will have
to keep one eye focused on Washington, D.C., where proposed
federal legislation addressing electric utility deregulation
and the reimbursement of not-for-profit health care
providers is being considered. We note that an uncertain
political climate for many municipal bond market sectors
such as these has become commonplace in recent
years -- presenting both a challenge and an opportunity for
astute investors seeking to capitalize on undervalued
securities.
In Virginia, a major challenge for the future will be
contending with the loss of revenue attributed to the
governor's planned elimination of the state's tax on
automobiles. Lost revenues could approach $3 billion by the
year 2003.
</TABLE>
80
<PAGE> 85
Nations Virginia
Municipal Bond
Fund
PORTFOLIO BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 3/31/98)
[PIE CHART]
25.79% Insured
5.85% Hospital
6.25% Transportation
7.15% Education
12.45% General Obligation
12.71% Other
13.21% Pollution Control
Revenue/Industrial
Development Revenue
16.59% Water
PORTFOLIO HOLDINGS WERE CURRENT AS
OF MARCH 31, 1998, ARE SUBJECT TO
CHANGE AND MAY NOT BE REPRESENTATIVE
OF CURRENT HOLDINGS.
<TABLE>
<C> <C>
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 3/31/98)
----------------------------------------------
1 Rivanna, Virginia Regional Water 5.9%
and Sewer Authority, Regional
Water and Sewer Systems Revenue
Refunding,
6.450% 10/01/12
----------------------------------------------
2 Staunton, Virginia, Industrial 4.3%
Development Authority, Educational
Facilities Revenue, (Mary Baldwin
College Project),
6.600% 11/01/14
----------------------------------------------
3 Prince William County, Virginia, 4.2%
Industrial Development Authority,
Lease Revenue, (ATCC Project),
6.000% 02/01/14
----------------------------------------------
4 Fairfax County, Virginia, Sewer, 4.1%
Revenue Refunding (AMBAC Insured),
5.500% 11/15/13
----------------------------------------------
5 Augusta County, Virginia, 4.0%
Industrial Development Authority,
Hospital Revenue Refunding
(Augusta Hospital Corporation),
(AMBAC Insured),
5.500% 09/01/15
----------------------------------------------
6 Virginia Commonwealth, Virginia 4.0%
Transportation Program Revenue,
(Oak Grove Connector, Series A),
5.250% 05/15/22
----------------------------------------------
7 Norfolk, Virginia, Capital 3.5%
Improvement, (FGIC Insured), GO,
5.375% 06/01/05
----------------------------------------------
8 Richmond, Virginia, Metropolitan 3.4%
Expressway Authority, Revenue
Refunding, Series B, (FGIC
Insured),
6.250% 07/15/22
----------------------------------------------
9 West Point, Virginia, Industrial 3.4%
Development Authority, Solid Waste
Disposal Revenue, (Chesapeake
Corporation Project), Series A,
AMT,
6.375% 03/01/19
----------------------------------------------
10 Giles County, Virginia, Industrial 3.3%
Development Authority, Revenue
Exempt Facilities, (Hoechst
Celanese Corporation Project),
AMT,
5.950% 12/01/25
----------------------------------------------
THE TOP TEN HOLDINGS ARE PRESENTED TO
ILLUSTRATE EXAMPLES OF THE INDUSTRIES AND
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
81
<PAGE> 86
Nations Virginia
Municipal Bond
Fund Performance
GROWTH OF $10,000 INVESTMENT
Primary A Shares (as of 3/31/98) [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20-
Measurement Period Virginia Municipal Bond Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Fund $12,413 Index $13,129 Index $12,847
<S> <C> <C> <C>
Jan. 11 1994 10000 10000 10000
9118 9307 9451
9143 9400 9555
9156 9449 9621
1994 9023 9266 9483
9762 10092 10153
9994 10309 10398
10286 10588 10697
1995 10809 11207 11138
10596 10957 11004
10676 11081 11088
10951 11397 11343
1996 11209 11705 11632
11172 11633 11604
11554 12125 12004
11890 12549 12365
1997 12270 12975 12701
Mar. 31 1998 12413 13129 12847
</TABLE>
Investor B Shares (as of 3/31/98)* [LINE GRAPH]
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
Lehman 20-
Measurement Period Virginia Municipal Bond Year Municipal Bond Lehman Municipal Bond
(Fiscal Year Covered) Fund $11,929 Index $13,446 Index $13,003
<S> <C> <C> <C>
Oct. 21 1993 10000 10000 10000
1993 10047 10241 10121
9185 9532 9565
9193 9626 9671
9189 9677 9737
1994 9038 9490 9598
9761 10335 10276
9974 10557 10524
10246 10843 10826
1995 10747 11477 11273
10516 11221 11137
10575 11348 11223
10827 11672 11480
1996 11061 11987 11772
11005 11914 11744
11359 12417 12149
11666 12851 12515
1997 12013 13288 12855
Mar. 31 1998 11929 13446 13003
</TABLE>
<TABLE>
<S> <C>
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
SINCE INCEPTION
(1/11/94 through 3/31/98) 5.26%
The charts to the left show the growth
in value of a hypothetical $10,000
investment in Primary A and Investor B
Shares of Nations Virginia Municipal
Bond Fund from the date each class of
shares was first offered. The Lehman
20-Year Municipal Bond Index is a
broad-based, unmanaged, total return
index composed of investment-grade
bonds with maturities of 18 to 22
years. It is unavailable for
investment. The Lehman Municipal Bond
Index is a broad-based, unmanaged,
total return index composed of 8,000
investment-grade, long-term maturity
bonds. It is unavailable for
investment. The performance shown
reflects the performance of Primary A
and Investor B Shares. The performance
of Investor A and Investor C Shares may
vary based on the differences in sales
loads and fees paid by the shareholders
investing in each class.
The annual reports for the fiscal year
ended March 31, 1997 and prior years
compared the Fund's performance to the
Lehman 20-Year Municipal Bond Index.
Fund management believes that the
Lehman Municipal Bond Index is a more
appropriate benchmark because the
maturities of the municipal debt
securities comprising the index more
closely resemble the maturities of the
securities acquired by the Fund.
AVERAGE ANNUAL TOTAL RETURN
Investor B Shares
SINCE INCEPTION NAV CDSC*
(10/21/93 through 3/31/98) 4.44% 4.05%
</TABLE>
TOTAL RETURN (AS OF 3/31/98)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A INVESTOR B INVESTOR C
<S> <C> <C> <C> <C> <C>
Inception Date 1/11/94 11/8/93 10/21/93 11/3/94
NAV CDSC*
- ------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 11.11% 10.88% 10.21% 5.21% 10.31%
- ------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
3 Years 8.34% 8.12% 7.51% 6.64% 7.65%
Since Inception 5.26% 5.44% 4.44% 4.05% 10.02%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of dividends.
The performance shown includes the effect of fee waivers by the investment
adviser and the administrator, which have the effect of increasing total return.
*Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
Figures at net asset value (NAV) do not reflect any sales charges.
82
<PAGE> 87
NATIONS FUNDS
Nations Short-Term Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 100.0%
ALASKA -- 2.8%
$1,000,000 Alaska State, Student
Loan Corporation,
Student Loan Revenue,
Series A, AMT, (AMBAC
Insured),
4.900% 07/01/00....... Aaa AAA $ 1,016,110
2,000,000 North Slope Borough,
Alaska, GO, Series B,
(CGIC Insured),
6.100% 06/30/99....... Aaa AAA 2,056,520
------------
3,072,630
------------
ARIZONA -- 6.0%
1,700,000 Arizona, East Valley,
Institute of
Technology,
Project of 1994, Series
B, (AMBAC Insured),
6.400% 07/01/00....... Aaa AAA 1,790,950
2,125,000 Maricopa County,
Arizona, School
District, Number
006-Washington
Elementary, GO,
(Projects of 1996),
Series B, (FGIC
Insured),
5.000% 07/01/00....... Aaa AAA 2,175,214
1,370,000 Maricopa County,
Arizona, School
District, Number 4,
Mesa University,
Series D (AMBAC-TCRS
Insured),
6.900% 07/01/00....... Aaa AAA 1,457,365
1,000,000 Pima County, Arizona,
Unified School
District Number
10-Amphitheater, GO,
(Projects of 1994),
Series C,
(MBIA Insured),
6.000% 07/01/06....... Aaa AAA 1,110,350
------------
6,533,879
------------
DISTRICT OF COLUMBIA -- 1.6%
1,750,000 District of Columbia,
Refunding, GO, Series
C, (FSA-CR Insured),
5.100% 12/01/99....... Aaa AAA 1,784,475
------------
GEORGIA -- 3.9%
1,000,000 Clarke County, Georgia,
School District, GO,
Refunding,
(FSA Insured),
5.125% 09/01/00....... Aaa AAA 1,027,960
1,000,000 Georgia State, GO,
Series C,
7.250% 07/01/00....... Aaa AAA 1,072,300
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
GEORGIA -- (CONTINUED)
$2,000,000 Metropolitan Atlanta
Rapid Transit
Authority, Georgia,
Sales Tax Revenue,
6.550% 07/01/20....... A1 NR $ 2,181,300
------------
4,281,560
------------
GUAM -- 2.3%
Government of Guam:
500,000 Airport Authority
Revenue, Series A,
5.400% 10/01/99....... NR BBB 509,840
2,000,000 GO, Series A,
5.375% 09/01/00....... NR BBB 2,021,380
------------
2,531,220
------------
HAWAII -- 0.9%
1,000,000 Hawaii State, GO,
Series BT,
5.700% 02/01/99....... Aa3 A+ 1,016,480
------------
ILLINIOS -- 3.8%
1,000,000 Chicago, Illinois,
Metropolitan Water
Reclamation District -
Greater Chicago, GO,
Refunding,
4.150% 12/01/99....... Aa2 AA 1,006,120
1,000,000 Chicago, Illinois,
O'Hare International
Airport, General
Airport Revenue,
Second Lien, Series A,
AMT, (AMBAC Insured),
5.000% 01/01/02....... Aaa AAA 1,025,680
2,000,000 Illinois Health
Facilities Authority
Revenue, (Ingalls
Memorial Hospital
Project),
Pre-Refunded,
(MBIA Insured)
7.000% 01/01/00....... Aaa AAA 2,141,480
------------
4,173,280
------------
INDIANA -- 1.2%
1,280,000 Indiana State, Health
Facilities Financing
Authority, Hospital
Revenue Refunding,
(Methodist Hospital
Inc. Project),
6.000% 09/15/99....... A2 NR 1,318,874
------------
IOWA -- 2.8%
3,000,000 Iowa Student Loan
Liquidity Corporation,
Student Loan Revenue,
Series B,
4.900% 12/01/05....... Aaa NR 3,059,340
------------
MARYLAND -- 2.4%
1,500,000 Baltimore, Maryland,
Wastewater Utilities
Revenue, Series A,
(MBIA Insured)
6.500% 07/01/20....... Aaa AAA 1,582,455
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
83
<PAGE> 88
NATIONS FUNDS
Nations Short-Term Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MARYLAND -- (CONTINUED)
$1,000,000 Montgomery County,
Maryland, Construction
for Public
Improvement,
GO, Refunded, Series
B,
6.800% 11/01/08....... AAA AAA $ 1,066,220
------------
2,648,675
------------
MASSACHUSETTS -- 0.9%
1,000,000 Massachusetts State,
Refunding, GO, Series
A,
5.500% 07/01/99....... A1 A+ 1,020,740
------------
MICHIGAN -- 4.7%
2,000,000 Detroit, Michigan,
Convention Facilities
Revenue Refunding,
(Cobo Hall Expansion
Project),
4.750% 09/30/00....... NR A 2,031,060
1,000,000 Detroit, Michigan, GO,
Series B,
5.100% 04/01/99....... Baa2 BBB+ 1,011,950
Detroit, Michigan,
Self-Insurance, GO,
Series A:
1,000,000 5.200% 05/01/98........ NR BBB 1,001,090
1,000,000 5.600% 05/01/01........ NR BBB 1,035,670
------------
5,079,770
------------
MINNESOTA -- 1.2%
1,200,000 Minneapolis, Minnesota,
Hospital Revenue,
Refunded, (Lifespan,
Incorporated-Abbott
Northwestern),
7.000% 12/01/05....... AAA AAA 1,285,056
------------
MISSISSIPPI -- 7.3%
3,000,000 Grenada County,
Mississippi, Revenue,
(Refunding GA-Pacific
Corporation Project),
4.300% 09/01/00....... Baa2 NR 2,995,140
5,000,000 Lawrence County,
Mississippi, Pollution
Control Revenue,
4.300% 12/01/00....... Baa2 NR 5,009,750
------------
8,004,890
------------
NEVADA -- 2.8%
1,000,000 Clark County, Nevada,
Sanitation District,
GO, Series A, (AMBAC
Insured),
5.700% 07/01/99....... Aaa AAA 1,023,040
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEVADA -- (CONTINUED)
$2,000,000 Washoe County, Nevada,
Airport Authority,
Airport System
Improvement Revenue,
Series A, AMT, (MBIA
Insured),
5.100% 07/01/99....... Aaa AAA $ 2,030,360
------------
3,053,400
------------
NEW MEXICO -- 2.2%
1,390,000 New Mexico Mortgage
Finance Authority,
Single-family Mortgage
Purchase, Refunding,
Series A-1,
5.900% 07/01/99....... Aa1 AA 1,416,883
1,000,000 New Mexico State
Severance Tax Revenue,
Series A,
5.375% 07/01/99....... Aa2 AA 1,019,480
------------
2,436,363
------------
NEW YORK -- 4.7%
1,000,000 New York State,
Refunding, GO, Series
B,
6.375% 08/15/00....... A2 A 1,054,920
4,000,000 New York State Thruway
Authority, Service
Contract Revenue,
Local Highways and
Bridges, Refunding,
5.000% 04/01/01....... Baa1 BBB+ 4,087,040
------------
5,141,960
------------
NORTH CAROLINA -- 0.9%
1,000,000 North Carolina Eastern
Municipal Power
Agency, Power System
Revenue, Refunding,
Series A,
5.000% 01/01/99....... Baa1 BBB 1,007,990
------------
NORTH DAKOTA -- 1.1%
1,000,000 University of North
Dakota, University
Revenue,
10.625% 04/01/09...... AAA NR 1,182,380
------------
OKLAHOMA -- 1.0%
1,075,000 Grand River Dam
Authority, Oklahoma,
Revenue Refunding,
5.000% 06/01/99....... A2 A- 1,090,147
------------
PENNSYLVANIA -- 11.1%
5,425,000 Dauphin County,
Pennsylvania, General
Authority, School
District Pooled
Financing Program II,
(AMBAC Insured),
4.450% 09/01/32....... Aaa NR 5,457,278
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
84
<PAGE> 89
NATIONS FUNDS
Nations Short-Term Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
PENNSYLVANIA -- (CONTINUED)
Greene County,
Pennsylvania,
Industrial Development
Authority, Series B:
$1,560,000 (Monongahela Power
Company),
4.350% 02/01/02........ A2 A- $ 1,561,388
2,200,000 (Potomac Edison
Company),
4.350% 02/01/02........ A2 A- 2,201,958
Monroeville,
Pennsylvania, Hospital
Authority Revenue
Refunding, (Forbes
Health System):
1,000,000 4.875% 10/01/98........ A3 A- 1,005,180
1,000,000 5.000% 10/01/99........ A3 A- 1,015,000
1,000,000 5.125% 10/01/00........ A3 A- 1,022,210
------------
12,263,014
------------
SOUTH CAROLINA -- 1.0%
1,000,000 Medical University of
South Carolina,
Hospital Facilities
Revenue Refunding,
Series A,
7.000% 07/01/00....... A3 A+ 1,062,300
------------
SOUTH DAKOTA -- 0.5%
515,000 South Dakota Student
Loan Assistance
Corporation, Student
Loan Revenue, Series
A, (GTD STD LNS),
7.000% 08/01/98....... NR A+ 520,660
------------
TENNESSEE -- 2.1%
2,100,000 McMinn County,
Tennessee, Industrial
Development Board,
PCR, Refunding,
(Bowater Inc.
Project),
6.850% 04/01/01....... Baa1 BBB 2,253,489
------------
TEXAS -- 14.3%
1,000,000 Addison, Texas,
Refunding, GO,
(FGIC Insured),
6.100% 09/01/99....... Aaa AAA 1,009,480
1,010,000 Addison, Texas, CTFS
Obligation, (FSA
Insured),
6.250% 02/15/01....... Aaa AAA 1,070,186
655,000 Bexar County, Texas,
Refunding Limited Tax,
GO,
6.100% 06/15/98....... Aa AA 656,277
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
TEXAS -- (CONTINUED)
Brazos, Texas, Higher
Education Authority
Inc., Revenue
Refunding, AMT, (GTD
STD LNS):
$ 950,000 Senior Lien, Series
A-2,
5.850% 06/01/01........ Aaa NR $ 990,242
1,415,000 Series C-1,
6.000% 11/01/99........ Aa NR 1,445,932
1,000,000 Conroe, Texas,
Independent School
District, GO,
Schoolhouse and
Refunding, (MBIA
Insured),
7.000% 02/01/99....... Aaa AAA 1,027,120
1,000,000 Dallas-Fort Worth,
Texas, Regional
Airport Revenue,
6.000% 11/01/02....... A1 A+ 1,073,870
1,650,000 Harris County, Texas,
GO, Refunding,
5.600% 10/01/01....... Aa2 AA 1,731,032
2,450,000 Houston, Texas, Water
and Sewer System
Revenue Refunding,
Prior Lien, Series B,
5.250% 12/01/99....... A3 A 2,504,536
3,000,000 Panhandle-Plains,
Texas, Higher
Education Authority
Inc, Student Loan
Revenue, Series E,
(GTD STD LNS),
5.550% 03/01/05....... A NR 3,116,670
1,000,000 Texas State College,
Texas, Student Loan
Authority Revenue, GO,
AMT,
5.100% 08/01/01....... Aa2 AA 1,028,510
------------
15,653,855
------------
VIRGINIA -- 5.8%
1,000,000 Ashland, Virginia, IDA,
Educational Facilities
Revenue, (Randolph-
Macon College
Project),
4.375% 11/01/11....... NR A- 1,005,520
2,350,000 Greenville County,
Virginia, Industrial
Development Authority
Revenue,
4.100% 08/01/00....... Baa2 NR 2,343,679
1,000,000 Virginia Beach,
Virginia, GO, Series
A,
6.800% 06/01/99....... Aa2 AA 1,035,140
1,825,000 Virginia Education Loan
Authority, (GTD STD
LNS),
6.625% 09/01/03....... AAA NR 1,979,997
------------
6,364,336
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
85
<PAGE> 90
NATIONS FUNDS
Nations Short-Term Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
WASHINGTON -- 9.7%
$1,000,000 Conservation and
Renewable Energy
System Revenue,
Washington,
(Washington
Conservation Project),
5.050% 10/01/98....... Aa1 AA- $ 1,006,780
1,570,000 King County,
Washington, GO, Series
A,
9.000% 12/01/98....... Aa1 AA+ 1,624,997
1,000,000 Washington State,
Revenue, GO, Series B,
Pre-Refunded,
6.600% 08/01/01....... Aa1 AA+ 1,058,170
Revenue Refunding,
(Nuclear Project No. 2
):
4,000,000 Series A,
5.000% 07/01/00........ Aa1 AA- 4,078,960
1,000,000 Series C,
7.300% 07/01/00....... Aa1 AA- 1,068,020
1,675,000 (MBIA-IBC Insured),
7.200% 07/01/99........ Aaa AAA 1,742,737
------------
10,579,664
------------
WISCONSIN -- 1.0%
1,115,000 Kenosha, Wisconsin, GO,
Refunding, Promissory
Notes, Series B,
4.150% 12/01/99....... A1 AA- 1,116,728
------------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $108,483,127)............ 109,537,155
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
INVESTMENT COMPANY -- 4.1% (Cost $4,437,000)
4,437,000 AIM Tax-Exempt Fund............. $ 4,437,000
------------
TOTAL INVESTMENTS
(Cost $112,920,126*)........................ 104.1% 113,974,155
OTHER ASSETS AND
LIABILITIES (NET)........................... (4.1) (4,513,052)
----- ------------
NET ASSETS................................... 100.0% $109,461,103
===== ============
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $1,065,305 and gross
depreciation of $11,276 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$112,920,126.
Nations Short-Term Municipal Bond Fund had the following insurance concentration
greater than 10% at March 31, 1998 (as a percentage of net assets):
AMBAC 10.8%
Nations Short-Term Municipal Bond Fund had the following industry concentrations
greater than 10% at March 31, 1998 (as a percentage of net assets):
Power/Utilities Revenue 10.97%
Pollution Control Revenue/
Industrial Development Revenue 10.52%
SEE NOTES TO FINANCIAL STATEMENTS.
86
<PAGE> 91
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 97.0%
ALABAMA -- 1.7%
$ 2,500,000 Birmingham, Alabama,
Industrial Water Board,
Industrial Water Supply
Revenue,
6.000% 07/01/07........ NR AAA $ 2,793,025
2,500,000 Birmingham, Alabama,
Special Care Facility
Financing Authority
Revenue, (Baptist
Medical Centers),
Series A, (MBIA
Insured),
5.500% 08/15/05........ Aaa AAA 2,587,950
5,750,000 Courtland, Alabama,
Industrial Development
Board, Solid Waste
Disposal, Series A,
6.375% 03/01/29........ Baa1 BBB 6,141,804
3,600,000 Jefferson County,
Alabama, Sewer Revenue
Refunding, Series A,
(FGIC Insured),
5.625% 02/01/18........ Aaa AAA 3,755,556
------------
15,278,335
------------
ALASKA -- 1.3%
3,000,000 Alaska State, Housing
Finance Corporation,
Series A, (MBIA
Insured),
5.400% 06/01/08........ Aaa AAA 3,135,810
Alaska State, Student
Loan Corporation,
Student Loan Revenue,
Series A, AMT, (AMBAC
Insured):
3,280,000 5.250% 07/01/03......... Aaa AAA 3,399,851
1,500,000 5.150% 07/01/05......... Aaa AAA 1,551,195
1,250,000 5.200% 07/01/06......... Aaa AAA 1,297,438
2,000,000 Anchorage, Alaska, GO,
Series A, (AMBAC
Insured),
5.100% 08/01/07........ Aaa AAA 2,079,680
------------
11,463,974
------------
ARIZONA -- 3.0%
2,000,000 Arizona State,
Transportation Board,
Excise Tax Revenue,
(Maricopa County
Regional Area Project),
Series A, (AMBAC
Insured),
5.500% 07/01/02........ Aaa AAA 2,106,460
Arizona State,
University, Revenue
Refunding:
2,250,000 6.000% 07/01/07......... A1 AA 2,513,723
955,000 Series A,
6.500% 07/01/01........ A1 AA 1,025,804
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
ARIZONA -- (CONTINUED)
$ 5,000,000 Central Arizona Water
Conservation, Series A,
5.500% 11/01/09........ A1 AA- $ 5,386,400
1,100,000 Glendale, Arizona,
Refunding, GO, (FGIC
Insured),
4.950% 07/01/01........ Aaa AAA 1,129,799
7,000,000 Maricopa County,
Arizona, School
District No. 4-Mesa
University, Series D,
(AMBAC-TCRS Insured),
6.900% 07/01/00........ Aaa AAA 7,446,390
300,000 Maricopa County,
Arizona, Union High
School District No.
210-Phoenix, Series D,
6.700% 07/01/03........ Aa3 AA 326,112
Pima County, Arizona,
Union School District
No. 1-Tucson, (MBIA
Insured):
400,000 6.700% 07/01/04......... Aaa AAA 435,200
2,125,000 (Project of 1989),
Series G, GO,
7.300% 07/01/05........ Aaa AAA 2,510,156
Scottsdale, Arizona,
Refunding, GO:
1,285,000 5.250% 07/01/09......... Aa1 AA+ 1,356,472
1,000,000 5.500% 07/01/10......... Aa1 AA+ 1,078,630
400,000 Tempe, Arizona, GO,
5.600% 07/01/00........ Aa1 AA+ 412,152
------------
25,727,298
------------
ARKANSAS -- 0.9%
7,000,000 Hot Springs, Arkansas,
Industrial Development
Revenue Refunding,
(Willamette
Industries),
6.650% 12/01/02........ NR A- 7,676,900
------------
COLORADO -- 2.0%
1,500,000 Arapahoe County,
Colorado, School
District No. 5, (Cherry
Creek),
7.000% 12/15/04........ Aa AA 1,628,910
Denver, Colorado, City
and County GO:
3,445,000 Series A,
5.700% 08/01/01........ Aa2 AA 3,602,540
7,000,000 Series C,
5.750% 08/01/06........ Aa2 AA 7,270,130
3,500,000 Denver Metropolitan
Major League Baseball
Stadium District,
Revenue Refunding and
Improvement-Sales
Tax-Series A, (FGIC
Insured),
5.900% 10/01/99........ Aaa AAA 3,610,075
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
87
<PAGE> 92
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
COLORADO -- (CONTINUED)
$ 1,500,000 Northglenn, Colorado,
Refunding, Water and
Sewer, GO, (FSA
Insured),
5.250% 12/01/04........ Aaa AAA $ 1,586,205
------------
17,697,860
------------
CONNECTICUT -- 2.8%
Connecticut State,GO:
300,000 Series A,
6.600% 03/01/04........ AAA AAA 326,343
1,000,000 Series B,
4.800% 03/15/01........ Aa3 AA- 1,022,750
2,500,000 Series C,
5.500% 08/01/07........ Aa3 AA- 2,700,525
6,625,000 Series D,
5.500% 03/15/01........ Aa3 AA- 7,171,628
6,140,000 Connecticut State,
Special Tax Obligation,
Revenue Refunding,
(Transportation
Infastructure Project),
Series A, (FGIC-TCRS
Insured),
5.100% 09/01/04........ Aaa AAA 6,423,176
6,465,000 Connecticut State,
Housing Finance
Authority,
5.600% 11/15/21........ Aa2 AA 6,614,341
------------
24,258,763
------------
DISTRICT OF COLUMBIA -- 0.6%
1,100,000 District of Columbia,
GO, Series A, (AMBAC
Insured),
7.000% 06/01/98........ Aaa AAA 1,105,819
District of Columbia,
Hospital Revenue,
Refunding, (Medlantic
Healthcare Group),
Series A, (MBIA
Insured):
1,000,000 6.000% 08/15/06......... Aaa AAA 1,095,580
1,350,000 6.000% 08/15/07......... Aaa AAA 1,486,026
1,500,000 Metropolitan Washington,
D.C., Airport Authority
of Virginia, General
Airport Revenue, Series
A, AMT, (MBIA Insured),
5.600% 10/01/06........ Aaa AAA 1,611,915
------------
5,299,340
------------
FLORIDA -- 6.6%
5,895,000 Alachua County, Florida,
Public Improvement
Revenue, Refunding,
(FSA Insured),
5.000% 08/01/14........ Aaa AAA 5,881,559
1,000,000 Broward County, Florida,
School District,
Refunding,
5.100% 02/15/02........ A1 AA- 1,035,960
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
$ 2,700,000 Duval County, Florida,
Housing Finance
Authority Refunding,
(Greentree Place
Project),
6.750% 04/01/25........ NR BBB+ $ 2,869,209
4,800,000 Duval County, Florida,
Housing Finance
Authority, Multi-
Family Mortgage
Revenue, Refunding,
(The Cove Project),
6.100% 10/01/02........ NR AAA 5,047,871
3,035,000 Florida State Board of
Education, Capital
Outlay, Public
Education, Series A,
5.400% 01/01/06........ Aa2 AA+ 3,234,308
3,000,000 Florida State,
Refunding, Senior Lien,
GO,
5.000% 07/01/19........ Aa2 AA+ 2,934,450
3,650,000 Florida State Division
of Bond Financing,
Department of General
Services Revenue,
Department of Natural
Resources-Preservation
2000, Series A, (AMBAC
Insured),
6.200% 07/01/00........ Aaa AAA 3,833,741
Florida State Housing
Finance Agency,
Refunding, Multi-
family Housing:
7,440,000 (Altamonte Project),
Series C,
7.000% 12/01/24........ NR BBB+ 8,227,523
2,000,000 (Andover Project),
Series E,
6.350% 05/01/26........ NR BBB+ 2,141,320
Jacksonville, Florida,
Electric Authority
Revenue, Refunding,
(St. John River), Issue
2:
300,000 Series 6-C,
6.400% 10/01/00........ Aa2 AA 318,069
Series 10:
5,900,000 5.000% 10/01/04......... Aa2 AA 6,138,537
1,500,000 4.600% 10/01/00......... Aa2 AA 1,526,565
2,080,000 Nassau County, Florida,
Pollution Control
Revenue Refunding, (ITT
Rayonier Inc. Project),
5.700% 06/01/01........ Baa2 BBB+ 2,158,978
Orlando Utilities
Commission, Florida,
Water and Electric
Revenue, Refunding:
1,000,000 5.200% 10/01/00......... Aa1 AA 1,031,640
4,000,000 5.600% 10/01/03......... Aa1 AA 4,276,520
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
88
<PAGE> 93
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
$ 5,490,000 Pinellas County,
Florida, Resource
Recovery Revenue,
Refunding, Series A,
(MBIA Insured),
6.600% 10/01/00........ Aaa AAA $ 5,847,948
600,000 Tampa, Florida,
Guaranteed Entitlement
Revenue, Refunding,
(AMBAC Insured),
6.500% 10/01/99........ Aaa AAA 623,538
------------
57,127,736
------------
GEORGIA -- 3.4%
8,500,000 Burke County, Georgia,
Development Authority,
PCR, (Oglethorpe Power
Corporation Project),
Series B,
4.900% 01/01/06........ A3 A 8,703,065
3,000,000 Cartersville, Georgia,
Development Authority,
Revenue Refunding,
Sewer Facilities,
(Anheuser Busch
Companies Inc.),
5.625% 05/01/09........ A1 A+ 3,213,360
1,500,000 Fulco, Georgia, Hospital
Authority Revenue,
Revenue Anticipation
Certificates, St.
Joseph's Hospital,
5.100% 10/01/05........ A3 A 1,581,450
1,105,000 Fulton County, Georgia,
Development Authority
Revenue, (Clark
University Project),
(CONNIE LEE Insured),
5.100% 01/01/05........ Baa2 AAA 1,144,449
5,000,000 Fulton De Kalb, Georgia,
Hospital Authority,
Hospital Revenue
Refunding, (Grady
Memorial Hospital
Projects), (MBIA
Insured),
5.250% 01/01/04........ Aaa AAA 5,249,750
300,000 Georgia Municipal
Electric Authority,
Power Revenue,
Refunded, Series U,
6.800% 01/01/03........ AAA A 326,664
Georgia State, GO:
2,940,000 7.250% 09/01/04......... Aaa AAA 3,435,155
300,000 Series D,
7.000% 11/01/00........ Aaa AAA 322,884
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
GEORGIA -- (CONTINUED)
Gwinnett County,
Georgia, School
District:
$ 1,500,000 4.500% 02/01/15......... Aa1 AA+ $ 1,403,865
4,000,000 Refunding, Series B,
6.200% 02/01/03........ Aa1 AA+ 4,355,520
------------
29,736,162
------------
GUAM -- 0.2%
1,500,000 Government of Guam, GO,
Series A,
5.200% 11/15/08........ NR BBB 1,530,165
------------
HAWAII -- 1.7%
Hawaii State, GO:
1,000,000 Series BU,
5.850% 11/01/01........ Aa A+ 1,056,810
2,000,000 Series CJ,
5.625% 01/01/02........ Aa3 A+ 2,100,620
2,000,000 Series CL,
5.000% 03/01/03........ Aa3 A+ 2,064,960
5,000,000 Series CN, (FGIC
Insured),
6.250% 03/01/04........ Aaa AAA 5,501,600
Honolulu, Hawaii, City
and County, Refunding,
GO,
Series A:
2,500,000 7.350% 07/01/07......... Aa2 AA 3,018,425
1,300,000 5.250% 01/01/01......... Aa2 AA 1,339,104
------------
15,081,519
------------
ILLINOIS -- 7.3%
2,500,000 Chicago, Illinois, Gas
Supply Revenue,
6.875% 03/01/15........ Aa3 AA- 2,738,725
Chicago, Illinois,
Metropolitan Water
Reclamation District-
Greater Chicago Capital
Improvement:
2,165,000 5.750% 12/01/01......... Aa2 AA 2,287,366
1,100,000 5.000% 12/01/02......... Aa2 AA 1,139,710
2,000,000 Chicago, Illinois,
O'Hare International
Airport Revenue,
Passenger Facility
Charge, Series B, AMT,
(AMBAC Insured),
5.000% 01/01/02........ Aaa AAA 2,051,360
5,000,000 Chicago, Illinois, Park
District, GO,
6.600% 11/15/14........ A1 AA- 5,608,500
Chicago, Illinois,
School Financing
Authority, GO, Series
A, (MBIA Insured):
2,000,000 4.800% 06/01/04......... Aaa AAA 2,043,760
1,160,000 4.900% 06/01/05......... Aaa AAA 1,188,803
4,000,000 Chicago, Illinois, Water
Revenue, (AMBAC
Insured),
5.400% 11/01/02........ Aaa AAA 4,196,400
1,500,000 Cook County, Illinois,
Capital Improvement,
GO, (FGIC Insured),
5.100% 11/15/03........ Aaa AAA 1,563,855
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
89
<PAGE> 94
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
ILLINOIS -- (CONTINUED)
$ 2,000,000 Cook County, Illinois,
Community College
District Number 508,
Chicago Certificates of
Participation, (FGIC
Insured),
8.750% 01/01/07........ Aaa AAA $ 2,589,600
Du Page County,
Illinois, GO, Refunded:
100,000 (Jail Project),
9.000% 01/01/00........ AAA AAA 108,607
300,000 (Stormwater Project),
9.000% 01/01/00........ AAA AAA 325,821
1,145,000 Du Page County,
Illinois, School
District GO, (FGIC
Insured),
6.750% 02/01/11........ Aaa NR 1,361,852
1,100,000 Illinois State, GO,
5.500% 08/01/03......... Aa3 AA 1,163,855
1,000,000 Illinois State Health
Facilities Authority
Revenue, (Lutheran
General Health Systems
Project), Series C,
5.250% 04/01/02........ A1 A+ 1,034,570
12,500,000 Illinois State Sales Tax
Revenue Refunding,
Series S,
6.000% 06/15/03........ Aa3 AAA 13,519,500
1,595,000 Lake County, Illinois,
High School District
No. 125, (Adlai E.
Stevenson High School),
5.000% 01/01/04........ Aa1 NR 1,652,069
1,050,000 Lansing, Illinois, Sales
Tax Increment Revenue,
Refunding,
6.500% 12/01/02........ NR BBB 1,137,423
Metropolitan Pier and
Exposition Authority,
Illinois, Dedicated Tax
Revenue Refunding:
2,400,000 (MBIA-IBC Insured),
6.500% 06/01/05........ Aaa AAA 2,706,744
2,000,000 (McCormick Place
Expansion Project),
Series A, (AMBAC
Insured),
6.000% 12/15/06........ Aaa AAA 2,221,560
Regional Transportation
Authority, Illinois,
Series A,
3,300,000 (AMBAC Insured),
5.800% 06/01/05........ Aaa AAA 3,570,600
1,000,000 (FGIC Insured),
6.350% 11/01/04........ Aaa AAA 1,091,880
8,750,000 Springfield, Illinois,
Airport Authority,
Garrett Aviation
Services Project,
4.400% 02/01/08........ Aaa AAA 8,566,250
------------
63,868,810
------------
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
INDIANA -- 0.5%
Indiana Health
Facilities Financing
Authority, Hospital
Revenue:
$ 2,000,000 (Clarian Health Partners
Inc. Project), Series
A,
5.000% 02/15/04........ Aa3 AA $ 2,058,280
(Methodist Hospital Inc.
Project):
1,280,000 6.200% 09/15/00......... A2 NR 1,343,373
1,040,000 6.500% 09/15/02......... A2 NR 1,133,174
------------
4,534,827
------------
IOWA -- 1.2%
Iowa Student Loan
Liquidity Corporation,
Student Loan Revenue:
7,000,000 Series B,
4.900% 12/01/05........ Aaa NR 7,138,460
3,000,000 Series C, (AMBAC
Insured),
6.500% 12/01/99........ Aaa AAA 3,122,760
------------
10,261,220
------------
KANSAS -- 1.4%
5,000,000 Kansas State Department
of Transportation,
Highway Revenue,
7.250% 03/01/05......... Aa2 AA 5,849,700
5,000,000 Kansas State Department
of Transportation,
Highway Revenue, (AMBAC
Insured),
5.500% 10/01/06......... Aaa AAA 5,382,850
2,175,000 Labette County, Kansas,
Single Family Mortgage
Revenue, Refunded,
6.300% 12/01/14+....... AAA A- 941,123
------------
12,173,673
------------
MAINE -- 0.1%
1,000,000 Maine State, Municipal
Board Refunding, Series
E, (AMBAC Insured),
5.250% 11/01/04........ Aaa AAA 1,055,100
------------
MARYLAND -- 2.5%
2,000,000 Baltimore County,
Maryland, Consolidated
Public Improvement
Bonds, Refunded,
6.900% 04/01/03........ AAA AAA 2,152,120
1,500,000 Baltimore, Maryland,
Port Facilities
Revenue, Consolidated
Coal Sales, Series 85,
6.500% 12/01/10........ Aa3 AA 1,650,090
Maryland State, GO,
Third Series:
4,890,000 6.250% 07/15/02......... Aaa AAA 5,216,261
1,500,000 6.800% 07/15/04,
Refunded............... AAA AAA 1,614,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
90
<PAGE> 95
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
MARYLAND -- (CONTINUED)
$ 1,490,000 Maryland State,
Transportation
Authority, Special
Obligation Revenue,
(Baltimore-Washington
D.C. International
Airport Project),
Series A, AMT, (FGIC
Insured),
6.400% 07/01/19........ Aaa AAA $ 1,582,082
1,000,000 Prince Georges County,
Maryland, Consolidated
Public Improvement,
(MBIA Insured),
5.375% 01/01/09........ Aaa AAA 1,055,230
3,500,000 Prince Georges County,
Maryland, Solid Waste
Management Systems
Revenue, (FSA Insured),
5.200% 06/15/06........ Aaa AAA 3,644,725
Washington County,
Maryland, Suburban
Sanitation District
Authority, GO,
Refunded:
2,500,000 Water Supply Revenue,
4.900% 12/01/05........ Aa1 AA 2,588,675
2,000,000 General Construction
Revenue,
5.000% 06/01/04........ Aa1 AA 2,080,500
------------
21,583,683
------------
MASSACHUSETTS -- 4.0%
Massachusetts State,
Refunding, GO:
1,000,000 Series B,
5.000% 11/01/01........ A1 AA- 1,029,440
5,000,000 Series C,
5.000% 08/01/07........ A1 AA- 5,151,250
12,840,000 Series C, (AMBAC
Insured),
4.950% 08/01/05........ Aaa AAA 13,302,240
400,000 Series D, GO,
6.375% 07/01/00........ Aa3 AA- 420,876
4,500,000 Massachusetts
Educational Financing,
Authority, Issue
G -- Series A,
4.800% 12/01/09........ NR AAA 4,440,420
6,000,000 Massachusetts State
Water Resources
Authority, Refunding,
Series B, GO,
5.125% 03/01/04........ A A 6,236,880
2,000,000 New England Education
Loan Marketing
Corporation, Series A,
AMT, GO,
5.700% 07/01/05........ A1 A- 2,100,220
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
MASSACHUSETTS -- (CONTINUED)
$ 2,000,000 University of Lowell,
Building Authority,
Massachusetts
Gauranteed Bond, Series
A, (AMBAC Insured),
5.700% 11/01/09........ Aaa AAA $ 2,159,220
------------
34,840,546
------------
MICHIGAN -- 1.3%
7,500,000 Detroit, Michigan,
Convention Facilities,
Revenue Refunding,
(Cobo Hall Expansion
Project), (FSA
Insured),
5.100% 09/30/04........ Aaa AAA 7,802,625
Detroit, Michigan,
Refunding, GO, Series
B:
1,000,000 6.750% 04/01/03......... Baa2 BBB+ 1,099,280
2,000,000 7.000% 04/01/04......... Baa2 BBB+ 2,245,860
------------
11,147,765
------------
MINNESOTA -- 1.1%
900,000 Metropolitan Council,
Minnesota,
Minneapolis-St. Paul
Metropolitan Area,
Refunding, Series A,
5.000% 12/01/04........ Aaa AAA 929,403
1,390,000 Rochester, Minnesota,
Health Care Facilities
Revenue, (Mayo
Foundation/Mayo Medical
Center), Series C,
7.100% 11/15/00........ NR AA+ 1,462,016
900,000 St. Paul, Minnesota,
Sewer Revenue
Refunding, (AMBAC
Insured),
5.100% 12/01/01........ Aaa AAA 930,519
Southern Minnesota
Municipal Power Agency,
Power Supply Systems
Revenue, Series B:
2,150,000 Refunded Balance,
5.800% 01/01/07........ AAA AAA 2,360,743
3,850,000 Unrefunded Balance,
5.800% 01/01/07........ A2 A+ 4,100,058
------------
9,782,739
------------
MISSOURI -- 1.2%
4,000,000 Kansas City, Missouri,
Industrial Development
Authority, Review,
4.900% 12/31/08........ Baa2 NR 3,952,360
400,000 Metropolitan Saint
Louis, Missouri, Sewer
District, Mississippi
River Subdistrict,
(FGIC Insured),
6.300% 02/15/01......... Aaa AAA 416,259
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
91
<PAGE> 96
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
MISSOURI -- (CONTINUED)
Missouri State:
Refunding, 3rd State
Building, Refunding:
$ 300,000 Series B,
5.500% 11/01/01........ Aaa AAA $ 315,414
State Water Pollution
Control, Series B:
200,000 5.700% 11/01/02......... Aaa AAA 210,692
300,000 5.800% 11/01/03......... Aaa AAA 317,028
400,000 Missouri State Board of
Public Buildings, State
Office Buildings,
Special Obligation,
5.900% 12/01/01........ Aa AA 424,352
1,000,000 Missouri State
Environmental
Improvement and Energy
Resource Authority,
Pollution Control
Revenue, (Association
of Electrical
Cooperation Thomas
Hill),
5.500% 12/01/05........ A3 A- 1,072,210
Missouri State Health
and Educational
Facilities Authority:
300,000 (Baptist Medical
Center), Series A,
7.300% 07/01/99......... NR NR 313,125
(Christian Health),
Series A, (FGIC
Insured):
300,000 6.400% 02/15/00......... Aaa AAA 313,674
600,000 6.600% 02/15/02......... Aaa AAA 651,582
700,000 (Sisters of Mercy),
Series E,
7.000% 06/01/99........ Aa1 AA+ 725,417
1,500,000 (SSM Health Care),
Series AA, (MBIA
Insured),
5.400% 06/01/00........ Aaa AAA 1,544,250
600,000 St. Louis County,
Missouri, GO,
Pattonville R-3 School
District, (FGIC
Insured),
5.700% 02/01/01........ Aaa AAA 626,916
------------
10,883,276
------------
MISSISSIPPI -- 1.3%
8,000,000 Adams County,
Mississippi, Pollution
Control Revenue
Refunding,
(International Paper
Company), Series A,
5.500% 12/01/05........ A3 A- 8,540,080
2,370,000 Mississippi Higher
Education, Series C,
(GTD STD LNS),
6.400% 01/01/03........ NR A 2,510,565
------------
11,050,645
------------
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEBRASKA -- 0.1%
$ 1,000,000 Nebraska Public Power
District Revenue, Power
Supply System,
5.300% 01/01/02........ A1 A+ $ 1,039,490
------------
NEVADA -- 1.8%
Clark County, Nevada,
GO:
6,500,000 (FGIC Insured),
6.900% 09/01/99........ Aaa AAA 6,777,745
2,500,000 Series B, (AMBAC
Insured),
6.500% 06/01/10........ Aaa AAA 2,764,625
Nevada State, Municipal
GO:
1,000,000 (BD Bank Project),
Series 39-A,
6.000% 07/01/01........ NR AA 1,056,250
1,000,000 Series A,
5.800% 05/01/00........ Aa2 AA 1,037,890
1,000,000 ETM, Refunded,
7.000% 01/01/03........ Aaa AAA 1,064,420
2,910,000 Reno, Nevada, GO, Series
A, (FGIC Insured),
5.300% 04/01/05........ Aaa AAA 3,047,148
------------
15,748,078
------------
NEW JERSEY -- 1.9%
1,100,000 Bergen County, New
Jersey, Utilities
Authority, Water
Pollution Control
Revenue, Series B,
5.500% 12/15/02........ Aaa AAA 1,163,778
3,490,000 Middlesex County, New
Jersey, General
Improvement, GO,
4.875% 08/01/07........ Aaa AA+ 3,612,883
3,230,000 Monmouth County, New
Jersey, Refunded,
5.000% 12/01/04........ Aaa AA+ 3,374,898
5,000,000 New Jersey State, GO,
Series D,
5.500% 02/15/04........ Aa1 AA+ 5,329,550
1,100,000 New Jersey State,
Transportation Trust
Fund Authority,
Transportation System,
Refunded, Series A,
(AMBAC Insured),
5.200% 12/15/00........ AAA AAA 1,136,916
University of Medicine
and Dentistry, New
Jersey, Revenue Bonds,
Series C:
1,000,000 7.000% 12/01/00......... A3 AA- 1,067,560
1,000,000 7.000% 12/01/01......... A3 AA- 1,070,710
------------
16,756,295
------------
NEW MEXICO -- 1.6%
1,400,000 Albuquerque, New Mexico,
GO, Series A,
4.700% 07/01/00........ Aa3 AA 1,424,430
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
92
<PAGE> 97
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEW MEXICO -- (CONTINUED)
Bernalillo County, New
Mexico, Gross Receipts
Tax Revenue:
$ 2,500,000 5.200% 04/01/21......... Aa3 AA $ 2,550,675
4,000,000 5.250% 04/01/27......... Aa3 AA 4,108,760
New Mexico Mortgage
Financial Authority,
AMT, (Single Family
Mortgage Project):
1,355,000 Series C-2,
5.950% 07/01/17........ Aaa NR 1,419,552
2,175,000 Series E-2,
5.600% 07/01/17........ NR AAA 2,222,154
2,000,000 New Mexico State, GO,
(Capital Projects),
5.250% 09/01/03........ Aa1 AA+ 2,047,700
------------
13,773,271
------------
NEW YORK -- 4.9%
10,000,000 Metropolitan Transit
Authority, New York,
Commuter Facilities
Revenue,
5.250% 07/01/17........ Baa1 BBB+ 9,856,200
3,000,000 Municipal Assistance
Corporation for the
City of New York,
Series J, (GO of Corp),
5.750% 07/01/03........ Aa2 AA 3,210,990
5,000,000 New York, New York,
Series E, (MBIA
Insured),
5.800% 05/15/05........ Aaa AAA 5,365,700
1,500,000 New York, New York, City
Municipal Water Finance
Authority,
5.000% 06/15/08........ A2 A- 1,544,625
1,100,000 New York State, Serial
Bonds, GO,
6.700% 11/15/99........ A2 A 1,149,489
New York State Dormitory
Authority Revenue:
5,000,000 City University, Series
B,
5.250% 07/01/06........ Baa1 BBB+ 5,172,050
7,000,000 State University
Educational Facilities,
Series A,
5.400% 05/15/04........ A3 A- 7,367,920
Westchester County, New
York, GO, Series D:
2,960,000 4.625% 11/15/07........ Aaa AAA 3,023,314
1,835,000 4.625% 11/15/11......... Aaa AAA 1,814,815
1,720,000 4.625% 11/15/15......... Aaa AAA 1,645,902
1,680,000 4.625% 11/15/16......... Aaa AAA 1,602,182
1,565,000 4.625% 11/15/17......... Aaa AAA 1,489,254
------------
43,242,441
------------
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
NORTH CAROLINA -- 3.2%
$ 4,440,000 Charlotte -- Mecklenberg
Hospital, Health Care
Services, Series A,
5.000% 01/15/17........ Aa3 AA $ 4,344,407
Mecklenburg County,
North Carolina, GO:
3,000,000 Public Improvement,
Refunding,
6.200% 01/01/04........ AAA AAA 3,240,300
8,000,000 Revenue Refunding,
5.750% 03/01/03........ Aaa AAA 8,504,000
4,000,000 North Carolina Medical
Care Community, Health
Care Facilities
Revenue, (Carolina
Medicorp Project),
5.125% 05/01/16........ Aa3 AA 3,946,480
3,550,000 North Carolina State,
Prison Facilities,
Series B,
4.500% 06/01/07........ Aaa AAA 3,589,725
2,500,000 Pitt County, North
Carolina, Revenue
Bonds, (Pitt County
Memorial Hospital),
5.250% 12/01/21........ Aa AA- 2,498,800
1,950,000 Wake County, North
Carolina, Special
Obligations, (Solid
Waste Management
Projects),
5.000% 02/01/05........ Aa2 AA 2,026,460
------------
28,150,172
------------
OHIO -- 0.7%
1,000,000 Cleveland, Ohio, GO,
(AMBAC Insured),
4.900% 09/01/04........ Aaa AAA 1,034,430
1,325,000 Ohio State, Higher
Education Facilities,
(Higher Education
Facility-Case Western),
Series A,
6.000% 07/01/05........ Aa3 AA 1,456,997
3,000,000 Ohio State, Highway
Capital Improvements,
GO, Series B,
5.000% 05/01/07........ Aa1 AAA 3,124,350
300,000 Ohio State, Water
Development Authority
Revenue, Refunded,
(Pure Water Project),
Series I, (MBIA
Insured),
7.000% 06/01/99........ Aaa AAA 311,286
------------
5,927,063
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
93
<PAGE> 98
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
OKLAHOMA -- 0.6%
$ 5,000,000 Tulsa County, Oklahoma,
Industrial Authority,
Health Care Revenue,
(St. Francis Hospital
Inc.), Series B,
5.150% 12/15/18........ NR AA $ 5,197,300
------------
OREGON -- 0.7%
3,000,000 Multnomah County,
Oregon, School District
Number 1J-Portland, GO,
5.50% 06/01/05......... Aa AA- 3,212,190
1,300,000 Portland, Oregon, Sewer
System Revenue, Series
A,
5.450% 06/01/03........ A1 A+ 1,373,892
1,300,000 Washington County,
Oregon, Sewer Revenue,
Series A, (AMBAC
Insured),
5.300% 10/01/01........ Aaa AAA 1,352,104
------------
5,938,186
------------
PENNSYLVANIA -- 3.0%
2,890,000 Erie, Pennsylvania,
Water Authority, Water
Revenue,
7.125% 12/01/11........ NR BBB- 3,174,260
2,000,000 Geisinger Authority,
Pennsylvania, Health
Systems Revenue, Series
A,
6.000% 07/01/01........ Aa2 AA 2,108,160
9,180,000 Pennsylvania Housing
Finance Agency, Single
Family Mortgage, Series
61A,
5.450% 10/01/21........ Aa2 AA+ 9,211,120
2,500,000 Philadelphia,
Pennsylvania,
Industrial Development
Authority, Industrial
Development Revenue
Refunding, (Ashland Oil
Inc. Project),
5.700% 06/01/05........ Baa2 NR 2,659,675
9,000,000 Philadelphia,
Pennsylvania, Water and
Wastewater Systems,
(FGIC Insured),
5.500% 06/15/03........ Aaa AAA 9,494,010
------------
26,647,225
------------
RHODE ISLAND -- 0.5%
800,000 Pawtucket, Rhode Island,
GO, (FGIC Insured),
5.250% 04/15/01........ Aaa AAA 827,128
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
RHODE ISLAND -- (CONTINUED)
$ 3,000,000 Rhode Island State,
Consolidated Capital
Development Loan,
Series A,
5.400% 08/01/06........ A1 AA- $ 3,131,400
------------
3,958,528
------------
SOUTH CAROLINA -- 2.2%
3,210,000 Greenville Hospital
System, South Carolina,
Hospital Facilities
Revenue, Series B,
5.500% 05/01/08........ Aa3 AA 3,414,220
Piedmont Municipal Power
Agency, South Carolina,
Electric Revenue, (FGIC
Insured):
2,580,000 Series A,
6.1250% 01/01/03....... Aaa AAA 2,780,156
5,160,000 Series B,
6.000% 01/01/07........ Aaa AAA 5,686,836
3,665,000 Richland County, South
Carolina, Solid Waste
Disposal Facilities
Revenue, (Union Camp
Corporation Project),
Series A,
6.750% 05/01/22........ A1 A- 3,994,484
3,000,000 Spartanburg County,
South Carolina, Health
Services District Inc.,
Hospital Revenue,
Series B, (MBIA
Insured),
5.125% 04/15/17........ Aaa AAA 2,965,800
500,000 York County, South
Carolina, Industrial
Development Revenue,
Exempt Facility,
(Hoechst Celanese
Corporation Project),
AMT,
5.700% 01/01/24........ A2 A+ 509,510
------------
19,351,006
------------
SOUTH DAKOTA -- 0.5%
5,000,000 Education LNS Inc.,
South Dakota, (GTD STD
LNS),
4.950% 06/01/10........ Aaa NR 4,950,150
------------
TENNESSEE -- 2.3%
McMinn County,
Tennessee, Industrial
Development Board,
Pollution Control
Revenue, (Calhoun
Newsprint Co. Project):
1,000,000 7.625% 03/01/16......... Baa1 BBB 1,094,740
4,500,000 7.400% 12/01/22......... Baa1 BBB 5,027,625
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
94
<PAGE> 99
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
TENNESSEE -- (CONTINUED)
Metropolitan Government,
Nashville and Davidson
County, Tennessee:
$ 1,000,000 Health and Educational
Facilities Board
Revenue, Refunding and
Improvement, (Meharry
Medical College
Project), (AMBAC
Insured),
6.000% 12/01/08........ Aaa AAA $ 1,123,190
Tennessee State, GO,
Series A:
5,000,000 7.000% 03/01/05......... Aaa AA+ 5,793,600
6,500,000 6.000% 05/01/07......... Aaa AAA 7,271,550
------------
20,310,705
------------
TEXAS -- 10.6%
2,175,000 Aldine, Texas,
Independent School
District, Capital
Appreciation,
Refunding, (PSF-GTD),
5.450% 02/15/07+....... Aaa AAA 1,441,568
Austin, Texas, Utilities
Systems Revenue
Refunded:
5,000,000 Series A,
8.000% 11/15/16........ AAA AAA 5,568,150
2,555,000 Series 2,
5.600% 10/01/03........ AAA AAA 2,722,582
980,000 Brazos, Texas, Higher
Education Authority
Inc., Revenue
Refunding, Senior Lien,
Series A-2, AMT,
(Guaranteed Student
Loans),
6.050% 06/01/03........ Aaa NR 1,044,611
Crowley, Texas,
Independent School
District, GO, (PSF-
GTD):
5,930,000 5.125% 08/01/25......... Aaa AAA 5,873,606
6,285,000 5.125% 08/01/26......... Aaa AAA 6,215,048
4,905,000 Dallas County, Texas,
Refunding, Series B,
5.250% 08/15/09........ Aaa AAA 5,202,439
1,000,000 Gulf Coast, Texas,
Industrial Development
Authority, (Champion
International
Corporation Project),
7.000% 04/01/04........ Baa1 BBB 1,021,380
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
TEXAS -- (CONTINUED)
Harris County, Texas,
Health Facilities
Development Authority,
Hospital Revenue
Refunding:
$ 1,000,000 (Memorial Hospital
Systems Project --
Series A),
4.875% 06/01/05........ Aaa AAA $ 1,022,700
2,350,000 (Texas Childrens
Hospital Project),
(MBIA Insured),
6.000% 10/01/05........ Aaa AAA 2,573,861
1,245,000 Houston, Texas, GO,
6.800% 03/01/01........ Aa3 AA- 1,310,997
2,500,000 Houston, Texas, Water
Works and Sewer
Revenue, Junior Lien,
Series A, (MBIA
Insured),
5.800% 12/01/04........ Aaa AAA 2,715,600
1,500,000 Irving, Texas,
Independent School
District, Capital
Appreciation Refunding,
GO,
(PSF-GTD),
5.350% 02/15/02+....... Aaa AAA 1,269,765
7,520,000 Lower Colorado River
Authority, Texas,
Revenue Refunding,
Junior Lien, (Fifth
Supply), (AMBAC
Insured),
5.300% 01/01/06........ Aaa AAA 7,879,682
5,000,000 North Central Texas
Health Facilities
Development
Corporation, Health
Facilities Revenue,
(Presbyterian
Healthcare), Series B,
(MBIA Insured),
5.500% 06/01/16........ Aaa AAA 5,301,900
1,100,000 San Antonio, Texas,
Electric and Gas
Revenue Refunding,
5.200% 02/01/01........ Aa1 AA 1,132,791
San Antonio, Texas,
Water Revenue, (FGIC
Insured):
415,000 Prerefunded,
5.900% 05/15/00........ NR AAA 431,691
2,455,000 Unrefunded Balance,
5.900% 05/15/00........ NR AAA 2,554,206
2,000,000 Southwest Higher
Education Authority
Inc., Revenue
Refunding, (Southern
Methodist), (FSA
Insured),
5.125% 10/01/16........ Aaa AAA 1,994,320
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
95
<PAGE> 100
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
TEXAS -- (CONTINUED)
$ 5,000,000 Tarrant County, Texas,
Health Facilities
Development
Corporation, Health
Systems Revenue, Texas
Health Resources
Systems, Series A,
(MBIA Insured),
5.250% 02/15/17........ Aaa AAA $ 4,999,700
Texas A&M University
Revenue Bonds:
1,880,000 5.000% 05/15/02......... Aa2 AA 1,941,683
2,200,000 5.950% 05/15/05......... Aa2 AA 2,410,650
Texas Municipal Power
Agency, Revenue Bonds,
(MBIA Insured):
7,210,000 5.750% 09/01/12......... Aaa AAA 7,673,891
4,790,000 5.750% 09/01/12......... Aaa AAA 5,098,189
900,000 Texas State, Texas
Public Finance
Authority, Series B,
5.000% 10/01/01........ Aa2 AA 927,045
1,100,000 Texas State, Revenue
Refunding, Series C,
5.350% 04/01/01........ Aa2 AA 1,140,645
5,500,000 Texas State, Public
Finance Authority,
Building Revenue, (MBIA
Insured),
6.600% 02/01/00........ Aaa AAA 5,761,195
1,000,000 Texas State, Revenue
Refunding, Veterans
Housing Assistance,
Series B-4, AMT,
6.100% 12/01/06........ Aa2 AA 1,074,630
University of Texas:
300,000 Permanent University
Fund, Refunding,
6.700% 07/01/05........ AAA AAA 328,839
4,965,000 University Revenue
Bonds, Financing
System, Series B,
4.500% 08/15/12........ Aa1 AAA 4,746,739
------------
93,380,103
------------
UTAH -- 0.6%
Cache County, Utah,
School District,
Refunding, Utah School
Board Guaranty Program,
(SCH BD GTY),
2,995,000 5.500% 06/15/06......... NR AAA 3,219,655
2,145,000 5.500% 06/15/07......... NR AAA 2,313,446
300,000 Davis County, Utah,
School District, (FGIC
Insured),
6.450% 06/01/02........ Aaa AAA 323,859
------------
5,856,960
------------
VIRGINIA -- 6.5%
6,170,000 Chesapeake, Virginia,
GO,
5.000% 12/01/03........ Aa3 AA 6,425,747
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
VIRGINIA -- (CONTINUED)
$ 4,000,000 Chesterfield County,
Virginia, Refunding and
Improvement, GO,
6.250% 07/15/05........ Aaa AAA $ 4,326,640
6,000,000 Covington-Allegheny
County, Virginia,
Industrial Development
Authority, PCR,
(Westvaco Corporation
Project),
5.900% 03/01/05........ A1 A 6,550,140
Fairfax County,
Virginia, GO:
1,100,000 Series A, (ST AID
WITHHLDG),
4.700% 06/01/00........ Aaa AAA 1,119,437
5,790,000 Series C, (ST AID
WITHHLDG),
5.000% 05/01/05........ Aaa AAA 6,031,443
2,500,000 Newport News, Virginia,
GO, Series B, (ST AID
WITHHLDG),
5.400% 11/01/06........ Aa2 AA 2,656,300
1,000,000 Norfolk, Virginia, GO,
5.250% 06/01/01........ A1 AA 1,036,690
1,500,000 Norfolk, Virginia,
Industrial Development
Authority, Industrial
Development Revenue,
(Sentara Hospitals),
Series A,
4.600% 11/01/04........ Aa2 AA 1,516,080
3,000,000 Virginia Beach,
Virginia, GO,
5.100% 07/15/05........ Aa2 AA 3,137,160
2,600,000 Virginia College
Building Authority,
Virginia Educational
Facilities Revenue,
(University of Richmond
Project),
5.625% 11/01/02........ Aa2 AA- 2,717,624
1,100,000 Virginia State, Higher
Educational
Institutions, Series C,
5.900% 06/01/05........ Aaa AAA 1,173,326
1,500,000 Virginia State, Public
Facilities, Series A,
5.400% 06/01/05........ Aaa AAA 1,601,145
Virginia State, Public
School Authority
Revenue:
Series A:
2,265,000 6.000% 01/01/00......... Aa AA 2,348,058
1,520,000 6.000% 01/01/00......... Aa AA 1,573,823
Series B:
7,000,000 5.250% 01/01/07......... Aa AA 7,344,470
7,620,000 5.250% 08/01/09......... Aa1 AA+ 8,039,329
------------
57,597,412
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
96
<PAGE> 101
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
WASHINGTON -- 6.4%
$ 1,000,000 Chelan County,
Washington, Public
Utilities, Division II,
Series A,
5.250% 07/01/32........ Aa3 AA $ 1,010,080
King County, Washington,
GO:
600,000 Series A,
5.250% 12/01/01........ Aa1 AA+ 623,586
2,500,000 Series C,
5.625% 06/01/02........ Aa1 AA+ 2,641,875
1,195,000 King County, Washington,
School District Number
415-Kent, (FSA
Insured),
5.100% 06/01/04........ Aaa AAA 1,246,889
3,000,000 Pierce County,
Washington, School
District Number
003-Puyallup, GO, (FGIC
Insured),
5.000% 12/01/03........ Aaa AAA 3,113,610
1,500,000 Snohomish County,
Washington, School
District Number 103,
(FGIC Insured),
5.150% 06/01/05........ Aaa AAA 1,570,290
400,000 Spokane, Washington, GO,
8.500% 01/01/00........ Aa3 AA 430,900
1,000,000 Tacoma, Washington, Go,
Series A,
5.750% 07/01/02........ A1 A+ 1,058,890
Tacoma, Washington,
Electric Systems
Revenue:
800,000 (FGIC Insured),
5.500% 01/01/01........ Aaa AAA 830,056
2,500,000 Series B, (AMBAC
Insured),
5.900% 01/01/05........ Aaa AAA 2,672,400
Washington State, GO:
Series B:
1,000,000 6.550% 08/01/00......... Aa1 AA+ 1,058,490
500,000 6.300% 06/01/02......... Aa1 AA+ 532,260
3,500,000 Series R-92-A,
6.400% 09/01/03........ Aa1 AA+ 3,765,965
900,000 Series R-92-C,
5.600% 09/01/01........ Aa1 AA+ 943,362
900,000 Series R-93-A,
5.250% 10/01/00........ Aa1 AA+ 928,674
10,000,000 Series R-93-B,
5.125% 10/01/04........ Aa1 AA+ 10,475,100
3,840,000 Washington State,
Housing Finance
Commission, Series 1A,
(GNMA/ FNMA COLL),
5.25% 12/01/18......... Aaa NR 3,820,531
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
WASHINGTON -- (CONTINUED)
Washington State Public
Power Supply System,
Revenue Refunding:
$ 2,000,000 (Nuclear Project No. 1),
Series A,
6.500% 07/01/03......... Aa1 AA- $ 2,157,920
1,000,000 (AMBAC Insured),
5.500% 07/01/04........ Aaa AAA 1,060,030
(Nuclear Project No. 2),
Series A:
3,500,000 6.200% 07/01/99......... Aa1 AA- 3,598,770
1,150,000 5.800% 07/01/07......... Aa1 AA- 1,244,818
7,500,000 (Nuclear Project No. 2),
Series C, (FGIC
Insured),
7.000% 07/01/01........ Aaa AAA 8,131,125
3,000,000 (Nuclear Project No. 3),
Series B, (FSA
Insured),
5.400% 07/01/05........ Aaa AAA 3,167,130
------------
56,082,751
------------
WEST VIRGINIA -- 0.2%
2,000,000 West Virginia State,
Building Community
Lease Revenue, (West
Virginia Regional Jail
and Correction), Series
A, (MBIA Insured),
6.700% 07/01/02........ Aaa AAA 2,150,620
------------
WISCONSIN -- 2.6%
300,000 Milwaukee, Wisconsin,
GO, Series BZ,
6.375% 06/15/03........ Aa1 AA+ 320,181
Milwaukee, Wisconsin,
Metropolitan Sewer
District, GO, Series A:
300,000 7.000% 09/01/00......... Aa1 AA+ 321,093
400,000 6.700% 10/01/00......... Aa1 NR 425,796
5,000,000 6.700% 10/01/01......... Aa1 NR 5,416,500
1,000,000 6.000% 10/01/07......... Aa1 AA+ 1,115,740
3,000,000 5.500% 10/01/09......... Aa1 AA+ 3,236,250
3,070,000 Sun Praire, Wisconsin,
Area School District,
Promissary Notes, (FGIC
Insured), 5.500%
04/01/03............... Aaa AAA 3,245,481
2,735,000 Wisconsin Housing &
Economic Development
Authority, Series G,
GO,
5.350% 03/01/12........ Aa2 UR 2,779,280
Wisconsin State, GO:
600,000 Series A,
5.750% 05/01/00........ Aa2 AA 622,386
300,000 Series D,
6.000% 05/01/00........ Aa2 AA 312,678
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
97
<PAGE> 102
NATIONS FUNDS
Nations Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ----------------------------------------------------------------------
<C> <S> <C> <C> <C>
WISCONSIN -- (CONTINUED)
Wisconsin State,
Refunding, GO:
$ 900,000 Series 1,
5.100% 11/01/01........ Aa2 AA $ 930,681
3,625,000 Series 2,
5.125% 11/01/08........ Aa2 AA 3,807,735
------------
22,533,801
------------
TOTAL MUNICIPAL BONDS
AND NOTES
(Cost $810,567,809).............. 850,651,893
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------
<C> <C> <C>
INVESTMENT COMPANY -- 1.9% (Cost $17,069,000)
17,069,000 AIM Tax-Exempt Fund............ $ 17,069,000
------------
TOTAL INVESTMENTS
(Cost $827,636,809*)...................... 98.9% 867,720,893
OTHER ASSETS AND
LIABILITIES (NET)......................... 1.1 9,533,385
----- ------------
NET ASSETS................................. 100.0% $877,254,278
===== ============
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $40,636,241 and gross
depreciation of $552,157 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$827,636,809.
+ Zero coupon security. The rate shown reflects the yield to maturity.
SEE NOTES TO FINANCIAL STATEMENTS.
98
<PAGE> 103
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 98.7%
ALABAMA -- 3.3%
$ 2,000,000 Birmingham, Alabama,
Refunding, GO, Series
B, 6.250% 04/01/12... A3 AA $ 2,165,660
3,000,000 Butler County,
Alabama, Industrial
Development Board,
Solid Waste Disposal
Revenue, (James River
Corporation Project),
8.000% 09/01/28...... NR BBB- 3,441,810
7,210,000 Courtland, Alabama,
Industrial
Development Board,
Solid Waste Disposal
Revenue, 5.750%
11/01/27............. Baa1 NR 7,484,629
2,000,000 Jefferson County,
Alabama, Warrants,
Sewer Revenue
Refunding, Series A,
(FGIC Insured),
5.625% 02/01/22...... Aaa AAA 2,086,420
1,000,000 Morgan County-
Decatur, Alabama,
Healthcare Authority,
Hospital Revenue
Refunding, (Decatur
General Hospital),
(CONNIE LEE Insured),
6.250% 03/01/13...... NR AAA 1,091,680
------------
16,270,199
------------
ALASKA -- 2.6%
1,500,000 Alaska Student Loan
Corporation, Student
Loan Revenue Series
A, (AMBAC Insured),
5.250% 07/01/07...... Aaa AAA 1,562,340
Anchorage, Alaska,
Electric Utilities
Revenue Refunding,
Senior Lien, (MBIA
Insured):
1,000,000 8.000% 12/01/09....... Aaa AAA 1,298,940
7,000,000 Series B, 5.500%
02/01/26............. Aaa AAA 7,181,230
2,250,000 Anchorage, Alaska,
Telephone Utilities
Revenue Refunding,
Series A, (AMBAC
Insured),
4.500% 12/01/02...... Aaa AAA 2,282,040
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
ALASKA -- (CONTINUED)
$ 1,000,000 North Slope Boro,
Alaska, Capital
Appreciation, GO,
Series A, (MBIA
Insured),
5.750% 06/30/06+..... Aaa AAA $ 683,830
------------
13,008,380
------------
ARIZONA -- 2.5%
2,000,000 Maricopa County
Arizona, Unified
School District No.
93-Cave Creek, GO,
Series A, (FGIC
Insured),
5.900% 07/01/06...... Aaa AAA 2,132,400
4,000,000 Maricopa County
Arizona, Unified
School District No.
4-Mesa, Capital
Appreciation, GO,
Refunded, (FGIC
Insured),
5.300% 07/01/02+..... Aaa AAA 3,335,600
Maricopa County,
Arizona, Unified
School District No.
48, (Scottsdale
Refunding), Series B:
1,000,000 6.300% 07/01/04....... Aa2 AA 1,113,730
1,300,000 4.600% 07/01/11....... Aa2 AA 1,275,391
2,000,000 Salt River Project
Arizona Agriculture
Improvement and Power
District, Arizona,
Electric System
Revenue, Series C,
6.250% 01/01/19...... Aa2 AA 2,143,160
5,000,000 Tucson and Pima
County, Arizona,
Industrial
Development
Authority, Single
Family Mortgage
Revenue, Capital
Appreciation, Series
1983-A,
11.000% 12/01/14+.... AAA NR 2,163,500
------------
12,163,781
------------
ARKANSAS -- 1.0%
1,300,000 Arkansas State
Development Finance
Authority, Waste
Water Systems
Revenue, Revolving Ln
Fd, Series A, 5.700%
12/01/12............. NR AA 1,381,029
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
99
<PAGE> 104
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
ARKANSAS -- (CONTINUED)
$ 3,425,000 Blytheville, Arkansas,
Solid Waste Recycling
and Sewer Treatment
Revenue, (Nucor
Corporation Project),
6.375% 01/01/23...... A1 AA- $ 3,668,106
------------
5,049,135
------------
CALIFORNIA -- 1.7%
California State, GO:
1,000,000 7.100% 09/01/02....... A1 A+ 1,121,570
1,000,000 7.000% 08/01/04....... A1 A+ 1,153,620
1,000,000 Los Angeles,
California, Waste
Water Systems Revenue
Refunding, Series C,
(MBIA Insured),
5.500% 06/01/14...... Aaa AAA 1,036,430
2,000,000 Metropolitan Water
District of Southern
California,
Waterworks Revenue,
Series A, (MBIA
Insured), 5.750%
07/01/15............. Aaa AAA 2,134,260
2,595,000 San Franscisco,
California, City and
County Airport
Commission,
International Airport
Revenue, Second
Series, Issue 9B,
(FGIC Insured),
5.250% 05/01/13...... Aaa AAA 2,651,441
------------
8,097,321
------------
COLORADO -- 0.9%
1,500,000 Arapahoe County,
Colorado, Capital
Improvement,
Transportation,
Federal Highway
Revenue Bonds, Series
E-470, 6.900%
08/31/15............. AAA NR 1,774,800
2,500,000 Douglas County,
Colorado, Sales and
Use Tax Revenue,
(MBIA Insured),
5.500% 10/15/11...... Aaa AAA 2,626,725
------------
4,401,525
------------
CONNECTICUT -- 1.0%
1,000,000 Connecticut State, GO,
Series A, 5.300%
05/15/10............. Aa3 AA- 1,046,510
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
CONNECTICUT -- (CONTINUED)
Connecticut State
Housing Finance
Authority Revenue,
(Housing Mortgage
Finance Program):
$ 1,750,000 Series A, 6.100%
05/15/13............. Aa2 AA $ 1,843,660
1,635,000 Series B, 6.700%
11/15/12............. Aa3 AA 1,768,710
------------
4,658,880
------------
DISTRICT OF COLUMBIA -- 1.7%
4,000,000 District of Columbia,
Hospital Revenue
Refunding, (Medlantic
Healthcare Group),
Series A, (MBIA
Insured), 5.375%
08/15/15............. Aaa AAA 4,049,000
3,905,000 District of Columbia,
Revenue Refunding,
(Howard University),
(MBIA Insured),
5.750% 10/01/12...... Aaa AAA 4,145,275
------------
8,194,275
------------
FLORIDA -- 8.8%
Florida State Board of
Education, Capital
Outlay, Public
Education, GO, Series
A:
1,655,000 6.600% 06/01/04....... AAA AAA 1,793,507
1,000,000 5.500% 06/01/14....... Aa2 AA+ 1,039,230
3,000,000 5.000% 01/01/17....... Aa2 AA+ 2,946,060
2,000,000 Florida State
Department, General
Services Division,
Facilities Management
Revenue Refunding,
(Florida Facilities
Pool), Series B,
(AMBAC, Insured),
Series B, 5.700%
09/01/20............. Aaa AAA 2,090,940
3,400,000 Florida State
Division, Board
Finance Department,
General Services
Revenue, Department
National Resources,
(Preservation 2000),
Series A, (AMBAC
Insured), 6.700%
07/01/05............. AAA AAA 3,729,018
3,500,000 Hillsborough County,
Florida, Industrial
Development
Authority, Pollution
Control Revenue
Refunding, (Tampa
Electric Project),
8.000% 05/01/22...... Aa3 AA 4,048,240
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
100
<PAGE> 105
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
$ 3,000,000 Jacksonville, Florida,
PCR, Refunding,
(Anheuser-Busch
Companies Project),
5.700% 08/01/31...... A1 A+ $ 3,146,700
3,900,000 Martin County,
Florida, Industrial
Development Authority
Revenue, (Indiantown
Cogeneration
Project), AMT, Series
A, 7.875% 12/15/25... Baa3 BBB- 4,574,778
1,000,000 North Broward Hospital
District, Florida,
Hospital Revenue
Refunding, (MBIA
Insured), 6.250%
01/01/06............. AAA AAA 1,088,940
Orlando, Florida,
Community Water and
Electric Utilities
Revenue Refunding:
1,500,000 Series A,
5.000% 10/01/20...... Aa2 AA- 1,454,685
1,200,000 Series D,
6.750% 10/01/17...... Aa2 AA- 1,459,668
1,000,000 Orlando and Orange
County Expressway
Authority, Florida
Expressway Revenue,
Junior Lien, (FGIC
Insured),
6.500% 07/01/10...... Aaa AAA 1,172,230
12,115,000 Polk County, Florida,
Industrial
Development
Authority, Solid
Waste Disposal
Facilities Revenue,
(Tampa Electric
Company Project),
5.850% 12/01/30...... Aa2 AA 12,682,830
2,000,000 South Broward,
Florida, Hospital
District Revenue
Refunding, (FSA
Insured),
5.500% 05/01/28...... Aaa AAA 2,038,640
------------
43,265,466
------------
GEORGIA -- 7.4%
1,100,000 Atlanta, Georgia, GO,
5.600% 12/01/11...... Aa3 AA 1,161,974
1,000,000 Cartersville, Georgia,
Development Authority
Revenue, Sewer
Facilities, (Anheuser
Busch),
6.125% 05/01/27...... A1 A+ 1,060,460
2,000,000 Coweta County,
Georgia, School
System, GO,
6.300% 08/01/11...... A A 2,199,760
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
GEORGIA -- (CONTINUED)
$ 1,000,000 Dalton, Georgia,
Utilities Revenue,
Combined Revenue,
(MBIA Insured),
4.450% 01/01/03...... Aaa AAA $ 1,010,180
2,000,000 De Kalb County,
Georgia, School
District, GO, Series
A,
6.250% 07/01/09...... Aa AA 2,302,340
4,750,000 Fulco, Georgia,
Hospital Authority
Revenue, Anticipation
Certificates, (Saint
Josephs Hospital),
5.500% 10/01/18...... A3 A 5,063,690
3,000,000 Georgia State,
Refunding, GO, Series
A,
6.250% 03/01/06...... Aaa AAA 3,380,310
1,650,000 Gwinnett County,
Georgia, Certificates
of Participation,
Water and Sewer,
8.600% 08/01/03...... Aaa AAA 1,990,197
Metropolitan Atlanta
Rapid Transit
Authority (MARTA),
Georgia, Sales Tax
Revenue Refunding:
2,080,000 Series M,
6.350% 07/01/04....... A1 AA- 2,237,518
Series P, (AMBAC
Insured):
1,000,000 6.100% 07/01/05....... Aaa AAA 1,107,080
1,000,000 6.000% 07/01/04....... Aaa AAA 1,094,520
2,000,000 Monroe County,
Georgia, Development
Authority, PCR,
(Oglethorpe Power
Corporation), Series
A,
6.800% 01/01/11...... A3 A 2,345,720
Savannah, Georgia,
Hospital Authority,
Revenue Refunding and
Improvement:
3,000,000 (Candler Hospital
Project),
7.000% 01/01/23...... Ba1 BB 3,221,340
2,000,000 (St. Joseph's Hospital
Project),
6.125% 07/01/12...... A2 NR 2,144,980
2,690,000 Union County, Georgia,
Housing Authority,
Multi-family Housing
Revenue Refunding,
(Hidden Lake
Apartments), Series
A, (FHA/ FNMA COLL),
7.125% 12/01/25...... Aaa NR 2,907,218
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
101
<PAGE> 106
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
GEORGIA -- (CONTINUED)
$ 3,000,000 White County, Georgia,
Industrial
Development Authority
Revenue Refunding,
(Clark-Schwebel Fiber
Glass Company
Project),
6.850% 06/01/10...... NR BBB+ $ 3,221,520
------------
36,448,807
------------
HAWAII -- 1.9%
1,900,000 Hawaii State
Department of Budget
and Finance, Special
Purpose Mortgage
Revenue, (Hawaiian
Electric Company and
Subsidiaries), (MBIA
Insured),
6.550% 12/01/22...... Aaa AAA 2,084,604
3,000,000 Hawaii State, GO,
Series CN, (FGIC
Insured),
6.250% 03/01/04...... Aaa AAA 3,300,960
1,500,000 Honolulu, Hawaii, City
and County, Refunding
and Improvement, GO,
Series B,
8.000% 10/01/10...... A2 AA 1,950,600
2,100,000 Maui County, Hawaii,
Refunding, GO, (FGIC
Insured),
5.000% 09/01/03...... Aaa AAA 2,178,498
------------
9,514,662
------------
ILLINOIS -- 4.8%
3,385,000 Chicago, Illinois,
Metropolitan Water
Reclamation District,
(Greater Chicago),
Capital Improvement
Bonds,
6.900% 01/01/07...... Aa2 AA 3,961,600
Chicago, Illinois,
O'Hare International
Airport:
3,000,000 Revenue Refunding,
Second Lien, Series
C, (MBIA Insured),
5.000% 01/01/18...... Aaa AAA 2,908,230
1,500,000 Special Facilities
Revenue Refunding,
(American Airlines
Inc. Project),
8.200% 12/01/24...... Baa2 BBB- 1,833,885
2,000,000 Chicago, Illinois,
Park District, GO,
(MBIA Insured),
5.500% 01/01/16...... Aaa AAA 2,073,780
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
ILLINOIS -- (CONTINUED)
$ 2,000,000 Cook County, Illinois,
Capital Improvement,
GO, (FGIC Insured),
5.900% 11/15/16...... Aaa AAA $ 2,144,440
1,000,000 Cook County, Illinois,
Forest Preserve
District, (Zoo), GO,
(MBIA Insured),
5.800% 11/01/16...... Aaa AAA 1,054,610
1,800,000 Illinois Educational
Facilities Authority
Reserves,
(NorthWestern
University),
5.375% 12/01/21...... Aa1 AA+ 1,798,668
1,000,000 Illinois State
Development Finance
Authority, PCR,
Refunding, (Edison
Company Project),
Series D, (AMBAC
Insured),
6.750% 03/01/15...... Aaa AAA 1,124,820
2,000,000 Illinois State, GO,
(MBIA Insured),
6.000% 02/01/16...... Aaa AAA 2,152,600
1,500,000 Illinois State Sales
Tax Revenue
Refunding, Series V,
6.375% 06/15/17...... Aa3 AAA 1,668,525
2,680,000 Southern Illinois
University Revenue,
Capital Appreciation,
Housing and Auxilary
Facilities Systems,
(MBIA Insured),
5.100% 04/01/06+..... Aaa AAA 1,859,706
1,000,000 Waukegan, Illinois,
GO, Series A, (FGIC
Insured),
5.800% 11/15/03...... Aaa AAA 1,077,260
------------
23,658,124
------------
INDIANA -- 2.3%
2,500,000 Franklin, Indiana,
Economic Development
Revenue Refunding,
(Hoover Universal
Inc. Project
Guaranteed by Johnson
Controls, Inc.),
6.100% 12/01/04...... A2 A 2,737,500
Hamilton South Eastern
Indiana, North
Delaware School
Building Corporation,
First Mortgage,
(AMBAC Insured):
1,000,000 5.000% 07/15/07....... Aaa AAA 1,038,320
1,000,000 5.100% 07/15/09....... Aaa AAA 1,036,910
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
102
<PAGE> 107
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
INDIANA -- (CONTINUED)
$ 1,000,000 Hammond, Indiana,
Pollution Control
Revenue, (Stauffer
Chemical Project),
8.000% 11/01/12...... A1 NR $ 1,079,090
1,000,000 Indiana Health
Facility, Financing
Authority, Hospital
Revenue, (Clarian
Health Partners,
Incorporated), Series
A,
5.500% 02/15/16...... Aa3 AA 1,017,130
2,000,000 Indianapolis, Indiana,
Airport Authority,
Special Facilities
Revenue, (Federal
Express Corporation
Project),
7.100% 01/15/17...... Baa2 BBB 2,249,900
2,000,000 Saint Joseph County,
Indiana, Educational
Facilities Revenue,
University of Notre
Dame, (Du Lac
Project),
5.500% 03/01/26...... Aaa NR 2,042,820
------------
11,201,670
------------
KANSAS -- 0.9%
2,000,000 Kansas City, Kansas,
Utilities System
Revenue Refunding and
Improvement, (FGIC
Insured),
6.250% 09/01/14...... Aaa AAA 2,220,800
2,000,000 Kansas State,
Department of
Transportation,
Highway Revenue,
Series A,
6.000% 09/01/07...... Aa2 AA 2,180,360
------------
4,401,160
------------
KENTUCKY -- 0.2%
1,000,000 Kentucky State
Turnpike Authority,
Economic Development,
Revenue Refunding,
(Revitalization
Projects), (AMBAC
Insured),
5.500% 07/01/08...... Aaa AAA 1,080,460
------------
MAINE -- 0.2%
1,000,000 Maine State, Health
and Higher
Educational
Facilities Authority
Revenue, Series B,
(AMBAC Insured),
5.500% 07/01/16...... Aaa AAA 1,026,720
------------
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MASSACHUSETTS -- 3.4%
$ 3,675,000 Massachusetts Bay
Transportation
Authority, General
Transportation
Systems, Series A,
5.750% 03/01/18...... A1 AA- $ 4,029,270
Massachusetts State,
Consolidated Loan,
GO:
2,500,000 Series A, (MBIA
Insured),
5.750% 02/01/13...... Aaa AA- 2,726,550
2,000,000 Series B, (FGIC
Insured),
5.500% 06/01/10...... Aaa AAA 2,122,420
7,400,000 Massachusetts State
Port Authority,
Revenue Bonds,
Special Facilities,
(Bosfuel Project),
(MBIA Insured),
5.750% 07/01/39...... Aaa AAA 7,691,486
------------
16,569,726
------------
MICHIGAN -- 1.9%
1,750,000 Byron Center,
Michigan, Public
Schools, GO, (MBIA
Insured),
5.970% 05/01/15...... Aaa AAA 1,872,080
1,000,000 Detroit, Michigan,
Refunding, Series B,
6.375% 04/01/07...... Baa2 BBB+ 1,100,510
1,250,000 Kalamazoo, Michigan,
City School District,
Refunding, GO, (FGIC
Insured),
5.650% 05/01/14...... Aaa AAA 1,317,775
1,000,000 Lakeshore, Michigan,
Public Schools, GO,
(MBIA Insured),
5.750% 05/01/15...... Aaa AAA 1,056,180
1,000,000 Michigan State,
Environmental
Protection Program,
GO,
6.250% 11/01/12...... Aa1 AA+ 1,150,780
2,000,000 Michigan State
Hospital Finance
Authority, Hospital
Revenue, (Holland
Community Hospital),
(AMBAC Insured),
5.625% 01/01/28...... Aaa AAA 2,074,160
1,000,000 Michigan State Trunk
Line, Series A, (FGIC
Insured),
5.625% 11/15/14...... Aaa AAA 1,047,560
------------
9,619,045
------------
MINNESOTA -- 0.2%
1,000,000 Minneapolis,
Minnesota, Refunding,
(Laurel Village),
5.750% 09/01/10...... Aaa AAA 1,049,930
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
103
<PAGE> 108
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MISSISSIPPI -- 1.6%
$ 5,000,000 Adams County
Mississippi,
Pollution Control,
Revenue, Refunded,
(International Paper
Company), Series A,
5.500% 12/01/05...... A3 A- $ 5,337,550
2,200,000 Mississippi, Hospital
Equipment and
Facilities Authority
Revenue, Refunding
and Improvement,
(North Mississippi
Health Services),
(AMBAC Insured),
5.400% 05/15/04...... Aaa AAA 2,322,870
------------
7,660,420
------------
MISSOURI -- 3.6%
1,000,000 Independence,
Missouri, School
District, GO,
6.250% 03/01/11...... A3 NR 1,146,660
4,140,000 Joplin, Missouri,
Industrial
Development Authority
Revenue,
5.125% 12/01/15...... Aa2 AA 4,075,913
Missouri State
Environmental
Improvement and
Energy Resource
Authority:
1,100,000 Environment
Improvement
Resources, (Union
Electric Company
Project), Series A,
(AMBAC Insured),
7.400% 05/01/20...... Aaa AAA 1,188,484
1,000,000 Water Pollution
Control, State
Revolving Fund,
(Kansas City), Series
A,
5.750% 01/01/16...... Aa1 NR 1,047,210
5,000,000 Missouri State Health
and EDL Facility
Authority, EDL
Facility Revenue,
5.000% 11/15/37...... Aa1 AA+ 4,792,150
1,685,000 Missouri State Housing
Development
Commission, Mortgage
Revenue, Single
Family-Homeowner
Loan, Series A,
6.100% 09/01/14...... NR AAA 1,768,542
1,625,000 Missouri State Water
Pollution Control,
Series A,
5.600% 04/01/15...... Aaa AAA 1,721,785
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MISSOURI -- (CONTINUED)
$ 2,000,000 University of
Missouri, Health
Facilities Revenue,
(University of
Missouri Health
Systems), Series A,
(AMBAC Insured),
5.500% 11/01/16...... Aaa AAA $ 2,054,820
------------
17,795,564
------------
NEVADA -- 1.9%
1,400,000 Clark County, Nevada,
Refunding and
Improvement-
Transportation,
Series A, (MBIA
Insured),
6.000% 06/01/12...... Aaa AAA 1,540,798
1,000,000 Las Vegas-Clark
County, Nevada,
Library District, GO,
Series A, (FGIC
Insured),
6.000% 02/01/12...... Aaa AAA 1,070,700
2,000,000 Las Vegas, Nevada,
Water District,
Refunding and
Improvement-Water
(MBIA Insured),
5.600% 09/01/05...... Aaa AAA 2,093,680
2,000,000 Nevada State, GO,
(Project No.
40-41-A),
6.375% 12/01/17...... NR AAA 2,156,720
2,500,000 Nevada State, Series
A,
6.000% 05/01/06...... Aa2 AA 2,658,525
------------
9,520,423
------------
NEW JERSEY -- 0.6%
3,000,000 New Jersey State,
Transportation Trust
Fund Authority,
(Transportation
Systems Project),
Series B, (MBIA
Insured),
5.000% 06/15/04...... Aaa AAA 3,118,110
------------
NEW MEXICO -- 0.4%
2,000,000 New Mexico Mortgage
Finance Authority,
AMT, Single Family
Mortgage Program,
Series C-2,
(GNMA/FNMA/FHLMC
COLL),
6.050% 07/01/28...... Aaa NR 2,084,880
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
104
<PAGE> 109
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEW YORK -- 3.2%
Municipal Assistance
Corporation for New
York City, New York:
$ 2,000,000 Series E,
5.200% 07/01/08...... Aa2 AA $ 2,098,660
5,000,000 Series J,
5.500% 07/01/02...... Aa2 AA 5,258,200
1,000,000 New York State Dorm
Authority, Revenue
Bonds, (Canisius
College),
5.300% 07/01/08...... Aaa AAA 1,053,720
2,000,000 New York State Energy
Reshape and
Development
Authority, Facilities
Revenue Refunding,
(Consolidated Edison
Company-New York),
Series A,
6.100% 08/15/20...... A1 A+ 2,160,200
3,000,000 New York State Local
Government Assistance
Corporation, Series
A,
6.000% 04/01/16...... A3 A+ 3,264,300
2,000,000 New York, New York,
City Municipal Water
Finance Authority,
Water and Sewer
Systems Revenue,
Series B,
5.750% 06/15/29...... A2 A 2,095,780
------------
15,930,860
------------
NORTH CAROLINA -- 3.0%
1,950,000 North Carolina Housing
Finance Agency,
Refunding,
Multifamily Revenue,
Series B, (FHA COLL),
6.900% 07/01/24...... Aa2 NR 2,086,032
2,500,000 North Carolina Medical
Care Community,
Health Care
Facilities Revenue,
(Carolina Medicorp
Project),
5.250% 05/01/26...... Aa3 AA 2,503,450
6,000,000 North Carolina State,
Highway -- Series A,
4.500% 05/01/07...... Aaa AAA 6,066,720
2,000,000 University of North
Carolina, Chapel
Hill, Hospital
Revenue,
5.000% 02/15/29...... Aa3 AA 1,941,720
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
NORTH CAROLINA -- (CONTINUED)
$ 2,400,000 Wake County, North
Carolina, GO,
4.500% 03/01/08...... Aaa AAA $ 2,413,272
------------
15,011,194
------------
OHIO -- 1.3%
1,000,000 Dayton, Ohio, Special
Facilities Revenue,
(Air Freight
Corporation Project),
Series F,
6.050% 10/01/09...... NR BBB 1,087,070
1,000,000 Lucas County, Ohio,
Hospital Revenue,
(Flower Hospital
Project),
Pre-refunded,
6.125% 12/01/13...... NR NR 1,108,590
4,000,000 Ohio State Highway
Capital Improvements,
GO, Series B,
5.000% 05/01/07...... Aa1 AAA 4,165,800
------------
6,361,460
------------
OREGON -- 1.1%
2,000,000 Chemeketa, Oregon,
Community College
District, GO, (FGIC
Insured),
5.800% 06/01/12...... Aaa AAA 2,141,200
2,900,000 Portland, Oregon,
Sewer System Revenue,
6.250% 06/01/15...... A1 A+ 3,223,901
------------
5,365,101
------------
PENNSYLVANIA -- 4.1%
3,000,000 Beaver County,
Pennsylvania,
Industrial
Development
Authority, Pollution
Control Revenue
Refunding,
(Pennsylvania Power
Company), (Beaver
Valley Project),
(AMBAC Insured),
6.000% 09/01/28...... Aaa AAA 3,202,080
3,480,000 Butler, Pennsylvania,
Area School District,
(FGIC Insured),
5.830% 11/15/21+..... Aaa AAA 1,000,187
2,000,000 Lehigh County,
Pennsylvania,
Industrial
Development
Authority, PCR,
Refunding,
(Pennsylvania Power
and Light Company
Project), Series A,
(MBIA Insured),
6.400% 11/01/21...... Aaa AAA 2,192,700
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
105
<PAGE> 110
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
PENNSYLVANIA -- (CONTINUED)
$ 1,000,000 Monroeville,
Pennsylvania,
Hospital Authority,
Hospital Revenue
Refunding, (Forbes
Health Systems),
5.750% 10/01/05...... A3 A- $ 1,069,640
1,000,000 Philadelphia,
Pennsylvania, Gas
Works Revenue
Refunding, 14th
Series,
6.250% 07/01/08...... Baa1 BBB 1,073,870
Philadelphia,
Pennsylvania,
Hospital and Higher
Education Facilities
Authority, Hospital
Revenue, (Frankford
Hospital Project),
Series A:
1,725,000 6.000% 06/01/14...... A3 A- 1,799,210
3,125,000 6.000% 06/01/23...... A3 A- 3,233,063
Philadelphia,
Pennsylvania,
Industrial
Development
Authority, Industrial
Development Revenue
Refunding, (Ashland
Oil Inc. Project):
4,800,000 5.700% 06/01/05...... Baa2 NR 5,106,576
1,250,000 7.000% 01/01/11...... NR NR 1,377,025
------------
20,054,351
------------
RHODE ISLAND -- 0.6%
2,845,000 Rhode Island State,
Construction Capital
Development Lane, GO,
Series A, (MBIA
Insured),
5.600% 08/01/10...... Aaa AAA 3,030,466
------------
SOUTH CAROLINA -- 2.6%
5,000,000 Florence County, South
Carolina, Hospital
Revenue, McLeod
Regional Medical
Center Project,
Series A, (MBIA
Insured),
5.000% 11/01/18...... Aaa AAA 4,837,500
1,500,000 Greenville, South
Carolina, Waterworks
Revenue,
5.500% 02/01/22...... Aa1 AA 1,546,830
2,000,000 South Carolina, State
Housing Finance and
Development
Authority,
Homeownership
Mortgage Purchase,
Series A,
6.375% 07/01/16...... Aa2 AA 2,128,240
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
SOUTH CAROLINA -- (CONTINUED)
$ 2,000,000 Spartanburg County,
South Carolina, Solid
Waste Disposal
Facilities Revenue,
(BMW Project),
7.550% 11/01/24...... NR NR $ 2,311,260
2,000,000 York County, South
Carolina, Industrial
Development Revenue,
Exempt Facility,
(Hoechst Celanese
Corporation Project),
AMT,
5.700% 01/01/24...... A2 A+ 2,038,040
------------
12,861,870
------------
TENNESSEE -- 2.0%
2,500,000 Maury County,
Tennessee, Industrial
Development Board,
PCR, Multi-Modal,
Refunding, (Saturn
Corporation Project),
General Motors
Guaranty Agreement,
6.500% 09/01/24...... A3 A 2,748,675
2,750,000 McMinn County,
Tennessee, Industrial
Development Board,
Solid Waste Recycling
Facility Revenue,
(Calhoun Newsprint
Project), AMT,
7.400% 12/01/22...... Baa1 BBB 3,072,438
2,735,000 Memphis-Shelby County,
Tennessee, Airport
Revenue Refunded,
(Federal Express
Corporation),
6.750% 09/01/12...... Baa2 BBB 3,003,331
1,000,000 Memphis, Tennessee,
Refunded, GO,
5.200% 11/01/10...... Aa AA 1,033,940
------------
9,858,384
------------
TEXAS -- 11.2%
4,000,000 Alliance Airport
Authority Inc.,
Texas, Special
Facilities Revenue,
(American Airlines
Inc. Project), AMT,
7.000% 12/01/11...... Baa2 BBB- 4,767,320
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
106
<PAGE> 111
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
TEXAS -- (CONTINUED)
Arlington Texas,
Independent School
District-D, GO, (PSFG
Insured):
$ 2,000,000 6.500% 08/15/03...... Aaa Aa2 $ 2,213,980
1,220,000 6.000% 02/15/04...... Aaa Aa2 1,292,736
2,470,000 Beaumont Texas,
Independent School
District, (PSFG
Insured), GO,
5.000% 02/15/17...... Aaa AAA 2,422,551
3,610,000 Bexar, Texas,
Metropolitan Water
District Water Works,
(MBIA Insured),
6.000% 05/01/15...... Aaa AAA 3,898,583
1,000,000 Brazos River
Authority, Texas,
Revenue Refunding,
(Houston Light and
Power Company
Project), Series B,
(MBIA Insured),
6.375% 04/01/12...... Aaa AAA 1,093,060
2,575,000 Carrollton-Farmers
Branch Independent
School District,
Texas,(PSF-GTD), GO,
5.700% 02/15/17...... Aaa AAA 2,682,455
1,275,000 Cypress-Fairbanks
Independent School
District, Texas, GO,
(PSF-GTD),
5.750% 02/15/16...... Aaa AAA 1,330,705
1,750,000 Dallas County, Texas,
GO,
5.250% 08/15/16...... Aaa AAA 1,775,778
1,000,000 Dallas Independent
School District,
Texas, GO, (PSF-
GTD),
5.700% 08/15/12...... Aaa AAA 1,053,620
1,075,000 Denton, Texas,
Utilities Systems
Revenue Refunding,
Series A, (MBIA
Insured),
5.700% 12/01/10...... Aaa AAA 1,150,100
2,000,000 Guadalupe-Blanco River
Authority, Texas,
Revenue Refunding,
(Sohio Chemical
Company),
6.550% 05/01/13...... Aa2 AA- 2,173,040
4,000,000 Harris County, Texas,
Health Facilities
Development
Authority, Hospital
Revenue Refunding,
(Memorial Hospital
Systems Project),
Series A, (MBIA
Insured),
4.875% 06/01/05...... Aaa AAA 4,090,800
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
TEXAS -- (CONTINUED)
$ 4,000,000 Lower Neches Valley
Authority, Texas,
Industrial
Development
Corporation, Revenue
Refunding, (Mobil Oil
Refining Project),
5.800% 05/01/22...... Aa2 AA $ 4,234,600
1,500,000 Lubbock, Texas, Health
Facilities
Development
Corporation, Revenue
Refunding, (St.
Joseph Health System
Project),
5.500% 07/01/14...... Aa3 AA 1,529,490
North Central Texas,
Health Facilities
Development
Corporation, Hospital
Revenue,
(Presbyterian
Healthcare), Series
A:
2,000,000 6.625% 06/01/11++.... Aa3 NR 2,287,000
10,000,000 5.000% 05/15/17...... Aa3 NR 9,664,900
1,500,000 Plano, Texas, GO,
(FGIC Insured),
6.750% 09/01/11...... AAA AAA 1,625,955
San Antonio, Texas,
Water Revenue
Refunding, (MBIA
Insured):
635,000 6.500% 05/15/10...... Aaa AAA 692,829
315,000 p6.500% 05/15/10...... NR AAA 348,210
5,000,000 Texas State Department
of Housing and
Community Affairs,
Single Family
Mortgage Revenue,
AMT, Series A, Class
1, (MBIA Insured),
5.800% 09/01/29...... Aaa AAA 5,155,600
------------
55,483,312
------------
UTAH -- 2.3%
2,000,000 Emery County, Utah,
Pollution Control
Revenue Refunding,
(Pacificorp
Projects), Series A,
(AMBAC Insured),
5.650% 11/01/23...... Aaa AAA 2,065,820
8,300,000 Murray City, Utah,
Hospital Revenue
Refunding, (IHC
Health Services
Inc.), (MBIA
Insured),
5.000% 05/15/22...... Aaa AAA 7,984,517
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
107
<PAGE> 112
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
UTAH -- (CONTINUED)
$ 1,300,000 Salt Lake City, Utah,
Water and Sewer
Revenue, (AMBAC
Insured),
6.100% 02/01/14...... Aaa AAA $ 1,421,615
------------
11,471,952
------------
VIRGINIA -- 1.9%
2,900,000 Bedford County,
Virginia, Industrial
Development
Authority,
4.600% 08/01/04...... Baa2 NR 2,894,316
2,000,000 Covington-Allegheny
County, Virginia,
Industrial
Development
Authority, PCR,
(Westvaco Corporation
Project),
6.650% 09/01/18...... A1 A 2,230,840
1,000,000 Norfolk, Virginia,
Capital Improvements,
GO, (FGIC Insured),
5.375% 06/01/15...... Aaa AAA 1,025,520
3,000,000 Virginia Commonwealth
Transportation Board,
Transportation
Program Revenue, (Oak
Grove Connector),
Series A,
5.250% 05/15/22...... Aa2 AA 3,035,130
------------
9,185,806
------------
WASHINGTON -- 9.0%
2,310,000 Chelan County,
Washington, Public
Utility,
5.600% 07/01/32...... Aa3 AA 2,365,994
2,480,000 Clark County,
Washington, Sewer
Revenue, (MBIA
Insured),
5.800% 12/01/11...... Aaa AAA 2,656,502
1,035,000 King County,
Washington, Library
Systems, GO,
6.150% 12/01/10...... Aa AA- 1,136,885
2,000,000 King County,
Washington, School
District No.
415-Kent, GO, (FSA
Insured),
5.800% 06/01/13...... Aaa AAA 2,131,160
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
WASHINGTON -- (CONTINUED)
$ 7,150,000 Pierce County,
Washington, Economic
Development
Corporation, Solid
Waste Revenue,
(Occidental
Petroleum),
5.800% 09/01/29...... Baa2 BBB $ 7,247,955
2,500,000 Public Industrial
Corporation, Port
Camas -- Washougal,
Washington, PCR,
(James River
Corporation Project),
6.700% 04/01/23...... NR BBB- 2,671,450
2,000,000 Seattle, Washington,
GO, Series A,
5.625% 01/15/10...... Aa1 AA+ 2,120,680
2,000,000 Seattle, Washington,
Municipal Light and
Power Revenue,
6.625% 07/01/16...... Aa2 AA 2,281,780
1,400,000 Seattle, Washington,
Water Systems Revenue
Refunding,
5.500% 06/01/18...... Aa2 AA 1,424,752
2,000,000 Snohomish County,
Washington, Public
Utility District No.
1, Electric Revenue
Refunding, Series A,
6.800% 01/01/05...... A1 A+ 2,169,240
Washington State, GO:
Refunding,
3,500,000 Series 92-A,
6.500% 09/01/04...... Aa1 AA+ 3,776,990
5,000,000 Series A,
6.750% 02/01/15...... Aa1 AA+ 6,025,850
Washington State,
Public Power Supply
System, Revenue
Refunding:
5,000,000 Series A, (Systems
Nuclear Project No.
1), (MBIA Insured),
5.750% 07/01/11...... Aaa AAA 5,330,550
3,000,000 Series B, (Systems
Nuclear Project No.
3), (FSA Insured),
5.400% 07/01/05...... Aaa AAA 3,167,130
------------
44,506,918
------------
WISCONSIN -- 0.2%
1,000,000 Wisconsin State,
Refunding, Go, Series
1,
5.800% 11/01/08...... Aa2 AA 1,106,690
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
108
<PAGE> 113
NATIONS FUNDS
Nations Municipal Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
WEST VIRGINIA -- 0.9%
Jefferson County, West
Virginia, Board of
Education, (FGIC
Insured):
$ 1,450,000 6.850% 07/01/07...... Aaa AAA $ 1,708,738
1,560,000 6.850% 07/01/08...... Aaa AAA 1,853,436
1,000,000 West Virginia,
University Revenue,
State University
System, (Marshall
University Library),
(AMBAC Insured),
5.750% 04/01/16...... Aaa AAA 1,059,030
------------
4,621,204
------------
WYOMING -- 0.5%
2,300,000 Campbell County,
Wyoming, School
District No. 001
Gillette, GO, (SCH BD
GTY),
5.550% 06/01/06...... Aaa AAA 2,461,736
------------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $451,379,072)........... 487,169,967
------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
SHARES VALUE
<S> <C> <C>
INVESTMENT COMPANY -- 2.3% (Cost $11,282,000)
11,282,000 AIM Tax-Exempt Fund............ $ 11,282,000
------------
TOTAL INVESTMENTS
(Cost $462,661,072*)...................... 101.0% 498,451,967
OTHER ASSETS AND
LIABILITIES (NET)......................... (1.0) (4,913,476)
----- ------------
NET ASSETS................................. 100.0% $493,538,491
===== ============
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $35,901,474 and gross
depreciation of $110,579 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$462,661,072.
+ Zero coupon security. The rate shown reflects the yield to maturity.
++ Security purchased on a when-issued or delayed delivery basis.
Nations Municipal Income Fund had the following insurance concentration greater
than 10% at March 31, 1998 (as a percentage of net assets):
MBIA 18.4%
Nations Municipal Income Fund had the following industry concentration greater
than 10% at March 31, 1998 (as a percentage of net assets):
Pollution Control Revenue/
Industrial Development Revenue 20.25%
SEE NOTES TO FINANCIAL STATEMENTS.
109
<PAGE> 114
NATIONS FUNDS
Nations Florida Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ---------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 97.8%
FLORIDA -- 96.5%
$2,000,000 Alachua County, Florida,
Health Facilities
Authority Revenue,
(Shands Hospital,
University of Florida),
(MBIA Insured),
6.100% 12/01/05......... Aaa AAA $ 2,151,480
Bay Medical Center,
Florida, Hospital
Revenue Refunding, (Bay
Medical Center Project),
(AMBAC Insured):
1,000,000 5.000% 10/01/05......... Aaa AAA 1,042,520
2,000,000 5.450% 10/01/12......... Aaa AAA 2,094,800
2,000,000 Boca Raton, Florida,
Water and Sewer Revenue
Refunding,
5.600% 10/01/04......... Aa2 AA- 2,128,620
1,000,000 Brevard County, Florida,
Health Facilities,
Authority Revenue
Refunding (Wuesthoff
Memorial Hospital),
(MBIA Insured),
6.250% 04/01/06......... Aaa AAA 1,122,910
1,000,000 Broward County, Florida,
Gas Tax Revenue,
6.400% 09/01/03......... A1 AA- 1,076,980
Broward County, Florida,
GO, Series C:
2,000,000 5.600% 01/01/01......... Aa2 AA 2,084,540
3,000,000 6.200% 01/01/07......... Aa2 AA 3,249,660
2,000,000 Broward County, Florida,
School District Revenue
Refunding, GO,
6.000% 02/15/07......... A1 AA- 2,155,380
2,000,000 Broward County, Florida,
Solid Waste Revenue,
(MBIA Insured),
5.500% 07/01/04......... Aaa AAA 2,136,940
1,000,000 Citrus County, Florida,
PCR Refunding, Crystal
River, (Florida Power
Corporation), Series B,
6.350% 02/01/22......... Aa3 A+ 1,079,060
3,000,000 Clearwater, Florida,
Water and Sewer
Authority Revenue,
(AMBAC Insured),
5.000% 12/01/02......... Aaa AAA 3,116,040
1,000,000 Collier County, Florida,
Water and Sewer District
Revenue, (FGIC Insured),
6.375% 07/01/10......... Aaa AAA 1,091,520
1,000,000 Dade County, Florida,
Aviation Facility
Revenue, Series B, AMT,
(AMBAC Insured),
6.300% 10/01/05......... Aaa AAA 1,124,880
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ---------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
$1,650,000 Dade County, Florida,
School District Revenue
Refunding, (AMBAC
Insured),
5.000% 07/15/01......... Aaa AAA $ 1,699,104
3,000,000 Dade County, Florida,
Water and Sewer Systems
Revenue, (FGIC Insured),
5.000% 10/01/00......... Aaa AAA 3,080,760
Delray Beach, Florida,
Water and Sewer
Authority Revenue
Refunding, Series A,
(AMBAC Insured):
2,000,000 5.000% 10/01/02......... Aaa AAA 2,074,940
1,000,000 5.000% 10/01/03......... Aaa AAA 1,040,920
Dunes, Florida, Community
Development District
Revenue, (Intercoastal
Water Way Bridge):
1,565,000 5.300% 10/01/03......... NR BBB 1,627,725
1,900,000 5.400% 10/01/04......... NR BBB 1,988,920
1,925,000 Duval County, Florida,
Housing Finance
Authority, Multi-family
Mortgage Revenue
Refunding, (The Cove
Project),
6.100% 10/01/02......... NR AAA 2,024,407
3,600,000 Escambia County, Florida,
PCR, (Champion
International
Corporation Project),
AMT,
6.400% 09/01/30......... Baa1 NR 3,950,964
1,700,000 Escambia County, Florida,
Utilities Authority
Systems Revenue, (FGIC
Insured),
5.625% 01/01/21......... Aaa AAA 1,760,996
1,000,000 Florida Ports Financing
Community Revenue, State
Transportation Trust
Fund, (MBIA Insured),
5.375% 06/01/16......... Aaa AAA 1,018,000
Florida State Board of
Education, GO, Capital
Outlay, Public
Education:
1,450,000 Refunding,
5.500% 06/01/01......... Aa2 AA+ 1,514,307
1,000,000 Refunding, Series A,
5.000% 06/01/08......... Aa2 AA 1,040,370
1,500,000 Unrefunded Balance,
7.250% 06/01/23......... Aa2 AA+ 1,616,220
1,000,000 Unrefunded Balance,
Series C,
6.500% 06/01/11......... AAA AA+ 1,098,640
4,000,000 Unrefunded Balance,
Series D,
5.200% 06/01/11......... Aa2 AA+ 4,082,560
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
110
<PAGE> 115
NATIONS FUNDS
Nations Florida Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ---------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
$3,030,000 Florida State Board of
Regents, University
System Improvement
Revenue,
Series A,
5.000% 07/01/16......... Aa3 AA- $ 2,994,034
1,500,000 Florida State Department
of Transportation,
(Right-of-Way Bridge),
GO,
5.375% 07/01/26......... Aa2 AA+ 1,518,960
1,000,000 Florida State Division
Bond, Financial
Department of General
Services Revenue, Pool
Facilities Management,
(AMBAC Insured),
4.800% 09/01/01......... Aaa AAA 1,024,830
Florida State Division
Bond, Financial
Department of General
Service Revenue,
Preservation Authority:
(AMBAC Insured):
2,000,000 6.200% 07/01/00.......... Aaa AAA 2,100,680
3,000,000 6.250% 07/01/01.......... Aaa AAA 3,203,580
(MBIA Insured):
2,000,000 5.800% 07/01/01.......... Aaa AAA 2,108,560
1,000,000 6.250% 07/01/06.......... Aaa AAA 1,090,600
Florida State Housing
Finance Agency,
Refunding:
4,000,000 Multi-family Housing,
(Altamonte Project),
Series C,
7.000% 12/01/24......... NR BBB+ 4,423,400
1,000,000 Multi-family Housing
Revenue, (Andover
Project), Series E,
6.350% 05/01/26......... NR BBB+ 1,070,660
(The Vinyards Project),
Series H:
1,290,000 5.875% 11/01/05.......... NR BBB+ 1,341,471
1,000,000 6.400% 11/01/15.......... NR BBB+ 1,045,070
1,805,000 Florida State
Jacksonville
Transportation
Authority, GO,
Refunding,
6.000% 07/01/05......... Aa2 AA+ 1,990,716
2,500,000 Florida State Turnpike
Authority Revenue,
Series A, (AMBAC
Insured),
7.000% 07/01/04......... Aaa AAA 2,762,925
1,000,000 Fort Lauderdale, Florida,
Water and Sewer
Authority Revenue,
5.500% 09/01/01......... NR AAA 1,045,150
1,000,000 Gainesville, Florida,
Utilities Systems
Revenue, Series A,
5.750% 10/01/07......... Aa AA 1,103,900
1,375,000 Hialeah, Florida, Capital
Improvement Revenue,
5.500% 10/01/18......... Baa1 NR 1,382,549
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
Hillsborough County,
Florida, Aviation
Authority Revenue
Refunding, (Tampa
International Airport
Project), Series A,
(AMBAC Insured):
$1,000,000 5.900% 10/01/06.......... Aaa AAA $ 1,059,170
3,170,000 5.750% 10/01/07.......... Aaa AAA 3,459,643
1,000,000 Hillsborough County,
Florida, Capital
Improvement Program,
Revenue Refunding,
(County Center Project),
Series B, (MBIA
Insured),
5.000% 07/01/11......... Aaa AAA 1,013,540
2,640,000 Hillsborough County,
Florida, Environmentally
Sensitive Lands,
(AMBAC Insured),
6.250% 07/01/06......... Aaa AAA 2,882,959
2,000,000 Hillsborough County,
Florida, Utility Revenue
Refunding, Capital
Appreciation, Series A,
(MBIA-IBC Insured),
7.050% 08/01/99+........ Aaa AAA 1,902,600
1,000,000 Hollywood, Florida, Water
and Sewer Revenue, (FGIC
Insured),
6.200% 10/01/01......... Aaa AAA 1,067,830
Indian River County,
Florida, School
District, (FSA Insured):
1,500,000 5.000% 04/01/03.......... Aaa AAA 1,557,045
1,800,000 5.000% 04/01/04.......... Aaa AAA 1,873,746
1,750,000 5.100% 04/01/05.......... Aaa AAA 1,831,707
1,000,000 Indian River County,
Florida, Water and Sewer
Revenue Refunding,
Series A, (FGIC
Insured),
5.200% 09/01/05......... Aaa AAA 1,054,650
Jacksonville, Florida,
Electric Authority
Revenue Refunding:
4th Series, St. John's
River Authority:
1,000,000 Series 6B,
6.650% 10/01/02......... Aa2 AA 1,073,810
2,000,000 Series 6C,
6.400% 10/01/00......... Aa2 AA 2,120,460
2,000,000 Series 10,
4.600% 10/01/00......... Aa2 AA 2,035,420
1,000,000 Electric Systems, Series
3A,
5.200% 10/01/02......... Aa2 AA 1,045,200
1,000,000 Jacksonville, Florida,
Excise Tax Revenue
Refunding, Series A,
(FGIC Insured),
5.000% 10/01/09......... Aaa AAA 1,036,320
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
111
<PAGE> 116
NATIONS FUNDS
Nations Florida Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ---------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
Jacksonville, Florida,
Health Facilities
Authority, Hospital
Revenue:
$1,000,000 (Daughters of Charity),
Series A,
5.000% 11/15/15......... Aa2 AA $ 982,700
1,375,000 (St. Lukes Hospital
Association Project),
6.750% 11/15/02......... NR AA+ 1,516,226
4,200,000 Series B,
5.400% 08/15/18......... Aa2 AA+ 4,278,372
1,000,000 Jacksonville Beach,
Florida, Utilities
Revenue, (MBIA Insured),
6.500% 10/01/12......... Aaa AAA 1,095,900
2,000,000 Lakeland, Florida, Water
and Electricity Revenue
Refunding,
5.625% 10/01/04......... Aa AA- 2,157,120
1,000,000 Leon County, Florida,
School District Revenue
Refunding, GO,
6.200% 07/01/04......... A1 A+ 1,061,320
2,000,000 Miami, Florida, GO, (FGIC
Insured),
5.600% 12/01/03......... Aaa AAA 2,140,820
1,500,000 Miami Beach, Florida, GO,
(FGIC Insured),
5.300% 09/01/03......... Aaa AAA 1,579,890
1,000,000 Naples, Florida, Water
and Sewer Revenue
Refunding, (FGIC
Insured),
6.400% 09/01/07......... Aaa AAA 1,100,610
3,000,000 North Broward, Florida,
Hospital Revenue, (MBIA
Insured),
6.250% 01/01/06......... AAA AAA 3,266,820
Orange County, Florida,
Health Facilities
Authority Revenue
Refunding:
1,375,000 (Lakeside Alternatives
Inc.),
6.250% 07/01/05......... NR BBB 1,480,050
(Orlando Regional Medical
Center Hospital), (MBIA
Insured):
3,000,000 4.400% 10/01/02.......... Aaa AAA 3,037,860
2,000,000 5.400% 11/01/02.......... Aaa AAA 2,108,420
2,000,000 6.250% 10/01/16.......... Aaa AAA 2,296,040
2,000,000 Orange County, Florida,
Housing Finance
Authority,
Single-family Mortgage
Revenue, Series A,
(GNMA/FNMA Collateral),
5.900% 09/01/19......... NR AAA 2,096,700
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
Orlando, Florida, Greater
Orlando Aviation
Authority, Airport
Facilities
Revenue Refunding:
$2,000,000 Series B, (FGIC Insured),
6.200% 10/01/03......... Aaa AAA $ 2,198,740
Series D, (AMBAC
Insured):
3,200,000 5.450% 10/01/01.......... Aaa AAA 3,346,944
2,000,000 5.600% 10/01/02.......... Aaa AAA 2,122,980
Orlando, Florida,
Utilities Commission,
Water and Electricity
Revenue
Refunding:
3,000,000 5.600% 10/01/03.......... Aa1 AA 3,207,390
2,000,000 Series B,
5.400% 10/01/08......... Aa2 AA- 2,112,200
Orlando and Orange
County, Florida,
Expressway Authority
Revenue Refunding:
2,000,000 Junior Lien, (FGIC
Insured),
6.500% 07/01/10......... Aaa AAA 2,344,460
3,000,000 Senior Lien, (AMBAC
Insured),
5.000% 07/01/03......... Aaa AAA 3,117,570
Palm Beach County,
Florida, GO:
1,750,000 6.875% 12/01/03.......... Aa2 AA 1,987,528
1,300,000 7.000% 12/01/04.......... Aa2 AA 1,506,375
1,250,000 6.600% 10/01/11.......... NR NR 1,370,037
1,000,000 Palm Beach County,
Florida, Health
Facilities Authority
Revenue, (Good Samaritan
Health Systems),
6.100% 10/01/05......... NR A+ 1,091,310
2,000,000 Palm Beach County,
Florida, School District
Revenue Refunding, GO,
(AMBAC Insured),
6.000% 08/01/06......... Aaa AAA 2,150,440
2,000,000 Palm Beach County,
Florida, Stadium
Facilities Revenue,
(MBIA Insured),
5.250% 12/01/16......... Aaa AAA 2,025,980
1,250,000 Pembroke Pines, Florida,
Utility Systems Revenue,
(FGIC Insured),
6.250% 09/01/07......... Aaa AAA 1,351,163
1,400,000 Pinellas County, Florida,
Health Facilities
Authority Revenue,
(Morton Plant Health
Systems Project), (MBIA
Insured),
4.900% 11/15/02......... Aaa AAA 1,447,264
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
112
<PAGE> 117
NATIONS FUNDS
Nations Florida Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ---------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
</TABLE>
<TABLE>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
$1,000,000 Pinellas County, Florida,
PCR, (Anclote & Barton
Power Plants Florida
Power Corporation),
7.200% 12/01/14......... Aa3 A+ $ 1,098,330
Pinellas County, Florida,
Resource Recovery
Revenue Refunding,
Series A,
(MBIA Insured):
2,000,000 6.600% 10/01/00.......... Aaa AAA 2,130,400
2,500,000 6.800% 10/01/02.......... Aaa AAA 2,704,650
2,700,000 Reedy Creek, Florida,
Improvement District
Revenue, Series A,
6.400% 06/01/07......... A1 A+ 2,897,883
St. John's County,
Florida, Industrial
Development Authority,
Hospital Revenue,
(Flagler Hospital
Project):
850,000 5.700% 08/01/02.......... A2 A- 893,104
945,000 6.000% 08/01/08.......... A2 A- 990,464
St. Lucie County,
Florida, School District
Revenue, GO:
2,000,000 (AMBAC Insured),
6.000% 07/01/03......... Aaa AAA 2,171,800
1,000,000 (FGIC Insured),
5.875% 02/01/07......... Aaa AAA 1,103,850
2,000,000 St. Petersburg, Florida,
Utility Tax Refunding
Revenue, (AMBAC
Insured),
6.000% 06/01/05......... Aaa AAA 2,162,600
1,000,000 Sarasota, Florida, Water
and Sewer Utility
Revenue Refunding,
(FGIC Insured),
6.000% 10/01/02......... Aaa AAA 1,078,210
1,200,000 Sarasota County, Florida,
GO, (FGIC Insured),
6.100% 10/01/02......... Aaa AAA 1,298,736
1,650,000 Sarasota County, Florida,
Public Hospital Board
Revenue, (Sarasota
Memorial Hospital
Project), Series B,
(MBIA Insured),
5.000% 10/01/07......... Aaa NR 1,718,393
2,100,000 Seminole County, Florida,
School District Revenue,
GO, (MBIA Insured),
5.900% 08/01/02......... Aaa AAA 2,250,276
Tallahassee, Florida,
Health Facilities
Revenue Refunding,
Memorial Regional
Medical Center, Inc.,
(MBIA Insured):
1,000,000 Series A,
5.750% 12/01/04......... Aaa AAA 1,080,590
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
$1,000,000 Series B,
5.750% 12/01/04......... Aaa AAA $ 1,080,590
3,170,000 Tampa, Florida, Sports
Authority Revenue,
(Stadium Project),
(MBIA Insured),
6.000% 01/01/07......... Aaa AAA 3,525,072
Tampa, Florida, Water and
Sewer Revenue, (FGIC
Insured):
1,000,000 5.125% 10/01/17.......... Aaa AAA 998,170
1,000,000 Series A,
5.000% 10/01/02......... Aaa AAA 1,037,470
2,750,000 Tampa Hillsborough
County, Florida,
Expressway Authority
Revenue, (AMBAC
Insured),
5.000% 07/01/27......... Aaa AAA 2,675,640
1,025,000 Venice, Florida, Health
Facilities Revenue,
(Venice Hospital, Inc.
Project),
5.300% 12/01/02......... AAA NR 1,074,036
1,000,000 Venice, Florida
Stormwater & Drain
Revenue, (AMBAC
Insured),
5.600% 05/01/16......... Aaa AAA 1,046,450
------------
207,091,291
------------
PUERTO RICO -- 1.3%
1,650,000 Puerto Rico Industrial,
Medical and
Environmental Agency,
Pollution Control
Facilities, Finance
Authority Revenue,
Higher Education,
(Catholic University
Project), Series A,
5.600% 12/01/07......... NR BBB- 1,739,265
1,000,000 Puerto Rico Industrial,
Tourist, Educational,
Medical and
Environmental Control
Facilities Financing
Authority, (Ryder
Memorial Hospital
Project), Series A,
6.600% 05/01/14......... NR BBB 1,086,250
------------
2,825,515
------------
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $198,405,336)...................... 209,916,806
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
113
<PAGE> 118
NATIONS FUNDS
Nations Florida Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C>
- ---------------------------------------------------------------------
INVESTMENT COMPANY -- 0.8% (Cost $1,686,000)
1,686,000 AIM Tax-Exempt Fund............... $ 1,686,000
------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $200,091,336*)...................... 98.6% 211,602,806
OTHER ASSETS AND
LIABILITIES (NET)......................... 1.4 3,106,716
----- ------------
NET ASSETS................................. 100.0% $214,709,522
===== ============
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $11,542,175 and gross
depreciation of $30,705 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$200,091,336.
+ Zero coupon security. The rate shown reflects the yield to maturity.
Nations Florida Intermediate Municipal Bond Fund had the following insurance
concentrations greater than 10% at March 31, 1998 (as a percentage of net
assets):
AMBAC 20.4%
MBIA 18.3%
FGIC 11.8%
SEE NOTES TO FINANCIAL STATEMENTS.
114
<PAGE> 119
NATIONS FUNDS
Nations Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATINGS
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- --------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 96.4%
FLORIDA -- 94.1%
Alachua County, Florida,
Health Facilities
Authority, Revenue
Refunding:
$1,000,000 (Santa Fe Healthcare
Facilities Project),
ETM,
6.000% 11/15/09......... Baa1 AAA $ 1,084,030
1,000,000 (Shands Teaching
Hospitals and Clinics
Inc. Project), Series A,
(MBIA Insured),
5.000% 12/01/04......... Aaa AAA 1,043,680
1,000,000 Alachua County, Florida,
Public Improvement
Revenue Refunding, (FSA
Insured),
5.000% 08/01/14......... Aaa AAA 997,720
1,000,000 Canaveral, Florida, Port
Authority Revenue
Refunding, Port
Improvement, Series B,
(FGIC Insured),
5.700% 06/01/13......... NR AAA 1,058,450
1,000,000 Citrus County, Florida,
PCR Refunding, Crystal
River, (Florida Power
Corporation), Series B,
6.350% 02/01/22......... Aa3 A+ 1,079,060
1,000,000 Dade County, Florida,
Health Facilities
Authority, Hospital
Revenue Refunding,
(Baptist Hospital, Miami
Project), Series A,
(MBIA Insured),
5.250% 05/15/21......... Aaa AAA 997,280
1,000,000 Dade County, Florida,
School District Revenue
Refunding, GO, Series A,
(MBIA Insured),
6.125% 06/01/14......... Aaa AAA 1,097,240
1,500,000 Dade County, Florida,
Water and Sewer System
Revenue Refunding, (FGIC
Insured),
5.000% 10/01/13......... Aaa AAA 1,500,930
Escambia County, Florida,
PCR, (Champion
International
Corporation Project),
AMT:
1,000,000 6.900% 08/01/22.......... Baa1 BBB 1,111,980
1,000,000 6.400% 09/01/30.......... Baa1 NR 1,097,490
Florida State Board of
Education, GO, Capital
Outlay, Public
Education:
1,000,000 Refunding, Series A,
5.000% 06/01/08......... Aa2 AA+ 1,040,370
1,000,000 Refunding, Series D,
5.125% 06/01/18......... Aa2 AA+ 986,940
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
RATINGS
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
$1,000,000 Unrefunded Balance,
Series A,
7.250% 06/01/23......... Aa2 AA+ $ 1,077,480
1,000,000 Florida State Department
of Transportation, Fuel
Sales Tax Revenue,
(Right-of-Way Bridge),
GO,
5.375% 07/01/26......... Aa2 AA+ 1,012,640
2,000,000 Florida State Department
of Transportation, Right
of Way -- A,
5.000% 07/01/2017....... Aa2 AA+ 1,980,340
Florida State Housing
Finance Agency,
Refunding:
Multi-family Housing:
1,000,000 (Altamonte Project),
Series C,
7.000% 12/01/24......... NR BBB+ 1,105,850
805,000 Single-family Mortgage,
Series B, AMT,
(GNMA/FNMA Collateral),
6.550% 07/01/17......... Aaa AAA 853,791
500,000 (The Vinyards Project),
Series H,
6.500% 11/01/25......... NR BBB+ 524,300
Florida State
Jacksonville
Transportation
Authority, GO,
Refunding:
500,000 6.000% 07/01/05.......... Aa2 AA+ 551,445
1,000,000 5.000% 07/01/19.......... Aa2 AA+ 978,150
1,000,000 Florida State Municipal
Power Agency Revenue,
(Stanton II Project),
Pre-refunded, (AMBAC
Insured),
6.500% 10/01/20......... Aaa AAA 1,113,500
1,000,000 Greater Orlando Aviation
Authority, (FGIC
Insured),
5.125% 10/01/2012....... Aaa AAA 1,003,880
1,000,000 Hillsborough County,
Florida, Industrial
Development Authority,
PCR, (Tampa Electric
Company Project),
8.000% 05/01/22......... Aa3 AA 1,156,640
1,000,000 Hillsborough County,
Florida, Utility
Refunding Revenue, (MBIA
Insured),
5.500% 08/01/12......... Aaa AAA 1,034,460
Jacksonville, Florida,
Health Facilities
Authority, Hospital
Revenue:
1,500,000 (Daughters Of Charity),
Series A,
5.000% 11/15/15......... Aa2 AA 1,474,050
1,000,000 Series B,
5.250% 08/15/27......... Aa2 AA+ 991,060
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
115
<PAGE> 120
NATIONS FUNDS
Nations Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATINGS
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- --------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
$ 750,000 Jacksonville, Florida
Pollution Control
Revenue,
5.7000% 08/01/2031...... A1 A+ $ 786,675
1,000,000 Martin County, Florida,
Industrial Development
Authority Revenue,
(Indiantown Cogeneration
Project), Series A, AMT,
7.875% 12/15/25......... Baa3 BBB- 1,173,020
1,000,000 Orange County, Florida,
Health Facilities
Authority Revenue
Refunding, (Orlando
Regional Medical Center
Hospital), Series B,
(MBIA Insured),
5.000% 10/01/10......... Aaa AAA 1,016,880
1,000,000 Orange County, Florida,
Sales Tax Revenue,
Series B,
5.375% 01/01/24......... A1 A+ 1,008,640
1,000,000 Orange County, Florida,
Tourist Development Tax
Revenue, Series B, (MBIA
Insured),
6.000% 10/01/14......... Aaa AAA 1,090,410
1,000,000 Osceola County, Florida,
Health Facilities
Authority Revenue
Refunding, Lutheran Good
Samaritan Society,
(AMBAC Insured),
6.000% 05/01/10......... Aaa AAA 1,088,680
1,500,000 Palm Beach County,
Florida, Health
Facilities Authority
Revenue, (Good
Samaritans Health
System),
6.200% 10/01/11......... NR A+ 1,669,890
665,000 Palm Beach County,
Florida, Housing Finance
Authority, Single-family
Mortgage Purchase
Revenue, Series A,
(GNMA/ FNMA Collateral),
6.500% 10/01/21......... Aaa NR 708,132
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
RATINGS
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
FLORIDA -- (CONTINUED)
$1,000,000 Polk County, Florida,
Industrial Development
Authority, Solid Waste
Disposal Facilities
Revenue, (Tampa Electric
Company Project),
5.850% 12/01/30......... Aa2 AA $ 1,046,870
2,000,000 South Broward, Florida,
Hospital District
Revenue Refunding, (FSA
Insured),
5.500% 05/01/28......... Aaa AAA 2,038,640
1,000,000 Tampa, Florida, Sports
Authority Revenue,
(Stadium Project), (MBIA
Insured),
5.125% 01/01/12......... Aaa AAA 1,018,640
Venice, Florida, Health
Facilities Revenue
Refunding, (Venice
Hospital Inc. Project):
900,000 5.600% 12/01/05.......... AAA NR 976,311
1,000,000 5.700% 12/01/06.......... AAA NR 1,090,520
1,000,000 Volusia County, Florida,
Educational Facilities
Authority Revenue,
Series A,
6.125% 10/15/26......... Baa2 NR 1,060,960
-----------
43,727,024
-----------
PUERTO RICO -- 2.3%
995,000 Puerto Rico, Housing,
Bank and Finance Agency,
Single-family Mortgage
Revenue, (Affordable
Housing
Mortgage-Portfolio I),
AMT, (GNMA/FNMA/ FHLMC
Collateral),
6.250% 04/01/29......... Aaa AAA 1,048,143
-----------
1,048,143
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $41,756,112)............... 44,775,167
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
116
<PAGE> 121
NATIONS FUNDS
Nations Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C> <C> <C>
INVESTMENT COMPANY -- 2.3% (Cost $1,063,000)
1,063,000 AIM Tax-Exempt Fund............. $ 1,063,000
-----------
TOTAL INVESTMENTS
(Cost $42,819,112*)........................ 98.7% 45,838,167
OTHER ASSETS AND
LIABILITIES (NET).......................... 1.3 617,535
----- -----------
NET ASSETS.................................. 100.0% $46,455,702
===== ===========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $3,063,685 and gross
depreciation of $44,630 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$42,819,112.
Nations Florida Municipal Bond Fund had the following insurance concentrations
greater than 10% at March 31, 1998 (as a percentage of net assets):
MBIA 15.7%
Nations Florida Municipal Bond Fund had the following industry concentration
greater than 10% at March 31, 1998 (as a percentage of net assets):
Pollution Control Revenue/
Industrial Development Revenue 13.52%
SEE NOTES TO FINANCIAL STATEMENTS.
117
<PAGE> 122
NATIONS FUNDS
Nations Georgia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 98.7%
GEORGIA -- 98.0%
$1,000,000 Alpharetta, Georgia,
GO,
6.000% 05/01/03....... Aa2 AA- $ 1,084,290
Atlanta, Georgia,
Airport Facilities
Revenue Refunding,
(AMBAC Insured):
1,000,000 5.000% 01/01/03........ Aaa AAA 1,034,500
1,000,000 6.000% 01/01/03........ Aaa AAA 1,077,150
8,000,000 7.250% 01/01/10+....... Aaa AAA 4,306,880
1,000,000 Atlanta, Georgia,
Downtown Development
Authority Revenue
Refunding,
(Underground Atlanta
Project), 6.250%
10/01/12.............. Aa3 AA 1,086,090
1,000,000 Atlanta and Fulton
Counties, Georgia,
Recreation Authority
Revenue Refunding,
(Atlanta Zoo Project),
5.850% 12/01/00....... Aa3 AA 1,048,610
3,000,000 Baldwin County,
Georgia, School
District, GO, (State
Aid Withholding),
4.500% 01/01/03....... NR AA- 3,039,510
3,000,000 Bibb County, Georgia,
GO, 5.500% 01/01/08... A1 AA 3,167,400
Burke County, Georgia,
Development Authority,
PCR, (Oglethorpe Power
Corporation):
Series B:
1,000,000 4.350% 01/01/01........ A3 A 1,005,350
1,000,000 4.700% 01/01/04........ A3 A 1,015,540
830,000 (MBIA Insured),
7.700% 01/01/06........ Aaa AAA 973,880
2,000,000 Cartersville, Georgia,
Development Authority
Revenue Refunding,
(Anheuser-Busch),
5.625% 05/01/09....... A1 A+ 2,142,240
1,000,000 Chatham County,
Georgia, School
District, GO, 5.800%
08/01/04.............. A1 AA 1,064,050
Cherokee County,
Georgia, School System
Revenue, GO:
1,000,000 5.900% 06/01/02........ A1 NR 1,067,960
1,000,000 (AMBAC Insured),
5.875% 02/01/09....... Aaa AAA 1,106,850
875,000 Cherokee County,
Georgia, Water and
Sewer Authority,
Revenue Refunding and
Improvement (MBIA
Insured), 5.300%
08/01/09.............. Aaa AAA 927,771
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
GEORGIA -- (CONTINUED)
Clark County, Georgia,
Hospital Authority
Revenue, (Regional
Medical Center
Project), (MBIA
Insured):
$1,000,000 5.100% 07/01/04........ Aaa AAA $ 1,045,600
1,000,000 5.750% 07/01/08........ Aaa AAA 1,073,040
1,000,000 Clayton County,
Georgia, Water and
Sewer Authority
Revenue, (MBIA
Insured), 5.400%
05/01/07.............. Aaa AAA 1,055,270
1,000,000 Clayton County,
Georgia, Hospital
Authority Revenue,
(MBIA Insured), 6.700%
08/01/02.............. Aaa AAA 1,096,980
1,000,000 Cobb County, Georgia,
Detention Buildings
and Facilities, GO,
5.300% 01/01/08....... Aaa AAA 1,049,610
Cobb County, Georgia,
Kennestone Hospital
Authority Revenue,
Series A:
1,200,000 5.600% 04/01/05........ Aa2 AA 1,274,736
1,000,000 5.700% 04/01/06........ Aa2 AA 1,063,630
Cobb County, Georgia,
School District, GO:
2,000,000 4.800% 02/01/04........ Aa1 AA 2,059,320
2,000,000 Series B, 6.150%
02/01/03.............. Aa1 AA 2,173,420
Cobb County, Georgia,
Water and Sewer
Authority, Revenue
Refunding, Series A:
1,000,000 5.400% 07/01/08........ Aa1 AA 1,053,180
2,000,000 Cobb County and
Marietta, Georgia,
Water Authority
Revenue Refunding,
5.000% 11/01/03....... Aa1 AA 2,078,820
Columbus, Georgia,
Water and Sewer
Authority Revenue
Refunding:
1,000,000 5.100% 05/01/03........ A3 A+ 1,037,070
2,250,000 Series 1992, (FGIC
Insured), 6.000%
05/01/03.............. Aaa AAA 2,433,240
1,000,000 Dalton, Georgia,
Building Authority
Revenue, 5.000%
07/01/02.............. A1 NR 1,034,320
Dalton, Georgia,
Multiple Utility
Revenue Refunding,
(MBIA Insured):
2,000,000 4.450% 01/01/03........ Aaa AAA 2,020,360
5,000,000 6.000% 01/01/06........ Aaa AAA 5,509,800
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
118
<PAGE> 123
NATIONS FUNDS
Nations Georgia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
GEORGIA -- (CONTINUED)
DeKalb County, Georgia,
School District, GO:
$1,000,000 5.000% 07/01/03........ Aa AA $ 1,038,710
1,000,000 Series A, 4.250%
07/01/99.............. Aa AA 1,006,370
1,000,000 Downtown Savannah
Authority, Georgia,
(Chatham County
Projects), Series A,
5.000% 01/01/11....... Aa3 AA 1,008,470
Fayette County,
Georgia, School
District, GO, Series
1992:
1,000,000 5.200% 03/01/00........ Aa A+ 1,024,620
1,000,000 (FGIC Insured), 6.100%
03/01/03.............. Aaa AAA 1,084,030
500,000 Series 1994, 5.500%
03/01/03.............. Aa A+ 528,815
750,000 Forsyth County,
Georgia, School
District, GO, 6.400%
07/01/05.............. Aa3 AA- 843,180
Fulco, Georgia,
Hospital Authority
Revenue, Revenue
Anticipation
Certificates:
Georgia Baptist
Healthcare, Series A:
1,500,000 5.800% 09/01/01........ Baa1 NR 1,576,560
1,000,000 6.000% 09/01/03........ Baa1 NR 1,087,210
St. Joseph's Hospital:
2,000,000 4.900% 10/01/03........ A3 A 2,064,160
1,000,000 5.500% 10/01/14........ A3 A 1,066,160
2,000,000 (Catholic Health East),
4.600% 11/15/09........ Aaa AAA 1,984,980
1,735,000 Fulton County, Georgia,
Development Authority
Revenue,
5.000% 09/01/17........ Aa1 AA+ 1,703,215
Fulton and DeKalb
Counties, Georgia,
Hospital Authority,
Revenue Refunding,
(Grady Memorial
Hospital Project),
(MBIA Insured):
1,000,000 5.250% 01/01/04........ Aaa AAA 1,049,950
1,000,000 Series A, (AMBAC
Insured), 6.950%
01/01/01.............. Aaa AAA 1,070,500
Fulton County, Georgia,
Building Authority
Revenue Refunding:
1,000,000 5.700% 01/01/00........ Aa3 AA 1,030,780
1,025,000 5.700% 01/01/04........ Aa3 AA 1,098,421
1,000,000 Fulton County, Georgia,
Hospital Authority
Revenue Refunding,
Revenue Anticipation
Certificates,
(Northside Hospital
Project), Series A,
(MBIA Insured),
6.000% 10/01/01........ Aaa AAA 1,061,700
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
GEORGIA -- (CONTINUED)
Fulton County, Georgia,
School District, GO:
$1,000,000 7.500% 01/01/02........ Aa3 AA $ 1,116,240
1,500,000 6.250% 05/01/04........ Aa3 AA 1,659,270
1,000,000 George L. Smith II,
Georgia, World
congress Control
Authority, Revenue,
Domed Stadium Project,
(SunTrust Bank LOC),
7.875% 07/01/20........ Aa3 AA- 1,087,640
Georgia State, GO:
Series A:
695,000 7.700% 02/01/00........ Aaa AAA 742,267
1,500,000 6.250% 03/01/06........ Aaa AAA 1,690,155
1,200,000 Series B,
6.000% 03/01/04........ Aaa AAA 1,312,068
2,750,000 Series C,
6.500% 07/01/05........ Aaa AAA 3,125,018
1,500,000 Series D, GO,
6.800% 08/01/99........ Aaa AAA 1,559,925
1,000,000 Georgia State,
Housing & Finance
Authority Revenue,
6.600% 6/01/25......... Aa2 AA+ 1,068,600
1,500,000 Georgia State,
Municipal Gas
Authority, Gas Tax
Revenue, (Southern
Storage Gas Project),
6.000% 07/01/04........ NR A- 1,631,490
Georgia State Tollway
Authority Revenue,
(Georgia 400 Project),
(ST GTD):
2,000,000 6.375% 07/01/02........ Aaa AA+ 2,172,680
1,000,000 6.400% 07/01/03........ Aaa AAA 1,087,090
1,000,000 5.000% 07/01/07........ Aaa AAA 1,042,810
Griffin-Spalding
County,Georgia, School
System, GO, (FSA
Insured):
1,000,000 5.250% 02/01/10........ Aaa AAA 1,022,170
2,000,000 5.600% 02/01/21........ Aaa AAA 2,041,340
Gwinnett County,
Georgia, School
District, GO:
1,000,000 5.250% 02/01/08........ Aa1 AA+ 1,033,950
1,400,000 5.375% 02/01/09........ Aa1 AA+ 1,461,236
1,000,000 Refunding, Series B,
6.000% 02/01/01........ Aa1 AA+ 1,053,640
Gwinnett County,
Georgia, Water & Sewer
Authority, Water
Revenue Refunding:
925,000 8.400% 08/01/01........ NR AA+ 1,047,785
Hall County, Georgia,
School District, GO:
2,000,000 (AMBAC Insured),
6.700% 12/01/14........ Aaa AAA 2,309,420
1,000,000 Refunding, Series B,
6.300% 12/01/05........ A1 NR 1,125,760
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
119
<PAGE> 124
NATIONS FUNDS
Nations Georgia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
GEORGIA -- (CONTINUED)
$1,000,000 Henry City and County,
Georgia, Water and
Sewer Authority
Revenue Refunding,
Series A,
5.000% 02/01/07........ A NR $ 1,029,980
Henry County, Georgia,
School District, GO:
1,000,000 Series A,
5.700% 08/01/02........ A1 A+ 1,061,240
Series B:
1,000,000 5.300% 08/01/99........ A1 A+ 1,019,900
1,000,000 5.600% 08/01/01........ A1 A+ 1,047,280
2,000,000 Henry County, Georgia,
Hospital (AMBAC
Insured),
5.250% 07/01/09........ Aaa AAA 2,107,640
2,000,000 Houston County,
Georgia, School
District, GO, (MBIA
Insured), 5.500%
03/01/16.............. Aaa AAA 2,040,400
1,000,000 La Grange, Georgia,
Water & Sewer Revenue,
7.375% 01/01/12........ NR NR 1,075,950
1,000,000 Macon, Georgia, Water
and Sewer Authority
Revenue Refunding,
Series A,
4.700% 10/01/04........ A1 A+ 1,024,750
1,000,000 Meriwether County,
Georgia, School
District, GO, (FSA
Insured),
5.500% 02/01/16........ Aaa AAA 1,041,360
Metropolitan Atlanta
Rapid Transit
Authority (MARTA),
Georgia, Sales Tax
Revenue Refunding:
540,000 Series D,
7.000% 07/01/11........ AAA AAA 660,809
Series M:
1,000,000 6.150% 07/01/02........ A1 AA- 1,075,100
1,000,000 6.350% 07/01/04........ A1 AA- 1,075,730
3,000,000 Refunding, Series P,
(AMBAC Insured),
5.900% 07/01/03........ Aaa AAA 3,237,840
1,000,000 Monroe County, Georgia,
Development Authority,
PCR, (Oglethorpe Power
Corporation), Series
A,
6.800% 01/01/12........ A3 A 1,174,280
2,495,000 Municipal Electric
Authority, Georgia,
(Project One), Series
A, (MBIA Insured),
5.375% 01/01/19........ Aaa AAA 2,532,450
1,100,000 Paulding County,
Georgia, School
District, GO, Series
A,
6.400% 02/01/04........ A2 A 1,218,217
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
GEORGIA -- (CONTINUED)
$1,715,000 Port Houston Authority
Tex Harris (MBIA
Insured),
4.850% 10/01/07+....... Aaa AAA $ 1,104,066
1,400,000 Private Colleges and
Universities
Facilities Authority
Revenue, Georgia,
(Emory University
Project), Series C,
(GO of Instn),
5.750% 10/01/02........ Aa1 AA 1,494,052
1,000,000 Richmond County,
Georgia, Board of
Education, GO, (FGIC
Insured),
4.700% 11/01/06........ Aaa AAA 1,018,490
1,500,000 Richmond County,
Georgia, Water and
Sewer Revenue
Refunding and
Improvement, Series A,
(FGIC Insured),
5.250% 10/01/28........ Aaa AAA 1,497,735
Roswell, Georgia, GO:
925,000 5.750% 02/01/07........ Aa AA 992,506
2,000,000 5.600% 02/01/10........ Aa AA 2,137,420
1,000,000 Savannah, Georgia,
Economic Development
Authority Refunding,
PCR, (Union Camp
Corporation Project),
5.150% 05/01/02........ A1 NR 1,036,030
1,250,000 Savannah, Georgia,
Hospital Authority
Revenue Refunding and
Improvement, (Candler
Hospital Project),
7.000% 01/01/11........ Ba1 BB 1,342,225
Savannah, Georgia,
Resource Recovery
Development Authority,
Revenue Refunding,
(Southern Energy
Systems Company
Project):
1,000,000 5.700% 12/01/00........ A1 A+ 1,040,740
1,500,000 5.850% 12/01/01........ A1 A+ 1,583,715
1,000,000 Savannah, Georgia,
Water and Sewer
Revenue Refunding and
Improvement,
5.100% 12/01/09........ Aa3 AA- 1,025,940
------------
140,620,697
------------
PUERTO RICO -- 0.7%
1,000,000 Puerto Rico Municipal
Finance Agency
Refunding, Series B,
5.000% 07/01/99....... MIG1 A- 1,015,680
------------
TOTAL MUNICIPAL
BONDS AND NOTES (Cost
$134,346,898).................. 141,636,377
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
120
<PAGE> 125
NATIONS FUNDS
Nations Georgia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
INVESTMENT COMPANY -- 1.1% (Cost $1,641,000)
1,641,000 AIM Tax-Exempt Fund............. $ 1,641,000
------------
TOTAL INVESTMENTS (Cost $135,987,898*)...... 99.8% 143,277,377
OTHER ASSETS AND LIABILITIES (NET).......... 0.2 234,545
----- ------------
NET ASSETS.................................. 100.0% $143,511,922
===== ============
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $7,303,531 and gross
depreciation of $14,052 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$135,987,898.
+ Zero coupon security. The rate shown reflects the yield to maturity.
Nations Georgia Intermediate Municipal Bond Fund had the following insurance
concentrations greater than 10% at March 31, 1998 (as a percentage of net
assets):
MBIA 14.2%
SEE NOTES TO FINANCIAL STATEMENTS.
121
<PAGE> 126
NATIONS FUNDS
Nations Georgia Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 95.9%
GEORGIA -- 95.9%
$ 500,000 Albany, Georgia, Sewer
System Revenue, (MBIA
Insured),
4.900% 07/01/07........ Aaa AAA $ 516,495
500,000 Atlanta & Fulton County,
Georgia, Recreational
Authority Revenue,
(Downtown Arena Public
Improvement Project),
Series A, (MBIA
Insured),
5.375% 12/01/26........ Aaa AAA 508,150
500,000 Bartow County, Georgia
School District, GO,
Series 1993,
5.300% 05/01/08........ A A 520,015
500,000 Brunswick & Glynn
County, Georgia,
Development Authority
Revenue, (Pacific
Corporate Project),
5.550% 03/01/26........ Baa2 NR 499,835
500,000 Burke County, Georgia,
Development Authority,
PCR, (Oglethorpe Power
Corporation Project),
Series B,
4.700% 01/01/04........ A3 A 507,770
500,000 Cartersville, Georgia,
Development Authority
Revenue, Sewerage
Facilities, (Anheuser
Busch Project), AMT,
5.625% 05/01/09........ A1 A+ 535,560
500,000 Clayton County, Georgia,
Housing Authority,
Multi-family Housing
Revenue, (Advantages of
Atlanta Apartments
Project), (FHLMC
Collateral),
5.700% 12/01/16........ NR AAA 511,520
500,000 Columbia County,
Georgia, School
District, Series B,
(MBIA Insured),
6.250% 04/01/13........ Aaa AAA 551,830
500,000 Columbus, Georgia, Water
and Sewer Authority
Revenue Refunding,
5.700% 05/01/20........ A3 A+ 518,965
470,000 Coweta County, Georgia,
Development Authority,
Industrial Development
Revenue, (Sivaco
National Wire Project),
AMT,
5.400% 02/01/09........ A1 NR 483,254
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
GEORGIA -- (CONTINUED)
$ 500,000 Dalton, Georgia,
Multiple Utility
Revenue Refunding,
(MBIA Insured),
4.450% 01/01/03........ Aaa AAA $ 505,090
500,000 Fayette County, Georgia,
School District, GO,
6.125% 03/01/15........ Aa A+ 541,570
500,000 Fayette County, Georgia,
Water Revenue, (FGIC
Insured),
5.000% 10/01/23++...... Aaa AAA 484,590
1,000,000 Fulco, Georgia, Hospital
Authority Revenue,
Revenue Anticipation
Certificates, St.
Joseph's Hospital,
5.500% 10/01/14........ A3 A 1,066,160
500,000 Fulton County, Georgia,
Development Authority
Revenue, (Clark Atlanta
University Project),
(CONNIE LEE Insured),
5.125% 01/01/10........ Baa2 AAA 508,990
1,000,000 Galena Park, Texas,
Independent School
District, GO,
(PSF-GTD),
6.375% 08/15/24+....... Aaa NR 247,720
1,000,000 Georgia L. Smith II,
Georgia, World Congress
Center Authority,
Recreational Revenue,
(Domed Stadium
Project), (LOC-
SUNTRUST BANK),
7.875% 07/01/20........ Aa3 AA- 1,087,640
500,000 Georgia State Municipal
Electric Authority
Power Revenue, Series
CC,
4.500% 01/01/02........ A3 A 504,090
500,000 Georgia State Tollway
Authority Revenue,
4.500% 07/01/11........ Aaa AAA 489,705
500,000 Gwinnett County,
Georgia, Water and
Sewer Revenue
Refunding,
4.900% 08/01/06........ Aaa AAA 518,670
500,000 Hall County Georgia,
School District, (State
Aid Withholdings),
4.5000% 11/01/14....... Aa3 NR 467,205
500,000 Lawrenceville, Georgia,
Housing Authority,
Multi-family Housing
Revenue, (Knollwood
Park Apartments
Project), (FNMA
Collateral),
6.25% 12/01/29......... NR AAA 539,530
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
122
<PAGE> 127
NATIONS FUNDS
Nations Georgia Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
GEORGIA -- (CONTINUED)
$ 500,000 Peach County, Georgia,
School District, GO,
(MBIA Insured),
6.500% 02/01/08........ Aaa AAA $ 577,855
500,000 Private Colleges &
Universities Authority
Georgia Revenue, (Emory
University Project),
Series C,
5.125% 11/01/27........ Aa1 AA 494,345
500,000 Richmond County,
Georgia, Water & Sewer
Revenue, (FGIC
Insured),
5.250% 10/01/28........ Aaa AAA 499,245
1,000,000 Roswell, Georgia, GO,
5.600% 02/01/10........ Aa AA 1,068,710
Savannah, Georgia,
Hospital Authority,
Revenue Refunding and
Improvement:
500,000 (Candler Hospital
Project),
7.000% 01/01/23........ Ba1 BB 536,890
450,000 (St. Joseph's Hospital
Project),
6.125% 07/01/12........ A2 NR 482,620
500,000 Savannah, Georgia, Water
and Sewer Revenue
Refunding and
Improvement,
5.100% 12/01/10........ Aa3 AA- 509,865
500,000 Union County, Georgia,
Housing Authority,
Multi-family Housing
Revenue Refunding,
(Hidden Lake
Apartments), Series A,
(FHA/FNMA COLL),
7.125% 12/01/25........ Aaa NR 540,375
500,000 Upper Oconee Basin Water
Authority, Georgia
Revenue, (FGIC
Insured),
5.2500% 07/01/27....... Aaa AAA 499,955
570,000 White County, Georgia,
Industrial Development
Authority Revenue
Refunding, (Clark-
Schwebel Fiber and
Glass Company Project),
6.850% 06/01/10........ NR BBB+ 612,089
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $17,097,446).............. 17,936,303
-----------
SHARES
---------
INVESTMENT COMPANIES -- 5.7% (Cost $1,057,000)
947,000 AIM Tax-Exempt Fund.............. $ 947,000
110,000 Nuveen Tax-Exempt Fund........... 110,000
-----------
1,057,000
-----------
TOTAL INVESTMENTS
(Cost $18,154,446*)........................ 101.6% 18,993,303
OTHER ASSETS AND
LIABILITIES (NET).......................... (1.6) (293,634)
----- -----------
NET ASSETS.................................. 100.0% $18,699,669
===== ===========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $873,752 and gross
depreciation of $34,895 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$18,154,446.
+ Zero coupon security. The rate shown reflects the yield to maturity.
++ Security purchased on a when-issued or delayed delivery basis.
Nations Georgia Municipal Bond Fund had the following insurance concentration
greater than 10% at March 31, 1998 (as a percentage of net assets):
MBIA 14.2%
Nations Georgia Municipal Bond Fund had the following industry concentrations
greater than 10% at March 31, 1998 (as a percentage of total investments):
Pollution Control Revenue/
Industrial Development Revenue 11.22%
Hospital Revenue 10.98%
SEE NOTES TO FINANCIAL STATEMENTS.
123
<PAGE> 128
NATIONS FUNDS
Nations Maryland Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 94.3%
MARYLAND -- 84.1%
Anne Arundel County,
Maryland, Consolidated
Public Improvement
Revenue, GO:
$1,000,000 6.200% 04/15/03......... Aa1 AA+ $ 1,074,820
1,000,000 5.125% 07/15/08......... Aa1 AA+ 1,039,660
1,740,000 Baltimore, Maryland,
Consolidated Public
Improvement Revenue,
Series A,
(FGIC Insured),
5.300% 10/15/16........ Aaa AAA 1,770,328
1,000,000 Baltimore, Maryland, GO,
Series B, (MBIA
Insured),
7.050% 10/15/07........ Aaa AAA 1,195,890
1,750,000 Baltimore, Maryland,
Port Facilities
Revenue,Consolidated
Coal Sales, Series 85,
6.500% 12/01/10........ Aa3 AA- 1,925,105
Baltimore, Maryland,
Revenue Refunding,
(Wastewater Projects),
Series A:
(FGIC Insured):
500,000 5.000% 07/01/22......... Aaa AAA 499,960
500,000 5.000% 07/01/24......... Aaa AAA 498,510
1,000,000 (MBIA Insured),
5.100% 07/01/04........ Aaa AAA 1,046,160
Baltimore County,
Maryland, Consolidated
Public Improvement,
Revenue Refunding:
1,000,000 6.100% 07/01/01......... Aaa AAA 1,063,960
1,000,000 Series A,
(AMBAC Insured),
5.300% 10/15/06........ Aaa AAA 1,042,800
1,075,000 Series C,
(FGIC Insured),
6.375% 10/15/07........ Aaa AAA 1,232,606
Baltimore County,
Maryland, Metropolitan
District Special
Assignment Refunding,
GO:
1,375,000 5.750% 05/01/02......... Aaa AAA 1,460,882
1,000,000 5.800% 05/01/03......... Aaa AAA 1,075,120
2,000,000 Calvert County,
Maryland, Consolidated
Public Improvement
Revenue Refunding, GO,
4.625% 07/15/05......... Aa AA- 2,031,420
Carroll County,
Maryland, Consolidated
Public Improvement
Revenue, GO:
1,350,000 6.000% 11/01/00......... Aa3 AA 1,419,998
500,000 6.900% 10/01/02......... Aaa AA 544,020
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
MARYLAND -- (CONTINUED)
Cecil County,
Maryland, Revenue
Refunding, Consolidated
Public Improvement, GO,
(FGIC Insured):
$1,000,000 5.300% 12/01/00......... Aaa AAA $ 1,035,330
1,500,000 4.800% 12/01/04......... Aaa AAA 1,545,615
Charles County,
Maryland, Consolidated
Public Improvement,
Revenue Refunding, GO:
3,400,000 4.400% 06/01/03......... Aa3 AA- 3,436,312
750,000 6.450% 06/01/04......... AAA AA- 815,828
1,000,000 6.375% 12/01/04......... AAA AA- 1,061,720
2,000,000 Frederick County,
Maryland, Consolidated
Public Improvement,
Revenue Refunding, GO,
(FGIC Insured),
5.750% 12/01/01......... Aaa AAA 2,112,340
1,000,000 Frederick County,
Maryland, GO,
Series B,
6.300% 07/01/06......... Aa AA- 1,096,820
600,000 Harford County,
Maryland, GO, Refunded,
6.100% 12/01/04......... AAA AAA 643,470
1,455,000 Harford County,
Maryland, Public
Improvement Revenue,
GO,
5.300% 09/01/03......... Aa2 AA- 1,533,934
1,000,000 Howard County,
Maryland, Metropolitan
District
Series B,
6.000% 08/15/03......... Aaa AAA 1,088,720
605,000 Laurel, Maryland, GO,
Series A,
(MBIA Insured)
6.300% 07/01/00......... Aaa AAA 636,345
1,530,000 Laurel, Maryland,
Public Improvement
Refunding,
Series A,
(FGIC Insured),
5.000% 10/01/11......... Aaa AAA 1,552,491
500,000 Maryland-National
Capital Park and
Planning Co (Prince
Georges County), GO,
Series J-2, Pre-
Refunded,
6.900% 07/01/02......... Aa2 AA 540,440
1,000,000 Maryland State,
Community Development
Administration,
Department of Housing
and Community
Development, (Single-
family Project),
First Series,
(FHA Insured),
4.950% 04/01/07......... Aa2 NR 1,022,600
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
124
<PAGE> 129
NATIONS FUNDS
Nations Maryland Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MARYLAND -- (CONTINUED)
$1,100,000 Maryland State, GO,
Third Series,
Refunded,
6.800% 07/15/04......... AAA AAA $ 1,183,600
Maryland State, Health
and Higher Education
Facilities Authority
Revenue,
Howard County
General Hospital:
1,000,000 5.125% 07/01/03......... Baa1 BBB 1,014,620
1,000,000 5.500% 07/01/13......... Baa1 BBB 1,014,220
1,000,000 5.500% 07/01/21......... Baa1 BBB 1,012,240
700,000 Johns Hopkins Hospital,
7.000% 07/01/00........ Aa3 AA- 727,174
500,000 Refunding,
7.300% 07/01/05........ AAA AAA 544,950
1,000,000 (FGIC Insured),
6.750% 07/01/23........ AAA AAA 1,078,630
1,000,000 Suburban Hospital,
Refunded,
6.000% 07/01/21........ AAA AAA 1,072,130
1,500,000 The Johns Hopkins
Hospital,
5.500% 07/01/07........ Aa3 AA- 1,594,665
1,000,000 Charity Obligation,
Group D,
4.600% 11/01/26........ Aa2 AA+ 1,009,280
1,000,000 University of Maryland
Medical System Project,
(FGIC Insured),
5.200% 07/01/04........ Aaa AAA 1,049,920
Maryland State, State
and Local Facilities
Loan, GO:
Second Series,
Pre-Refunded:
1,000,000 5.000% 08/01/06......... Aaa AAA 1,046,390
1,000,000 5.000% 08/01/07......... Aaa AAA 1,047,020
3,000,000 Third Series,
Pre-Refunded,
5.000% 10/15/06........ Aaa AAA 3,142,140
Maryland State,
Transportation
Authority Revenue, GO:
1,250,000 6.100% 09/01/01......... Aa AA 1,316,475
3,235,000 4.375% 12/15/03......... Aa AA 3,261,656
2,285,000 Maryland State,
Transportation
Authority, Special
Obligation Revenue,
(Baltimore-Washington
D.C. International
Airport Project),
Series A, AMT,
(FGIC Insured),
6.400% 07/01/19......... Aaa AAA 2,426,213
1,005,000 Maryland Water Quality
Financing
Administration,
Revolving Loan Fund
Revenue, Series A,
6.650% 09/01/98........ Aa2 AA 1,017,402
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
MARYLAND -- (CONTINUED)
Montgomery County,
Maryland, Consolidated
Public Improvement,
GO, Series A:
$1,000,000 4.900% 10/01/07......... Aaa AAA $ 1,032,940
1,000,000 5.375% 05/01/08......... Aaa AAA 1,076,140
500,000 Pre-Refunded,
6.700% 04/01/06........ AAA AAA 546,245
1,000,000 Montgomery County,
Maryland, GO,
Refunded,
6.125% 10/01/07......... AAA AAA 1,083,440
1,000,000 Montgomery County,
Maryland, Housing
Opportunities
Commission, Single-
family Mortgage
Revenue, Series A,
5.400% 07/01/08........ Aa2 NR 1,033,480
1,575,000 Montgomery County,
Maryland, Parking
Revenue, Bethesda
Parking Lot District,
Series A,
(FGIC Insured),
5.700% 06/01/00......... Aaa AAA 1,633,826
1,535,000 Northeast Maryland,
Solid Waste Disposal
Authority Revenue
Refunding, (Southwest
Resource Recovery
Facility Project),
(MBIA Insured),
7.000% 01/01/01......... Aaa AAA 1,647,454
630,000 Ocean City, Maryland,
GO, Refunded,
(MBIA Insured),
6.100% 11/01/04......... Aaa AAA 682,901
Prince Georges County,
Maryland, Consolidated
Public Improvement
Revenue, GO:
1,000,000 6.500% 07/01/02......... A1 AA- 1,087,860
1,000,000 5.600% 01/15/03......... A1 AA- 1,058,760
1,000,000 Prince Georges County,
Maryland, GO,
Series A,
(MBIA Insured),
5.400% 03/01/02......... Aaa AAA 1,046,300
Prince Georges County,
Maryland, Solid Waste
Management Systems
Authority, Revenue
Refunding,
(FSA Insured):
800,000 6.600% 06/30/00......... Aaa AAA 845,696
2,000,000 5.100% 06/15/05......... Aaa AAA 2,076,760
1,000,000 Rockville, Maryland, GO,
4.750% 04/15/05......... Aa1 AA+ 1,018,810
1,000,000 St. Mary's County,
Maryland, GO,
(MBIA Insured),
5.700% 03/01/08......... Aaa AAA 1,086,550
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
125
<PAGE> 130
NATIONS FUNDS
Nations Maryland Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MARYLAND -- (CONTINUED)
University of Maryland,
Auxilliary Facilities
and Tuition Revenue:
Series A:
$ 745,000 6.000% 02/01/04......... Aa3 AA+ $ 790,840
1,000,000 6.300% 02/01/08......... Aa3 AA+ 1,074,370
1,000,000 6.300% 02/01/10......... Aa3 AA+ 1,074,370
Washington County,
Maryland, GO:
500,000 6.400% 12/01/00......... A1 A+ 518,145
1,000,000 Series F, (FGIC
Insured),
5.250% 01/01/06......... Aaa AAA 1,049,100
1,000,000 Washington County,
Maryland, Sanitation
District Authority,
Series F,
(FGIC Insured),
5.250% 01/01/06......... Aaa AAA 1,049,100
Washington Suburban
Sanitation District
Authority, Maryland,
Water Supply
Revenue, GO:
1,000,000 5.000% 06/01/03......... Aa1 AA 1,037,360
1,000,000 5.600% 06/01/15......... Aa1 AA 1,044,660
Wicomico County,
Maryland, Public
Improvement,
(MBIA Insured):
1,355,000 4.900% 12/01/11......... Aaa A1 1,364,498
1,425,000 5.000% 12/01/12......... Aaa A1 1,434,932
------------
88,996,466
------------
COLORADO -- 1.2%
3,800,000 E-470 Public
Highway Authority
Revenue, Colorado,
Series B, (MBIA
Insured),
5.470% 09/01/18+....... Aaa AAA 1,308,644
------------
GUAM -- 0.2%
250,000 Government of Guam, GO,
Series A,
5.200% 11/15/08........ NR BBB 255,028
------------
ILLINOIS -- 1.2%
5,000,000 Metropolitan Pier
and Exposition
Authority, Illinois,
Dedicated State
Tax Revenue,
Series A,
(MBIA Insured),
6.250% 06/15/24+....... Aaa AAA 1,256,300
------------
MAINE -- 1.9%
2,000,000 Baileyville Pollution
Control Revenue,
4.750% 06/01/05........ Baa2 NR 2,001,080
------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
PUERTO RICO -- 1.0%
$1,000,000 Puerto Rico Municipal
Finance Agency, Series
B,
5.000% 07/01/99........ MIG1 A- $ 1,015,680
------------
TEXAS -- 0.3%
1,000,000 Bastrop, Texas,
Independent School
District, Revenue
Refunding, GO,
(PSF-GTD),
5.650% 02/15/18+....... Aaa AAA 352,260
------------
VIRGINIA -- 1.1%
1,085,000 Metropolitan Washington,
D.C., Airports
Authority, Virginia,
General Airports
Revenue, AMT, Series B,
(FGIC Insured),
5.750% 10/01/03........ Aaa AAA 1,160,234
------------
WASHINGTON -- 3.3%
3,000,000 Public Power Supply
System Nuclear, Project
No 1, Revenue Series A,
7.000% 07/01/08........ Aa1 AA- 3,531,780
------------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $95,905,284).............. 99,877,472
------------
INVESTMENT COMPANY -- 3.5% (Cost $3,704,000)
3,704,000 AIM Tax-Exempt Fund.............. 3,704,000
------------
TOTAL INVESTMENTS
(Cost $99,609,284*)....................... 97.8% 103,581,472
OTHER ASSETS AND
LIABILITIES (NET)......................... 2.2 2,336,479
----- ------------
NET ASSETS................................. 100.0% $105,917,951
===== ============
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $4,064,009 and gross
depreciation of $91,821 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$99,609,284.
+ Zero coupon security. The rate shown is the yield to maturity.
Nations Maryland Intermediate Municipal Bond Fund had the following insurance
concentrations greater than 10% at March 31, 1998 (as a percentage of net
assets):
FGIC 19.3%
SEE NOTES TO FINANCIAL STATEMENTS.
126
<PAGE> 131
NATIONS FUNDS
Nations Maryland Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 94.0%
MARYLAND -- 73.9%
Anne Arundel County,
Maryland,
Consolidated Public
Improvement Revenue,
GO:
$ 500,000 5.300% 04/01/10....... Aa1 AA+ $ 513,355
500,000 5.250% 07/15/11....... Aa1 AA+ 522,060
150,000 Baltimore, Maryland,
Consolidated Public
Improvement Revenue,
GO, AMT, Series B,
(FGIC Insured),
6.300% 10/15/08...... Aaa AAA 160,651
250,000 Baltimore, Maryland,
Convention Center
Revenue, (FGIC
Insured),
6.150% 09/01/19...... Aaa AAA 269,367
250,000 Baltimore, Maryland,
Port Facilities
Revenue, Consolidated
Coal Sales, Series
85, AA-/
6.500% 12/01/10...... Aa3 A-1+ 275,015
Baltimore, Maryland,
Wastewater Projects
Revenue, Series A,
(FGIC Insured):
500,000 5.000% 07/01/22....... Aaa AAA 498,510
500,000 5.000% 07/01/24....... Aaa AAA 499,960
300,000 Baltimore County,
Maryland, Mortgage
Revenue Refunding,
(Kingswood Common
III-A), (FHA
Insured),
5.750% 11/01/20...... NR AAA 305,700
610,000 Bel Air, Maryland,
Industrial
Development Revenue,
(May Department
Stores Company
Project),
6.375% 10/01/99...... NR A 631,161
500,000 Cecil County, Maryland
REF-C, (FGIC
Insured),
4.800% 12/01/04...... Aaa AAA 515,205
250,000 Cumberland, Maryland,
Revenue Refunding,
GO, Series A, (FGIC
Insured),
5.250% 05/01/21...... Aaa AAA 250,150
400,000 Howard County,
Maryland, Special
Facilities Revenue,
Series A,
6.000% 02/15/21...... Aa2 AA- 429,000
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
MARYLAND -- (CONTINUED)
$1,000,000 Maryland State,
Community Development
Administration,
Department of Housing
and Community
Development, Single
Family Program --
First Series,
(MHF/FHA Insured),
5.600% 04/01/18...... Aa2 NR $ 1,034,039
Maryland State,
Community Development
Administration, (FHA
Insured):
545,000 4.500% 09/01/2006..... Aa2 NR 543,093
500,000 4.950% 09/01/2011..... Aa2 NR 499,010
Maryland State, Health
and Higher Education
Facilities Authority
Revenue:
110,000 (Anne Arundel Medical
Center), (AMBAC
Insured),
5.250% 07/01/13...... Aaa AAA 104,158
100,000 (Frederick Memorial
Hospital), (FGIC
Insured),
5.250% 07/01/13...... Aaa AAA 111,713
200,000 (Greater Baltimore
Medical Center),
(FGIC Insured),
5.000% 07/01/13...... Aaa AAA 199,774
290,000 (Memorial Hospital of
Cumberland),
6.500% 07/01/10...... A2 A 323,945
Project and Refunding:
150,000 (Doctors Community
Hospital),
5.750% 07/01/13...... Baa1 BBB- 153,915
200,000 (Peninsula Regional
Medical Center),
5.000% 07/01/08...... A2 A 204,376
300,000 (The Johns Hopkins
Hospital),
5.600% 07/01/09...... Aa3 AA- 318,105
370,000 Maryland State,
Industrial
Development Financing
Authority,
(American Center
Physics
Headquarters),
6.375% 01/01/12...... NR BBB 397,336
500,000 Maryland State,
Stadium Authority,
Lease Revenue, (Ocean
City Convention
Center),
5.375% 12/15/13...... Aa AA 512,355
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
127
<PAGE> 132
NATIONS FUNDS
Nations Maryland Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ------------------------------------------------------------------
<C> <S> <C> <C> <C>
MARYLAND -- (CONTINUED)
$ 195,000 Maryland State,
Transportation
Authority, Special
Obligation Revenue,
(Baltimore-
Washington D.C.
International Airport
Project), Series A,
AMT, (FGIC Insured),
6.400% 07/01/19...... Aaa AAA $ 207,051
Maryland State,
Transportation
Authority Revenue,
(Transportation
Facilities Project):
300,000 5.750% 07/01/15....... A1 A+ 311,049
500,000 Refunded,
6.800% 07/01/16...... AAA AAA 596,640
1,000,000 Maryland State, Health
and Higher Education,
4.600% 11/01/2026.... Aa2 AA+ 1,009,280
Maryland Water Quality
Financing
Administration,
Revolving Loan Fund
Revenue, Series A:
250,000 5.400% 09/01/10....... Aa2 AA 257,815
200,000 6.550% 09/01/14....... Aa2 AA 219,490
250,000 Montgomery County,
Maryland, Housing
Opportunities
Commission Multi-
family Mortgage
Revenue, Series A,
6.000% 07/01/14...... Aa2 NR 261,380
300,000 Northeast, Maryland,
Solid Waste Disposal
Authority Rev
Refunding,
(Montgomery County
Project), Series A,
AMT,
6.300% 07/01/16...... A NR 320,688
500,000 Prince Georges County,
Maryland, PCR
Refunding, (Potomac
Electric Power
Project),
5.750% 03/15/10...... A1 A 549,030
Prince Georges County,
Maryland, Project and
Refunding Revenue,
(Dimensions Health
Corporation), GO:
175,000 5.375% 07/01/14....... A NR 177,723
500,000 5.300% 07/01/24....... A NR 494,365
500,000 Prince Georges County,
Maryland, Solid Waste
Management Authority,
Revenue Refunding,
(FSA Insured),
5.200% 06/15/06...... Aaa AAA 520,675
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
MARYLAND -- (CONTINUED)
$ 500,000 Prince Georges County,
Maryland, Stormwater
Management, GO,
5.500% 03/15/13...... Aa3 AA $ 515,115
1,000,000 University of
Maryland, System
Auxiliary Facility
and Tuition Revenue,
Series A,
5.125% 04/01/13...... Aa3 AA+ 1,014,790
200,000 Washington County,
Maryland,
Consolidated Public
Improvement Revenue,
GO,
(MBIA Insured),
5.800% 01/01/15...... Aaa AAA 213,166
320,000 Washington County,
Maryland, Sanitation
District Refunding,
GO, Series F,
(FGIC Insured),
5.000% 01/01/04...... Aaa AAA 331,779
-----------
16,271,989
-----------
DISTRICT OF COLUMBIA -- 7.6%
Washington, D.C.,
Metropolitan Area
Transportation
Authority Revenue,
Refunding, (FGIC
Insured):
200,000 4.900% 01/01/05....... Aaa AAA 206,008
350,000 6.000% 07/01/10....... Aaa AAA 392,676
1,000,000 Washington Suburban
Sanitation District,
MD,
5.800% 06/01/03...... Aa1 AA 1,078,530
-----------
1,677,214
-----------
GUAM -- 2.8%
600,000 Government of Guam,
GO, Series A,
5.200% 11/15/08...... NR BBB 612,066
-----------
ILLINOIS -- 3.6%
2,520,000 Metropolitan Pier and
Exposition Authority,
Illinois Dedicated
State Tax Revenue,
Capital Appreciation,
(McCormick Place
Exposition), Series
A, (FGIC Insured),
6.750% 06/15/20+..... Aaa AAA 787,046
-----------
PUERTO RICO -- 6.1%
500,000 Puerto Rico Electric
Power Authority,
Power Revenue
Refunding Series Y,
(MBIA Insured),
6.500% 07/01/06...... Aaa AAA 572,320
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
128
<PAGE> 133
NATIONS FUNDS
Nations Maryland Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ------------------------------------------------------------------
<C> <S> <C> <C> <C>
PUERTO RICO -- (CONTINUED)
$ 490,000 Puerto Rico Housing,
Bank and Finance
Agency, Single-family
Mortgage Revenue,
(Affordable Housing
Mortgage --
Portfolio I), AMT,
(GNMA/FNMA/FHLMC
Collateral),
6.100% 10/01/15...... Aaa AAA $ 515,264
250,000 Puerto Rico
Industrial, Medical
and Environmental
Agency, Pollution
Control Facilities,
Finance Authority
Revenue, Higher
Education, (Catholic
University Project),
Series A,
5.600% 12/01/07...... NR BBB- 263,525
-----------
1,351,109
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $19,620,110)............. 20,699,424
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
INVESTMENT COMPANY -- 3.0% (Cost $656,000)
656,000 AIM Tax-Exempt Fund............. $ 656,000
-----------
TOTAL INVESTMENTS
(Cost $20,276,110*)........................ 97.0% 21,355,424
OTHER ASSETS AND
LIABILITIES (NET).......................... 3.0 670,093
----- -----------
NET ASSETS.................................. 100.0% $22,025,517
===== ===========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $1,084,231 and gross
depreciation of $4,917 for federal income tax purposes. At March 31, 1998, the
aggregate cost of securities for federal income tax purposes was $20,276,110.
+ Zero coupon security. The rate shown reflects the yield to maturity.
Nations Maryland Municipal Bond Fund had the following insurance concentration
greater than 10% at March 31, 1998 (as a percentage of net assets):
FGIC 16.5%
Nations Maryland Municipal Bond Fund had the following industry concentrations
greater than 10% at March 31, 1998 (as a percentage of net assets):
Housing Revenue 14.34%
Hospital Revenue 11.90%
SEE NOTES TO FINANCIAL STATEMENTS.
129
<PAGE> 134
NATIONS FUNDS
Nations North Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 97.6%
NORTH CAROLINA -- 92.9%
$1,000,000 Buncombe County, North
Carolina, GO:
5.000% 03/01/03....... Aa2 AA $ 1,037,870
Buncombe County, North
Carolina, Metropolitan
Sewer District, Sewer
System Revenue:
1,250,000 Series A,
6.750% 07/01/09....... AAA NR 1,372,850
5,000 Unrefunded, Series B,
6.750% 07/01/16....... A A+ 5,487
Charlotte, North
Carolina, Health Care
Systems Revenue,
(Mecklenburg Hospital
Authority):
2,000,000 5.000% 01/15/17....... Aa3 AA 1,956,940
2,500,000 5.125% 01/15/22....... Aa3 AA 2,447,650
Prefunded:
760,000 6.375% 01/01/09....... NR AA 830,855
705,000 6.250% 01/01/20....... NR AA 767,703
Unrefunded Balance:
1,240,000 6.375% 01/01/09........ Aa3 AA 1,349,281
425,000 6.250% 01/01/20........ Aa3 AA 457,865
1,000,000 Charlotte, North
Carolina,
6.750% 06/01/01....... AAA AAA 1,044,730
Charlotte, North
Carolina, Public
Improvement, GO,
Series A:
1,340,000 5.300% 04/01/05....... Aaa AAA 1,421,928
1,000,000 6.900% 10/01/05....... AAA AAA 1,088,290
1,800,000 6.500% 02/01/07....... AAA AAA 1,950,462
Charlotte, North
Carolina, Refunding,
GO:
1,000,000 4.500% 02/01/03....... Aaa AAA 1,016,890
3,055,000 5.000% 06/01/05....... Aaa AAA 3,189,359
Charlotte, North
Carolina, Water and
Sewer, GO:
1,000,000 6.750% 06/01/01....... AAA AAA 1,044,730
1,670,000 5.500% 05/01/06....... Aaa AAA 1,801,997
1,000,000 5.800% 02/01/16....... Aaa AAA 1,069,140
Cleveland County, North
Carolina, GO:
(FGIC Insured):
2,500,000 5.100% 06/01/01....... Aaa AAA 2,579,175
2,500,000 5.100% 06/01/02....... Aaa AAA 2,594,050
1,000,000 5.100% 06/01/05....... Aaa AAA 1,042,320
1,000,000 (AMBAC Insured),
7.100% 06/01/00....... Aaa AAA 1,065,490
2,000,000 Coastal Regional Solid
Waste Management
Authority, Solid Waste
Disposal System,
6.300% 06/01/04....... A BBB 2,172,300
500,000 Concord, North
Carolina, GO,
6.200% 06/01/05....... Aa A+ 543,735
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
NORTH CAROLINA -- (CONTINUED)
$1,000,000 Concord, North
Carolina, Utilities
System, (MBIA
Insured),
5.200% 12/01/02....... Aaa AAA $ 1,045,800
1,000,000 Dayton, Ohio, Special
Facilities Revenue,
(Air Freight), Series
D,
6.200% 10/01/09....... NR BBB 1,085,110
Durham and Wake County,
North Carolina, GO:
1,000,000 4.500% 05/01/00....... Aaa AAA 1,013,660
2,000,000 5.750% 02/01/06....... Aaa AAA 2,142,180
1,500,000 5.200% 03/01/07....... Aaa AAA 1,569,090
Durham and Wake County,
North Carolina,
Special Apartment
District, GO:
2,300,000 5.000% 04/01/03....... Aaa AAA 2,391,678
1,720,000 5.750% 04/01/03....... Aaa AAA 1,830,390
Fayetteville, North
Carolina, Public Works
Commission,
Revenue Refunding,
(FGIC Insured):
2,000,000 4.500% 03/01/04....... Aaa AAA 2,022,720
1,000,000 6.750% 03/01/07....... Aaa AAA 1,071,710
3,300,000 Fayetteville, North
Carolina, Public Works
Commission,
(FSA Insured),
5.125% 03/01/17....... Aaa AAA 3,286,404
2,000,000 Forsyth County, North
Carolina, Refunded,
GO, Series A,
4.750% 03/01/06....... Aaa AAA 2,055,720
500,000 Gastonia, North
Carolina, Water
Revenue and Street
Improvement, (FGIC
Insured),
5.200% 04/01/02....... Aaa AAA 520,100
2,590,000 Greensboro, North
Carolina, Public
Improvement,
4.700% 04/01/15....... Aa1 AAA 2,489,693
1,185,000 Greensboro, North
Carolina, Enterprise
System, Revenue Bond,
Series A,
6.500% 06/01/04....... A1 AA- 1,328,219
2,000,000 Greenville, North
Carolina, Combined
Enterprises Revenue,
6.000% 09/01/10....... A1 A+ 2,158,300
1,000,000 Guilford County, North
Carolina, GO,
5.300% 04/01/04....... Aa1 AA+ 1,053,210
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
130
<PAGE> 135
NATIONS FUNDS
Nations North Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
NORTH CAROLINA -- (CONTINUED)
$1,000,000 Haywood County, North
Carolina, Industrial
Facilities and
Pollution Control
Financing Authority,
Solid Waste Disposal,
(Champion
International
Corporation Project),
AMT,
5.500% 10/01/18....... Baa1 BBB $ 1,023,020
Henderson County, North
Carolina, School and
Community College, GO:
1,000,000 6.500% 06/01/05....... A1 A+ 1,085,000
500,000 6.500% 06/01/08....... A1 A+ 540,945
1,250,000 High Point, North
Carolina, GO,
6.900% 06/01/04....... Aa3 AA 1,349,113
Iridell County, North
Carolina, GO,
1,000,000 4.750% 02/01/11....... Aa3 A+ 993,300
1,095,000 4.750% 02/01/16....... Aa3 A+ 1,051,627
1,160,000 Lee County, North
Carolina, GO,
6.000% 02/01/06....... A1 A+ 1,248,334
750,000 Lower Cape Fear, North
Carolina, Water and
Sewer Authority
Revenue, AMT,
5.200% 03/01/04....... A BBB 779,738
3,650,000 Martin County, North
Carolina, Industrial
Facilities and
Pollution Control
Financing Authority
Revenue, (Wayerhaeuser
Company Project),
8.500% 06/15/99....... A2 A 3,846,954
Mecklenburg County,
North Carolina, GO:
1,000,000 6.600% 04/01/99....... Aaa AAA 1,029,110
1,000,000 6.750% 04/01/00....... AAA AAA 1,055,120
1,000,000 6.200% 04/01/06....... AAA AAA 1,078,780
1,000,000 Mecklenberg County,
North Carolina,
Industrial Facilities
and Pollution Control
Finance Authority
Revenue Refunding,
(Fluor Corporation
Project),
5.250% 12/01/09....... A2 A+ 1,023,020
1,195,000 Morganton, North
Carolina, Water and
Sewer, Revenue Bonds,
GO, (FGIC Insured),
5.700% 06/01/11....... Aaa AAA 1,282,677
2,220,000 New Hanover County,
North Carolina, GO,
5.500% 03/01/10....... Aa3 A+ 2,360,015
</TABLE>
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
NORTH CAROLINA -- (CONTINUED)
North Carolina Housing
Finance Agency:
$1,950,000 Multi-Family Housing
Revenue, Series B,
6.900% 07/01/24....... Aa2 NR $ 2,086,032
Single-Family Housing
Revenue, Series R,
(FHA Mortgages):
775,000 6.350% 03/01/03....... Aa2 AA 826,321
780,000 6.350% 09/01/03....... Aa2 AA 835,037
925,000 Series Y,
6.300% 09/01/15....... Aaa AA 990,342
North Carolina
Municipal Power
Agency, Refunding #1,
Catawba Electric
Revenue Refunding:
2,000,000 (AMBAC-TCRS Insured),
6.000% 01/01/15....... Aaa AAA 2,040,000
3,000,000 (FGIC Insured),
5.200% 01/01/00....... Aaa AAA 3,065,160
North Carolina
Municipal Power
Agency, Refunding #1,
Catawba Electric
Revenue Refunding:
(FSA Insured):
1,000,000 5.500% 01/01/01....... Aaa AAA 1,036,250
1,000,000 7.000% 01/01/06....... AAA A- 1,071,620
2,000,000 (MBIA-IBC Insured),
7.250% 01/01/07....... Aaa AAA 2,383,620
1,000,000 North Carolina State,
Educational Authority
Revenue, AMT,
(Guaranteed Students
Loans),
5.300% 07/01/03....... A NR 1,031,780
North Carolina State,
Educational Facility
Financial Agency
Revenue:
1,000,000 (Davidson College
Project), GO,
5.100% 12/01/00....... NR AA- 1,030,320
1,000,000 (Duke University
Project), Series C,
6.625% 10/01/08....... Aa1 AA+ 1,095,120
1,500,000 (Wake Forest
University), GCO,
5.000% 11/01/17....... Aa3 AA 1,477,845
North Carolina,
Medicare Care,
Community Health Care
Facility Revenue,
(Stanley Memory
Hospital Project),
(AMBAC Insured):
1,000,000 5.000% 05/01/00....... Aa3 AA 1,020,510
2,000,000 5.250% 06/01/00....... Aa3 AA 2,056,180
1,000,000 5.200% 10/01/00....... Aa3 AA 1,030,200
1,930,000 5.400% 06/01/02....... A1 A+ 2,019,070
1,620,000 5.600% 06/01/04....... A1 A+ 1,744,659
2,000,000 5.250% 10/01/04....... Aa3 AA 2,107,920
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
131
<PAGE> 136
NATIONS FUNDS
Nations North Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
NORTH CAROLINA -- (CONTINUED)
North Carolina,
Medicare Care,
Community Health Care
Facility Revenue,
(Stanley Memory
Hospital Project),
(AMBAC Insured):
$1,000,000 5.300% 10/01/05........ Aa3 AA $ 1,058,280
1,500,000 5.200% 10/01/13........ Aa3 A+ 1,503,135
2,000,000 5.250% 06/01/17........ Aa3 AA 2,007,760
3,000,000 6.250% 06/01/17........ A1 A+ 3,321,870
1,000,000 5.250% 05/01/21........ Aa3 AA 1,002,100
3,000,000 5.500% 10/01/14........ Aa3 AA 3,068,400
2,000,000 5.000% 02/15/05........ Aaa AAA 2,074,000
1,000,000 5.250% 10/01/06........ Aaa AAA 1,053,910
4,000,000 5.250% 10/01/16........ Aaa AAA 4,018,560
1,800,000 North Carolina State,
Capital Improvement,
GO, Series A,
4.700% 02/01/01....... Aaa AAA 1,837,368
North Carolina State,
GO, Series A:
2,000,000 6.100% 03/01/01........ Aaa AAA 2,118,260
4,000,000 5.100% 03/01/06........ Aaa AAA 4,212,640
1,625,000 Orange County, North
Carolina, GO,
5.500% 02/01/12....... Aa1 AA+ 1,707,664
2,000,000 Piedmont Triad Airport
Authority, North
Carolina, Revenue,
(MBIA Insured),
Refunding, Series A,
6.800% 07/01/05....... Aaa AAA 2,152,620
Pitt County, North
Carolina, Revenue
Refunding, (Pitt
County Memorial
Hospital):
1,240,000 5.375% 12/01/10........ Aa AA- 1,291,621
1,000,000 Series A,
6.200% 12/01/99....... AAA AA- 1,039,770
1,000,000 Raleigh, North
Carolina, Combined
Enterprise System
Revenue,
5.250% 03/01/07....... Aa AA+ 1,058,310
1,910,000 Raleigh, North
Carolina, GO,
5.300% 06/01/16....... Aaa AAA 1,974,195
2,000,000 Randolph County, North
Carolina, GO,
6.250% 05/01/08....... Aa3 A+ 2,173,440
1,000,000 Robeson County, North
Carolina, Industrial
Facilities & Pollution
Control, Revenue,
6.400% 12/01/06....... NR AA- 1,136,110
750,000 Rutherford County,
North Carolina, GO,
(MBIA Insured),
6.400% 06/01/01....... Aaa AAA 802,463
1,000,000 Surry County, North
Carolina, GO, (AMBAC
Insured),
6.250% 04/01/99....... Aaa AAA 1,025,700
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
NORTH CAROLINA -- (CONTINUED)
Union County, North
Carolina, School
District, GO:
$1,000,000 6.500% 04/01/03........ A1 A+ $ 1,077,430
500,000 5.800% 03/01/05........ A1 A+ 531,795
University of North
Carolina, University
Revenue Refunding,
Utilities Systems:
3,500,000 5.200% 08/01/06........ Aa2 AA 3,657,010
1,000,000 5.000% 08/01/09........ Aa2 AA 1,022,250
1,600,000 5.000% 08/01/11........ Aa2 AA 1,618,064
University of North
Carolina, Chapel Hill
Hospital, Revenue:
1,000,000 5.400% 02/15/01........ Aa3 AA 1,037,860
1,000,000 5.500% 02/15/02........ Aa3 AA 1,050,340
2,500,000 5.000% 02/15/29........ Aa3 AA 2,427,150
1,000,000 University of North
Carolina, Charlotte,
Revenue Refunding,
Housing & Dining
Systems, Series M,
(MBIA Insured),
4.800% 01/01/04....... Aaa AAA 1,026,190
Wake County, North
Carolina, Refunded,
GO:
1,000,000 6.500% 02/01/99........ NR AAA 1,023,450
2,000,000 4.200% 04/01/99........ Aaa AAA 2,011,680
1,000,000 4.700% 04/01/05........ Aaa AAA 1,025,170
2,000,000 Pre-refunded,
6.500% 02/01/00........ NR AAA 2,056,660
2,065,000 Wake County, North
Carolina, Hospital
Revenue, (MBIA
Insured),
5.125% 10/01/26....... Aaa AAA 2,071,340
1,000,000 Wake County, North
Carolina, Public
Improvement Revenue,
GO,
4.600% 02/01/06....... Aaa AAA 1,017,720
1,200,000 Wayne County, North
Carolina, GO, Revenue
Refunding, (MBIA
Insured),
4.900% 04/01/05....... Aaa AAA 1,239,468
Wilmington North
Carolina, Public
Improvement, Refunded,
GO, (FGIC Insured),
Series A:
1,000,000 5.000% 04/01/11........ Aaa AAA 1,020,150
1,000,000 5.000% 04/01/13........ Aaa AAA 1,004,200
1,370,000 Series B, (FGIC
Insured),
5.000% 04/01/08....... Aaa AAA 1,434,801
Winston-Salem North
Carolina, Water and
Sewer Systems,
Revenue:
2,295,000 5.500% 06/01/06........ Aa2 AA+ 2,466,482
1,000,000 5.500% 06/01/07........ Aa2 AA+ 1,078,266
------------
182,145,472
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
132
<PAGE> 137
NATIONS FUNDS
Nations North Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
INDIANA -- 1.1%
$2,105,000 Purdue University
Indiana University
Revenue, Student
Fee -- Series N,
5.000% 07/01/08....... Aa2 AA $ 2,176,528
------------
MISSOURI -- 1.0%
2,000,000 Kansas City Missouri,
Industrial Development
Authority, Industrial
Development Revenue,
(Owens-Illinois Inc.)
PJ-Conv.,
4.900% 12/31/08....... Baa2 NR 1,976,180
------------
PUERTO RICO -- 0.9%
1,000,000 Puerto Rico Electric
Power Authority, Power
Revenue Refunding,
(MBIA Insured), Series
Y,
7.000% 07/01/07....... Aaa AAA 1,190,710
500,000 Puerto Rico Industrial,
Tourist, Educational,
Medical and
Environmental Control
Facilities Financing
Authority, (Ryder
Memorial Hospital
Project), Series A,
6.600% 05/01/14....... NR BBB 543,125
------------
1,733,835
------------
TEXAS -- 1.0%
1,865,000 Waxahachie Texas,
Independant School
District, Refunding,
(PSF-GTD),
5.250% 08/15/07....... Aaa Baa1 1,972,368
------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
WASHINGTON -- 0.7%
$1,150,000 Washington State Public
Power Supply System,
Revenue Refunding,
(Nuclear Project
Number 2), (MBIA
Insured), Series A,
5.800% 07/01/07....... Aaa AAA $ 1,253,834
------------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $181,273,903)............ 191,258,217
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
- ----------
<C> <S> <C> <C> <C>
INVESTMENT COMPANY -- 1.2% (Cost $2,312,000)
2,312,000 AIM Tax-Exempt Fund............ 2,312,000
------------
TOTAL INVESTMENTS
(Cost $183,585,903*)...................... 98.8% 193,570,217
OTHER ASSETS AND
LIABILITIES (NET)......................... 1.2 2,412,506
----- ------------
NET ASSETS................................. 100.0% $195,982,723
===== ============
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $10,110,863 and gross
depreciation of $126,549 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$183,585,903.
Nations North Carolina Intermediate Municipal Bond Fund had the following
insurance concentration greater than 10% at March 31, 1998 (as a percentage of
net assets):
AMBAC 17.0%
Nations North Carolina Intermediate Municipal Bond Fund had the following
industry concentration greater than 10% at March 31, 1998 (as a percentage of
net assets):
Hospital Revenue 15.83%
SEE NOTES TO FINANCIAL STATEMENTS.
133
<PAGE> 138
NATIONS FUNDS
Nations North Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 94.2%
NORTH CAROLINA -- 92.2%
$1,050,000 Catawba County, North
Carolina,
4.750% 06/01/13........ Aa2 AA- $ 1,024,432
Charlotte, North
Carolina, Health Care
Systems Revenue
Refunding, Mecklenburg
Hospital Authority:
525,000 6.250% 01/01/20......... Aa AA 565,598
2,000,000 5.125% 01/15/22......... NR AA 1,958,120
975,000 Charlotte, North
Carolina, Health Care
Systems Revenue
Refunding, Mecklenburg
Hospital Authority,
Carolinas Healthcare
System A,
6.250% 01/01/20........ Aa3 AA 1,061,717
1,000,000 Craven County, North
Carolina, Industrial
Facilities and
Pollution Control
Financing Authority,
PCR, Refunding,
(Weyerhaeuser Company
Project),
6.350% 01/01/10........ NR A 1,080,090
1,000,000 Haywood County, North
Carolina, Industrial
Facilities and
Pollution Control
Financing Authority,
Solid Waste Disposal,
(Champion International
Corporation Project),
AMT,
5.500% 10/01/18........ Baa1 BBB 1,023,020
2,000,000 Martin County, North
Carolina, Industrial
Facilities and
Pollution Control
Financing Authority
Revenue, Solid Waste
Disposal, AMT,
(Weyerhaeuser Company),
5.650% 12/01/23........ A2 A 2,043,340
2,000,000 Mecklenburg County,
North Carolina,
Industrial Facilities
and Pollution Control
Finance Authority
Revenue Refunding,
(Fluor Corporation
Project),
5.250% 12/01/09........ NR A+ 2,046,041
1,000,000 Mecklenburg County,
North Carolina,
Refunding, GO,
6.000% 04/01/11........ Aaa AAA 1,130,600
1,000,000 Monroe, North Carolina,
Combined Enterprise
System Revenue,
6.000% 03/01/14........ A A 1,066,690
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
NORTH CAROLINA -- (CONTINUED)
$1,000,000 Morganton, North
Carolina, Water and
Sewer Revenue, GO,
(FGIC Insured),
5.600% 06/01/10........ Aaa AAA $ 1,070,900
1,000,000 New Hanover County,
North Carolina,
Industrial Facilities
and Pollution Control
Financing Authority,
(Solid Waste Disposal,
Occidental Petroleum
Corporation Project),
AMT,
6.500% 08/01/14........ Baa3 BBB 1,092,260
North Carolina Housing
Finance Agency:
830,000 Series U, (GNMA/
FNMA COLL),
6.700% 03/01/18........ Aa2 AA 888,349
970,000 Single-family Housing
Revenue, Series W,
6.200% 09/01/09........ Aa2 AA 1,035,485
North Carolina Medical
Care Commission,
Hospital Revenue
Refunding:
1,130,000 (AMBAC - TCRS Insured),
5.250% 02/15/07........ Aaa AAA 1,193,065
1,000,000 (Grace Hospital Inc.
Project), (AMBAC
Insured),
5.250% 10/01/16........ Aaa AAA 1,004,640
1,000,000 (Rex Hospital Project),
6.250% 06/01/17........ A1 A+ 1,107,290
1,000,000 North Carolina Municipal
Power Agency, Refunding
#1, Catawba Electric
Revenue Refunding, (FSA
Insured),
6.200% 01/01/18........ Aaa AAA 1,087,190
1,000,000 North Carolina State,
University and College
Improvements, GO,
5.100% 06/01/06........ Aaa AAA 1,054,550
1,500,000 Onslow County, North
Carolina, Combined
Enterprise System
Revenue, (MBIA
Insured),
5.875% 06/01/09........ Aaa AAA 1,628,880
1,000,000 Orange County, North
Carolina, GO,
5.500% 02/01/14........ Aa1 AA+ 1,046,690
1,000,000 Pitt County, North
Carolina, Hospital
Revenue, (Pitt County
Memorial Hospital
Project),
5.250% 12/01/21........ Aa AA- 999,520
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
134
<PAGE> 139
NATIONS FUNDS
Nations North Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
NORTH CAROLINA -- (CONTINUED)
$1,000,000 St. John's County,
Florida, Industrial
Development Authority,
Industrial Development
Revenue, Professional
Golf Hall of Fame -- A,
(MBIA Insured),
5.500% 3/01/17......... Aaa AAA $ 1,033,120
1,500,000 University North
Carolina, Chapel Hill,
Hospital Revenue,
5.000% 02/15/29........ Aa3 AA 1,456,290
1,000,000 Wilmington, North
Carolina, Water
Authority, GO,
5.700% 06/01/15........ A1 A+ 1,057,450
-----------
29,755,327
-----------
PUERTO RICO -- 2.0%
600,000 Puerto Rico Industrial,
Medical and
Environmental Agency,
Pollution Control
Facilities, Finance
Authority Revenue,
Higher Education,
(Catholic University
Project), Series A,
5.600% 12/01/07........ NR BBB- 632,460
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $28,286,389).............. 30,387,787
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
INVESTMENT COMPANY -- 4.8% (Cost $1,554,000)
1,554,000 AIM Tax-Exempt Fund.............. $ 1,554,000
-----------
TOTAL INVESTMENTS
(Cost $29,840,389*)........................ 99.0% 31,941,787
OTHER ASSETS AND
LIABILITIES (NET).......................... 1.0 309,922
----- -----------
NET ASSETS.................................. 100.0% $32,251,709
===== ===========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $2,110,019 and gross
depreciation of $8,621 for federal income tax purposes. At March 31, 1998, the
aggregate cost of securities for federal income tax purposes was $29,840,389.
Nations North Carolina Municipal Bond Fund had the following industry
concentration greater than 10% at March 31, 1998 (as a percentage of net
assets):
Pollution Control Revenue/
Industrial Development Revenue 22.59%
Hospital Revenue 16.32%
SEE NOTES TO FINANCIAL STATEMENTS.
135
<PAGE> 140
NATIONS FUNDS
Nations South Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 98.6%
SOUTH CAROLINA -- 98.6%
Anderson County, South
Carolina, Revenue
Refunding, GO:
$1,100,000 6.400% 04/01/03........ A1 A+ $ 1,204,918
1,300,000 6.500% 04/01/04........ A1 A+ 1,415,973
Anderson County, South
Carolina, Refunding,
Sewer Authority, (FGIC
Insured):
1,240,000 5.200% 07/01/03........ Aaa AAA 1,296,011
1,000,000 5.500% 07/01/06........ Aaa AAA 1,065,450
1,500,000 5.600% 07/01/07........ Aaa AAA 1,601,490
1,000,000 5.600% 07/01/08........ Aaa AAA 1,064,750
Beaufort County, South
Carolina, School
District, GO, (SCSDE):
1,000,000 6.650% 02/01/99........ Aa1 AA 1,022,260
(AMBAC Insured),
2,000,000 6.250% 02/01/01........ Aaa AAA 2,114,640
2,000,000 6.300% 02/01/02........ Aaa AAA 2,116,000
1,000,000 6.400% 02/01/03........ Aaa AAA 1,059,740
Beaufort County, South
Carolina, Revenue
Refunding, GO, (MBIA
Insured):
1,000,000 5.600% 12/01/08........ Aaa AAA 1,035,650
1,415,000 5.650% 12/01/09........ Aaa AAA 1,481,463
Berkeley County, South
Carolina, Refunding
and Improvement
Authority, GO, (FGIC
Insured):
1,000,000 5.300% 05/01/04........ Aaa AAA 1,054,090
1,000,000 5.400% 05/01/05........ Aaa AAA 1,062,130
1,000,000 5.500% 05/01/06........ Aaa AAA 1,064,190
Berkeley County, South
Carolina, Water and
Sewer Authority
Revenue Refunding,
(MBIA Insured):
1,000,000 7.000% 06/01/16........ Aaa AAA 1,103,320
1,000,000 Camden, South Carolina,
Combined Public
Utilities Revenue,
Refunding and
Improvement, (MBIA
Insured),
5.500% 03/01/17........ Aaa AAA 1,038,210
Charleston County,
South Carolina,
Hospital Facilities,
Revenue Refunding and
Improvement:
3,000,000 (Bon Secours Health
Systems Project), (FSA
Insured),
5.500% 08/15/10....... Aaa AAA 3,117,600
1,000,000 (Medical Society Health
Project), (MBIA
Insured),
6.000% 10/01/09....... Aaa AAA 1,078,990
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
SOUTH CAROLINA -- (CONTINUED)
Charleston County,
South Carolina, Park
and Recreation
Commission District,
GO:
$1,930,000 5.000% 02/01/00........ Aa AA- $ 1,969,275
1,000,000 Charleston County,
South Carolina, Public
Improvement Authority,
GO, (ST Aid Withhldg),
5.500% 06/01/14....... Aa3 AA 1,037,870
1,040,000 Charleston County,
South Carolina, Solid
Waste User Fee
Revenue, (MBIA
Insured),
5.800% 01/01/06....... Aaa AAA 1,130,386
Charleston County,
South Carolina, Water
and Sewer
Improvements, Revenue
Refunding:
1,345,000 5.200% 01/01/99........ A1 AA- 1,360,104
1,000,000 5.750% 01/01/04........ A1 AA- 1,066,700
1,645,000 Cherokee County, South
Carolina, School
District No.1, GO,
(SCSDE),
5.000% 03/01/02....... Aa1 AA 1,698,199
1,125,000 Chester County, South
Carolina, School
District, GO, (SCSDE),
6.450% 02/01/04........ NR AA 1,196,707
Clemson University,
South Carolina,
University & College
Improvements Revenue
(MBIA Insured):
1,500,000 6.550% 06/01/07........ Aaa AAA 1,609,650
1,000,000 6.600% 06/01/08........ Aaa AAA 1,074,570
1,000,000 Columbia, South
Carolina, Auto Parking
Revenue, (AMBAC
Insured),
5.750% 12/01/09....... Aaa AAA 1,082,490
Columbia, South
Carolina, Waterworks
and Sewer System,
Revenue Refunding:
2,420,000 6.200% 02/01/99........ Aa3 AA 2,470,844
1,285,000 6.500% 02/01/02........ Aa3 AA 1,389,059
6,000,000 5.500% 02/01/09........ Aa3 AA 6,450,960
Capital Appreciation:
2,700,000 6.900% 02/01/03+....... Aa AA 2,202,336
1,000,000 Darlington County,
South Carolina,
Industrial Development
Revenue, (Nucor
Corporation Project),
Series A,
5.750% 08/01/23....... A1 AA- 1,031,260
1,600,000 6.125% 06/01/25........ A2 A 1,700,704
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
136
<PAGE> 141
NATIONS FUNDS
Nations South Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
SOUTH CAROLINA -- (CONTINUED)
Darlington County,
South Carolina,
Pollution Control
Revenue:
$1,500,000 6.600% 11/01/10........ A2 A $ 1,655,865
1,000,000 (MBIA Insured),
6.600% 11/01/10....... Aaa AAA 1,108,310
Florence, South
Carolina, Water and
Sewer Revenue
Refunding, (AMBAC
Insured):
1,000,000 4.700% 03/01/01........ Aaa AAA 1,017,210
1,250,000 5.150% 03/01/06........ Aaa AAA 1,303,063
3,000,000 Florence County, South
Carolina, Hospital Ser
A (MBIA Insured),
5.000% 11/01/18....... AA3 AAA 2,902,500
Georgetown County,
South Carolina,
Pollution Control and
Industrial Revenue
Refunding,
2,000,000 6.250% 06/15/05........ A3 A- 2,157,760
1,225,000 5.700% 10/01/21........ A3 A- 1,266,895
Grand Strand Water and
Sewer Authority
Revenue Refunding,
(MBIA Insured):
1,000,000 5.700% 06/01/00........ Aaa AAA 1,035,870
1,000,000 5.900% 06/01/01........ Aaa AAA 1,052,370
1,000,000 6.000% 06/01/02........ Aaa AAA 1,068,200
1,950,000 6.300% 06/01/05........ Aaa AAA 2,128,289
1,000,000 6.400% 06/01/07........ Aaa AAA 1,095,200
Greenville, South
Carolina, Hospital
Facilities Revenue
Refunding:
2,110,000 7.200% 05/01/06........ Aa3 AAA 2,286,607
1,000,000 Series A, (Guaranty
Agreement),
5.400% 05/01/07....... Aa3 AA- 1,058,810
4,000,000 Series B,
5.250% 05/01/17....... Aa3 AA- 3,975,960
Series C:
1,000,000 5.300% 05/01/04........ AA3 AA 1,044,290
4,000,000 5.400% 05/01/05........ AA3 AA 4,203,760
2,100,000 5.500% 05/01/11........ AA3 AA 2,159,367
1,000,000 Greenville, South
Carolina, Industrial
Revenue Refunding,
(Monsanto Company
Project),
7.500% 10/01/07........ A1 NR 1,067,750
Greenville, South
Carolina, Waterworks
Revenue, Water Utility
Improvements:
2,000,000 6.000% 02/01/06........ Aa1 AA 2,209,960
1,000,000 6.000% 02/01/08........ Aa1 AA 1,118,060
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
SOUTH CAROLINA -- (CONTINUED)
Greenwood, South
Carolina, Combined
Public Utilities,
Revenue Refunding and
Improvement, (AMBAC
Insured):
$1,885,000 5.500% 12/01/06........ Aaa AAA $ 2,014,386
2,000,000 5.500% 12/01/07........ Aaa AAA 2,131,000
1,060,000 5.500% 12/01/08........ Aaa AAA 1,125,200
Greer, South Carolina,
Combined Public
Utilities, Revenue
Refunding and
Improvement, (AMBAC
Insured):
3,900,000 4.750% 09/01/11........ Aaa AAA 3,865,485
3,500,000 5.000% 09/01/17........ Aaa AAA 3,435,880
Horry County, South
Carolina, School
District, GO:
1,220,000 (SCSDE Insured),
7.000% 01/01/04....... Aa1 AA 1,340,390
Horry County, South
Carolina,Hospital
Facilities Revenue:
1,100,000 4.750% 07/01/10........ Aaa AAA 1,088,846
1,200,000 4.875% 07/01/11........ Aaa AAA 1,190,088
1,275,000 (MBIA SCSDE Insured),
5.700% 03/01/16....... Aaa AAA 1,326,816
1,000,000 Kershaw County, South
Carolina, School
District, GO, (SCSDE
Insured),
6.400% 07/01/06....... Aa1 AA 1,086,450
1,725,000 Lancaster County, South
Carolina, School
District, GO, (MBIA
Insured),
6.500% 07/01/07....... Aaa AAA 1,911,731
1,000,000 Lexington and Richland
Counties School
District, South
Carolina, GO,
6.450% 02/01/99....... Aa1 AA 1,022,990
5,000,000 Lexington County,
South Carolina, Health
Service District, (FSA
Insured),
5.125% 11/01/21........ Aaa AAA 4,876,200
2,000,000 Lexington, South
Carolina, Water and
Sewer Authority
Revenue, (Asset
Guaranty)
5.450% 04/01/19....... NR AA 2,019,780
Medical University of
South Carolina,
Hospital Facilities
Revenue, Series A:
2,100,000 6.400% 07/01/99........ A3 A+ 2,165,100
1,000,000 6.900% 07/01/99........ A3 A+ 1,037,440
Refunding:
2,000,000 7.000% 07/01/01........ A3 A+ 2,153,500
4,500,000 7.000% 07/01/02........ A3 A+ 4,834,260
3,725,000 7.200% 07/01/05........ A3 A+ 4,009,963
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
137
<PAGE> 142
NATIONS FUNDS
Nations South Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
SOUTH CAROLINA -- (CONTINUED)
$2,500,000 Myrtle Beach, South
Carolina, Sewer and
Water Improvements,
Revenue Refunding,
(MBIA Insured),
5.000% 03/01/03....... Aaa AAA $ 2,586,800
North Charleston, South
Carolina, Refunding,
GO:
1,750,000 5.600% 08/01/07........ A2 AA- 1,869,595
1,725,000 5.750% 08/01/08........ A2 AA- 1,849,925
1,000,000 North Charleston, South
Carolina, Sewer,
Revenue Refunding,
(MBIA Insured)
6.000% 07/01/02....... Aaa AAA 1,072,130
3,025,000 Oconee County, South
Carolina, Pollution
Control, (Duke Power
Co. Project),
5.800% 04/01/14....... Aa3 AA- 3,171,924
Oconee County, South
Carolina, School
District, GO:
1,000,000 5.100% 01/01/13........ Aaa AAA 1,004,560
Refunding, Series B:
1,500,000 6.000% 03/01/99........ AA1 AA 1,530,855
1,505,000 6.100% 03/01/00........ AA1 AA 1,563,545
Piedmont Municipal
Power Agency, South
Carolina, Electric
Revenue Refunding,
(FGIC Insured):
1,500,000 5.600% 01/01/00........ Aaa BBB 1,544,430
1,850,000 6.850% 01/01/07........ Aaa AAA 2,008,915
Series A:
1,000,000 6.250% 01/01/13........ Aaa AAA 1,078,410
1,715,000 Unrefunded Balance,
6.125% 01/01/03....... Aaa AAA 1,848,050
Revenue Bonds, (MBIA
Insured):
9,000,000 Series B,
5.250% 01/01/09....... Aaa AAA 9,351,630
(South Carolina
Electric Company
Project):
1,600,000 6.000% 01/01/05........ Aaa AAA 1,755,808
Richland County, South
Carolina, GO:
1,000,000 6.250% 03/01/09........ NR AA 1,060,650
Series B:
2,020,000 4.750% 03/01/03........ Aa2 AA 2,070,621
2,250,000 4.950% 03/01/05........ Aa2 AA 2,329,808
Richland County, South
Carolina, PCR, (Union
Camp Corporation
Project):
Series B:
1,000,000 6.625% 05/01/22........ A1 A- 1,081,430
Series C:
4,000,000 5.875% 11/01/02........ A1 A- 4,259,400
1,000,000 6.350% 11/01/07........ A1 A- 1,087,770
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
SOUTH CAROLINA -- (CONTINUED)
Richland County, South
Carolina, Revenue
Refunding and
Improvement:
$2,040,000 5.900% 12/01/01........ Aa2 AA $ 2,166,337
1,500,000 7.125% 12/31/01........ NR A+ 1,525,170
2,120,000 Series B,
4.850% 03/01/04........ Aa2 AA 2,185,847
Richland County, South
Carolina, School
District:
5,000,000 No. 1, GO, (State Aid
Withholding),
4.625% 03/01/22........ Aa1 AA 4,628,200
No. 2, Refunding,
Series A, GO, (MBIA
Insured):
1,330,000 4.800% 03/01/03........ Aaa AAA 1,364,474
1,590,000 4.900% 03/01/04........ Aaa AAA 1,640,991
1,655,000 5.000% 03/01/05........ Aaa AAA 1,716,599
1,395,000 Richland County, South
Carolina, Solid Waste
Disposal Facilities
Revenue, (Union Camp
Corporation Project),
Series A,
6.750% 05/01/22....... A1 A- 1,520,411
1,000,000 Rock Hill, South
Carolina, Combined
Public Utility Systems
Revenue,
6.200% 01/01/03....... Aaa AAA 1,069,190
2,410,000 Rock Hill, South
Carolina, School
District No. 3,
Refunding,
Series B, (FGIC
Insured),
5.900% 02/01/02........ Aaa AAA 2,558,504
South Carolina State,
Capital Improvement,
GO, Series A:
6,135,000 3.500% 07/01/06........ Aaa AAA 5,727,820
2,000,000 4.250% 03/01/09........ Aaa AAA 1,942,060
4,000,000 South Carolina State,
Educational Facilities
for Nonprofit
Institutions, (Furman
University Project),
Series A, (MBIA
Insured),
5.500% 10/01/26........ Aaa AAA 4,122,280
South Carolina State,
Jobs Economic
Development Authority
Hospital Facilities
Revenue:
6,500,000 5.450% 08/01/15........ Aaa AAA 6,637,150
1,500,000 (Oconee Memorial
Hospital), (Connie Lee
Insured),
6.150% 03/01/15....... NR AAA 1,623,630
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
138
<PAGE> 143
NATIONS FUNDS
Nations South Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
SOUTH CAROLINA -- (CONTINUED)
South Carolina State,
Housing Finance and
Development Authority:
$1,000,000 Homeownership Mortgage
Purchase, Series A,
5.550% 07/01/15....... Aa2 AA $ 1,018,720
Multi-family Housing
Revenue:
2,600,000 Rental Housing Revenue,
(Windsor Shores
Project), Series B,
(FHA Insured),
5.600% 07/01/16....... NR AA 2,621,320
Series A, (FNMA
Insured),
4,595,000 6.800% 11/15/11........ Aaa NR 4,885,772
(United Dominion
Project),
5,000,000 6.500% 05/01/24........ NR BBB+ 5,267,200
South Carolina State,
Public Service
Authority, Revenue
Bonds:
1,000,000 Series A,
5.200% 07/01/03....... Aa2 A+ 1,042,780
Series A, Refunded:
1,500,000 5.300% 07/01/05........ Aaa AAA 1,578,000
3,000,000 6.200% 07/01/05........ Aa2 A+ 3,266,640
1,000,000 6.375% 07/01/11........ Aa2 A+ 1,081,180
1,000,000 Series B,
6.700% 07/01/02....... Aa2 AA- 1,092,280
1,000,000 Series B, Refunded,
6.600% 07/01/01....... AAA AA- 1,075,900
2,000,000 Series C, Refunded,
5.100% 01/01/11....... Aaa AAA 2,024,900
3,000,000 South Carolina State
Refunding, Capital
Improvement, GO,
4.400% 04/01/04....... Aaa AAA 3,033,120
1,750,000 South Carolina State
Revenue Bonds, GO,
Series W,
6.000% 05/01/01....... Aaa AAA 1,851,920
1,000,000 South Carolina State,
University of South
Carolina, GO, Series
B,
6.000% 03/01/01....... Aaa NR 1,053,660
1,000,000 Spartanburg, South
Carolina, Health
Services District Inc.
Hospital Revenue,
Series B, Refunding,
5.125% 04/15/17....... Aaa AAA 988,600
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
SOUTH CAROLINA -- (CONTINUED)
Spartanburg, South
Carolina, Waterworks
and Sewer System
Authority, Revenue
Refunding and
Improvement,
$3,445,000 6.200% 06/01/09........ A1 AA- $ 3,699,069
Spartanburg County,
South Carolina, GO:
1,025,000 5.800% 02/01/05........ Aa3 AA- 1,105,278
1,005,000 5.700% 02/01/06........ Aa3 AA- 1,076,636
1,000,000 5.700% 02/01/09........ Aa3 AA- 1,072,100
1,000,000 West Colombia, South
Carolina, Water &
Sewer, Revenue
Refunding, (MBIA
Insured),
6.300% 10/01/07....... Aaa AAA 1,096,690
Western Carolina
Regional Sewer Systems
Authority (AMBAC
Insured):
1,000,000 5.600% 03/01/01........ Aaa AAA 1,042,560
2,500,000 5.000% 03/01/02........ Aaa AAA 2,579,025
1,000,000 5.800% 03/01/03........ Aaa AAA 1,065,320
1,000,000 5.900% 03/01/04........ Aaa AAA 1,066,280
1,000,000 5.500% 03/01/10........ Aaa AAA 1,045,530
1,000,000 6.750% 03/01/10........ Aaa AAA 1,052,930
York County, South
Carolina, GO:
1,000,000 6.700% 06/01/99........ A2 A 1,033,600
1,000,000 York County, South
Carolina, Industrial
Development Revenue,
Exempt Facility,
(Hoechst Celanese
Corporation Project),
AMT,
5.700% 01/01/24....... A2 A+ 1,019,020
4,000,000 York County, South
Carolina, PCR
Refunding, (Bowater
Inc. Project), Series
B,
6.850% 04/01/01....... Baa1 BBB 4,241,840
------------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $256,252,504)............ 272,652,379
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
139
<PAGE> 144
NATIONS FUNDS
Nations South Carolina Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
INVESTMENT COMPANY -- 0.4% (Cost $1,033,000)
1,033,000 AIM Tax-Exempt Fund............ $ 1,033,000
------------
TOTAL INVESTMENTS
(Cost $257,285,504*)...................... 99.0% 273,685,379
OTHER ASSETS AND
LIABILITIES (NET)......................... 1.0 2,865,681
----- ------------
NET ASSETS................................. 100.0% $276,551,060
===== ============
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $16,458,203 and gross
depreciation of $58,328 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$257,285,504.
+ Zero coupon security. The rate shown reflects the yield to maturity.
Nations South Carolina Intermediate Municipal Bond Fund had the following
insurance concentration greater than 10% at March 31, 1998 (as a percentage of
net assets):
MBIA 15.7%
SEE NOTES TO FINANCIAL STATEMENTS.
140
<PAGE> 145
NATIONS FUNDS
Nations South Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 94.7%
SOUTH CAROLINA -- 85.6%
$ 750,000 Berkeley County, South
Carolina, PCR, (South
Carolina Electric and
Gas Company),
6.500% 10/01/14....... A1 A- $ 817,628
525,000 Camden, South Carolina,
Combined Public
Utilities Revenue,
Refunding and
Improvement, (MBIA
Insured),
4.900% 03/01/06....... Aaa AAA 541,307
500,000 Charleston, South
Carolina, GO,
6.500% 06/01/11....... Aa3 NR 544,150
500,000 Charleston County,
South Carolina,
Hospital Facilities
Revenue, (Bon Secours
Health Systems
Project), (FSA
Insured),
5.625% 08/15/25....... Aaa AAA 513,765
1,000,000 Chester County, South
Carolina, Industrial
Development Authority,
Revenue Refunding,
(Springs Industries
Inc. Project),
7.350% 02/01/14....... NR BBB+ 1,091,020
500,000 Clemson University,
South Carolina,
Stadium Refunding
Bonds, Student and
Faculty Housing,
Series M, (MBIA
Insured),
6.600% 06/01/08....... Aaa AAA 537,285
1,000,000 Columbia, South
Carolina, Waterworks
and Sewer System
Revenue,
5.500% 02/01/09....... Aa AA 1,075,160
Darlington County,
South Carolina,
Industrial Development
Revenue:
750,000 (Nucor Corporation
Project), Series A,
5.750% 08/01/23....... A1 AA- 773,445
500,000 (Sonoco Products
Company Project),
6.125% 06/01/25....... A2 A 531,470
500,000 Darlington County,
South Carolina, PCR,
(Carolina Power and
Light Company
Project),
6.600% 11/01/10....... A2 A 551,955
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
SOUTH CAROLINA -- (CONTINUED)
Dorchester County,
South Carolina, School
District No. 2, GO,
(FGIC Insured):
$ 500,000 4.800% 07/01/05........ Aaa AAA $ 513,205
500,000 5.125% 02/01/13........ Aaa AAA 504,005
Georgetown County,
South Carolina, PCR,
(International Paper
Company Project):
500,000 6.250% 06/15/05........ A3 A- 539,440
735,000 5.600% 12/01/21........ A3 A- 745,635
300,000 Greenville, South
Carolina, Hospital
Facilities Revenue
Refunding, Series C,
5.500% 05/01/11....... Aa3 AA 308,481
710,000 Greer, South Carolina,
Combined Utility
Systems Revenue,
(AMBAC Insured),
5.000% 09/01/17....... Aaa AAA 696,993
500,000 Horry County, South
Carolina, Hospital
Facility Revenue,
Conway Hospital
Income, (AMBAC
Insured),
5.000% 07/01/28....... Aaa AAA 478,925
500,000 Lexington, South
Carolina, Health
Services District Inc
Hospital Revenue, (FSA
Insured),
5.125% 11/01/26....... Aaa AAA 486,450
500,000 Lexington, South
Carolina, Water and
Sewer Revenue, (Asset
Guaranty),
5.500% 04/01/29....... NR AA 508,670
1,000,000 Piedmont Municipal
Power Agency, South
Carolina, Electric
Revenue Bonds, Series
B, (MBIA Insured),
5.250% 01/01/09....... Aaa AAA 1,039,070
1,000,000 Richland County, South
Carolina, School
District No. 1, GO,
(SCSDE),
4.625% 03/01/22....... Aa1 AA 925,640
525,000 Richland County, South
Carolina, Sewer System
Revenue, GO, Series A,
5.500% 03/01/17....... Aa2 AA 537,232
500,000 Richland County, South
Carolina, Waste
Disposal Facilities,
Revenue Refunding,
(Union Camp
Corporation Project),
Series A, AMT,
6.750% 05/01/22....... A1 A- 544,950
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
141
<PAGE> 146
NATIONS FUNDS
Nations South Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ------------------------------------------------------------------
<C> <S> <C> <C> <C>
SOUTH CAROLINA -- (CONTINUED)
$ 500,000 South Carolina State,
Capital Improvement,
GO,
4.400% 04/01/04....... Aaa AAA $ 505,520
1,000,000 South Carolina, State
Educational Facilities
Authority, (Furman
University Project),
Series A, (MBIA
Insured),
5.500% 10/01/26....... Aaa AAA 1,030,570
500,000 South Carolina State,
Jobs-Economic
Development Authority,
Hospital Facilities
Revenue, First
Mortgage, (Lowman
Home-Trinity Lutheran
Home Project),
6.700% 09/01/20....... NR NR 517,935
500,000 York County, South
Carolina, GO, (AMBAC
Insured),
4.750% 06/01/07....... Aaa AAA 506,135
900,000 York County, South
Carolina, PCR
Refunding, (Bowater
Inc. Project), Series
B,
6.850% 04/01/01....... Baa1 BBB 954,414
-----------
18,320,455
-----------
COLORADO -- 1.6%
1,000,000 E-470 Public Highway
Authority, Colorado,
Revenue, Capital
Appreciation, Series
B, (MBIA Insured),
5.470% 09/01/18+...... Aaa AAA 344,380
-----------
OHIO -- 2.6%
500,000 Dayton, Ohio, Special
Facilities Revenue
Refunding, (Emery Air
Freight Corporation
Project), Series F,
6.050% 10/01/09....... NR BBB 543,535
-----------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
PUERTO RICO -- 4.9%
$ 995,000 Puerto Rico, Housing,
Bank and Finance
Agency, Single-family
Mortgage Revenue,
(Affordable Housing
Mortgage -- Portfolio
I), AMT,
(GNMA/FNMA/FHLMC
Collateral),
6.250% 04/01/29....... Aaa AAA $ 1,048,143
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $19,188,852)............. 20,256,513
-----------
SHARES
- ----------
INVESTMENT COMPANY -- 3.8% (Cost $822,000)
822,000 AIM Tax-Exempt Fund............. 822,000
-----------
TOTAL INVESTMENTS
(Cost $20,010,852*)................... 98.5% 21,078,513
OTHER ASSETS AND
LIABILITIES (NET)..................... 1.5 315,665
----- -----------
NET ASSETS.............................. 100.0% $21,394,178
===== ===========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $1,069,989 and gross
depreciation of $2,328 for federal income tax purposes. At March 31, 1998, the
aggregate cost of securities for federal income tax purposes was $20,010,852.
+ Zero coupon security. The rate shown reflects the yield to maturity.
Nations South Carolina Municipal Bond Fund had the following insurance
concentration greater than 10% at March 31, 1998 (as a percentage of net
assets):
MBIA 16.3%
Nations South Carolina Municipal Bond Fund had the following industry
concentration greater than 10% at March 31, 1998 (as a percentage of net
assets):
Pollution Control Revenue/
Industrial Development Revenue 33.15%
SEE NOTES TO FINANCIAL STATEMENTS.
142
<PAGE> 147
NATIONS FUNDS
Nations Tennessee Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 96.2%
TENNESSEE -- 92.1%
Anderson County,
Tennessee, Health and
Educational Facilities
Board, (Methodist
Medical Center):
$ 585,000 5.000% 07/01/01......... A1 NR $ 597,969
1,000,000 5.400% 07/01/04......... A1 NR 1,041,120
Chattanooga-Hamilton
County, Tennessee,
Hospital Authority
Revenue, GO, (Erlanger
Medical Center), (FSA
Insured):
1,700,000 5.375% 10/01/04......... Aaa AAA 1,803,666
1,000,000 5.500% 10/01/07......... Aaa AAA 1,077,420
2,240,000 Dickson County,
Tennessee, (FGIC
Insured),
5.000% 04/01/18......... Aaa NR 2,195,626
Hamilton County,
Tennessee, GO:
1,750,000 5.000% 07/01/01......... Aa2 NR 1,800,575
500,000 6.400% 09/01/04......... Aa2 NR 536,895
1,145,000 Harpeth VY Utilities
Revenue Refunding,
5.000% 09/01/01........ A1 A 1,178,457
1,600,000 Knox County, Tennessee,
Health, Educational and
Housing Facilities
Board, Hospital
Facilities Revenue,
Refunding and
Improvement, (Baptist
Health System of East
Tennessee, Inc.
Project), (CONNIE LEE
Insured), 5.500%
04/15/11............... NR AAA 1,663,552
500,000 Madison County,
Tennessee, GO, Series
A, 5.850% 08/01/03..... A1 NR 533,440
1,500,000 Maury County, Tennessee,
Industrial Development
Board, PCR, Multi-Modal
Refunding, (Saturn
Corporation Project),
General Motors Guaranty
Agreement, 6.500%
09/01/24............... A3 A 1,649,205
McMinn County,
Tennessee, Industrial
Development Board, PCR,
Refunding:
1,800,000 (Bowater Inc. Project),
6.850% 04/01/01........ Baa1 BBB 1,931,562
1,000,000 (Recycling Facility-
Calhoun Newsprint),
7.400% 12/01/22........ Baa1 BBB 1,117,250
1,000,000 Memphis-Shelby County,
Tennessee, Refunding,
6.750% 09/01/12........ Baa2 BBB 1,098,110
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
TENNESSEE -- (CONTINUED)
$1,000,000 Memphis, Tennessee,
Electric System
Revenue, Pre-refunded,
6.000% 01/01/05........ Aa AA $ 1,093,710
1,000,000 Memphis, Tennessee, GO,
5.000% 07/01/17........ Aa2 AA 980,540
1,500,000 Memphis, Tennessee,
Water Revenue, 5.900%
01/01/04............... Aa AA 1,622,595
Metropolitan Government,
Nashville and Davidson
County, Tennessee,
Health and Educational
Facilities Board
Revenue, Refunding and
Improvement, (Meharry
Medical College
Project), (AMBAC
Insured):
505,000 6.000% 12/01/08......... Aaa AAA 567,211
295,000 6.000% 12/01/09......... Aaa AAA 331,946
Metropolitan Government,
Nashville and Davidson
County, Tennessee,
Refunding, GO:
750,000 5.250% 05/15/07......... Aa AA 795,120
1,000,000 5.625% 05/15/14......... Aa AA 1,057,250
1,000,000 Metropolitan Government,
Nashville and Davidson
County, Tennessee,
Health and Educational
Facilities Board,
Revenue Refunding,
(FNMA Collateral),
(Multi-Family Hsg.,
Welch Bend Apts.),
Series A,
5.500% 01/01/07........ NR AAA 1,045,820
600,000 Metropolitan Government,
Nashville and Davidson
County, Tennessee,
Water and Sewer,
Revenue Refunding,
(FGIC Insured),
6.500% 01/01/10........ Aaa AAA 698,376
1,000,000 Rutherford County,
Tennessee, Capital
Outlay Notes, Series A,
6.500% 05/01/06........ Aa3 AA- 1,140,770
1,345,000 Rutherford County,
Tennessee, Public
Improvements,
6.000% 04/01/06........ Aa3 AA- 1,487,852
Shelby County,
Tennessee, Revenue
Refunding, GO:
1,000,000 Series A,
5.000% 03/01/03........ Aa2 AA+ 1,035,170
Series B:
740,000 6.000% 03/01/08......... NR AA+ 792,037
260,000 6.000% 03/01/08......... Aa2 AA+ 276,645
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
143
<PAGE> 148
NATIONS FUNDS
Nations Tennessee Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
TENNESSEE -- (CONTINUED)
Shelby County,
Tennessee, Health,
Educational and Housing
Facilities Board, (MBIA
Insured):
$ 500,000 6.250% 08/01/09......... Aaa AAA $ 567,930
520,000 Series D,
5.300% 08/15/04........ Aaa AAA 550,768
500,000 Shelby County,
Tennessee, Public
Improvement, GO, Series
A,
5.625% 06/01/06........ Aa2 AA+ 540,895
1,000,000 Sumner County,
Tennessee, Solid Waste
Revenue, (AMBAC
Insured),
5.125% 08/01/03........ Aaa AAA 1,040,340
Tennessee Housing
Development Agency,
Mortgage Finance, AMT:
700,000 5.850% 07/01/17......... Aa2 AA 725,634
GO, (Agency Insured):
1,120,000 4.850% 07/01/03+........ Aa2 AA 879,850
715,000 4.950% 07/01/04+........ Aa2 AA 533,190
Series A:
1,000,000 5.100% 07/01/01......... A1 A+ 1,023,840
200,000 6.300% 01/01/08......... A1 A+ 209,288
300,000 Series B,
6.550% 07/01/19........ A1 A+ 316,968
Tennessee State, GO,
Series A:
1,000,000 7.000% 03/01/03......... Aaa AA+ 1,125,530
1,000,000 5.200% 03/01/05......... Aaa AA+ 1,053,930
1,000,000 Tennessee State, Local
Development Revenue
Refunding, Series A,
5.050% 03/01/01........ A2 AA- 1,025,080
500,000 Tennessee State, School
Board Authority Higher
Education Revenue,
Series A,
6.000% 05/01/05........ A1 AA 537,415
500,000 Volunteer State Student
Funding,
4.850% 06/01/99........ Aa NR 502,050
1,275,000 West Plains, Missouri,
Industrial Development
Authority,
5.250% 11/15/07........ NR BBB- 1,289,318
1,000,000 Williamson County,
Tennessee, Revenue
Refunding, GO,
5.750% 03/01/03........ Aa1 NR 1,068,630
730,000 Williamson County,
Tennessee, Capital
Outlay Notes,
5.700% 05/01/02........ Aa1 NR 773,114
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
TENNESSEE -- (CONTINUED)
$1,140,000 Williamson County,
Tennessee,
5.000% 05/01/07........ Aa1 NR $ 1,185,520
-----------
46,099,179
-----------
PUERTO RICO -- 4.1%
600,000 Puerto Rico Electric
Power Authority, Power
Revenue, Series P,
6.750% 07/01/03........ Baa1 BBB+ 653,778
585,000 Puerto Rico, Housing,
Bank and Finance
Agency, Single-family
Mortgage Revenue,
(Affordable Housing
Mortgage -- Portfolio
I), AMT, (GNMA/FNMA/
FHLMC Collateral),
5.450% 04/01/05........ Aaa AAA 611,840
750,000 Puerto Rico, Industrial,
Tourist, Educational,
Medical and
Environmental Control
Facilities Financing
Authority, (Ryder
Memorial Hospital
Project), Series A,
6.400% 05/01/09........ NR BBB 813,090
-----------
2,078,708
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $46,085,197).............. 48,177,887
-----------
<CAPTION>
SHARES
---------
<C> <S> <C> <C> <C>
INVESTMENT COMPANY -- 2.6% (Cost $1,283,000)
1,283,000 AIM Tax-Exempt Fund.............. 1,283,000
-----------
TOTAL INVESTMENTS
(Cost $47,368,197*)........................ 98.8% 49,460,887
OTHER ASSETS AND
LIABILITIES (NET).......................... 1.2 617,696
----- -----------
NET ASSETS.................................. 100.0% $50,078,583
===== ===========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $2,107,320 and gross
depreciation of $14,630 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$47,368,197.
+ Zero Coupon Security. The rate shown reflects yield to maturity.
Nations Tennessee Intermediate Municipal Bond Fund had the following industry
concentrations greater than 10% at March 31, 1998 (as a percentage of net
assets):
Pollution Control Revenue/
Industrial Development Revenue 11.58%
Housing Revenue 10.68%
SEE NOTES TO FINANCIAL STATEMENTS.
144
<PAGE> 149
NATIONS FUNDS
Nations Tennessee Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- --------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 95.3%
TENNESSEE -- 87.6%
$250,000 Chattanooga-Hamilton
County, Tennessee,
Hospital Authority
Revenue, GO, (Erlanger
Medical Center), (FSA
Insured),
5.500% 10/01/07.......... Aaa AAA $ 269,355
400,000 Dickson County Tennessee,
GO, (FGIC Insured),
5.000% 04/01/18.......... Aaa NR 392,076
500,000 Humphreys County,
Tennessee, Industrial
Development Board, Solid
Waste Disposal Revenue,
(du Pont (E.I.) de
Nemours & Company
Project), AMT,
6.700% 05/01/24.......... Aa3 AA- 553,520
400,000 Knox County, Tennessee,
Health, Educational and
Housing Facilities Board,
Hospital Facilities
Revenue, Refunding and
Improvement:
(Baptist Health System of
East Tennessee, Inc.
Project), (CONNIE LEE
Insured),
5.500% 04/15/11.......... NR AAA 415,888
300,000 (Fort Sanders Alliance
Project), (MBIA Insured),
7.250% 01/01/09.......... Aaa AAA 363,669
200,000 Loudon County, Tennessee,
Industrial Development
Board, Solid Waste
Disposal Revenue,
(Kimberly-Clark
Corporation Project),
AMT,
6.200% 02/01/23.......... Aa2 AA 211,362
270,000 Maury County, Tennessee,
Industrial Development
Board, PCR, Multi-Modal
Refunding, (Saturn
Corporation Project),
General Motors Guaranty
Agreement,
6.500% 09/01/24.......... A3 A 296,857
250,000 McMinn County, Tennessee,
Industrial Development
Board, Solid Waste
Recycling Facility
Revenue, (Calhoun
Newsprint Project), AMT,
7.400% 12/01/22.......... Baa1 BBB 279,313
300,000 Memphis, Tennessee,
Electric System Revenue
Refunding,
4.900% 01/01/11.......... Aa AA 301,392
500,000 Memphis, Tennessee, GO,
5.000% 07/01/17.......... Aa2 AA 490,270
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
TENNESSEE -- (CONTINUED)
Memphis-Shelby County,
Tennessee, Airport
Authority, Special
Facilities and Project
Revenue Refunding,
(Federal Express
Corporation Project),
AMT:
$250,000 6.750% 09/01/12........... Baa2 BBB $ 274,528
100,000 6.200% 07/01/14........... Baa2 BBB 105,565
350,000 Metropolitan Government,
Nashville and Davidson
County, Tennessee,
Electric Revenue, Series
A,
5.625% 05/15/14.......... Aa AA 370,037
Metropolitan Government,
Nashville and Davidson
County, Tennessee, Health
and Educational
Facilities Board Revenue,
Refunding and
Improvement, (Meharry
Medical College Project),
(AMBAC Insured):
300,000 6.000% 12/01/09........... Aaa AAA 337,572
250,000 7.000% 12/01/11........... AAA AAA 292,670
500,000 6.000% 12/01/16........... Aaa AAA 559,530
250,000 Metropolitan Government,
Nashville and Davidson
County, Tennessee,
Refunding, GO,
5.250% 05/15/07........... Aa AA 265,040
Metropolitan Government,
Nashville and Davidson
County, Tennessee, Water
and Sewer Revenue, (FGIC
Insured):
300,000 6.500% 01/01/10........... Aaa AAA 349,188
300,000 5.200% 01/01/13........... Aaa AAA 311,271
250,000 Rutherford County,
Tennessee, Capital Outlay
Notes, GO, Series A,
6.500% 05/01/06.......... Aa3 AA- 285,193
300,000 Rutherford County,
Tennessee, Public
Improvement, GO,
6.000% 04/01/06.......... Aa3 AA- 331,863
240,000 Shelby County, Tennessee,
School Bonds, GO, Series
A,
5.900% 03/01/15.......... Aa2 AA+ 256,802
250,000 Sumner County, Tennessee,
Health, Education and
Housing Facilities Board
Revenue Refunding,
(Sumner Regional Health
System Inc.),
7.000% 11/01/03.......... NR A- 278,197
300,000 Tennessee Housing
Development Agency, AMT
(Homeown PG-3),
5.850% 07/01/17.......... Aa2 AA 310,986
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
145
<PAGE> 150
NATIONS FUNDS
Nations Tennessee Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- --------------------------------------------------------------------
<C> <S> <C> <C> <C>
TENNESSEE -- (CONTINUED)
$500,000 Tennessee Housing
Development Agency AMT,
GO,
4.950% 07/01/04+......... Aa2 AA $ 372,860
555,000 Tennessee State, GO,
Series A,
7.000% 03/01/05.......... Aaa AAA 643,090
250,000 Tennessee State, Local
Development Revenue,
Series A,
5.750% 03/01/11.......... A2 AA- 264,127
400,000 Williamson County
Tennessee, Refunding, GO,
5.000% 05/01/07.......... Aa1 NR 415,972
-----------
9,598,193
-----------
PUERTO RICO -- 7.7%
500,000 Puerto Rico, Industrial,
Tourist, Educational,
Medical and Environmental
Control Facilities
Financing Authority,
(Ryder Memorial Hospital
Project), Series A,
6.600% 05/01/14.......... NR BBB 543,125
300,000 Puerto Rico Public
Building Authority,
Guaranteed Public
Education and Health
Facilities Revenue
Refunding, Series M,
5.500% 07/01/21.......... Baa1 A 304,629
-----------
847,754
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $9,806,283)........................ 10,445,947
-----------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
SHARES VALUE
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
INVESTMENT COMPANY -- 3.5% (Cost $378,000)
378,000 AIM Tax-Exempt Fund....................... $ 378,000
-----------
TOTAL INVESTMENTS
(Cost $10,184,283*)....................... 98.8% 10,823,947
OTHER ASSETS AND
LIABILITIES (NET)......................... 1.2 132,569
----- -----------
NET ASSETS................................. 100.0% $10,956,516
===== ===========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $639,664 for federal income
tax purposes. At March 31, 1998, the aggregate cost of securities for federal
income tax purposes was $10,184,283.
+ Zero Coupon Security. The rate shown reflects yield to maturity.
Nations Tennessee Municipal Bond Fund had the following insurance concentration
greater than 10% at March 31, 1998 (as a percentage of net assets):
AMBAC 10.9%
Nations Tennessee Municipal Bond Fund had the following industry concentration
greater than 10% at March 31, 1998 (as a percentage of net assets):
Pollution Control Revenue/
Industrial Development Revenue 15.71%
SEE NOTES TO FINANCIAL STATEMENTS.
146
<PAGE> 151
NATIONS FUNDS
Nations Texas Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 99.3%
TEXAS -- 83.7%
$ 500,000 Alief, Texas,
Independent School
District, GO, (PSFG
Insured), 5.000%
02/15/18............. Aaa AAA $ 488,885
1,450,000 Alliance Airport
Authority Inc.,
Texas, Special
Facilities Revenue,
(American Airlines
Inc. Project), AMT,
7.000% 12/01/11...... Baa2 BBB- 1,728,153
750,000 Amarillo, Texas,
Junior College
District, GO, (FGIC
Insured), 7.600%
02/15/06............. Aaa AAA 886,365
Arlington, Texas,
Independent School
District, GO:
1,750,000 6.750% 08/15/99....... Aa2 NR 1,818,127
1,000,000 6.750% 08/15/00....... Aa2 NR 1,062,990
4,425,000 5.600% 08/15/05....... Aaa NR 4,680,676
4,450,000 5.700% 08/15/06....... Aaa NR 4,715,131
(PSFG Insured):
3,275,000 6.100% 02/15/05....... Aaa NR 3,481,816
1,725,000 6.100% 02/15/05....... Aaa NR 1,839,005
1,060,000 ETM, (PSFG Insured),
5.800% 02/15/02...... Aaa NR 1,122,890
1,375,000 Series A, (PSFG
Insured), 6.375%
08/15/01............. Aaa NR 1,472,955
1,000,000 Arlington, Texas,
Waterworks and Sewer
Revenue, Refunding
and Improvement
Revenue, (FGIC
Insured), 6.100%
06/01/02............. Aaa AAA 1,073,960
5,750,000 Austin, Texas, GO:
5.500% 09/01/04...... Aa2 AA 6,143,070
2,000,000 Public Improvement,
(AMBAC Insured),
5.900% 09/01/05...... Aaa AAA 2,140,680
965,000 Unrefunded, Series A,
8.875% 09/01/00...... Aa2 AA 1,073,958
Austin, Texas, Utility
System Revenue,
(AMBAC Insured):
4,275,000 6.250% 11/15/03....... Aaa AAA 4,693,864
3,000,000 6.250% 11/15/05....... Aaa AAA 3,289,320
985,000 Brazos, Texas, Higher
Education Authority
Inc., Revenue
Refunding, Senior
Lien, Series A-2,
AMT, (Guaranteed
Student Loans),
6.050% 06/01/03...... Aaa NR 1,049,941
3,525,000 Clear Creek, Texas,
Independent School
District, GO, (PSFG
Insured), 5.375%
02/01/06............. Aaa AAA 3,695,222
5,000,000 Dallas-Fort Worth,
Texas, Regional
Airport Revenue,
(Dallas-Fort Worth
Airport Project),
Series A, (MBIA
Insured), 5.400%
11/01/03............. Aaa AAA 5,285,500
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
TEXAS -- (CONTINUED)
$ 1,500,000 Dallas, Texas, Civic
Center Convention
Revenue, Sr. Lien,
(AMBAC Insured),
6.375% 01/01/02...... Aaa AAA $ 1,587,180
Dallas, Texas, GO:
7,000,000 5.500% 02/15/00....... Aaa AAA 7,210,840
3,000,000 5.600% 02/15/01....... Aaa AAA 3,129,690
Dallas, Texas,
Independent School
District, (PSFG
Insured), Unrefunded:
1,575,000 5.600% 08/15/05....... Aaa AAA 1,679,202
1,550,000 5.700% 08/15/06....... Aaa AAA 1,659,926
2,880,000 Dallas, Texas
Municipal Bond
5.5000% 02/15/07..... Aaa AAA 3,106,080
500,000 Denton, Texas, Health
Facilities
Development,
Refunding, (AMBAC
Insured), 6.000%
05/01/05............. Aaa AAA 545,355
El Paso, Texas, GO,
(FGIC Insured):
1,395,000 Series C, 5.700%
08/15/03............. Aaa AAA 1,475,436
3,000,000 Fort Worth, Texas
Higher Education
Revenue, 5.000%
03/15/20............. NR AA- 2,914,260
1,010,000 Fort Worth, Texas,
Independent School
District, GO, 7.250%
02/15/99............. Aa AA 1,040,785
3,500,000 Fort Worth, Texas,
Series A, GO, 5.300%
03/01/01............. Aa2 AA 3,621,730
3,000,000 Fort Worth, Texas,
Water and Sewer
Revenue, Series B,
5.875% 02/15/00...... Aa2 AA 3,106,920
2,000,000 Garland, Texas,
Utility System
Revenue, (AMBAC
Insured), 5.900%
03/01/02............. Aaa AAA 2,124,720
2,915,000 Grand Prairie, Texas,
Independent School
District, GO, (PSFG
Insured), 5.200%
02/15/24............. Aaa AAA 2,916,691
Harris County, Texas,
Flood Control
District, GO, Series
A,
1,115,000 5.800% 10/01/03....... Aa2 AA 1,186,048
3,000,000 6.250% 10/01/04....... Aa2 AA 3,192,240
Harris County, Texas,
Toll Road, Sr. Lien,
(FGIC Insured):
7,185,000 5.000% 08/15/16....... Aaa AAA 7,049,132
3,380,000 5.375% 08/15/20....... Aaa AAA 3,424,109
Harris County, Texas,
Health Facilities
Development
Authority,
Memorial Hospital:
1,000,000 6.700% 06/01/00....... NR NR 1,056,630
2,655,000 Series A,
6.000% 06/01/10....... Aaa AAA 2,969,246
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
147
<PAGE> 152
NATIONS FUNDS
Nations Texas Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
TEXAS -- (CONTINUED)
$ 4,400,000 Harris County, Texas,
Health Facilities
Development
Authority, (FSA
Insured), 5.500%
06/01/10............. Aaa AAA $ 4,676,848
4,390,000 Houston, Texas, GO,
Series C,
6.000% 03/01/05....... Aa3 AA- 4,670,828
Houston, Texas:
1,025,000 6.600% 04/01/05....... Aa3 AA- 1,097,539
1,305,000 6.600% 04/01/06....... Aa3 AA- 1,397,355
5,000,000 Houston, Texas,
Independent School
District, Refunding,
GO, (PSFG Insured),
5.400% 08/15/07....... Aaa AAA 5,214,800
6,145,000 Houston, Texas, Water
and Sewer Systems
Revenue, Unrefunded
Balance, Prior Lien,
Series B,
5.900% 12/01/03....... A3 A 6,624,802
1,000,000 Hurst-Euless-Bedford
Independent School
District, Texas
Refunding, GO, (PSFG
Insured),
5.250% 08/15/24....... Aaa AAA 1,005,320
Lewisville, Texas,
Independent School
District, Refunding,
GO, (PSFG Insured):
2,000,000 6.000% 08/15/00....... Aaa NR 2,094,180
2,000,000 6.100% 08/15/02....... Aaa NR 2,155,200
4,900,000 6.250% 08/15/05....... Aaa NR 5,282,935
12,000,000 Lower Colorado River
Authority, Texas,
Revenue Refunding,
Junior Lien Revenue,
(AMBAC Insured),
5.300% 01/01/06....... Aaa AAA 12,573,960
1,000,000 Lubbock, Texas,
Independent School
District, Series A,
(PSF-GTD),
6.300% 08/15/04....... NR NR 1,053,080
Mesquite, Texas,
Independent School
District 1,
Refunding, GO, (PSFG
Insured):
2,000,000 5.750% 08/15/03....... Aaa AAA 2,106,700
1,080,000 5.000% 08/01/06+...... Aaa NR 736,906
5,000,000 5.300% 08/15/06....... Aaa AAA 5,236,100
1,070,000 5.000% 08/15/07....... Aaa AAA 1,111,313
5,000,000 North Central, Texas,
Health Facilities
Development
Corporation, Hospital
Revenue,
(Presbyterian
Healthcare), Series
B, (MBIA Insured),
5.500% 06/01/16....... Aaa AAA 5,301,900
North East, Texas,
Independent School
District, (PSFG
Insured):
2,800,000 6.500% 02/01/06....... Aaa AAA 3,175,928
2,375,000 6.500% 02/01/07....... Aaa AAA 2,717,902
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
TEXAS -- (CONTINUED)
$ 1,150,000 North Texas, Municipal
Water District,
Revenue Refunding,
(MBIA Insured),
5.900% 09/01/99....... Aaa AAA $ 1,182,959
Plano, Texas,
Independent School
District, GO, (PSFG
Insured):
1,835,000 7.000% 02/15/05....... Aaa AAA 2,114,012
5,000,000 4.750% 02/15/07....... Aaa AAA 5,066,200
1,000,000 Plano, Texas,
Waterworks and Sewer
Systems Revenue,
Refunding and
Improvement, (AMBAC
Insured),
6.800% 05/01/99....... Aaa AAA 1,032,600
1,000,000 Port of Houston
Authority of Harris
County, Texas,
Revenue Bonds, (MBIA
Insured),
6.300% 05/01/04....... Aaa AAA 1,072,110
3,385,000 Richardson, Texas,
Refunding, GO,
5.250% 02/15/08++.... Aa2 AA 3,579,841
5,000,000 Round Rock, Texas,
Independent School
District, Capital
Appreciation,
Refunding, GO, (MBIA
Insured),
7.050% 08/15/11+...... Aaa AAA 2,576,500
5,625,000 Sabine River
Authority, Texas,
Water Supply
Facilities Revenue,
Refunding, (Lake Fork
Project),
6.500% 12/01/00....... NR AA 5,990,175
4,650,000 San Antonio, Texas,
GO,
5.500% 08/01/05....... Aa AA 4,853,251
1,000,000 San Antonio, Texas
Electric & Gas
Revenue,
5.500% 02/01/15....... Aa1 AA 1,039,660
San Antonio, Texas,
Water Revenue:
335,000 Prerefunded, ETM,
(FGIC Insured),
5.900% 05/15/00....... NR AAA 348,474
2,050,000 Unrefunded Balance,
(FGIC Insured),
5.900% 05/15/00....... NR AAA 2,132,840
1,000,000 Tarrant County, Texas,
GO,
6.750% 07/15/07....... NR AA+ 1,060,380
3,000,000 Tarrant County, Texas,
Health Facilities
Development
Corporation, Health
Systems Revenue,
Texas Health
Resources Systems,
Series A, (MBIA
Insured),
5.750% 02/15/08....... Aaa AAA 3,261,180
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
148
<PAGE> 153
NATIONS FUNDS
Nations Texas Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
TEXAS -- (CONTINUED)
Tarrant County, Texas,
Water Control and
Improvement District
No. 001, Water
Revenue, Refunding
and Improvement:
$ 2,200,000 5.700% 03/01/01....... A1 AA $ 2,298,406
5,000,000 5.900% 03/01/03....... AAA AA 5,253,250
Texas A&M University:
1,000,000 Revenue Financing
System, Refunding,
5.950% 05/15/05....... Aa2 AA 1,095,750
Texas Municipal Power
Agency, Revenue
Refunding:
1,000,000 (FGIC Insured),
7.000% 09/01/99....... Aaa AAA 1,043,830
(MBIA Insured):
6,000,000 5.900% 09/01/04....... Aaa AAA 6,522,180
15,000,000 5.250% 09/01/05....... Aaa AAA 15,722,550
Texas State College,
Texas, Student Loan
Authority Revenue,
GO, AMT,
11,675,000 5.000% 10/01/00....... Aa2 AA 11,980,885
500,000 5.750% 08/01/11....... Aa2 AA 520,380
5,665,000 Texas State,
Department of Housing
and Community
Affairs,
Single Family Revenue,
AMT, Series A, Class
1, (MBIA Insured),
5.250% 09/01/13....... Aaa AAA 5,803,679
Texas State, GO,
Refunding, Series A:
5,000,000 5.800% 10/01/04....... Aa2 AA 5,430,250
2,000,000 6.000% 10/01/08....... Aa2 AA 2,245,300
Texas State, Public
Finance Authority:
(Building Revenue):
5,000,000 Series B, (AMBAC
Insured),
6.100% 02/01/04....... Aaa AAA 5,465,050
1,200,000 Series C,
6.000% 10/01/06....... Aa2 AA 1,331,340
Texas State, Turnpike
Authority, Dallas
North Tollway
Revenue: President
George Bush Turnpike:
3,250,000 (AMBAC Insured),
5.450% 01/01/09+...... Aaa AAA 1,947,693
10,000,000 (FGIC Insured),
5.250% 01/01/23....... Aaa AAA 9,985,400
645,000 Texas State, Revenue
Refunding, Veterans
Housing Assistance,
Series B-4, AMT,
6.200% 12/01/14....... Aa2 AA 666,911
Texas State, Water
Development, GO:
1,850,000 5.500% 08/01/07....... Aa2 AA 1,993,986
5,000,000 5.250% 08/01/28....... Aa2 AA 5,043,700
1,000,000 Series D,
5.000% 08/01/19....... Aa2 AA 974,330
1,515,000 Texas Water Resource
Finance Authority,
Revenue,
7.400% 08/15/00....... A A 1,570,676
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
TEXAS -- (CONTINUED)
Travis County, Texas,
Limited Tax Revenue
Refunding,
Series A, (MBIA
Insured):
$ 4,000,000 6.000% 03/01/00....... Aaa AAA $ 4,154,800
3,250,000 5.500% 03/01/03....... Aaa AAA 3,432,845
3,500,000 5.600% 03/01/04....... Aaa AAA 3,701,180
1,500,000 5.750% 03/01/06....... Aaa AAA 1,585,875
Trinity River
Authority, Texas:
Regional Wastewater
Systems Revenue,
(AMBAC Insured):
2,750,000 7.000% 08/01/00....... Aaa AAA 2,936,918
3,885,000 5.700% 08/01/03....... Aaa AAA 4,107,144
1,000,000 University of Houston,
Texas, University
Revenue Refunding,
Series A, (MBIA
Insured),
7.100% 02/15/99....... Aaa AAA 1,029,210
7,000,000 University of Texas
Permanent University
Fund, (PUFG),
5.250% 07/01/12....... Aa1 AAA 7,206,430
2,500,000 University of Texas
University Revenues,
Financing Systems,
Series B,
4.500% 08/15/13....... Aa1 AAA 2,364,325
------------
327,696,779
------------
ALASKA -- 0.8%
4,725,000 North Slope Boro,
Alaska, Capital
Appreciation,
Series A, GO, (MBIA
Insured),
5.750% 06/30/06+...... Aaa AAA 3,231,097
------------
ARIZONA -- 1.4%
3,250,000 Arizona Educational
Loan Marketing
Corporation,
Educational Loan
Revenue, Series A,
(GTD STD LNS),
6.550% 03/01/99....... Aa2 NR 3,326,667
2,100,000 Coconino County,
Arizona, Unified
School District No.
001, (Flagstaff
Project), GO, (AMBAC
Insured),
5.800% 07/01/02....... Aaa AAA 2,194,080
------------
5,520,747
------------
CONNECTICUT -- 1.4%
5,000,000 Connecticut State,
Series A, GO,
5.625% 03/15/09....... Aa3 AA- 5,372,600
------------
FLORIDA -- 0.3%
1,000,000 Florida State, Housing
Finance Agency,
Multi-family Housing
Revenue, (Andover
Place Project),
Series E,
6.350% 05/01/26....... NR BBB+ 1,070,660
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
149
<PAGE> 154
NATIONS FUNDS
Nations Texas Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
GUAM -- 0.3%
$ 1,000,000 Government of Guam,
Series A, GO,
5.200% 11/15/08....... NR BBB $ 1,020,110
------------
HAWAII -- 0.7%
2,500,000 Honolulu, Hawaii, City
and County, Series D,
GO,
6.400% 12/01/99....... Aaa AA 2,607,150
------------
ILLINOIS -- 0.9%
2,500,000 Illinois State, GO,
4.400% 12/01/03....... Aa3 AA 2,516,075
1,100,000 Rosemont, Illinois,
Series B, GO, (FGIC
Insured),
6.400% 12/01/03....... Aaa AAA 1,180,542
------------
3,696,617
------------
MAINE -- 0.6%
1,000,000 Bucksport, Maine,
Solid Waste Disposal
Revenue, (Champion
International
Corporation Project),
6.250% 05/01/10....... Baa1 BBB 1,062,500
1,000,000 Maine Municipal Board
Bank, Series D,
7.100% 11/01/01....... Aa3 A+ 1,090,530
------------
2,153,030
------------
MICHIGAN -- 1.3%
4,600,000 Detroit, Michigan,
Series B, GO,
6.500% 04/01/02....... Baa2 BBB+ 4,947,300
------------
MISSOURI -- 0.3%
1,135,000 University of
Missouri, University
Revenue, (Systems
Facilities Project),
5.750% 11/01/07....... Aa2 AA+ 1,246,264
------------
NEVADA -- 0.4%
1,500,000 Clark County, Nevada,
Improvement and
Refunding,
GO, (AMBAC-TCRS
Insured),
6.100% 10/01/02....... Aaa AAA 1,607,370
------------
NEW JERSEY -- 1.4%
5,000,000 New Jersey State,
Series E, GO,
6.000% 07/15/09....... Aa1 AA+ 5,620,000
------------
NEW YORK -- 1.0%
3,600,000 New York City, New
York, Municipal
Assistance
Corporation,
Series J, (GO of
Corp),
5.750% 07/01/03....... Aa2 AA 3,853,188
------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
OHIO -- 0.3%
$ 1,000,000 Ohio State Building
Authority,
Correctional
Facilities Revenue,
Series A,
7.150% 08/01/99....... Aaa NR $ 1,044,580
------------
SOUTH CAROLINA -- 0.3%
1,000,000 Greenville Hospital
System, South
Carolina, Hospital
Facilities Revenue,
Series B,
5.250% 05/01/06....... Aa3 AA 1,046,860
------------
SOUTH DAKOTA -- 0.3%
1,000,000 South Dakota State,
Housing Development
Authority Revenue,
Homeownership
Mortgage Revenue,
Series A,
5.000% 05/01/01....... Aa1 AAA 1,020,560
------------
TENNESSEE -- 0.8%
3,135,000 Chattanooga-Hamilton
County, Tennessee,
Hospital Authority,
Hospital Revenue,
(Erlanger Medical
Center Project), (FSA
Insured),
5.500% 10/01/07....... Aaa AAA 3,377,712
------------
WASHINGTON -- 3.1%
3,100,000 King County,
Washington, School
District No. 414,
(Lake Washington
Project), GO,
5.300% 12/01/05....... Aa2 AA 3,283,830
Washington State, GO:
3,695,000 Motor Vehicle Fuel
Tax, Series 1995D,
6.500% 09/01/01....... Aa1 AA+ 3,978,074
2,000,000 Series B,
6.300% 06/01/02....... Aa1 AA+ 2,129,040
2,425,000 Series 1995C,
5.450% 07/01/07....... Aa1 AA+ 2,569,069
------------
11,960,013
------------
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $368,663,620)...........
388,092,637
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
150
<PAGE> 155
NATIONS FUNDS
Nations Texas Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
INVESTMENT COMPANY -- 0.7% (Cost $2,686,000)
2,686,000 AIM Tax-Exempt Fund............ $ 2,686,000
------------
TOTAL INVESTMENTS (Cost $371,349,620*)..... 99.97% 390,778,637
OTHER ASSETS AND LIABILITIES (NET)......... 0.03 134,134
----- ------------
NET ASSETS................................. 100.0% $390,912,771
===== ============
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $19,530,458 and gross
depreciation of $101,441 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$371,349,620.
+ Zero coupon security. The rate shown reflects the yield to maturity.
++ Security purchased on a when-issued or delayed delivery basis.
Nations Texas Intermediate Bond Fund had the following insurance concentrations
greater than 10% at March 31, 1998 (as a percentage of net assets):
MBIA 16.3%
PSF-GTD 16.2%
AMBAC 12.2%
SEE NOTES TO FINANCIAL STATEMENTS.
151
<PAGE> 156
NATIONS FUNDS
Nations Texas Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 98.6%
TEXAS -- 82.5%
$ 500,000 Dallas County, Texas,
GO,
5.250% 08/15/14........ Aaa AAA $ 507,905
750,000 Dallas-Fort Worth,
Texas, Regional Airport
Revenue Refunding,
Series A, (MBIA
Insured),
6.000% 11/01/09........ Aaa AAA 817,463
500,000 Denison, Texas, Hospital
Authority Revenue,
(Texoma Medical Center
Inc. Project),
5.450% 08/15/02........ NR BBB+ 518,635
500,000 Fort Worth Texas Higher
Education Financial
Corp, Higher Education
Revenue, (Christian
University Project),
5.000% 03/15/20........ NR AA- 485,710
500,000 Galena Park, Texas,
Independent School
District, GO, (PSFG
Insured),
5.000% 08/15/21........ Aaa NR 485,875
500,000 Gulf Coast, Texas, Waste
Disposal Authority
Revenue Refunding,
(Houston Light & Power
Company), Series A,
(MBIA Insured),
6.375% 04/01/12........ Aaa AAA 546,530
500,000 Harris County, Texas,
Health Facilities
Development Authority,
Hospital Revenue,
Revenue Refunding,
(Texas Childrens
Hospital Project),
(MBIA Insured),
6.000% 06/01/10........ Aaa AAA 559,180
500,000 Hurst Euless Bedford,
Texas, Independent
School District,
Revenue Refunding,
(PSFG Insured),
5.250% 08/15/24........ Aaa AAA 502,660
500,000 Lower Neches Valley,
Texas, Industrial
Development
Corporation, Revenue
Refunding, GO, (Mobil
Oil Refining Project),
5.800% 05/01/22........ Aa2 AA 529,325
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
TEXAS -- (CONTINUED)
$ 800,000 Pflugerville Texas,
Independent School
District, (PSFG
Insured),
5.750% 08/15/10........ Aaa AAA $ 879,664
1,000,000 Red River Authority,
Texas, PCR, (Hoechst
Celanese Corporation
Project), AMT,
6.875% 04/01/17........ A2 A+ 1,093,170
1,180,000 Santa Fe, Texas,
Independent School
District, (PSFG
Insured),
5.000% 02/15/07+....... Aaa NR 782,092
585,000 Sherman, Texas,
Independent School
District, GO, (PSFG
Insured),
6.500% 02/15/20........ Aaa AAA 659,353
Tarrant County, Texas,
Health Facilities
Development
Corporation, Health
System Revenue, (Harris
Methodist Health
System), (MBIA
Insured):
300,000 5.750% 02/15/08......... Aaa AAA 326,118
1,000,000 6.000% 09/01/10......... Aaa AAA 1,109,430
500,000 Texas State College,
Texas, Student Loan
Authority Revenue, GO,
AMT,
5.750% 08/01/11........ Aa2 AA 520,380
375,000 Texas State, Revenue
Refunding, Veterans
Housing Assistance, GO,
Series C,
6.400% 12/01/09........ Aa2 AA 399,315
600,000 Texas State, Water
Development Board
Revenue, State
Revolving Fund, Senior
Lien,
6.400% 07/15/08........ Aa1 AAA 655,110
1,000,000 Trinity River Authority,
Texas, PCR, (Texas
Instruments Inc.
Project),
6.200% 03/01/20........ NR A 1,074,260
500,000 University of Texas,
University Revenue
Financing, Series A,
5.200% 08/15/17........ Aa1 AAA 503,660
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
152
<PAGE> 157
NATIONS FUNDS
Nations Texas Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
TEXAS -- (CONTINUED)
$1,000,000 Waller, Texas,
Consolidated
Independent School
District, GO, (PSFG
Insured),
5.250% 02/15/21........ Aaa NR $ 1,006,830
-----------
13,962,665
-----------
COLORADO -- 6.4%
1,500,000 Arapahoe County,
Colorado, Capital
Improvements Highway
Revenue, Capital
Appreciation, Series E,
7.200% 08/31/05+....... AAA NR 1,078,335
-----------
OHIO -- 6.6%
1,000,000 Lucas County, Ohio,
Hospital Revenue,
(Flower Hospital
Project), Prerefunded,
6.125% 12/01/13........ NR NR 1,108,590
-----------
PUERTO RICO -- 3.1%
500,000 Puerto Rico Industrial,
Medical and
Environmental Agency,
Pollution Control
Facilities, Finance
Authority Revenue,
Higher Education,
(Catholic University
Project), Series A,
5.600% 12/01/07........ NR BBB- 527,049
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $15,388,135).............. 16,676,640
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
INVESTMENT COMPANY -- 0.8% (Cost $134,000)
134,000 AIM Tax-Exempt Fund.............. $ 134,000
-----------
TOTAL INVESTMENTS
(Cost $15,522,135*)........................ 99.4% 16,810,640
OTHER ASSETS AND
LIABILITIES (NET).......................... 0.6 108,541
----- -----------
NET ASSETS.................................. 100.0% $16,919,181
===== ===========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $1,294,862 and gross
depreciation of $6,357 for federal income tax purposes. At March 31, 1998, the
aggregate cost of securities for federal income tax purposes was $15,522,135.
+ Zero Coupon Security. The rate shown reflects the yield to maturity.
Nations Texas Municipal Bond Fund had the following insurance concentrations
greater than 10% at March 31, 1998 (as a percentage of net assets):
PSF-GTD 25.5%
MBIA 19.9%
Nations Texas Municipal Bond Fund had the following industry concentration
greater than 10% at March 31, 1998 (as a percentage of net assets):
Pollution Control Revenue/
Industrial Development Revenue 15.94%
SEE NOTES TO FINANCIAL STATEMENTS.
153
<PAGE> 158
NATIONS FUNDS
Nations Virginia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 96.3%
VIRGINIA -- 92.8%
$2,000,000 Alexandria, Virginia,
Redevelopment and
Housing Authority,
Multi-family Housing
Revenue Mortgage,
Buckingham Village
Apartments, Series A,
AMT,
6.050% 07/01/16...... NR A $ 2,062,160
1,000,000 Amherst, Virginia,
Industrial
Development Authority
Revenue,
5.250% 02/01/11...... Baa2 NR 1,001,780
Arlington County,
Virginia, GO:
2,345,000 5.400% 08/01/02....... Aaa AAA 2,469,519
3,000,000 5.000% 07/15/03....... Aaa AAA 3,124,140
2,900,000 5.900% 12/01/03....... Aaa AAA 3,123,155
1,000,000 Arlington County,
Virginia, Industrial
Development
Authority, Hospital
Facilities Revenue,
Series A,
6.650% 09/01/05...... AAA NR 1,097,220
1,000,000 Arlington County,
Virginia, Industrial
Development
Authority, Facilities
Revenue, (The Natures
Conservancy), Series
A,
5.450% 07/01/27...... Aa1 NR 1,020,150
3,455,000 Augusta County,
Virginia, Industrial
Development Authority
Hospital Revenue,
(Augusta Hospital
Corporate Project),
7.000% 09/01/21...... A NR 3,819,710
2,000,000 Brunswick County,
Virginia, Industrial
Development
Authority,
Correctional Facility
Lease, (MBIA
Insured),
5.250% 07/01/04...... Aaa AAA 2,104,140
1,000,000 Charlottesville-
Albemarle, Virginia,
Airport Authority
Revenue Refunding,
AMT,
6.125% 12/01/09...... NR BBB 1,051,790
1,000,000 Chesapeake, Virginia,
GO,
5.700% 08/01/01...... Aa AA 1,052,280
1,525,000 Chesapeake, Virginia,
Public Improvement,
GO, (State Aid
Withholding),
5.000% 05/01/03...... Aa3 AA 1,582,889
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
VIRGINIA -- (CONTINUED)
$6,195,000 Chesapeake, Virginia,
Revenue Refunding,
GO,
5.125% 12/01/05...... Aa3 AA $ 6,504,812
2,000,000 Chesapeake, Virginia,
Water and Sewer, GO,
Series A,
7.000% 12/01/09...... Aa3 AA 2,356,600
Chesterfield County,
Virginia, GO:
1,095,000 7.100% 03/01/00....... Aaa AAA 1,150,100
1,000,000 Series A,
6.500% 01/15/01....... Aaa AAA 1,062,140
1,000,000 Series B,
6.500% 01/01/02....... Aaa AAA 1,080,990
2,120,000 Pre-refunded,
6.700% 01/01/11....... NR AAA 2,303,189
2,000,000 Chesterfield County,
Virginia, Public
Improvement, GO,
5.900% 07/15/02....... Aaa AAA 2,143,700
Chesterfield County,
Virginia, Water and
Sewer Authority
Revenue, Revenue
Bond:
1,000,000 6.200% 11/01/05....... Aa2 AA 1,094,690
Series A:
2,000,000 5.500% 11/01/00....... Aa2 AA 2,080,340
2,020,000 5.625% 11/01/01....... Aa2 AA 2,125,949
1,320,000 Covington-Allegheny
County, Virginia,
Industrial
Development
Authority, PCR,
(Westvaco Corporation
Project),
5.900% 03/01/05...... A1 A 1,441,031
2,500,000 Fairfax County,
Virginia, Water
Authority, Revenue
Refunding,
5.000% 04/01/21...... Aa2 AA 2,479,750
2,000,000 Fairfax County,
Virginia, Public
Improvement, GO,
Series A,
6.000% 06/01/04...... Aaa AAA 2,190,260
1,000,000 Fairfax County,
Virginia, Industrial
Development Authority
Revenue Refunding,
(Inova Health Systems
Hospital Project),
6.100% 08/15/99...... Aa2 AA 1,032,150
3,135,000 Fairfax County,
Virginia, Water and
Sewer Authority
Revenue, (AMBAC
Insured),
5.100% 11/15/04...... Aaa AAA 3,279,900
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
154
<PAGE> 159
NATIONS FUNDS
Nations Virginia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ------------------------------------------------------------------
<C> <S> <C> <C> <C>
VIRGINIA -- (CONTINUED)
$1,330,000 Halifax County,
Virginia, Industrial
Development
Authority, Exempt
Facilities Revenue,
(Old Dominion
Electric Co-op
Project), AMT,
5.900% 12/01/02...... NR A+ $ 1,410,372
1,200,000 Halifax County,
Virginia, Industrial
Development
Authority, Hospital
Revenue, (Halifax
Regional Hospital),
4.900% 09/01/10...... NR A 1,183,500
Hampton, Virginia,
Public Improvement,
GO:
1,000,000 6.500% 01/01/00....... Aa3 AA 1,044,880
2,190,000 Series C,
4.750% 08/01/05....... Aa3 AA 2,241,618
2,500,000 Hampton Roads
Sanitation District,
Virginia, Sewer
Revenue Refunding:
4.500% 10/01/02....... Aa AA 2,539,675
5,000,000 Hanover County,
Virginia, Industrial
Development Authority
Revenue, (MBIA
Insured), (Memorial
Regional Medical
Center Project),
5.500% 08/15/25...... Aaa AAA 5,121,000
Henrico County,
Virginia, Industrial
Development Authority
Revenue:
2,105,000 Public Facilities
Lease Revenue,
7.500% 08/01/02....... Aa2 AA 2,370,335
3,500,000 Solid Waste,
(Browning-Ferris
Industries Inc.
Project),
5.300% 12/01/11...... A3 A 3,656,765
1,500,000 Henrico County,
Virginia, Water and
Sewer Authority
Revenue, Pre-
refunded,
6.200% 05/01/04...... Aa2 AAA 1,541,595
1,110,000 Henry County,
Virginia, Public
Service Authority,
Water and Sewer
Authority Revenue,
(FGIC Insured),
5.500% 11/15/99...... Aaa AAA 1,140,469
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
VIRGINIA -- (CONTINUED)
$1,915,000 James City County,
Virginia, GO, (FGIC
Insured),
5.000% 12/15/08....... Aaa AAA $ 1,989,494
1,000,000 Leesburg, Virginia,
Revenue Refunding,
5.500% 08/01/06...... A1 A 1,065,020
Loudoun County,
Virginia, Industrial
Development
Authority, Hospital
Revenue, (Loudoun
Hospital Center),
(FSA Insured):
1,500,000 5.500% 06/01/08....... Aaa AAA 1,591,875
1,000,000 5.600% 06/01/09....... Aaa AAA 1,060,220
Loudoun County,
Virginia, Sanitation
Authority:
2,000,000 Refunding and
Improvement
Authority, (ST AID
WITHHOLDING),
5.000% 10/01/02...... Aa2 AA- 2,072,460
1,000,000 Water and Sewer
Authority Revenue,
(FGIC Insured),
5.800% 01/01/01...... Aaa AAA 1,045,570
1,500,000 Louisa, Virginia,
Industrial
Development
Authority, Solid
Waste & Sewer
Disposal Revenue,
(Virginia Electric &
Power Company),
Series A,
5.150% 04/01/22...... A3 A- 1,540,305
1,140,000 Lynchburg, Virginia,
Public Improvement,
GO,
5.400% 05/01/17...... Aa3 AA 1,164,841
5,000,000 Newport News,
Virginia, Public
Improvement, Series
B,
5.200% 11/01/04...... Aa2 AA 5,264,250
Newport News,
Virginia, Water and
Sewer Authority
Revenue:
Series A:
1,020,000 5.500% 06/01/01....... Aa2 AA 1,064,625
1,095,000 5.600% 06/01/02....... Aa2 AA 1,156,955
1,000,000 Series B, (ST AID
WITHHOLDING),
5.100% 11/01/03....... Aa2 AA 1,044,850
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
155
<PAGE> 160
NATIONS FUNDS
Nations Virginia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ------------------------------------------------------------------
<C> <S> <C> <C> <C>
VIRGINIA -- (CONTINUED)
Norfolk, Virginia,
Capital Improvement,
GO, (FGIC Insured):
$1,000,000 5.375% 06/01/05....... Aaa AAA $ 1,062,470
1,000,000 Series A,
5.900% 02/01/06....... A1 AA 1,056,610
2,250,000 Norfolk, Virginia,
Redevelopment and
Housing Authority,
Educational Facility
Revenue, (Tidewater
Community College
Campus),
5.875% 11/01/15...... Aa AA 2,380,770
2,000,000 Norfolk, Virginia,
Water Revenue, (MBIA
Insured),
5.700% 11/01/10...... Aaa AAA 2,151,520
Portsmouth, Virginia,
Public Improvement,
GO, Pre-refunded:
1,750,000 6.700% 08/01/03....... NR AA- 1,887,603
1,000,000 6.800% 08/01/09....... NR AA- 1,080,740
1,735,000 6.800% 08/01/06....... NR AA- 1,875,084
Portsmouth, Virginia,
Refunding, GO:
1,000,000 5.000% 08/01/02....... A3 AA- 1,033,340
1,000,000 5.250% 08/01/04....... A3 AA- 1,051,560
1,465,000 Prince William County,
Virginia, GO, Series
A,
6.200% 12/01/10...... Aa2 AA 1,561,250
Prince William County,
Virginia, Industrial
Development
Authority, Hospital
Revenue Refunding:
1,775,000 (Potomoc Hospital
Corporation Project),
(GO of Hospital),
6.550% 10/01/05...... A2 NR 1,986,491
1,300,000 (Prince William
Hospital Project),
5.625% 04/01/12...... A2 NR 1,329,016
3,500,000 (Potomac Hospital
Corporation Project),
(FSA Insured),
5.000% 10/01/18...... Aaa NR 3,390,940
1,000,000 Prince William County,
Virginia, Park
Authority Revenue,
6.300% 10/15/07...... NR A- 1,105,710
3,000,000 Prince William County,
Virginia, Service
Authority, Water and
Sewer Systems,
Revenue Refunding,
(FGIC Insured),
5.000% 07/01/21...... Aaa AAA 2,903,640
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
VIRGINIA -- (CONTINUED)
$1,000,000 Richmond, Virginia,
Metropolitan
Expressway Authority,
Revenue Refunding,
Series A, (FGIC
Insured),
5.650% 07/15/00...... Aaa AAA $ 1,038,790
Richmond, Virginia,
Public Improvement,
GO:
Series A:
2,300,000 6.500% 01/15/02....... A1 AA 2,488,186
1,000,000 6.700% 01/15/11....... AAA AA 1,087,300
1,000,000 Series B, (FGIC
Insured),
5.000% 01/15/21...... Aaa AAA 969,500
1,000,000 Pre-refunded,
6.200% 01/15/03...... AAA AA 1,074,250
Roanoke, Virginia,
Public Improvement,
GO, Series B:
1,000,000 5.800% 08/01/00....... Aa3 AA 1,043,290
3,295,000 6.000% 08/01/03....... Aa3 AA 3,500,279
600,000 Roanoke, Virginia,
Redevelopment and
Housing Authority,
Multi-family Housing
Revenue Refunding,
United Dominion-
Laurel Ridge,
6.625% 05/01/23...... NR BBB+ 629,988
1,115,000 Roanoke County,
Virginia, Industrial
Development, (Hollins
College),
5.200% 03/15/17...... NR A 1,103,047
5,000,000 Southeastern Public
Service Authority,
Virginia, Series A,
(MBIA Insured),
5.100% 07/01/08...... Aaa AAA 5,239,650
Spotsylvania County,
Virginia, Public
Improvement, GO:
1,580,000 5.200% 07/15/01....... A1 A+ 1,635,174
2,320,000 5.875% 07/15/09....... A1 A+ 2,487,922
2,535,000 Staunton, Virginia,
Industrial
Development
Authority,
Educational
Facilities Revenue,
(Mary Baldwin College
Project),
6.600% 11/01/14...... NR NR 2,757,167
Suffolk, Virginia,
Refunding and
Improvement, GO:
1,110,000 5.400% 08/01/04....... A1 A 1,175,734
1,500,000 5.750% 08/01/08....... A1 A 1,605,675
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
156
<PAGE> 161
NATIONS FUNDS
Nations Virginia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ------------------------------------------------------------------
<C> <S> <C> <C> <C>
VIRGINIA -- (CONTINUED)
$2,000,000 University of
Virginia, Hospital
Revenue Bond,
6.000% 06/01/13...... Aa3 AA $ 2,042,920
2,000,000 Upper Occoquan,
Virginia, Sewer
Authority, Regional
Sewer Revenue, (MBIA
Insured),
6.250% 07/01/05...... AAA AAA 2,165,140
Virginia Beach,
Virginia, GO:
1,000,000 Pre-refunded,
6.950% 06/01/06...... NR NR 1,078,490
Refunding:
1,000,000 5.550% 02/01/01....... AA2 AA 1,041,700
2,300,000 5.400% 07/15/08....... AA2 AA 2,462,955
Series A:
1,000,000 6.900% 10/01/00....... AA AA 1,062,660
1,000,000 6.850% 06/01/01....... AA2 AA 1,076,540
2,350,000 Virginia Biotechnology
Research Park
Authority, Lease
Revenue, (Biotech Two
Project),
5.750% 09/01/05...... Aa AA 2,553,463
Virginia College
Building Authority,
Educational
Facilities Revenue,
University of
Richmond:
2,000,000 5.625% 11/01/02....... Aa2 AA- 2,090,480
2,000,000 (Equipment Leasing
Program),
5.000% 02/01/02...... 2,064,360
Virginia Port
Authority,
Commonwealth Port
Fund Revenue, AMT,
(MBIA Insured):
1,340,000 5.750% 07/01/02....... Aa2 AA 1,417,841
1,000,000 5.650% 07/01/17....... Aaa AAA 1,038,740
1,000,000 Virginia State,
Resource Authority,
Authority System
Revenue,
5.000% 05/01/18...... NR AA 972,780
1,175,000 Virginia State, Higher
Educational
Institutions Revenue,
GO,
6.000% 06/01/01...... Aaa AAA 1,227,617
1,695,000 Virginia State,
Housing Development
Authority,
Commonwealth
Mortgage, Series D,
Sub-Series D-3, (GO
of AUTH),
6.100% 01/01/15...... Aa1 AA+ 1,792,971
3,000,000 Virginia State, Public
Building Authority,
Series I, (School
Findings),
5.250% 08/01/10...... Aa1 AA+ 3,161,550
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
VIRGINIA -- (CONTINUED)
Virginia State, Public
Building Authority,
Series A,
(Correctional
Facilities):
$2,000,000 5.800% 08/01/02....... Aa AA $ 2,119,060
Series A, (ST AID
WITHHLDG):
2,195,000 5.400% 01/01/08....... Aa AA 2,302,226
5,000,000 5.000% 08/01/07....... Aa2 AA 5,184,650
1,000,000 6.500% 08/01/08....... Aa2 AA 1,090,810
1,480,000 Series B,
5.100% 01/01/05....... Aa AA 1,541,583
3,500,000 Virginia State,
Refunding, GO, Series
B,
4.800% 06/01/07...... Aaa AAA 3,589,390
Virginia State,
Residential
Authority, Water &
Sewer System Revenue:
1,000,000 (Hopewell Regional
Wastewater Facility),
Series A,
6.000% 10/01/15...... NR AA 1,065,550
1,020,000 (Suffolk Project),
5.500% 04/01/17...... NR AA 1,057,505
Virginia State,
Transportation Board
Authority, Contract
Revenue:
2,105,000 5.100% 05/15/05....... Aa2 AA 2,196,778
3,000,000 Project A,
4.900% 05/15/03...... Aa2 AA 3,091,560
3,150,000 Route 28,
6.000% 04/01/02...... Aa AA 3,366,342
Route 58, Series A:
2,100,000 5.125% 05/15/19....... Aa2 AA 2,077,173
5,390,000 5.500% 05/15/09....... Aa2 AA 5,664,781
2,470,000 Virginia State, Water
and Sewer Revenue
Authority, Revenue
Bond,
5.150% 10/01/07...... NR AA 2,576,037
Washington County,
Virginia, Industrial
Development Authority
Hospital Facility
Revenue, (Johnston
Memorial Hospital):
1,000,000 5.625% 07/01/02....... A3 NR 1,048,910
1,000,000 6.000% 07/01/14....... A3 NR 1,051,310
1,500,000 Winchester, Virginia,
Industrial
Development Authority
Revenue, (AMBAC
Insured),
6.150% 01/01/99...... Aaa AAA 1,527,165
------------
219,638,941
------------
MAINE -- 1.1%
2,500,000 Baileyville, Maine,
(Pollution Control
Project),
4.750% 06/01/05...... Baa2 NR 2,501,350
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
157
<PAGE> 162
NATIONS FUNDS
Nations Virginia Intermediate Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- ------------------------------------------------------------------
<C> <S> <C> <C> <C>
DISTRICT OF COLUMBIA -- 0.9%
Washington, D.C.,
Metropolitan Airports
Authority,
Virginia General
Airport Revenue, AMT:
$1,000,000 Series A, (MBIA
Insured),
5.200% 10/01/02...... Aaa AAA $ 1,038,960
1,000,000 Series B, (FGIC
Insured),
5.75% 10/01/03....... Aaa AAA 1,069,340
------------
2,108,300
------------
NEW YORK -- 0.9%
2,000,000 New York, NY, City
Municipal Water
Finance Authority &
Sewer System
Revenue -- Series D,
5.00% 06/15/04....... A2 A- 2,071,000
------------
ALASKA -- 0.4%
1,000,000 Alaska State, Student
Loan Corporation,
Student Loan Revenue,
Series A, AMT, (AMBAC
Insured),
5.250% 07/01/03...... Aaa AAA 1,036,540
------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
OHIO -- 0.2%
$ 500,000 Dayton, Ohio, Special
Facilities Revenue,
6.200% 10/01/09...... NR BBB $ 542,555
------------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $216,095,699)........... 227,898,686
SHARES
- ----------
INVESTMENT COMPANY -- 1.0% (Cost $2,324,000)
2,324,000 AIM Tax-Exempt Fund............ 2,324,000
------------
TOTAL INVESTMENTS
(Cost $218,419,699*)...................... 97.3% 230,222,686
OTHER ASSETS AND
LIABILITIES (NET)......................... 2.7 6,418,484
----- ------------
NET ASSETS................................. 100.0% $236,641,170
===== ============
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $11,933,567 and gross
depreciation of $130,580 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes was
$218,419,699.
SEE NOTES TO FINANCIAL STATEMENTS.
158
<PAGE> 163
NATIONS FUNDS
Nations Virginia Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 96.6%
VIRGINIA -- 96.6%
$1,000,000 Augusta County,
Virginia, Industrial
Development Authority,
Hospital Revenue
Refunding, (Augusta
Hospital Corporation),
(AMBAC Insured),
5.500% 09/01/15........ Aaa AAA $ 1,021,560
475,000 Chesapeake, Virginia,
Industrial Development
Authority Revenue
Refunding, Port
Facilities, (Cargill
Inc. Project),
5.875% 03/01/13........ Aa3 NR 503,187
500,000 Covington-Allegheny
County, Virginia,
Industrial Development
Authority, PCR,
(Westvaco Corporation
Project),
6.650% 09/01/18........ A1 A 557,710
500,000 Dayton, Ohio, Special
Facilities Revenue, Air
Freight-D-Convertible,
6.200% 10/01/09........ NR BBB 542,555
500,000 Fairfax County,
Virginia, Industrial
Development Authority
Revenue Refunding,
(Inova Health Systems
Hospital Project),
5.500% 08/15/10........ Aa2 AA 527,885
1,000,000 Fairfax County,
Virginia, Sewer,
Revenue Refunding,
(AMBAC Insured),
5.500% 11/15/13........ Aaa AAA 1,036,430
500,000 Fairfax County,
Virginia, Water
Authority, Revenue
Refunding,
5.000% 04/01/21........ Aa2 AA 495,950
2,420,000 Galena Park Texas,
Independent School
District, Capital
Appreciation, Revenue
Refunding, (PSF-GTD),
GO,
6.375% 08/15/24+....... Aaa NR 599,482
800,000 Giles County, Virginia,
Industrial Development
Authority, Revenue
Exempt Facilities,
(Hoechst Celanese
Corporation Project),
AMT,
5.950% 12/01/25........ A2 A+ 841,960
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
VIRGINIA -- (CONTINUED)
$ 400,000 Halifax County Virginia,
Industrial Development
Authority, Hospital
Revenue (Halifax
Regional Hospital,
Inc.),
5.2500% 09/01/17....... NR A $ 392,820
400,000 Hampton, Virginia,
Museum, Revenue
Refunding,
5.250% 01/01/09........ NR A 412,812
500,000 Hanover County,
Virginia, Industrial
Development Authority,
(Bon Secours Health
System Projects), (MBIA
Insured),
5.500% 08/15/25........ Aaa AAA 512,100
500,000 Henrico County,
Virginia, Industrial
Development Authority
Revenue, Public
Facilities Lease
Revenue,
7.000% 08/01/13........ Aa2 AA 580,080
500,000 Henry County, Virginia,
GO,
5.750% 07/15/07........ A2 A 541,425
700,000 James City County,
Virginia, Public
Improvement, GO, (FGIC
Insured),
5.250% 12/15/14........ Aaa AAA 712,733
Loudoun County,
Virginia, Industrial
Development Authority,
Hospital Revenue,
(Loudoun Hospital
Center), (FSA Insured):
765,000 5.600% 06/01/09......... Aaa AAA 811,068
500,000 5.800% 06/01/20......... Aaa AAA 526,080
840,000 Norfolk Virginia,
Capital Improvement,
(FGIC Insured), GO,
5.375% 06/01/05........ Aaa AAA 892,475
500,000 Peninsula Ports
Authority, Virginia,
Health Care Facilities,
Revenue Refunding,
(Riverside Health
Systems Project),
Series A,
6.625% 07/01/18........ Aa2 AA- 545,055
500,000 Pittsylvania County,
Virginia, Public
Improvement, GO,
5.850% 07/01/08........ A3 A 541,670
1,000,000 Prince William County,
Virginia, Industrial
Development Authority,
Lease Revenue, (ATCC
Project),
6.000% 02/01/14........ A2 NR 1,071,240
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
159
<PAGE> 164
NATIONS FUNDS
Nations Virginia Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1998
<TABLE>
<CAPTION>
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
VIRGINIA -- (CONTINUED)
$ 500,000 Prince William County,
Virginia, Park
Authority Revenue,
6.875% 10/15/16........ NR A- $ 562,255
500,000 Richmond, Virginia, GO,
Revenue Refunding,
Series B, (FGIC
Insured),
5.000% 01/15/21........ Aaa AAA 484,750
800,000 Richmond, Virginia,
Metropolitan Expressway
Authority, Revenue
Refunding, Series B,
(FGIC Insured),
6.250% 07/15/22........ Aaa AAA 868,192
1,390,000 Rivanna, Virginia,
Regional Water and
Sewer Authority,
Regional Water and
Sewer Systems Revenue
Refunding,
6.450% 10/01/12........ Aa NR 1,505,370
1,000,000 Staunton, Virginia,
Industrial Development
Authority, Educational
Facilities Revenue,
(Mary Baldwin College
Project),
6.600% 11/01/14........ NR NR 1,087,640
500,000 Upper Occoquan,
Virginia, Sewer
Authority, Regional
Sewer Revenue, Series
A, (MBIA Insured),
5.000% 07/01/25........ A NR 483,355
500,000 Virginia Beach,
Virginia, Public
Improvement Refunding,
GO,
5.750% 11/01/08........ Aa2 AA 542,410
Virginia Commonwealth,
Virginia Transportation
Program Revenue,
(Northern Virginia
Transportation District
PG -- B):
555,000 5.000% 05/15/14......... Aa2 AA 551,931
1,000,000 (Oak Grove Connector,
Series A),
5.250% 05/15/22......... Aa2 AA 1,011,710
640,000 Virginia State, Public
School Authority
Revenue, Series A,
(State Aid
Withholding),
6.125% 08/01/11........ Aa2 AA 703,392
820,000 Virginia State, Resource
Authority, Sewer
Systems Revenue,
(Harrisonburg --
Rockingham),
4.700% 05/01/11........ NR AA 807,995
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
RATING
PRINCIPAL (UNAUDITED)
AMOUNT MOODY'S S&P VALUE
<C> <S> <C> <C> <C>
VIRGINIA -- (CONTINUED)
$ 750,000 Virginia State, Resource
Authority, Sewer
Systems Revenue,
(Hopewell Regional
Wastewater Facility),
Series A, AMT,
6.000% 10/01/15........ NR AA $ 799,163
500,000 Virginia State, Resource
Authority, Water and
Sewer Systems Revenue,
(Fauquier County Water
and Sanitation
Authority), Series C,
6.125% 05/01/14........ NR AA 543,725
800,000 West Point, Virginia,
Industrial Development
Authority, Solid Waste
Disposal Revenue,
(Chesapeake Corporation
Project), Series A,
AMT,
6.375% 03/01/19........ Baa3 BBB 860,640
-----------
24,478,805
-----------
TOTAL MUNICIPAL
BONDS AND NOTES
(Cost $22,929,904).............. 24,478,805
-----------
SHARES
- ---------
INVESTMENT COMPANY -- 2.2% (Cost $556,000)
556,000 AIM Tax-Exempt Fund.............. 556,000
-----------
TOTAL INVESTMENTS
(Cost $23,485,904)......................... 98.8% 25,034,805
OTHER ASSETS AND
LIABILITIES (NET).......................... 1.2 297,798
----- -----------
NET ASSETS.................................. 100.0% $25,332,603
===== ===========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $1,560,099 and gross
depreciation of $11,198 for federal income tax purposes. At March 31, 1998,
the aggregate cost of securities for federal income tax purposes as
$23,485,904.
+ Zero coupon security. The rate shown reflects the yield to maturity.
Nations Virginia Municipal Bond Fund had the following industry concentrations
greater than 10% at March 31, 1998 (as a percentage of net assets):
Water Revenue 16.39%
Pollution Control Revenue/
Industrial Development Revenue 13.05%
SEE NOTES TO FINANCIAL STATEMENTS.
160
<PAGE> 165
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1998
ABBREVIATIONS:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
AMBAC-TCRS American Municipal Bond Assurance
Corporation -- Transferable Custodial Receipts
AMT Alternative Minimum Tax
CGIC Capital Guaranty Insurance Corporation
CONNIE LEE College Construction Loan Insurance Association
ETM Escrow to Maturity
FGIC Financial Guaranty Insurance Company
FHLMC COLL Federal Home Loan Mortgage Corporation
collateral
FHA Federal Housing Authority
FNMA COLL Federal National Mortgage Association
collateral
FSA Financial Security Assurance
GCO General Contractual Obligation
GO General Obligation
GNMA COLL Government National Mortgage Association
collateral
GTY-AGMT Guarantee Agreement
GTD STD LNS Guaranteed Student Loans
IBC Insured Bond Certificate
IDA Industrial Development Authority
LOC Letter of Credit
MHF Maryland Housing Fund
MBIA Municipal Bond Insurance Association
NR Not Rated
PCR Pollution Control Revenue
PSF-GTD Permanent School Fund Guaranteed
PUFG Permanent University Fund Guarantee
SCSDE South Carolina School District Enhancement
SCH BD GTY School Bond Guarantee
ST AID
WITHHLDG State Aid Withholding
ST GTD State Guaranteed
VA Veterans Association
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
161
<PAGE> 166
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES MARCH 31, 1998
<TABLE>
<CAPTION>
FLORIDA
SHORT-TERM INTERMEDIATE INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
INCOME BOND INCOME BOND
--------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value, See accompanying schedules........... $113,974,155 $867,720,893 $498,451,967 $211,602,806
Cash........................................................ 494 264 299 961
Interest receivable......................................... 1,539,026 12,608,870 7,112,842 3,876,206
Dividends receivable........................................ 14,778 25,560 20,295 2,463
Receivable for Fund shares sold............................. 130,455 1,519,485 643,310 287,115
Receivable for investment securities sold................... -- -- -- --
Unamortized organization costs.............................. 4,428 3,053 -- --
Prepaid expenses and other assets........................... -- 2,643 18,415 --
------------ ------------ ------------ ------------
Total Assets............................................ 115,663,336 881,880,768 506,247,128 215,769,551
------------ ------------ ------------ ------------
LIABILITIES:
Payable for Fund shares redeemed............................ 5,806,927 547,728 701,527 24,980
Payable for investment securities purchased................. -- -- 9,696,756 --
Dividends payable........................................... 277,816 3,387,871 1,895,327 825,259
Investment advisory fee payable............................. 18,871 236,803 174,774 56,397
Administration fee payable.................................. 7,793 59,259 33,374 14,538
Shareholder servicing and distribution fees payable......... 42,560 10,039 41,886 13,675
Transfer agent fees payable................................. 689 64,474 16,535 35,865
Custodian fees payable...................................... 1,937 8,881 898 2,260
Accrued Trustees' fees and expenses......................... 5,059 17,094 11,672 5,707
Accrued expenses and other payables......................... 40,581 294,341 135,888 81,348
------------ ------------ ------------ ------------
Total Liabilities....................................... 6,202,233 4,626,490 12,708,637 1,060,029
------------ ------------ ------------ ------------
NET ASSETS.................................................. $109,461,103 $877,254,278 $493,538,491 $214,709,522
============ ============ ============ ============
Investments, at cost........................................ $112,920,126 $827,636,809 $462,661,072 $200,091,336
============ ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital............................................. $108,789,017 $834,438,130 $456,218,748 $204,010,510
Undistributed net investment income/(distributions in excess
of net investment income)................................. 39,115 552,297 512,972 1
Accumulated net realized gain/(loss) on investments sold.... (421,058) 2,179,767 1,015,876 (812,459)
Net unrealized appreciation of investments.................. 1,054,029 40,084,084 35,790,895 11,511,470
------------ ------------ ------------ ------------
$109,461,103 $877,254,278 $493,538,491 $214,709,522
============ ============ ============ ============
NET ASSETS:
Primary A Shares............................................ $ 70,739,784 $867,154,294 $456,485,469 $203,710,476
Investor A Shares........................................... 23,580,384 6,487,361 19,225,884 7,205,307
Investor B Shares........................................... 13,753,149 2,022,729 15,383,084 3,605,598
Investor C Shares........................................... 1,387,786 1,589,894 2,444,054 188,141
SHARES OUTSTANDING:
Primary A Shares............................................ 7,038,749 84,154,390 39,833,259 18,921,971
Investor A Shares........................................... 2,346,231 629,584 1,677,650 669,272
Investor B Shares........................................... 1,368,434 196,299 1,342,323 334,913
Investor C Shares........................................... 138,083 154,293 213,261 17,473
PRIMARY A SHARES:
Net asset value, offering and redemption price per share.... $10.05 $10.30 $11.46 $10.77
INVESTOR A SHARES:
Net asset value, offering and redemption price per share.... $10.05 $10.30 $11.46 $10.77
INVESTOR B SHARES:
Net asset value and offering price per share*............... $10.05 $10.30 $11.46 $10.77
INVESTOR C SHARES:
Net asset value, offering and redemption price per share.... $10.05 $10.30 $11.46 $10.77
</TABLE>
- ---------------
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
162
<PAGE> 167
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
GEORGIA MARYLAND NORTH CAROLINA
FLORIDA INTERMEDIATE GEORGIA INTERMEDIATE MARYLAND INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND BOND BOND BOND BOND BOND
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$45,838,167 $143,277,377 $18,993,303 $103,581,472 $21,355,424 $193,570,217
922 552 76 727 675 791
831,546 1,916,680 282,454 1,548,099 332,310 2,982,485
1,419 6,726 1,790 6,891 1,347 8,325
30,575 90,745 5,327 1,227,867 440,067 385,706
-- -- -- -- -- --
333 -- 333 -- 508 --
527 14,180 2,059 15,115 1,944 4,660
----------- ------------ ----------- ------------ ----------- ------------
46,703,489 145,306,260 19,285,342 106,380,171 22,132,275 196,952,184
----------- ------------ ----------- ------------ ----------- ------------
5,855 1,123,804 32 41,034 9,990 53,624
-- -- 497,153 -- -- --
147,607 518,906 45,111 323,883 41,676 723,581
15,783 38,158 3,392 24,866 3,813 51,435
3,132 9,819 1,225 7,000 1,453 13,288
34,929 23,310 17,982 16,300 17,821 20,455
-- 17,317 -- 13,120 860 35,086
1,464 1,689 1,235 2,096 1,116 1,834
2,428 6,225 1,020 4,587 980 4,603
36,589 55,110 18,523 29,334 29,049 65,555
----------- ------------ ----------- ------------ ----------- ------------
247,787 1,794,338 585,673 462,220 106,758 969,461
----------- ------------ ----------- ------------ ----------- ------------
$46,455,702 $143,511,922 $18,699,669 $105,917,951 $22,025,517 $195,982,723
=========== ============ =========== ============ =========== ============
$42,819,112 $135,987,898 $18,154,446 $ 99,609,284 $20,276,110 $183,585,903
=========== ============ =========== ============ =========== ============
$44,508,037 $136,078,941 $18,093,368 $102,894,893 $20,976,197 $185,691,165
19,173 10,589 8,309 -- 6,677 81,013
(1,090,563) 132,913 (240,865) (949,130) (36,671) 226,231
3,019,055 7,289,479 838,857 3,972,188 1,079,314 9,984,314
----------- ------------ ----------- ------------ ----------- ------------
$46,455,702 $143,511,922 $18,699,669 $105,917,951 $22,025,517 $195,982,723
=========== ============ =========== ============ =========== ============
$27,378,129 $125,653,522 $ 8,137,509 $ 84,715,476 $ 9,048,969 $179,729,393
2,026,694 9,446,280 483,486 15,558,365 1,902,402 8,572,188
17,048,121 7,378,260 10,051,788 4,803,807 11,071,412 6,858,948
2,758 1,033,860 26,886 840,303 2,734 822,194
2,741,355 11,507,268 813,624 7,692,234 910,748 16,804,822
202,933 865,104 48,341 1,412,698 191,475 801,503
1,707,028 675,698 1,005,016 436,181 1,114,294 641,316
276 94,678 2,688 76,289 275 76,872
$9.99 $10.92 $10.00 $11.01 $9.94 $10.70
$9.99 $10.92 $10.00 $11.01 $9.94 $10.70
$9.99 $10.92 $10.00 $11.01 $9.94 $10.70
$9.99 $10.92 $10.00 $11.01 $9.94 $10.70
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
163
<PAGE> 168
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
SOUTH CAROLINA TENNESSEE
NORTH CAROLINA INTERMEDIATE SOUTH CAROLINA INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND BOND BOND BOND
------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value , See accompanying schedules.......... $31,941,787 $273,685,379 $21,078,513 $49,460,887
Cash........................................................ 274 375 476 942
Interest receivable......................................... 440,303 3,981,652 335,274 754,637
Dividends receivable........................................ 1,236 7,418 2,110 1,859
Receivable for Fund shares sold............................. 1,291 602,631 69,880 85,577
Receivable for investment securities sold................... -- -- -- --
Unamortized organization costs.............................. 334 -- 391 117
Prepaid expenses and other assets........................... 1,113 -- -- 166
----------- ------------ ----------- -----------
Total Assets............................................ 32,386,338 278,277,455 21,486,644 50,304,185
----------- ------------ ----------- -----------
LIABILITIES:
Payable for Fund shares redeemed............................ -- 374,219 -- 1,579
Payable for investment securities purchased................. -- -- -- --
Dividends payable........................................... 46,896 1,079,852 48,689 153,513
Investment advisory fee payable............................. 8,666 74,716 4,774 9,987
Administration fee payable.................................. 2,179 18,786 1,446 3,385
Shareholder servicing and distribution fees payable......... 43,762 26,056 19,619 10,987
Transfer agent fees payable................................. 856 49,746 510 6,874
Custodian fees payable...................................... 1,521 2,633 1,522 1,072
Accrued Trustees' fees and expenses......................... 1,819 7,251 1,131 1,626
Accrued expenses and other payables......................... 28,930 93,136 14,775 36,579
----------- ------------ ----------- -----------
Total Liabilities....................................... 134,629 1,726,395 92,466 225,602
----------- ------------ ----------- -----------
NET ASSETS.................................................. $32,251,709 $276,551,060 $21,394,178 $50,078,583
=========== ============ =========== ===========
Investments, at cost........................................ $29,840,389 $257,285,504 $20,010,852 $47,368,197
=========== ============ =========== ===========
NET ASSETS CONSIST OF:
Paid-in capital............................................. $31,045,798 $259,838,522 $20,358,974 $48,166,559
Undistributed net investment income/(distributions in excess
of net investment income)................................. 24,024 24,077 7,019 4,404
Accumulated net realized gain/(loss) on investments sold.... (919,511) 288,586 (39,476) (185,070)
Net unrealized appreciation of investments.................. 2,101,398 16,399,875 1,067,661 2,092,690
----------- ------------ ----------- -----------
$32,251,709 $276,551,060 $21,394,178 $50,078,583
=========== ============ =========== ===========
NET ASSETS:
Primary A Shares............................................ $ 6,452,397 $253,089,984 $ 9,455,470 $39,090,742
Investor A Shares........................................... 609,260 13,944,575 1,516,826 8,060,838
Investor B Shares........................................... 25,187,288 6,818,744 10,393,945 2,924,445
Investor C Shares........................................... 2,764 2,697,757 27,937 2,558
SHARES OUTSTANDING:
Primary A Shares............................................ 644,327 23,448,119 921,808 3,759,910
Investor A Shares........................................... 60,839 1,291,934 147,884 775,317
Investor B Shares........................................... 2,515,201 631,739 1,013,367 281,287
Investor C Shares........................................... 276 249,935 2,724 246
PRIMARY A SHARES:
Net asset value, offering and redemption price per share.... $10.01 $10.79 $10.26 $10.40
INVESTOR A SHARES:
Net asset value, offering and redemption price per share.... $10.01 $10.79 $10.26 $10.40
INVESTOR B SHARES:
Net asset value and offering price per share*............... $10.01 $10.79 $10.26 $10.40
INVESTOR C SHARES:
Net asset value, offering and redemption price per share.... $10.01 $10.79 $10.26 $10.40
</TABLE>
- ---------------
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
164
<PAGE> 169
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1998
<TABLE>
<CAPTION>
TEXAS VIRGINIA
TENNESSEE INTERMEDIATE TEXAS INTERMEDIATE VIRGINIA
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND BOND BOND BOND BOND
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$10,823,947 $390,778,637 $16,810,640 $230,222,686 $25,034,805
138 418 188 721 883
184,157 4,388,189 195,747 3,501,243 386,484
483 9,738 703 16,469 2,769
267 1,283,482 592 1,128,605 25,655
-- -- -- 2,739,600 --
519 -- 686 -- 333
398 -- -- 6,670 --
----------- ------------ ----------- ------------ -----------
11,009,909 396,460,464 17,008,556 237,615,994 25,450,929
----------- ------------ ----------- ------------ -----------
-- 66,477 -- 2,413 4,020
-- 3,548,514 -- -- --
21,158 1,562,536 40,706 754,813 59,248
900 108,682 2,456 60,948 5,759
742 26,581 1,149 15,902 1,716
8,802 6,778 16,142 43,451 23,630
424 87,177 549 800 952
1,392 3,355 2,450 4,168 1,506
570 7,041 1,029 13,967 1,318
19,405 130,552 24,894 78,362 20,177
----------- ------------ ----------- ------------ -----------
53,393 5,547,693 89,375 974,824 118,326
----------- ------------ ----------- ------------ -----------
$10,956,516 $390,912,771 $16,919,181 $236,641,170 $25,332,603
=========== ============ =========== ============ ===========
$10,184,283 $371,349,620 $15,522,135 $218,419,699 $23,485,904
=========== ============ =========== ============ ===========
$10,452,835 $371,586,009 $16,163,801 $224,955,635 $24,393,396
7,858 28,542 145,586 6,892
14,042
(150,025) (110,113) (561,667) (263,038) (616,586)
639,664 19,429,017 1,288,505 11,802,987 1,548,901
----------- ------------ ----------- ------------ -----------
$10,956,516 $390,912,771 $16,919,181 $236,641,170 $25,332,603
=========== ============ =========== ============ ===========
$ 4,559,019 $385,769,754 $ 7,615,473 $170,968,946 $11,026,251
1,440,334 2,665,543 418,921 54,079,989 1,221,541
4,915,130 2,184,451 8,804,367 9,643,303 13,082,034
42,033 293,023 80,420 1,948,932 2,777
445,946 36,741,449 758,682 15,652,574 1,107,945
140,887 253,880 41,734 4,951,236 122,742
480,776 208,051 877,119 882,875 1,314,525
4,111 27,908 8,012 178,441 279
$10.22 $10.50 $10.04 $10.92 $9.95
$10.22 $10.50 $10.04 $10.92 $9.95
$10.22 $10.50 $10.04 $10.92 $9.95
$10.22 $10.50 $10.04 $10.92 $9.95
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
165
<PAGE> 170
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
FLORIDA
SHORT-TERM INTERMEDIATE INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
INCOME BOND INCOME BOND
--------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest.................................................... $4,462,898 $ 32,948,751 $ 21,731,661 $ 8,165,551
Dividends................................................... 117,711 333,152 144,741 66,490
---------- ------------ ------------ -----------
Total investment income................................. 4,580,609 33,281,903 21,876,402 8,232,041
---------- ------------ ------------ -----------
EXPENSES:
Investment advisory fee..................................... 501,468 3,234,439 2,360,169 785,452
Administration fee.......................................... 100,294 646,888 393,361 157,090
Transfer agent fees......................................... 57,790 365,156 219,267 114,271
Custodian fees.............................................. 15,746 46,974 32,752 18,225
Legal and audit fees........................................ 23,973 57,692 50,289 22,844
Trustees' fees and expenses................................. 2,515 19,209 10,568 4,738
Amortization of organization costs.......................... 8,355 9,158 -- 4,036
Interest expense............................................ 3,012 1,367 2,040 120
Registration and filing fees................................ 47,251 275,999 133,674 53,872
Other....................................................... 19,531 126,057 99,702 26,996
---------- ------------ ------------ -----------
Subtotal................................................ 779,935 4,782,939 3,301,822 1,187,644
Shareholder servicing and distribution fees:
Investor A Shares......................................... 47,824 8,045 34,073 11,973
Investor B Shares......................................... 41,290 12,644 120,248 23,988
Investor C Shares......................................... 2,338 7,025 17,257 1,720
Fees waived by investment adviser, and/or administrator..... (377,636) (1,549,553) (943,792) (402,605)
---------- ------------ ------------ -----------
Total expenses.......................................... 493,751 3,261,100 2,529,608 822,720
---------- ------------ ------------ -----------
NET INVESTMENT INCOME....................................... 4,086,858 30,020,803 19,346,794 7,409,321
---------- ------------ ------------ -----------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain on investments sold....................... 273,468 6,161,351 6,905,832 187,982
Net change in unrealized appreciation of investments........ 564,231 9,021,135 11,577,549 3,444,054
---------- ------------ ------------ -----------
Net realized and unrealized gain on investments............. 837,699 15,182,486 18,483,381 3,632,036
---------- ------------ ------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $4,924,557 $ 45,203,289 $ 37,830,175 $11,041,357
========== ============ ============ ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
166
<PAGE> 171
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
GEORGIA MARYLAND NORTH CAROLINA
FLORIDA INTERMEDIATE GEORGIA INTERMEDIATE MARYLAND INTERMEDIATE
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND BOND BOND BOND BOND BOND
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$2,390,863 $ 5,715,644 $ 881,800 $4,753,518 $ 914,847 $ 6,947,250
41,033 53,741 16,630 54,638 27,326 71,898
---------- ----------- ---------- ---------- ---------- -----------
2,431,896 5,769,385 898,430 4,808,156 942,173 7,019,148
---------- ----------- ---------- ---------- ---------- -----------
267,598 572,857 99,602 468,304 108,545 676,510
44,600 114,571 16,600 93,661 18,091 135,302
32,621 77,520 12,354 79,532 16,489 104,517
11,460 15,882 9,417 14,902 9,430 16,791
16,024 21,921 11,056 38,630 10,951 19,772
1,065 3,209 422 2,329 509 4,212
500 1,255 500 -- 800 1,679
462 447 118 -- -- 271
9,507 33,070 9,415 18,011 12,610 50,392
16,092 22,489 9,373 30,907 16,718 19,616
---------- ----------- ---------- ---------- ---------- -----------
399,929 863,221 168,857 746,276 194,143 1,029,062
3,758 18,809 763 30,370 3,364 13,654
146,863 52,232 80,806 30,871 71,925 47,293
177 11,693 304 10,673 20 9,234
(132,026) (290,281) (69,442) (277,974) (86,165) (352,661)
---------- ----------- ---------- ---------- ---------- -----------
418,701 655,674 181,288 540,216 183,287 746,582
---------- ----------- ---------- ---------- ---------- -----------
2,013,195 5,113,711 717,142 4,267,940 758,886 6,272,566
---------- ----------- ---------- ---------- ---------- -----------
43,396 1,003,516 119,540 34,604 49,303 643,444
2,229,842 2,218,832 719,938 2,605,649 850,267 2,119,493
---------- ----------- ---------- ---------- ---------- -----------
2,273,238 3,222,348 839,478 2,640,253 899,570 2,762,937
---------- ----------- ---------- ---------- ---------- -----------
$4,286,433 $ 8,336,059 $1,556,620 $6,908,193 $1,658,456 $ 9,035,503
========== =========== ========== ========== ========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
167
<PAGE> 172
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
SOUTH CAROLINA
NORTH CAROLINA INTERMEDIATE SOUTH CAROLINA
MUNICIPAL MUNICIPAL MUNICIPAL
BOND BOND BOND
--------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest.................................................... $1,567,109 $ 10,706,157 $1,019,858
Dividends................................................... 24,317 48,004 14,540
---------- ------------ ----------
Total investment income................................. 1,591,426 10,754,161 1,034,398
---------- ------------ ----------
EXPENSES:
Investment advisory fee..................................... 177,660 1,003,746 115,062
Administration fee.......................................... 29,610 200,749 19,177
Transfer agent fees......................................... 25,249 153,113 17,280
Custodian fees.............................................. 10,420 21,029 9,751
Legal and audit fees........................................ 14,010 27,283 11,510
Trustees' fees and expenses................................. 739 6,056 495
Amortization of organization costs.......................... 500 2,776 601
Interest expense............................................ 66 1,076 299
Registration and filing fees................................ 7,670 65,096 7,797
Other....................................................... 10,730 35,096 8,758
---------- ------------ ----------
Subtotal................................................ 276,654 1,516,020 190,730
Shareholder servicing and distribution fees:
Investor A Shares......................................... 1,271 22,738 2,628
Investor B Shares......................................... 199,707 44,219 89,176
Investor C Shares......................................... 90 28,045 386
Fees waived and/or expenses reimbursed by investment
adviser, and/or administrator............................. (100,374) (511,403) (76,093)
---------- ------------ ----------
Total expenses.......................................... 377,348 1,099,619 206,827
---------- ------------ ----------
NET INVESTMENT INCOME....................................... 1,214,078 9,654,542 827,571
---------- ------------ ----------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain/(loss) on investments sold................ 71,477 659,799 (39,476)
Net change in unrealized appreciation of investments (Note
9)........................................................ 1,538,598 3,345,512 923,581
---------- ------------ ----------
Net realized and unrealized gain on investments............. 1,610,075 4,005,211 884,105
---------- ------------ ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $2,824,153 $ 13,659,753 $1,711,676
========== ============ ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
168
<PAGE> 173
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
TENNESSEE TEXAS VIRGINIA
INTERMEDIATE TENNESSEE INTERMEDIATE TEXAS INTERMEDIATE VIRGINIA
MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND BOND BOND BOND BOND BOND
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,890,398 $520,041 $ 13,392,724 $ 883,317 $11,642,343 $1,231,777
30,213 10,865 126,753 13,098 80,441 20,998
----------- -------- ------------ ---------- ----------- ----------
1,920,611 530,906 13,519,477 896,415 11,722,784 1,252,775
----------- -------- ------------ ---------- ----------- ----------
189,150 59,695 1,289,935 99,050 1,115,320 137,926
37,830 9,949 257,987 16,508 223,064 22,988
31,427 10,974 202,882 17,399 160,763 20,091
10,703 8,999 23,880 10,620 24,392 9,859
12,676 9,880 23,855 11,482 42,786 12,167
1,138 262 8,494 414 5,295 589
1,989 819 932 1,107 -- 500
596 110 -- 250 1,592 102
16,839 7,497 106,562 4,250 12,144 6,103
16,515 11,201 29,924 14,838 56,231 10,150
----------- -------- ------------ ---------- ----------- ----------
318,863 119,386 1,944,451 175,918 1,641,587 220,475
14,351 2,631 2,806 791 108,231 1,928
21,708 40,819 15,148 76,529 71,638 114,262
17 294 3,613 564 34,770 194
(129,537) (59,812) (653,525) (76,289) (528,796) (85,774)
----------- -------- ------------ ---------- ----------- ----------
225,402 103,318 1,312,493 177,513 1,327,430 251,085
----------- -------- ------------ ---------- ----------- ----------
1,695,209 427,588 12,206,984 718,902 10,395,354 1,001,690
----------- -------- ------------ ---------- ----------- ----------
126,302 62,881 907,826 187,141 479,389 50,169
762,677 444,243 3,698,523 743,636 6,165,879 1,203,154
----------- -------- ------------ ---------- ----------- ----------
888,979 507,124 4,606,349 930,777 6,645,268 1,253,323
----------- -------- ------------ ---------- ----------- ----------
$ 2,584,188 $934,712 $ 16,813,333 $1,649,679 $17,040,622 $2,255,013
=========== ======== ============ ========== =========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
169
<PAGE> 174
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT-TERM INTERMEDIATE
MUNICIPAL INCOME MUNICIPAL BOND
------------------------------- --------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
03/31/98 03/31/97 03/31/98 03/31/97
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income..................................... $ 4,086,858 $ 3,040,641 $30,020,803 $ 4,409,368
Net realized gain/(loss) on investments sold.............. 273,468 61,058 6,161,351 235,923
Net change in unrealized appreciation/(depreciation) of
investments............................................. 564,231 (307,856) 9,021,135 (562,215)
------------ ----------- ------------ ------------
Net increase in net assets resulting from operations...... 4,924,557 2,793,843 45,203,289 4,083,076
Distributions to shareholders from net investment income:
Primary A Shares........................................ (2,665,335) (2,281,637) (29,729,618) (4,229,321)
Investor A Shares....................................... (958,750) (252,440) (178,364) (82,555)
Investor B Shares....................................... (445,790) (446,785) (71,833) (65,237)
Investor C Shares....................................... (26,239) (59,779) (41,023) (32,255)
Distributions to shareholders from net realized gains on
investments:
Primary A Shares........................................ -- -- (3,319,423) --
Investor A Shares....................................... -- -- (13,867) --
Investor B Shares....................................... -- -- (7,584) --
Investor C Shares....................................... -- -- (5,593) --
Net increase/(decrease) in net assets from Fund share
transactions:
Primary A Shares........................................ 9,136,292 12,736,118 747,267,827 31,093,197
Investor A Shares....................................... 14,973,920 3,838,818 4,336,045 581,183
Investor B Shares....................................... 2,994,670 (3,159,815) 490,664 (138,009)
Investor C Shares....................................... 304,248 (986,312) 814,501 37,778
------------ ----------- ------------ ------------
Net increase/(decrease) in net assets..................... 28,237,573 12,182,011 764,745,021 31,247,857
NET ASSETS:
Beginning of period....................................... 81,223,530 69,041,519 112,509,257 81,261,400
------------ ----------- ------------ ------------
End of period............................................. $109,461,103 $81,223,530 $877,254,278 $112,509,257
============ =========== ============ ============
Undistributed net investment income at end of year........ $ 39,115 $ 947 $ 552,297 $ 60,630
============ =========== ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
170
<PAGE> 175
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FLORIDA INTERMEDIATE FLORIDA
MUNICIPAL INCOME MUNICIPAL BOND MUNICIPAL BOND
------------------------------ --------------------------- ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
03/31/98 03/31/97 03/31/98 03/31/97 03/31/98 03/31/97
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 19,346,794 $ 5,503,092 $ 7,409,321 $ 2,490,541 $2,013,195 $ 1,772,810
6,905,832 1,142,681 187,982 (30,898) 43,396 (210,373)
11,577,549 (753,768) 3,444,054 (354,732) 2,229,842 189,030
------------ ------------- ------------ ----------- ----------- -----------
37,830,175 5,892,005 11,041,357 2,104,911 4,286,433 1,751,467
(17,831,969) (3,726,441) (6,995,879) (2,200,901) (1,193,869) (725,315)
(794,689) (935,349) (265,022) (114,523) (89,248) (95,467)
(618,021) (750,105) (138,019) (165,677) (727,165) (950,250)
(102,115) (91,197) (10,400) (9,440) (2,914) (1,778)
(2,020,179) -- -- -- -- --
(74,268) -- -- -- -- --
(63,532) -- -- -- -- --
(14,243) -- -- -- -- --
364,721,706 9,007,226 148,591,829 7,109,886 9,471,361 3,709,085
3,270,986 (11,054,474) 4,934,836 121,830 147,129 (65,643)
(54,323) (2,357,406) (6,139) (489,261) (3,671,649) (4,214,981)
625,931 (470,496) (93,079) 323 (38,249) 1,778
------------ ------------- ------------ ----------- ----------- -----------
384,875,459 (4,486,237) 157,059,484 6,357,148 8,181,829 (591,104)
108,663,032 113,149,269 57,650,038 51,292,890 38,273,873 38,864,977
------------ ------------- ------------ ----------- ----------- -----------
$493,538,491 $ 108,663,032 $214,709,522 $57,650,038 $46,455,702 $38,273,873
============ ============= ============ =========== =========== ===========
$ 512,972 $ 103,572 $ 1 $ -- $ 19,173 $ 17,978
============ ============= ============ =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
171
<PAGE> 176
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
GEORGIA INTERMEDIATE GEORGIA
MUNICIPAL BOND MUNICIPAL BOND
-------------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
03/31/98 03/31/97 03/31/98 03/31/97
------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income....................................... $ 5,113,711 $2,674,918 $ 717,142 $ 641,380
Net realized gain/(loss) on investments sold................ 1,003,516 73,261 119,540 43,488
Net change in unrealized appreciation/(depreciation) of
investments............................................... 2,218,832 (398,430) 719,938 (35,496)
------------ ----------- ----------- -----------
Net increase in net assets resulting from operations........ 8,336,059 2,349,749 1,556,620 649,372
Distributions to shareholders from net investment income:
Primary A Shares.......................................... (4,358,784) (1,857,490) (303,135) (158,769)
Investor A Shares......................................... (405,742) (390,944) (17,500) (6,345)
Investor B Shares......................................... (289,887) (330,178) (394,746) (473,179)
Investor C Shares......................................... (64,525) (96,306) (1,761) (3,087)
Distributions to shareholders from net realized gains on
investments:
Primary A Shares.......................................... (509,163) -- -- --
Investor A Shares......................................... (39,842) -- -- --
Investor B Shares......................................... (30,328) -- -- --
Investor C Shares......................................... (7,278) -- -- --
Net increase/(decrease) in net assets from Fund share
transactions:
Primary A Shares.......................................... 80,149,607 5,482,256 2,280,018 3,500,180
Investor A Shares......................................... 342,541 232,646 251,927 200,730
Investor B Shares......................................... (463,665) (459,769) (635,035) (2,097,679)
Investor C Shares......................................... (1,010,665) (456,040) (48,238) 3,087
------------ ----------- ----------- -----------
Net increase/(decrease) in net assets....................... 81,648,328 4,473,924 2,688,150 1,614,310
NET ASSETS:
Beginning of period......................................... 61,863,594 57,389,670 16,011,519 14,397,209
------------ ----------- ----------- -----------
End of period............................................... $143,511,922 $61,863,594 $18,699,669 $16,011,519
============ =========== =========== ===========
Undistributed net investment income at end of year.......... $ 10,589 $ 9,933 $ 8,309 $ 8,172
============ =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
172
<PAGE> 177
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
MARYLAND INTERMEDIATE MARYLAND NORTH CAROLINA INTERMEDIATE
MUNICIPAL BOND MUNICIPAL BOND MUNICIPAL BOND
---------------------------- --------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
03/31/98 03/31/97 03/31/98 03/31/97 03/31/98 03/31/97
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,267,940 $ 3,944,353 $ 758,886 $ 608,097 $ 6,272,566 $ 1,749,355
34,604 1,745 49,303 (30,459) 643,444 (11,423)
2,605,649 (832,530) 850,267 55,520 2,119,493 (66,100)
------------ ----------- ----------- ----------- ------------ -----------
6,908,193 3,113,568 1,658,456 633,158 9,035,503 1,671,832
(3,394,926) (2,892,805) (350,630) (179,533) (5,650,336) (1,106,565)
(694,669) (760,315) (75,659) (66,776) (304,753) (289,190)
(174,042) (184,325) (332,491) (108) (264,098) (297,013)
(61,590) (106,908) (106) (361,680) (53,379) (56,587)
== == == == == ==
== == == == == ==
19,206,730 2,824,173 4,083,682 1,802,900 151,592,462 4,732,402
124,682 (4,309,961) 402,291 317,957 2,638,986 (1,931,811)
378,742 (160,621) 2,532,821 108 (161,361) (1,285,915)
(1,227,580) (863,535) 116 (1,576,575) (589,105) (11,762)
------------ ----------- ----------- ----------- ------------ -----------
21,065,540 (3,340,729) 7,918,480 569,451 156,243,919 1,425,391
84,852,411 88,193,140 14,107,037 13,537,586 39,738,804 38,313,413
------------ ----------- ----------- ----------- ------------ -----------
$105,917,951 $84,852,411 $22,025,517 $14,107,037 $195,982,723 $39,738,804
============ =========== =========== =========== ============ ===========
$ -- $ 28,863 $ 6,677 $ 6,677 $ 81,013 $ 10,964
============ =========== =========== =========== ============ ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
173
<PAGE> 178
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
NORTH CAROLINA SOUTH CAROLINA INTERMEDIATE
MUNICIPAL BOND MUNICIPAL BOND
---------------------------- -----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
03/31/98 03/31/97 03/31/98 03/31/97
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income....................................... $1,214,078 $ 1,234,634 $ 9,654,542 $ 3,276,348
Net realized gain/(loss) on investments sold................ 71,477 (30,053) 659,799 200,162
Net change in unrealized appreciation/(depreciation) of
investments............................................... 1,538,598 (31,510) 3,345,412 (320,293)
----------- ----------- ------------ -----------
Net increase in net assets resulting from operations........ 2,824,153 1,173,071 13,659,753 3,156,217
Distributions to shareholders from net investment income:
Primary A Shares.......................................... (221,309) (115,090) (8,700,905) (2,152,396)
Investor A Shares......................................... (29,482) (24,029) (526,570) (602,275)
Investor B Shares......................................... (962,778) (1,094,722) (261,514) (287,063)
Investor C Shares......................................... (509) (793) (165,548) (234,614)
Distributions to shareholders from net realized gains on
investments:
Primary A Shares.......................................... -- -- (117,374) --
Investor A Shares......................................... -- -- (4,878) --
Investor B Shares......................................... -- -- (3,185) --
Investor C Shares......................................... -- -- (2,058) --
Net increase/(decrease) in net assets from Fund share
transactions:
Primary A Shares.......................................... 3,126,378 1,513,901 200,883,202 7,210,466
Investor A Shares......................................... (21,170) 148,174 3,181,901 (3,826,508)
Investor B Shares......................................... (16,677) (4,388,434) 907,763 (1,220,014)
Investor C Shares......................................... (16,226) 793 (2,509,605) (315,082)
----------- ----------- ------------ -----------
Net increase/(decrease) in net assets....................... 4,682,380 (2,787,129) 206,340,982 1,728,731
NET ASSETS:
Beginning of period......................................... 27,569,329 30,356,458 70,210,078 68,481,347
----------- ----------- ------------ -----------
End of period............................................... $32,251,709 $27,569,329 $276,551,060 $70,210,078
=========== =========== ============ ===========
Undistributed net investment income at end of year.......... $ 24,024 $ 24,024 $ 24,077 $ 3,934
=========== =========== ============ ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
174
<PAGE> 179
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- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
SOUTH CAROLINA TENNESSEE INTERMEDIATE TENNESSEE
MUNICIPAL BOND MUNICIPAL BOND MUNICIPAL BOND
--------------------------- --------------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
03/31/98 03/31/97 03/31/98 03/31/97 03/31/98 03/31/97
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 827,571 $ 797,602 $1,695,209 $ 825,749 $ 427,588 $ 362,955
(39,476) 54,323 126,302 5,649 62,881 3,409
923,581 (24,716) 762,677 (40,872) 444,243 5,672
----------- ----------- ----------- ----------- ----------- -----------
1,711,676 827,209 2,584,188 790,526 934,712 372,036
(331,588) (197,197) (1,272,235) (385,987) (169,579) (75,170)
(60,269) (47,497) (304,845) (305,932) (60,930) (46,783)
(433,924) (541,690) (118,034) (133,734) (195,458) (239,349)
(2,499) (11,218) (95) (96) (1,622) (1,653)
(4,516) -- -- -- -- --
(711) -- -- -- -- --
(9,734) -- -- -- -- --
(225) -- -- -- -- --
4,042,444 3,052,543 29,638,845 487,962 1,794,772 1,627,730
653,730 (409,632) 1,012,065 (591,615) 354,312 43,604
(2,221,449) (914,041) (222,202) (477,355) (671,373) (1,457,124)
(222,843) (16,765) 101 96 1,622 1,653
----------- ----------- ----------- ----------- ----------- -----------
3,120,092 1,741,712 31,317,788 (616,135) 1,986,456 224,944
18,274,086 16,532,374 18,760,795 19,376,930 8,970,060 8,745,116
----------- ----------- ----------- ----------- ----------- -----------
$21,394,178 $18,274,086 $50,078,583 $18,760,795 $10,956,516 $ 8,970,060
=========== =========== =========== =========== =========== ===========
$ 7,019 $ 7,728 $ 4,404 $ 1,693 $ 14,042 $ 5,896
=========== =========== =========== =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
175
<PAGE> 180
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- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
TEXAS INTERMEDIATE TEXAS
MUNICIPAL BOND MUNICIPAL BOND
----------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
03/31/98 03/31/97 03/31/98 03/31/97
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income....................................... $12,206,984 $ 1,448,768 $ 718,902 $ 783,128
Net realized gain/(loss) on investments sold................ 907,826 7,708 187,141 76,398
Net change in unrealized appreciation/(depreciation) of
investments............................................... 3,698,523 (34,218) 743,636 (46,562)
------------ ----------- ----------- -----------
Net increase in net assets resulting from operations........ 16,813,333 1,422,258 1,649,679 812,964
Distributions to shareholders from net investment income:
Primary A Shares.......................................... (12,035,835) (1,287,524) (322,663) (293,983)
Investor A Shares......................................... (63,954) (38,114) (18,353) (17,461)
Investor B Shares......................................... (86,024) (99,405) (372,749) (468,468)
Investor C Shares......................................... (21,227) (23,725) (5,135) (3,216)
Net increase/(decrease) in net assets from Fund share
transactions:
Primary A Shares.......................................... 356,516,356 (2,398,208) 1,580,224 510,593
Investor A Shares......................................... 1,725,667 109,465 25,555 53,715
Investor B Shares......................................... (65,118) (653,342) (1,830,485) (1,750,002)
Investor C Shares......................................... (316,585) 23,725 3,155 3,215
------------ ----------- ----------- -----------
Net increase/(decrease) in net assets....................... 362,466,613 (2,944,870) 709,228 (1,152,643)
NET ASSETS:
Beginning of period......................................... 28,446,158 31,391,028 16,209,953 17,362,596
------------ ----------- ----------- -----------
End of period............................................... $390,912,771 $28,446,158 $16,919,181 $16,209,953
============ =========== =========== ===========
Undistributed net investment income at end of year.......... $ 7,858 $ 1,137 $ 28,542 $ 15,212
============ =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
176
<PAGE> 181
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
VIRGINIA INTERMEDIATE VIRGINIA
MUNICIPAL BOND MUNICIPAL BOND
--------------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
03/31/98 03/31/97 03/31/98 03/31/97
-------------------------------------------------------
<S> <C> <C> <C> <C>
$10,395,354 $10,665,828 $1,001,690 $ 916,887
479,389 939,225 50,169 (40,560)
6,165,879 (3,178,654) 1,203,154 84,735
------------ ------------ ----------- -----------
17,040,622 8,426,399 2,255,013 961,062
(7,365,019) (7,108,542) (394,572) (223,872)
(2,412,657) (2,780,800) (44,126) (32,652)
(396,991) (486,499) (561,855) (658,331)
(220,687) (289,987) (1,137) (2,032)
17,725,846 (5,256,690) 4,901,214 2,428,702
(3,309,945) (11,640,180) 442,950 64,024
(1,191,256) (1,311,327) (1,689,994) (2,008,842)
(4,698,688) (384,351) (44,013) 2,032
------------ ------------ ----------- -----------
15,171,225 (20,831,977) 4,863,480 530,091
221,469,945 242,301,922 20,469,123 19,939,032
------------ ------------ ----------- -----------
$236,641,170 $221,469,945 $25,332,603 $20,469,123
============ ============ =========== ===========
$ 145,586 $ 145,586 $ 6,892 $ 6,892
============ ============ =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
177
<PAGE> 182
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
SHORT-TERM MUNICIPAL INCOME
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
--------------------------- --------------------------
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 5,491,014 $ 55,100,087 4,368,213 $ 43,578,419
Issued as reinvestment of dividends....................... 1,904 19,085 1,632 16,286
Redeemed.................................................. (4,589,943) (45,982,880) (3,093,414) (30,858,587)
----------- ------------ ---------- ------------
Net increase.............................................. 902,975 9,136,292 1,276,431 12,736,118
----------- ------------ ---------- ------------
INVESTOR A SHARES:
Sold...................................................... 4,261,635 42,742,190 866,486 8,632,324
Issued as reinvestment of dividends....................... 84,448 845,706 21,810 217,532
Redeemed.................................................. (2,845,505) (28,613,976) (503,339) (5,011,038)
----------- ------------ ---------- ------------
Net increase.............................................. 1,500,578 14,973,920 384,957 3,838,818
----------- ------------ ---------- ------------
INVESTOR B SHARES:
Sold...................................................... 1,110,812 11,127,666 632,233 6,308,576
Issued as reinvestment of dividends....................... 41,045 411,541 41,012 409,216
Redeemed.................................................. (853,891) (8,544,537) (991,095) (9,877,607)
----------- ------------ ---------- ------------
Net increase/(decrease)................................... 297,966 2,994,670 (317,850) (3,159,815)
----------- ------------ ---------- ------------
INVESTOR C SHARES:
Sold...................................................... 114,839 1,155,598 17,035 169,722
Issued as reinvestment of dividends....................... 2,369 23,747 5,832 58,158
Redeemed.................................................. (87,602) (875,097) (121,972) (1,214,192)
----------- ------------ ---------- ------------
Net increase/(decrease)................................... 29,606 304,248 (99,105) (986,312)
----------- ------------ ---------- ------------
Total net increase.......................................... 2,731,125 $ 27,409,130 1,244,433 $ 12,428,809
=========== ============ ========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
178
<PAGE> 183
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
INTERMEDIATE MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
---------------------------- -----------------------------
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 11,792,669 $121,101,870 4,979,213 $ 50,069,761
Issued in exchange for Pilot Shares of Pilot
Intermediate Municipal Bond Fund (Note 9)............... 21,603,106 218,049,626 -- --
Issued in exchange for assets of NationsBank Common Trust
Intermediate Municipal Bond Fund (Note 9)............... 49,075,326 502,040,580 -- --
Issued as reinvestment of dividends....................... 50,896 521,568 7,773 78,150
Redeemed.................................................. (9,181,346) (94,445,817) (1,895,410) (19,054,714)
---------- ------------ ---------- ------------
Net increase.............................................. 73,340,651 747,267,827 3,091,576 31,093,197
---------- ------------ ---------- ------------
INVESTOR A SHARES:
Sold...................................................... 461,191 4,748,181 169,102 1,696,765
Issued in exchange for Class A Shares of Pilot
Intermediate Municipal Bond Fund (Note 9)............... 82,746 834,612 -- --
Issued as reinvestment of dividends....................... 11,220 115,185 5,517 55,382
Redeemed.................................................. (132,175) (1,361,933) (117,609) (1,170,964)
---------- ------------ ---------- ------------
Net increase.............................................. 422,982 4,336,045 57,010 581,183
---------- ------------ ---------- ------------
INVESTOR B SHARES:
Sold...................................................... 66,355 678,243 11,720 118,086
Issued as reinvestment of dividends....................... 4,316 44,239 3,724 37,407
Redeemed.................................................. (22,421) (231,818) (29,316) (293,502)
---------- ------------ ---------- ------------
Net increase/(decrease)................................... 48,250 490,664 (13,872) (138,009)
---------- ------------ ---------- ------------
INVESTOR C SHARES:
Sold...................................................... 190,370 1,957,656 22,724 229,240
Issued as reinvestment of dividends....................... 4,395 45,095 3,462 32,336
Redeemed.................................................. (116,033) (1,188,250) (21,999) (223,798)
---------- ------------ ---------- ------------
Net increase.............................................. 78,732 814,501 4,187 37,778
---------- ------------ ---------- ------------
Total net increase.......................................... 73,890,615 $752,909,037 3,138,901 $ 31,574,149
========== ============ ========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
179
<PAGE> 184
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
MUNICIPAL INCOME
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
---------------------------- ----------------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 7,932,635 $ 89,847,138 2,730,515 $ 29,871,880
Issued in exchange for Pilot Shares of Pilot
Municipal Bond Fund (Note 9)............................ 17,965,581 198,166,500 -- --
Issued in exchange for assets of NationsBank Common Trust
Municipal Bond Fund (Note 9)............................ 14,127,038 159,211,714 -- --
Issued as reinvestment of dividends....................... 31,674 358,887 9,420 102,911
Redeemed.................................................. (7,317,496) (82,862,533) (1,923,927) (20,967,565)
---------- ------------ ---------- ------------
Net increase.............................................. 32,739,432 364,721,706 816,008 9,007,226
---------- ------------ ---------- ------------
INVESTOR A SHARES:
Sold...................................................... 840,957 9,493,114 1,080,246 11,738,664
Issued in exchange for Class A Shares of Pilot
Municipal Bond Fund (Note 9)............................ 147,004 1,621,976 -- --
Issued as reinvestment of dividends....................... 42,487 480,342 47,889 522,701
Redeemed.................................................. (736,960) (8,324,446) (2,151,350) (23,315,839)
---------- ------------ ---------- ------------
Net increase/(decrease)................................... 293,488 3,270,986 (1,023,215) (11,054,474)
---------- ------------ ---------- ------------
INVESTOR B SHARES:
Sold...................................................... 249,854 2,786,899 46,816 505,476
Issued in exchange for Class B Shares of Pilot
Municipal Bond Fund (Note 9)............................ 141,044 1,555,236 -- --
Issued as reinvestment of dividends....................... 32,055 362,382 35,015 382,426
Redeemed.................................................. (422,491) (4,758,840) (296,881) (3,245,308)
---------- ------------ ---------- ------------
Net increase/(decrease)................................... 462 (54,323) (215,050) (2,357,406)
---------- ------------ ---------- ------------
INVESTOR C SHARES:
Sold...................................................... 255,461 2,900,773 6,900 76,000
Issued as reinvestment of dividends....................... 8,130 88,497 5,154 56,295
Redeemed.................................................. (207,595) (2,363,339) (55,293) (602,791)
---------- ------------ ---------- ------------
Net increase/(decrease)................................... 55,996 625,931 (43,239) (470,496)
---------- ------------ ---------- ------------
Total net increase/(decrease)............................... 33,089,378 $368,564,300 (465,496) $ (4,875,150)
========== ============ ========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
180
<PAGE> 185
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
FLORIDA INTERMEDIATE MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
-------------------------- --------------------------
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 3,473,413 $ 37,224,814 1,806,440 $ 18,900,351
Issued in exchange for assets of NationsBank Common Trust
Florida Municipal Bond Fund (Note 9).................... 12,806,781 136,392,214 -- --
Issued as reinvestment of dividends....................... 5,682 60,848 7,678 80,228
Redeemed.................................................. (2,340,301) (25,086,047) (1,138,077) (11,870,693)
---------- ------------ ---------- ------------
Net increase.............................................. 13,945,575 148,591,829 676,041 7,109,886
---------- ------------ ---------- ------------
INVESTOR A SHARES:
Sold...................................................... 593,523 6,333,741 295,572 3,093,698
Issued as reinvestment of dividends....................... 13,900 147,615 4,813 50,328
Redeemed.................................................. (144,070) (1,546,520) (288,370) (3,022,196)
---------- ------------ ---------- ------------
Net increase.............................................. 463,353 4,934,836 12,015 121,830
---------- ------------ ---------- ------------
INVESTOR B SHARES:
Sold...................................................... 51,925 551,750 12,072 125,929
Issued as reinvestment of dividends....................... 8,137 86,906 9,672 101,158
Redeemed.................................................. (60,611) (644,795) (68,762) (716,348)
---------- ------------ ---------- ------------
Net decrease.............................................. (549) (6,139) (47,018) (489,261)
---------- ------------ ---------- ------------
INVESTOR C SHARES:
Sold...................................................... 18,674 200,000 14,327 150,599
Issued as reinvestment of dividends....................... 460 4,902 554 5,806
Redeemed.................................................. (27,782) (297,981) (15,037) (156,082)
---------- ------------ ---------- ------------
Net increase/(decrease)................................... (8,648) (93,079) (156) 323
---------- ------------ ---------- ------------
Total net increase.......................................... 14,399,731 $153,427,447 640,882 $ 6,742,778
========== ============ ========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
181
<PAGE> 186
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
FLORIDA MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
----------------------------- --------------------------
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 2,138,963 $ 21,111,769 780,552 $ 7,452,607
Issued as reinvestment of dividends....................... 439 4,345 365 3,485
Redeemed.................................................. (1,160,781) (11,644,753) (394,938) (3,747,007)
---------- ------------ -------- -----------
Net increase.............................................. 978,621 9,471,361 385,979 3,709,085
---------- ------------ -------- -----------
INVESTOR A SHARES:
Sold...................................................... 32,761 324,684 174,121 1,646,866
Issued as reinvestment of dividends....................... 3,303 32,490 1,691 16,147
Redeemed.................................................. (21,107) (210,045) (181,645) (1,728,656)
---------- ------------ -------- -----------
Net increase/(decrease)................................... 14,957 147,129 (5,833) (65,643)
---------- ------------ -------- -----------
INVESTOR B SHARES:
Sold...................................................... 113,593 1,149,011 42,999 409,858
Issued as reinvestment of dividends....................... 32,518 321,051 44,974 428,432
Redeemed.................................................. (523,549) (5,141,711) (531,093) (5,053,271)
---------- ------------ -------- -----------
Net decrease.............................................. (377,438) (3,671,649) (443,120) (4,214,981)
---------- ------------ -------- -----------
INVESTOR C SHARES:
Sold...................................................... -- -- -- --
Issued as reinvestment of dividends....................... 97 934 186 1,778
Redeemed.................................................. (4,007) (39,183) -- --
---------- ------------ -------- -----------
Net increase/(decrease)................................... (3,910) (38,249) 186 1,778
---------- ------------ -------- -----------
Total net increase/(decrease)............................... 612,230 $ 5,908,592 (62,788) $ (569,761)
========== ============ ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
182
<PAGE> 187
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
GEORGIA INTERMEDIATE MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
----------------------------- -----------------------------
SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 1,650,151 $ 18,022,342 1,093,268 $ 11,620,800
Issued in exchange for Shares of Peachtree Georgia
Tax-Free Income Fund (Note 9)........................... -- -- 120,237 1,278,074
Issued in exchange for assets of NationsBank Common Trust:
Georgia Municipal Bond Fund (Note 9).................... 4,858,036 52,612,527 -- --
Tax-Free Income Fund for Personal Trusts (Note 9)....... 2,405,397 26,050,446 -- --
Issued as reinvestment of dividends....................... 3,756 40,975 1,745 18,655
Redeemed.................................................. (1,519,135) (16,576,683) (700,605) (7,435,273)
---------- ------------ ---------- ------------
Net increase.............................................. 7,398,205 80,149,607 514,645 5,482,256
---------- ------------ ---------- ------------
INVESTOR A SHARES:
Sold...................................................... 214,594 2,333,113 88,314 944,307
Issued as reinvestment of dividends....................... 29,819 321,070 28,390 302,296
Redeemed.................................................. (212,105) (2,311,642) (95,049) (1,013,957)
---------- ------------ ---------- ------------
Net increase.............................................. 32,308 342,541 21,655 232,646
---------- ------------ ---------- ------------
INVESTOR B SHARES:
Sold...................................................... 19,739 215,912 15,463 164,476
Issued as reinvestment of dividends....................... 12,135 131,299 13,852 147,469
Redeemed.................................................. (74,737) (810,876) (72,333) (771,714)
---------- ------------ ---------- ------------
Net decrease.............................................. (42,863) (463,665) (43,018) (459,769)
---------- ------------ ---------- ------------
INVESTOR C SHARES:
Sold...................................................... 5,710 62,839 104 1,101
Issued as reinvestment of dividends....................... 4,275 46,329 6,230 66,333
Redeemed.................................................. (102,715) (1,119,833) (48,861) (523,474)
---------- ------------ ---------- ------------
Net decrease.............................................. (92,730) (1,010,665) (42,527) (456,040)
---------- ------------ ---------- ------------
Total net increase.......................................... 7,294,920 $ 79,017,818 450,755 $ 4,799,093
========== ============ ========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
183
<PAGE> 188
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
GEORGIA MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
----------------------- -----------------------
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 385,402 $ 3,814,774 476,900 $ 4,553,988
Issued as reinvestment of dividends....................... 10 100 28 265
Redeemed.................................................. (156,003) (1,534,856) (110,850) (1,054,073)
-------- ----------- -------- -----------
Net increase.............................................. 229,409 2,280,018 366,078 3,500,180
-------- ----------- -------- -----------
INVESTOR A SHARES:
Sold...................................................... 36,988 356,467 21,228 201,516
Issued as reinvestment of dividends....................... 1,634 16,014 584 5,574
Redeemed.................................................. (12,142) (120,554) (670) (6,360)
-------- ----------- -------- -----------
Net increase.............................................. 26,480 251,927 21,142 200,730
-------- ----------- -------- -----------
INVESTOR B SHARES:
Sold...................................................... 107,814 1,079,943 4,541 42,751
Issued as reinvestment of dividends....................... 20,705 208,383 27,898 265,858
Redeemed.................................................. (195,486) (1,923,361) (252,803) (2,406,288)
-------- ----------- -------- -----------
Net decrease.............................................. (66,967) (635,035) (220,364) (2,097,679)
-------- ----------- -------- -----------
INVESTOR C SHARES:
Sold...................................................... -- -- -- --
Issued as reinvestment of dividends....................... 179 1,762 329 3,087
Redeemed.................................................. (5,055) (50,000) -- --
-------- ----------- -------- -----------
Net increase/(decrease)................................... (4,876) (48,238) 329 3,087
-------- ----------- -------- -----------
Total net increase.......................................... 184,046 $ 1,848,672 167,185 $ 1,606,318
======== =========== ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
184
<PAGE> 189
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
MARYLAND INTERMEDIATE MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
---------------------------- -----------------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 2,431,134 $26,651,627 1,570,112 $ 16,929,308
Issued as reinvestment of dividends....................... 6,720 73,703 4,891 52,630
Redeemed.................................................. (686,086) (7,518,600) (1,315,560) (14,158,284)
--------- ----------- ---------- ------------
Net increase.............................................. 1,751,768 19,206,730 259,443 2,823,654
--------- ----------- ---------- ------------
INVESTOR A SHARES:
Sold...................................................... 139,940 1,531,124 193,291 2,078,842
Issued as reinvestment of dividends....................... 52,090 569,687 56,201 605,703
Redeemed.................................................. (180,391) (1,976,129) (650,416) (6,993,949)
--------- ----------- ---------- ------------
Net increase/(decrease)................................... 11,639 124,682 (400,924) (4,309,404)
--------- ----------- ---------- ------------
INVESTOR B SHARES:
Sold...................................................... 74,910 823,920 7,691 82,996
Issued as reinvestment of dividends....................... 12,566 137,540 13,622 146,840
Redeemed.................................................. (53,131) (582,718) (36,251) (390,730)
--------- ----------- ---------- ------------
Net increase/(decrease)................................... 34,345 378,742 (14,938) (160,894)
--------- ----------- ---------- ------------
INVESTOR C SHARES:
Sold...................................................... 91,707 1,010,648 5,524 59,620
Issued as reinvestment of dividends....................... 4,587 50,118 8,140 87,716
Redeemed.................................................. (208,536) (2,288,346) (93,693) (1,010,636)
--------- ----------- ---------- ------------
Net decrease.............................................. (112,242) (1,227,580) (80,029) (863,300)
--------- ----------- ---------- ------------
Total net increase/(decrease)............................... 1,685,510 $18,482,574 (236,448) $ (2,509,944)
========= =========== ========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
185
<PAGE> 190
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
MARYLAND MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
----------------------- -----------------------
SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 580,347 $ 5,632,428 234,636 $ 2,211,353
Issued as reinvestment of dividends....................... 423 4,143 669 6,304
Redeemed.................................................. (158,339) (1,552,889) (43,789) (414,757)
-------- ----------- -------- -----------
Net increase.............................................. 422,431 4,083,682 191,516 1,802,900
-------- ----------- -------- -----------
INVESTOR A SHARES:
Sold...................................................... 44,488 430,177 67,007 629,185
Issued as reinvestment of dividends....................... 6,555 64,149 5,602 52,846
Redeemed.................................................. (9,310) (92,035) (38,486) (364,074)
-------- ----------- -------- -----------
Net increase.............................................. 41,733 402,291 34,123 317,957
-------- ----------- -------- -----------
INVESTOR B SHARES:
Sold...................................................... 341,576 3,392,658 15,656 146,980
Issued as reinvestment of dividends....................... 26,382 258,176 28,413 268,108
Redeemed.................................................. (114,143) (1,118,013) (212,307) (1,991,663)
-------- ----------- -------- -----------
Net increase/(decrease)................................... 253,815 2,532,821 (168,238) (1,576,575)
-------- ----------- -------- -----------
INVESTOR C SHARES:
Sold...................................................... 1,005 10,000 -- --
Issued as reinvestment of dividends....................... 11 106 12 108
Redeemed.................................................. (1,006) (9,990) -- --
-------- ----------- -------- -----------
Net increase.............................................. 10 116 12 108
-------- ----------- -------- -----------
Total net increase.......................................... 717,989 $ 7,018,910 57,413 $ 544,390
======== =========== ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
186
<PAGE> 191
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
-------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 1,886,559 $ 20,130,191 1,014,731 $10,515,384
Issued in exchange for assets of NationsBank Common Trust
North Carolina Municipal Bond Fund (Note 9)............. 13,384,781 141,744,830 -- --
Issued as reinvestment of dividends....................... 34 363 607 6,285
Redeemed.................................................. (966,776) (10,282,922) (557,201) (5,789,267)
---------- ------------ --------- -----------
Net increase.............................................. 14,304,598 151,592,462 458,137 4,732,402
---------- ------------ --------- -----------
INVESTOR A SHARES:
Sold...................................................... 345,286 3,663,655 347,293 3,646,011
Issued as reinvestment of dividends....................... 23,788 252,670 21,334 222,005
Redeemed.................................................. (121,010) (1,277,339) (555,498) (5,799,827)
---------- ------------ --------- -----------
Net increase/(decrease)................................... 248,064 2,638,986 (186,871) (1,931,811)
---------- ------------ --------- -----------
INVESTOR B SHARES:
Sold...................................................... 73,169 783,374 51,624 534,364
Issued as reinvestment of dividends....................... 19,270 204,577 22,387 232,636
Redeemed.................................................. (108,314) (1,149,312) (198,704) (2,052,915)
---------- ------------ --------- -----------
Net decrease.............................................. (15,875) (161,361) (124,693) (1,285,915)
---------- ------------ --------- -----------
INVESTOR C SHARES:
Sold...................................................... -- -- -- --
Issued as reinvestment of dividends....................... 4,458 47,296 4,951 51,463
Redeemed.................................................. (59,522) (636,401) (6,051) (63,225)
---------- ------------ --------- -----------
Net decrease.............................................. (55,064) (589,105) (1,100) (11,762)
---------- ------------ --------- -----------
Total net increase.......................................... 14,481,723 $153,480,982 145,473 $ 1,502,914
========== ============ ========= ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
187
<PAGE> 192
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
NORTH CAROLINA MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
-------------------------- -------------------------
SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 386,177 $ 3,794,851 321,358 $ 3,060,134
Issued as reinvestment of dividends....................... 12 121 261 2,464
Redeemed.................................................. (68,607) (668,594) (162,637) (1,548,697)
-------- ----------- -------- -----------
Net increase.............................................. 317,582 3,126,378 158,982 1,513,901
-------- ----------- -------- -----------
INVESTOR A SHARES:
Sold...................................................... 17,165 168,010 33,554 319,668
Issued as reinvestment of dividends....................... 2,503 24,459 2,283 21,755
Redeemed.................................................. (21,526) (213,639) (20,351) (193,249)
-------- ----------- -------- -----------
Net increase/(decrease)................................... (1,858) (21,170) 15,486 148,174
-------- ----------- -------- -----------
INVESTOR B SHARES:
Sold...................................................... 250,857 2,492,949 21,081 200,477
Issued as reinvestment of dividends....................... 70,042 689,908 81,214 772,682
Redeemed.................................................. (325,414) (3,199,534) (563,321) (5,361,593)
-------- ----------- -------- -----------
Net decrease.............................................. (4,515) (16,677) (461,026) (4,388,434)
-------- ----------- -------- -----------
INVESTOR C SHARES:
Sold...................................................... -- -- -- --
Issued as reinvestment of dividends....................... 52 504 83 793
Redeemed.................................................. (1,697) (16,730) -- --
-------- ----------- -------- -----------
Net increase/(decrease)................................... (1,645) (16,226) 83 793
-------- ----------- -------- -----------
Total net increase/(decrease)............................... 309,564 $ 3,072,305 (286,475) $(2,725,566)
======== =========== ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
188
<PAGE> 193
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
SOUTH CAROLINA INTERMEDIATE MUNICIPAL INCOME
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
---------------------------- -------------------------
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 2,145,968 $ 23,119,849 1,335,506 $14,059,668
Issued in exchange for assets of NationsBank Common Trust:
Old Colony South Carolina Tax-Exempt Bond Fund (Note
9).................................................... 6,420,542 68,635,591 -- --
South Carolina Municipal Bond Fund (Note 9)............. 12,876,466 137,649,419 -- --
Issued as reinvestment of dividends....................... 10,821 125,693 9,601 101,149
Redeemed.................................................. (2,665,319) (28,647,350) (660,889) (6,950,351)
---------- ------------ -------- -----------
Net increase.............................................. 18,788,478 200,883,202 684,218 7,210,466
---------- ------------ -------- -----------
INVESTOR A SHARES:
Sold...................................................... 560,799 6,029,415 28,019 295,941
Issued as reinvestment of dividends....................... 22,210 238,189 25,255 265,917
Redeemed.................................................. (287,937) (3,085,703) (414,675) (4,388,366)
---------- ------------ -------- -----------
Net increase/(decrease)................................... 295,072 3,181,901 (361,401) (3,826,508)
---------- ------------ -------- -----------
INVESTOR B SHARES:
Sold...................................................... 165,854 1,771,324 165,111 1,751,110
Issued as reinvestment of dividends....................... 16,152 170,291 17,417 183,517
Redeemed.................................................. (96,878) (1,033,852) (298,337) (3,154,641)
---------- ------------ -------- -----------
Net increase/(decrease)................................... 85,128 907,763 (115,809) (1,220,014)
---------- ------------ -------- -----------
INVESTOR C SHARES:
Sold...................................................... 66,362 719,790 58,225 606,527
Issued as reinvestment of dividends....................... 9,127 96,046 13,422 141,375
Redeemed.................................................. (310,280) (3,325,441) (101,102) (1,062,984)
---------- ------------ -------- -----------
Net decrease.............................................. (234,791) (2,509,605) (29,455) (315,082)
---------- ------------ -------- -----------
Total net increase.......................................... 18,933,887 $202,463,261 177,553 $ 1,848,862
========== ============ ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
189
<PAGE> 194
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
SOUTH CAROLINA MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
----------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 454,043 $ 4,598,408 360,137 $ 3,527,760
Issued as reinvestment of dividends....................... 13 128 -- --
Redeemed.................................................. (54,671) (556,092) (48,358) (475,217)
-------- ----------- -------- -----------
Net increase.............................................. 399,385 4,042,444 311,779 3,052,543
-------- ----------- -------- -----------
INVESTOR A SHARES:
Sold...................................................... 88,758 897,458 7,567 74,339
Issued as reinvestment of dividends....................... 4,563 45,383 3,635 35,610
Redeemed.................................................. (28,274) (289,111) (53,101) (519,581)
-------- ----------- -------- -----------
Net increase/(decrease)................................... 65,047 653,730 (41,899) (409,632)
-------- ----------- -------- -----------
INVESTOR B SHARES:
Sold...................................................... 75,761 774,877 145,761 1,437,355
Issued as reinvestment of dividends....................... 27,543 278,304 32,931 323,684
Redeemed.................................................. (326,704) (3,274,630) (271,284) (2,675,080)
-------- ----------- -------- -----------
Net decrease.............................................. (223,400) (2,221,449) (92,592) (914,041)
-------- ----------- -------- -----------
INVESTOR C SHARES:
Sold...................................................... 2,434 25,010 -- --
Issued as reinvestment of dividends....................... 55 550 19 180
Redeemed.................................................. (25,026) (248,403) (1,739) (16,945)
-------- ----------- -------- -----------
Net decrease.............................................. (22,537) (222,843) (1,720) (16,765)
-------- ----------- -------- -----------
Total net increase.......................................... 218,495 $ 2,251,882 175,568 $ 1,712,105
======== =========== ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
190
<PAGE> 195
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
TENNESSEE INTERMEDIATE MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
-------------------------- -------------------------
SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 670,421 $ 6,913,445 291,105 $ 2,938,293
Issued in exchange for assets of NationsBank Common Trust
Tennessee Municipal Bond Fund (Note 9).................. 2,471,206 25,428,706 -- --
Issued as reinvestment of dividends....................... 1,936 20,165 1,071 10,734
Redeemed.................................................. (263,446) (2,723,471) (245,724) (2,461,065)
--------- ----------- -------- -----------
Net increase.............................................. 2,880,117 29,638,845 46,452 487,962
--------- ----------- -------- -----------
INVESTOR A SHARES:
Sold...................................................... 134,737 1,392,889 6,038 60,692
Issued as reinvestment of dividends....................... 23,329 240,814 24,148 244,190
Redeemed.................................................. (61,330) (621,638) (88,908) (896,497)
--------- ----------- -------- -----------
Net increase/(decrease)................................... 96,736 1,012,065 (58,722) (591,615)
--------- ----------- -------- -----------
INVESTOR B SHARES:
Sold...................................................... 12,969 134,095 9,489 95,584
Issued as reinvestment of dividends....................... 9,592 99,287 10,558 106,766
Redeemed.................................................. (43,798) (455,584) (67,201) (679,705)
--------- ----------- -------- -----------
Net decrease.............................................. (21,237) (222,202) (47,154) (477,355)
--------- ----------- -------- -----------
INVESTOR C SHARES:
Sold...................................................... -- -- -- --
Issued as reinvestment of dividends....................... 10 101 9 96
Redeemed.................................................. -- 0 -- --
--------- ----------- -------- -----------
Net increase.............................................. 10 101 9 96
--------- ----------- -------- -----------
Total net increase/(decrease)............................... 2,955,626 $30,428,809 (59,415) $ (580,912)
========= =========== ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
191
<PAGE> 196
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
TENNESSEE MUNICIPAL INCOME
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
----------------------- -------------------------
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 233,165 $2,347,557 173,358 $ 1,693,318
Issued as reinvestment of dividends....................... 12 123 7 68
Redeemed.................................................. (54,605) (552,908) (6,759) (65,656)
------- ---------- -------- -----------
Net increase.............................................. 178,572 1,794,772 166,606 1,627,730
------- ---------- -------- -----------
INVESTOR A SHARES:
Sold...................................................... 32,645 320,744 200 1,946
Issued as reinvestment of dividends....................... 5,790 58,423 4,457 43,363
Redeemed.................................................. (2,508) (24,855) (177) (1,705)
------- ---------- -------- -----------
Net increase.............................................. 35,927 354,312 4,480 43,604
------- ---------- -------- -----------
INVESTOR B SHARES:
Sold...................................................... 15,393 155,915 3,320 32,017
Issued as reinvestment of dividends....................... 15,350 154,757 18,104 176,057
Redeemed.................................................. (98,119) (982,045) (171,629) (1,665,198)
------- ---------- -------- -----------
Net decrease.............................................. (67,376) (671,373) (150,205) (1,457,124)
------- ---------- -------- -----------
INVESTOR C SHARES:
Sold...................................................... -- -- -- --
Issued as reinvestment of dividends....................... 160 1,622 170 1,653
Redeemed.................................................. -- -- -- --
------- ---------- -------- -----------
Net increase.............................................. 160 1,622 170 1,653
------- ---------- -------- -----------
Total net increase.......................................... 147,283 $1,479,333 21,051 $ 215,863
======= ========== ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
192
<PAGE> 197
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
TEXAS INTERMEDIATE MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
-------------------------- -----------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 1,849,883 $ 19,418,894 647,531 $ 6,585,701
Issued in exchange for assets of NationsBank Common Trust
Texas Municipal Bond Fund (Note 9)...................... 34,435,428 357,784,093 -- --
Issued as reinvestment of dividends....................... 699 7,343 -- --
Redeemed.................................................. (1,978,014) (20,693,974) (877,019) (8,983,909)
---------- ------------ -------- -----------
Net increase/(decrease)................................... 34,307,996 356,516,356 (229,488) (2,398,208)
---------- ------------ -------- -----------
INVESTOR A SHARES:
Sold...................................................... 203,093 2,130,292 19,906 202,395
Issued as reinvestment of dividends....................... 3,595 37,592 1,811 18,394
Redeemed.................................................. (42,134) (442,217) (10,885) (111,324)
---------- ------------ -------- -----------
Net increase.............................................. 164,554 1,725,667 10,832 109,465
---------- ------------ -------- -----------
INVESTOR B SHARES:
Sold...................................................... 7,373 75,607 1,216 12,460
Issued as reinvestment of dividends....................... 5,499 57,334 6,080 62,109
Redeemed.................................................. (19,252) (198,059) (71,626) (727,911)
---------- ------------ -------- -----------
Net decrease.............................................. (6,380) (65,118) (64,330) (653,342)
---------- ------------ -------- -----------
INVESTOR C SHARES:
Sold...................................................... -- -- -- --
Issued as reinvestment of dividends....................... 1,990 20,703 2,321 23,725
Redeemed.................................................. (32,177) (337,288) -- --
---------- ------------ -------- -----------
Net increase/(decrease)................................... (30,187) (316,585) 2,321 23,725
---------- ------------ -------- -----------
Total net increase/(decrease)............................... 34,435,983 $357,860,320 (280,665) $(2,918,360)
========== ============ ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
193
<PAGE> 198
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
TEXAS MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
------------------------- -------------------------
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 269,276 $ 2,658,402 250,760 $ 2,375,276
Issued as reinvestment of dividends....................... 13 124 12 118
Redeemed.................................................. (109,218) (1,078,302) (193,829) (1,864,801)
-------- ----------- -------- -----------
Net increase.............................................. 160,071 1,580,224 56,943 510,593
-------- ----------- -------- -----------
INVESTOR A SHARES:
Sold...................................................... 3,421 33,936 6,766 62,991
Issued as reinvestment of dividends....................... 643 6,285 599 5,725
Redeemed.................................................. (1,490) (14,666) (1,598) (15,001)
-------- ----------- -------- -----------
Net increase.............................................. 2,574 25,555 5,767 53,715
-------- ----------- -------- -----------
INVESTOR B SHARES:
Sold...................................................... 5,989 60,555 8,632 82,485
Issued as reinvestment of dividends....................... 25,897 254,029 30,093 286,900
Redeemed.................................................. (219,000) (2,145,069) (222,374) (2,119,387)
-------- ----------- -------- -----------
Net decrease.............................................. (187,114) (1,830,485) (183,649) (1,750,002)
-------- ----------- -------- -----------
INVESTOR C SHARES:
Sold...................................................... -- -- -- --
Issued as reinvestment of dividends....................... 320 3,155 337 3,215
Redeemed.................................................. -- -- -- --
-------- ----------- -------- -----------
Net increase.............................................. 320 3,155 337 3,215
-------- ----------- -------- -----------
Total net decrease.......................................... (24,149) $ (221,551) (120,602) $(1,182,479)
======== =========== ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
194
<PAGE> 199
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
VIRGINIA INTERMEDIATE MUNICIPAL INCOME
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
----------------------------- -----------------------------
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 3,742,067 $ 40,764,272 2,958,562 $ 31,620,975
Issued as reinvestment of dividends....................... 8,870 95,993 7,432 79,415
Redeemed.................................................. (2,136,350) (23,134,419) (3,464,921) (36,957,080)
---------- ------------ ---------- ------------
Net increase/(decrease)................................... 1,614,587 17,725,846 (498,927) (5,256,690)
---------- ------------ ---------- ------------
INVESTOR A SHARES:
Sold...................................................... 577,416 6,271,546 359,732 3,852,993
Issued as reinvestment of dividends....................... 142,529 1,545,923 182,885 1,952,616
Redeemed.................................................. (1,035,583) (11,127,414) (1,634,419) (17,445,789)
---------- ------------ ---------- ------------
Net decrease.............................................. (315,638) (3,309,945) (1,091,802) (11,640,180)
---------- ------------ ---------- ------------
INVESTOR B SHARES:
Sold...................................................... 38,705 420,883 8,035 85,353
Issued as reinvestment of dividends....................... 24,857 269,564 29,858 318,831
Redeemed.................................................. (173,421) (1,881,703) (160,347) (1,715,511)
---------- ------------ ---------- ------------
Net decrease.............................................. (109,859) (1,191,256) (122,454) (1,311,327)
---------- ------------ ---------- ------------
INVESTOR C SHARES:
Sold...................................................... 5,941 64,400 8,421 89,965
Issued as reinvestment of dividends....................... 12,225 132,198 18,059 192,864
Redeemed.................................................. (449,826) (4,895,286) (62,436) (667,180)
---------- ------------ ---------- ------------
Net decrease.............................................. (431,660) (4,698,688) (35,956) (384,351)
---------- ------------ ---------- ------------
Total net increase/(decrease)............................... 757,430 $ 8,525,957 (1,749,139) $(18,592,548)
========== ============ ========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
195
<PAGE> 200
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
VIRGINIA MUNICIPAL BOND
YEAR ENDED YEAR ENDED
MARCH 31, 1998 MARCH 31, 1997
------------------------- -------------------------
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 593,274 $ 5,815,023 445,108 $ 4,182,650
Issued as reinvestment of dividends....................... -- -- -- --
Redeemed.................................................. (94,454) (913,809) (187,420) (1,753,948)
-------- ----------- -------- -----------
Net increase.............................................. 498,820 4,901,214 257,688 2,428,702
-------- ----------- -------- -----------
INVESTOR A SHARES:
Sold...................................................... 65,946 642,990 36,304 342,983
Issued as reinvestment of dividends....................... 3,418 33,586 2,474 23,323
Redeemed.................................................. (23,874) (233,626) (32,024) (302,282)
-------- ----------- -------- -----------
Net increase.............................................. 45,490 442,950 6,754 64,024
-------- ----------- -------- -----------
INVESTOR B SHARES:
Sold...................................................... 51,941 505,077 20,853 197,062
Issued as reinvestment of dividends....................... 36,538 357,118 43,741 413,677
Redeemed.................................................. (260,211) (2,552,189) (277,624) (2,619,581)
-------- ----------- -------- -----------
Net decrease.............................................. (171,732) (1,689,994) (213,030) (2,008,842)
-------- ----------- -------- -----------
INVESTOR C SHARES:
Sold...................................................... -- -- -- --
Issued as reinvestment of dividends....................... 110 1,066 216 2,032
Redeemed.................................................. (4,638) (45,079) -- --
-------- ----------- -------- -----------
Net increase/(decrease)................................... (4,528) (44,013) 216 2,032
-------- ----------- -------- -----------
Total net increase.......................................... 368,050 $ 3,610,157 51,628 $ 485,916
======== =========== ======== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
196
<PAGE> 201
[THIS PAGE INTENTIONALLY LEFT BLANK.]
197
<PAGE> 202
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SHORT-TERM MUNICIPAL INCOME
PRIMARY A SHARES
Year ended 03/31/1998................... $ 9.95 $0.42 $ 0.10 $ 0.52 $(0.42) --
Year ended 03/31/1997................... 9.98 0.44 (0.03) 0.41 (0.44) --
Period ended 03/31/1996(b).............. 10.03 0.15 (0.05) 0.10 (0.15) --
Year ended 11/30/1995................... 9.69 0.44 0.34 0.78 (0.44) --
Year ended 11/30/1994................... 9.96 0.38 (0.27) 0.11 (0.38) $(0.00)#
Period ended 11/30/1993*................ 10.00 0.05 (0.04) 0.01 (0.05) --
INVESTOR A SHARES
Year ended 03/31/1998................... $ 9.95 $0.40 $ 0.10 $ 0.50 $(0.40) --
Year ended 03/31/1997................... 9.98 0.42 (0.03) 0.39 (0.42) --
Period ended 03/31/1996(b).............. 10.03 0.14 (0.05) 0.09 (0.14) --
Year ended 11/30/1995................... 9.69 0.42 0.34 0.76 (0.42) --
Year ended 11/30/1994................... 9.96 0.36 (0.27) 0.09 (0.36) $(0.00)#
Period ended 11/30/1993*................ 9.98 0.03 (0.02) 0.01 (0.03) --
INVESTOR B SHARES
Year ended 03/31/1998................... $ 9.95 $0.39 $ 0.10 $ 0.49 $(0.39) --
Year ended 03/31/1997................... 9.98 0.40 (0.03) 0.37 (0.40) --
Period ended 03/31/1996(b).............. 10.03 0.13 (0.05) 0.08 (0.13) --
Year ended 11/30/1995................... 9.69 0.40 0.34 0.74 (0.40) --
Year ended 11/30/1994................... 9.96 0.34 (0.27) 0.07 (0.34) $(0.00)#
Period ended 11/30/1993*................ 10.00 0.04 (0.04) 0.00 (0.04) --
INVESTOR C SHARES
Year ended 03/31/1998................... $ 9.95 $0.39 $ 0.10 $ 0.49 $(0.39) --
Year ended 03/31/1997................... 9.98 0.40 (0.03) 0.37 (0.40) --
Period ended 03/31/1996(b).............. 10.03 0.14 (0.05) 0.09 (0.14) --
Year ended 11/30/1995................... 9.69 0.42 0.34 0.76 (0.42) --
Period ended 11/30/1994*................ 9.84 0.19 (0.15) 0.04 (0.19) $(0.00)#
</TABLE>
- ---------------
* Short-Term Municipal Income Primary A, Investor A, Investor B and Investor C
Shares commenced operations on October 7, 1993, November 2, 1993, October 12,
1993 and May 19, 1994, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
198
<PAGE> 203
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.42) $10.05 5.33% $70,740 0.40%(a) 4.17% 94% 0.77%
(0.44) 9.95 4.15 61,072 0.40(a) 4.36 80 0.84
(0.15) 9.98 0.96 48,511 0.40+(a) 4.37+ 16 0.86+
(0.44) 10.03 8.16 49,961 0.45(a) 4.38 82 0.93
(0.38) 9.69 1.09 33,488 0.34(a) 3.83 57 0.80
(0.05) 9.96 0.06 5,999 0.09+ 3.16+ 45 1.04+
$(0.40) $10.05 5.12% $23,580 0.60%(a) 3.97% 94% 0.97%
(0.42) 9.95 3.96 8,417 0.60(a) 4.16 80 1.04
(0.14) 9.98 0.90 4,599 0.60+(a) 4.17+ 16 1.06+
(0.42) 10.03 7.95 3,741 0.65(a) 4.18 82 1.13
(0.36) 9.69 0.90 217 0.52(a) 3.65 57 0.99
(0.03) 9.96 0.06 731 0.24+ 3.01+ 45 1.19+
$(0.39) $10.05 4.96% $13,753 0.75%(a) 3.82% 94% 1.12%
(0.40) 9.95 3.78 10,655 0.75(a) 4.01 80 1.19
(0.13) 9.98 0.84 13,859 0.75+(a) 4.02+ 16 1.21+
(0.40) 10.03 7.78 9,803 0.80(a) 4.03 82 1.28
(0.34) 9.69 0.73 13,421 0.69(a) 3.48 57 1.15
(0.04) 9.96 (0.02) 5,863 0.44+ 2.81+ 45 1.39+
$(0.39) $10.05 4.99% $ 1,388 0.75%(a) 3.82% 94% 1.12%
(0.40) 9.95 3.79 1,080 0.75(a) 4.01 80 1.19
(0.14) 9.98 0.85 2,072 0.72+(a) 4.05+ 16 1.18+
(0.42) 10.03 7.95 1,953 0.70(a) 4.13 82 1.18
(0.19) 9.69 0.45 323 0.59+(a) 3.58+ 57 1.05+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
199
<PAGE> 204
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTERMEDIATE MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................... $10.01 $0.48 $ 0.33 $ 0.81 $(0.48) $(0.04)
Year ended 03/31/1997.................... 10.03 0.48 (0.02) 0.46 (0.48) --
Period ended 03/31/1996(b)............... 10.17 0.16 (0.14) 0.02 (0.16) --
Year ended 11/30/1995.................... 9.24 0.48 0.93 1.41 (0.48) --
Year ended 11/30/1994.................... 10.11 0.45 (0.86) (0.41) (0.45)# (0.01)
Period ended 11/30/1993**................ 10.00 0.14 0.11 0.25 (0.14) --
INVESTOR A SHARES
Year ended 03/31/1998.................... $10.01 $0.46 $ 0.33 $ 0.79 $(0.46) $(0.04)
Year ended 03/31/1997.................... 10.03 0.46 (0.02) 0.44 (0.46) --
Period ended 03/31/1996(b)............... 10.17 0.15 (0.14) 0.01 (0.15) --
Year ended 11/30/1995.................... 9.24 0.47 0.93 1.40 (0.47) --
Year ended 11/30/1994.................... 10.11 0.42 (0.86) (0.44) (0.42)# (0.01)
Period ended 11/30/1993**................ 10.10 0.12 0.01 0.13 (0.12) --
INVESTOR B SHARES
Year ended 03/31/1998.................... $10.01 $0.41 $ 0.33 $ 0.74 $(0.41) $(0.04)
Year ended 03/31/1997.................... 10.03 0.43 (0.02) 0.41 (0.43) --
Period ended 03/31/1996(b)............... 10.17 0.14 (0.14) 0.00 (0.14) --
Year ended 11/30/1995.................... 9.24 0.43 0.93 1.36 (0.43) --
Period ended 11/30/1994**................ 10.13 0.39 (0.88) (0.49) (0.39)# (0.01)
INVESTOR C SHARES
Year ended 03/31/1998.................... $10.01 $0.42 $ 0.33 $ 0.75 $(0.42) $(0.04)
Year ended 03/31/1997.................... 10.03 0.43 (0.02) 0.41 (0.43) --
Period ended 03/31/1996(b)............... 10.17 0.14 (0.14) 0.00 (0.14) --
Year ended 11/30/1995.................... 9.24 0.43 0.93 1.36 (0.43) --
Period ended 11/30/1994**................ 9.35 0.03 (0.11) (0.08) (0.03) --
</TABLE>
- ---------------
** Intermediate Municipal Bond Primary A, Investor A, Investor B and Investor C
Shares commenced operations on July 30, 1993, August 17, 1993, December 2,
1993 and November 3, 1994, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Amount includes distributions in excess of net investment income, which were
less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
200
<PAGE> 205
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.52) $10.30 8.20% $867,154 0.50%(a) 4.65% 47% 0.74%
(0.48) 10.01 4.63 108,204 0.50(a) 4.74 21 0.81
(0.16) 10.03 0.20 77,423 0.50+(a) 4.75+ 4 0.83+
(0.48) 10.17 15.60 73,897 0.45(a) 4.91 31 0.84
(0.46) 9.24 (4.25) 38,055 0.35(a) 4.59 51 0.88
(0.14) 10.11 2.46 28,335 0.24+ 4.07+ 23 0.96+
$(0.50) $10.30 7.99% $ 6,487 0.70%(a) 4.45% 47% 0.94%
(0.46) 10.01 4.42 2,067 0.70(a) 4.54 21 1.01
(0.15) 10.03 0.13 1,500 0.70+(a) 4.55+ 4 1.03+
(0.47) 10.17 15.38 1,249 0.65(a) 4.71 31 1.04
(0.43) 9.24 (4.48) 172 0.53(a) 4.41 51 1.06
(0.12) 10.11 1.28 68 0.39+ 3.92+ 23 1.11+
$(0.45) $10.30 7.50% $ 2,023 1.20%(a) 3.95% 47% 1.44%
(0.43) 10.01 4.12 1,481 1.00(a) 4.24 21 1.31
(0.14) 10.03 0.03 1,623 1.00+(a) 4.25+ 4 1.33+
(0.43) 10.17 15.02 1,352 0.95(a) 4.41 31 1.34
(0.40) 9.24 (5.00) 943 0.85+(a) 4.09+ 51 1.38+
$(0.46) $10.30 7.62% $ 1,590 1.20%(a) 3.95% 47% 1.44%
(0.43) 10.01 4.11 756 1.00(a) 4.24 21 1.31
(0.14) 10.03 0.03 716 1.00+(a) 4.25+ 4 1.33+
(0.43) 10.17 14.96 359 0.95(a) 4.41 31 1.34
(0.03) 9.24 (0.52) 2 0.85+(a) 4.09+ 51 1.38+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
201
<PAGE> 206
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MUNICIPAL INCOME
PRIMARY A SHARES
Year ended 03/31/1998.................... $10.89 $ 0.57 $ 0.62 $ 1.19 $(0.57) $(0.05)
Year ended 03/31/1997.................... 10.84 0.59 0.05 0.64 (0.59) --
Period ended 03/31/1996(b)............... 11.08 0.20 (0.24) (0.04) (0.20) --
Year ended 11/30/1995.................... 9.64 0.59 1.44 2.03 (0.59) --
Year ended 11/30/1994.................... 11.33 0.57 (1.44) (0.87) (0.57)# (0.25)
Year ended 11/30/1993.................... 10.65 0.59 0.72 1.31 (0.59) (0.04)
Year ended 11/30/1992.................... 10.25 0.59 0.41 1.00 (0.59) (0.01)
Period ended 11/30/1991*................. 10.00 0.52 0.25 0.77 (0.52) --
INVESTOR A SHARES
Year ended 03/31/1998.................... $10.89 $ 0.54 $ 0.62 $ 1.16 $(0.54) $(0.05)
Year ended 03/31/1997.................... 10.84 0.57 0.05 0.62 (0.57) --
Period ended 03/31/1996(b)............... 11.08 0.19 (0.24) (0.05) (0.19) --
Year ended 11/30/1995.................... 9.64 0.57 1.44 2.01 (0.57) --
Year ended 11/30/1994.................... 11.33 0.55 (1.44) (0.89) (0.55)# (0.25)
Year ended 11/30/1993.................... 10.65 0.57 0.72 1.29 (0.57) (0.04)
Year ended 11/30/1992.................... 10.25 0.58 0.41 0.99 (0.58) (0.01)
Period ended 11/30/1991*................. 10.00 0.52 0.25 0.77 (0.52) --
INVESTOR B SHARES
Year ended 03/31/1998.................... $10.89 $ 0.48 $ 0.62 $ 1.10 $(0.48) $(0.05)
Year ended 03/31/1997.................... 10.84 0.51 0.05 0.56 (0.51) --
Period ended 03/31/1996(b)............... 11.08 0.17 (0.24) (0.07) (0.17) --
Year ended 11/30/1995.................... 9.64 0.51 1.44 1.95 (0.51) --
Year ended 11/30/1994.................... 11.33 0.49 (1.44) (0.95) (0.49)# (0.25)
Period ended 11/30/1993*................. 11.13 0.23 0.20 0.43 (0.23) --
INVESTOR C SHARES
Year ended 03/31/1998.................... $10.89 $ 0.49 $ 0.62 $ 1.11 $(0.49) $(0.05)
Year ended 03/31/1997.................... 10.84 0.53 0.05 0.58 (0.53) --
Period ended 03/31/1996 (b).............. 11.08 0.18 (0.24) (0.06) (0.18) --
Year ended 11/30/1995.................... 9.64 0.51 1.44 1.95 (0.51) --
Year ended 11/30/1994.................... 11.33 0.49 (1.44) (0.95) (0.49)# (0.25)
Year ended 11/30/1993.................... 10.65 0.50 0.72 1.22 (0.50) (0.04)
Period ended 11/30/1992*................. 10.48 0.21 0.17 0.38 (0.21) --
</TABLE>
- ---------------
* Municipal Income Primary A, Investor A, Investor B and Investor C Shares
commenced operations on February 1, 1991, February 1, 1991, June 7, 1993 and
June 17, 1992, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Amount includes distributions in excess of net investment income, which were
less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
202
<PAGE> 207
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF
OPERATING
EXPENSES TO
RATIO OF AVERAGE NET RATIO OF
TOTAL NET ASSETS OPERATING ASSETS NET INVESTMENT
DIVIDENDS NET ASSET END OF EXPENSES TO INCLUDING INCOME TO PORTFOLIO
AND VALUE TOTAL PERIOD AVERAGE NET INTEREST AVERAGE NET TURNOVER
DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS EXPENSES ASSETS RATE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.62) $11.46 11.12% $456,485 0.60% (a) 4.97% 38%
(0.59) 10.89 6.03 77,260 0.60 (a) 5.41 25
(0.20) 10.84 (0.41) 68,022 0.60+ (a) 5.35+ 4
(0.59) 11.08 21.55 68,836 0.60 (a) 5.63 49
(0.82) 9.64 (8.17) 59,279 0.61 0.62% 5.42 63
(0.63) 11.33 12.54 88,386 0.52 -- 5.24 48
(0.60) 10.65 9.97+++ 62,387 0.43 -- 5.51 19
(0.52) 10.25 7.87+++ 23,631 0.20+ -- 6.07+ 54
$(0.59) $11.46 10.89% $ 19,226 0.80% (a) 4.77% 38%
(0.57) 10.89 5.82 15,075 0.80 (a) 5.21 25
(0.19) 10.84 (0.47) 26,085 0.80+ (a) 5.15+ 4
(0.57) 11.08 21.31 27,963 0.80 (a) 5.43 49
(0.80) 9.64 (8.34) 23,754 0.79 0.80% 5.24 63
(0.61) 11.33 12.37 28,415 0.60 -- 5.09 48
(0.59) 10.65 9.88+++ 21,056 0.52 -- 5.42 19
(0.52) 10.25 7.87+++ 7,234 0.20+ -- 6.07+ 54
$(0.53) $11.46 10.23% $ 15,383 1.42% (a) 4.15% 38%
(0.51) 10.89 5.24 14,615 1.35 (a) 4.66 25
(0.17) 10.84 (0.66) 16,870 1.35+ (a) 4.60+ 4
(0.51) 11.08 20.65 18,165 1.35 (a) 4.88 49
(0.74) 9.64 (8.86) 17,101 1.36 1.37% 4.67 63
(0.23) 11.33 3.89 15,133 1.27+ -- 4.49+ 48
$(0.54) $11.46 10.37% $ 2,444 1.33% (a) 4.24% 38%
(0.53) 10.89 5.50 1,713 1.10 (a) 4.91 25
(0.18) 10.84 (0.60) 2,173 1.16+ (a) 4.79+ 4
(0.51) 11.08 20.65 2,268 1.35 (a) 4.88 49
(0.74) 9.64 (8.86) 3,064 1.36 1.37% 4.67 63
(0.54) 11.33 11.69 6,331 1.27 -- 4.49 48
(0.21) 10.65 3.63+++ 3,774 1.21+ -- 4.36+ 19
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF
OPERATING
EXPENSES TO
AVERAGE
NET ASSETS
----------------------
<S> <C>
0.84%
0.91
0.91+
0.88
0.90
0.84
0.90
0.88+
1.04%
1.11
1.11+
1.08
1.08
0.99
0.99
0.88+
1.66%
1.66
1.66+
1.63
1.65
1.59+
1.57%
1.41
1.47+
1.63
1.65
1.59
1.61+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
203
<PAGE> 208
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FLORIDA INTERMEDIATE MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................... $10.40 $0.50 $ 0.37 $ 0.87 $(0.50) --
Year ended 03/31/1997.................... 10.46 0.49 (0.06) 0.43 (0.49) --
Period ended 03/31/1996 (b).............. 10.63 0.17 (0.17) 0.00 (0.17) --
Year ended 11/30/1995.................... 9.61 0.48 1.02 1.50 (0.48) --
Year ended 11/30/1994.................... 10.50 0.45 (0.88) (0.43) (0.45)# $(0.01)
Period ended 11/30/1993**................ 10.00 0.44 0.50 0.94 (0.44) --
INVESTOR A SHARES
Year ended 03/31/1998.................... $10.40 $0.48 $ 0.37 $ 0.85 $(0.48) --
Year ended 03/31/1997.................... 10.46 0.47 (0.06) 0.41 (0.47) --
Period ended 03/31/1996 (b).............. 10.63 0.16 (0.17) (0.01) (0.16) --
Year ended 11/30/1995.................... 9.61 0.46 1.02 1.48 (0.46) --
Year ended 11/30/1994.................... 10.50 0.43 (0.88) (0.45) (0.43)# $(0.01)
Period ended 11/30/1993**................ 9.99 0.42 0.51 0.93 (0.42) --
INVESTOR B SHARES
Year ended 03/31/1998.................... $10.40 $0.43 $ 0.37 $ 0.80 $(0.43) --
Year ended 03/31/1997.................... 10.46 0.44 (0.06) 0.38 (0.44) --
Period ended 03/31/1996(b)............... 10.63 0.15 (0.17) (0.02) (0.15) --
Year ended 11/30/1995.................... 9.61 0.43 1.02 1.45 (0.43) --
Year ended 11/30/1994.................... 10.50 0.40 (0.88) (0.48) (0.40)# $(0.01)
Period ended 11/30/1993**................ 10.32 0.18 0.18 0.36 (0.18) --
INVESTOR C SHARES
Year ended 03/31/1998(c)................. $10.40 $0.43 $ 0.37 $ 0.80 $(0.43) --
Year ended 03/31/1997.................... 10.46 0.44 (0.06) 0.38 (0.44) --
Period ended 03/31/1996(b)............... 10.63 0.15 (0.17) (0.02) (0.15) --
Year ended 11/30/1995.................... 9.61 0.43 1.02 1.45 (0.43) --
Year ended 11/30/1994.................... 10.50 0.39 (0.88) (0.49) (0.39)# $(0.01)
Period ended 11/30/1993**................ 9.98 0.35 0.52 0.87 (0.35) --
</TABLE>
- ---------------
** Florida Intermediate Municipal Bond Primary A, Investor A, Investor B and
Investor C Shares commenced operations on December 11, 1992, December 14,
1992, June 7, 1993 and December 17, 1992, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Amount includes distributions in excess of net investment income, which were
less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(c) Per share net investment income has been calculated using the monthly
average shares method.
SEE NOTES TO FINANCIAL STATEMENTS.
204
<PAGE> 209
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.50) $10.77 8.55% $203,710 0.50%(a) 4.74% 13% 0.76%
(0.49) 10.40 4.22 51,748 0.50(a) 4.72 16 0.81
(0.17) 10.46 (0.06) 44,988 0.50+(a) 4.66+ 18 0.86+
(0.48) 10.63 15.92 44,038 0.55(a) 4.70 27 0.81
(0.46) 9.61 (4.26) 42,717 0.55(a) 4.44 34 0.76
(0.44) 10.50 9.50 41,489 0.44+ 4.28+ 15 0.80+
$(0.48) $10.77 8.34% $ 7,205 0.70%(a) 4.54% 13% 0.96%
(0.47) 10.40 4.01 2,142 0.70(a) 4.52 16 1.01
(0.16) 10.46 (0.13) 2,029 0.70+(a) 4.46+ 18 1.06+
(0.46) 10.63 15.68 2,292 0.75(a) 4.50 27 1.01
(0.44) 9.61 (4.43) 2,114 0.73(a) 4.26 34 0.94
(0.42) 10.50 9.44 2,261 0.59+ 4.13+ 15 0.95+
$(0.43) $10.77 7.80% $ 3,606 1.20%(a) 4.04% 13% 1.46%
(0.44) 10.40 3.70 3,488 1.00(a) 4.22 16 1.31
(0.15) 10.46 (0.23) 4,001 1.00+(a) 4.16+ 18 1.36+
(0.43) 10.63 15.34 4,775 1.05(a) 4.20 27 1.31
(0.41) 9.61 (4.73) 4,691 1.05(a) 3.94 34 1.26
(0.18) 10.50 3.53 3,328 0.94+ 3.78+ 15 1.30+
$(0.43) $10.77 7.80% $ 188 1.20%(a) 4.04% 13% 1.46%
(0.44) 10.40 3.71 272 1.00(a) 4.22 16 1.31
(0.15) 10.46 (0.23) 275 1.00+(a) 4.16+ 18 1.36+
(0.43) 10.63 15.34 277 1.05(a) 4.20 27 1.31
(0.40) 9.61 (4.81) 614 1.13(a) 3.86 34 1.34
(0.35) 10.50 8.80 684 1.19+ 3.53+ 15 1.55+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
205
<PAGE> 210
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FLORIDA MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................................... $ 9.48 $ 0.48 $ 0.51 $ 0.99 $(0.48)
Year ended 03/31/1997.................................... 9.47 0.48 0.01 0.49 (0.48)
Period ended 03/31/1996(b)............................... 9.76 0.16 (0.29) (0.13) (0.16)
Year ended 11/30/1995.................................... 8.40 0.51 1.36 1.87 (0.51)
Period ended 11/30/1994*................................. 9.93 0.49 (1.53) (1.04) (0.49)
INVESTOR A SHARES
Year ended 03/31/1998.................................... $ 9.48 $ 0.46 $ 0.51 $ 0.97 $(0.46)
Year ended 03/31/1997.................................... 9.47 0.46 0.01 0.47 (0.46)
Period ended 03/31/1996(b)............................... 9.76 0.15 (0.29) (0.14) (0.15)
Year ended 11/30/1995.................................... 8.40 0.49 1.36 1.85 (0.49)
Period ended 11/30/1994*................................. 9.98 0.47 (1.58) (1.11) (0.47)
INVESTOR B SHARES
Year ended 03/31/1998.................................... $ 9.48 $ 0.40 $ 0.51 $ 0.91 $(0.40)
Year ended 03/31/1997.................................... 9.47 0.41 0.01 0.42 (0.41)
Period ended 03/31/1996(b)............................... 9.76 0.14 (0.29) (0.15) (0.14)
Year ended 11/30/1995.................................... 8.40 0.44 1.36 1.80 (0.44)
Year ended 11/30/1994.................................... 9.73 0.45 (1.33) (0.88) (0.45)
Period ended 11/30/1993*................................. 10.00 0.03 (0.27) (0.24) (0.03)
INVESTOR C SHARES
Year ended 03/31/1998(c)................................. $ 9.48 $ 0.41 $ 0.51 $ 0.92 $(0.41)
Year ended 03/31/1997.................................... 9.47 0.44 0.01 0.45 (0.44)
Period ended 03/31/1996 (b).............................. 9.76 0.14 (0.29) (0.15) (0.14)
Year ended 11/30/1995.................................... 8.40 0.44 1.36 1.80 (0.44)
Period ended 11/30/1994*................................. 8.47 0.03 (0.07) (0.04) (0.03)
</TABLE>
- ---------------
* Florida Municipal Bond Primary A, Investor A, Investor B and Investor C
Shares commenced operations on December 13, 1993, December 10, 1993, October
22, 1993 and November 3, 1994, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(c) Per share net investment income has been calculated using the monthly
average shares method.
SEE NOTES TO FINANCIAL STATEMENTS.
206
<PAGE> 211
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.48) $ 9.99 10.60% $27,378 0.60%(a) 4.85% 19% 0.90%
(0.48) 9.48 5.29 16,702 0.60(a) 5.07 23 0.93
(0.16) 9.47 (1.33) 13,044 0.60+(a) 5.03+ 7 0.96+
(0.51) 9.76 22.69 11,219 0.39(a) 5.44 13 0.95
(0.49) 8.40 (10.70) 4,258 0.21+(a) 5.55+ 46 0.91+
$(0.46) $ 9.99 10.38% 2,027 0.80%(a) 4.65% 19% 1.10%
(0.46) 9.48 5.09 1,781 0.80(a) 4.87 23 1.13
(0.15) 9.47 (1.40) 1,836 0.80+(a) 4.83+ 7 1.16+
(0.49) 9.76 22.45 1,787 0.59(a) 5.24 13 1.15
(0.47) 8.40 (11.35) 1,024 0.39+(a) 5.37+ 46 1.09+
$(0.40) $ 9.99 9.71% 17,048 1.42%(a) 4.03% 19% 1.72%
(0.41) 9.48 4.52 19,751 1.35(a) 4.32 23 1.68
(0.14) 9.47 (1.58) 23,947 1.35+(a) 4.28+ 7 1.71+
(0.44) 9.76 21.78 25,398 1.14(a) 4.69 13 1.70
(0.45) 8.40 (9.37) 19,868 0.96(a) 4.80 46 1.66
(0.03) 9.73 (2.35) 11,434 0.68+ 3.29+ 0
$(0.41) $ 9.99 9.83% 3 1.33%(a) 4.12% 19% 1.63%
(0.44) 9.48 4.78 40 1.10(a) 4.57 23 1.43
(0.14) 9.47 (1.52) 38 1.15+(a) 4.48+ 7 1.51+
(0.44) 9.76 21.80 38 1.14(a) 4.69 13 1.70
(0.03) 8.40 (0.43) 2 0.96+(a) 4.80+ 46 1.66+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
207
<PAGE> 212
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GEORGIA INTERMEDIATE MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................... $10.58 $0.49 $ 0.38 $ 0.87 $(0.49) $(0.04)
Year ended 03/31/1997.................... 10.63 0.50 (0.05) 0.45 (0.50) --
Period ended 03/31/1996(b)............... 10.81 0.17 (0.18) (0.01) (0.17) --
Year ended 11/30/1995.................... 9.82 0.50 0.99 1.49 (0.50) --
Year ended 11/30/1994.................... 10.82 0.49 (0.98) (0.49) (0.49)# (0.02)
Year ended 11/30/1993.................... 10.29 0.50 0.56 1.06 (0.50) (0.03)
Period ended 11/30/1992**................ 10.00 0.41 0.29 0.70 (0.41) --
INVESTOR A SHARES
Year ended 03/31/1998.................... $10.58 $0.47 $ 0.38 $ 0.85 $(0.47) $(0.04)
Year ended 03/31/1997.................... 10.63 0.48 (0.05) 0.43 (0.48) --
Period ended 03/31/1996(b)............... 10.81 0.16 (0.18) (0.02) (0.16) --
Year ended 11/30/1995.................... 9.82 0.48 0.99 1.47 (0.48) --
Year ended 11/30/1994.................... 10.82 0.47 (0.98) (0.51) (0.47)# (0.02)
Year ended 11/30/1993.................... 10.28 0.48 0.57 1.05 (0.48) (0.03)
Period ended 11/30/1992**................ 9.98 0.30 0.30 0.60 (0.30) --
INVESTOR B SHARES
Year ended 03/31/1998.................... $10.58 $0.42 $ 0.38 $ 0.80 $(0.42) $(0.04)
Year ended 03/31/1997.................... 10.63 0.45 (0.05) 0.40 (0.45) --
Period ended 03/31/1996(b)............... 10.81 0.15 (0.18) (0.03) (0.15) --
Year ended 11/30/1995.................... 9.82 0.45 0.99 1.44 (0.45) --
Year ended 11/30/1994.................... 10.82 0.44 (0.98) (0.54) (0.44)# (0.02)
Period ended 11/30/1993**................ 10.61 0.20 0.21 0.41 (0.20) --
INVESTOR C SHARES
Year ended 03/31/1998(c)................. $10.58 $0.42 $ 0.38 $ 0.80 $(0.42) $(0.04)
Year ended 03/31/1997.................... 10.63 0.45 (0.05) 0.40 (0.45) --
Period ended 03/31/1996(b)............... 10.81 0.15 (0.18) (0.03) (0.15) --
Year ended 11/30/1995.................... 9.82 0.45 0.99 1.44 (0.45) --
Year ended 11/30/1994.................... 10.82 0.43 (0.98) (0.55) (0.43)# (0.02)
Year ended 11/30/1993.................... 10.29 0.42 0.56 0.98 (0.42) (0.03)
Period ended 11/30/1992**................ 10.11 0.20 0.18 0.38 (0.20) --
</TABLE>
- ---------------
** Georgia Intermediate Municipal Bond Primary A, Investor A, Investor B and
Investor C Shares commenced operations on March 1, 1992, May 4, 1992, June
7, 1993 and June 17, 1992, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Amount includes distributions in excess of net investment income, which were
less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(c) Per share net investment income has been calculated using the monthly
average shares method.
SEE NOTES TO FINANCIAL STATEMENTS.
208
<PAGE> 213
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF
OPERATING
EXPENSES TO
RATIO OF AVERAGE NET RATIO OF
TOTAL NET ASSETS OPERATING ASSETS NET INVESTMENT
DIVIDENDS NET ASSET END OF EXPENSES TO INCLUDING INCOME TO PORTFOLIO
AND VALUE TOTAL PERIOD AVERAGE NET INTEREST AVERAGE NET TURNOVER
DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS EXPENSE ASSETS RATE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.53) $10.92 8.45% $125,654 0.50% (a) 4.54% 25%
(0.50) 10.58 4.33 43,470 0.50 (a) 4.72 9
(0.17) 10.63 (0.13) 38,222 0.50+ (a) 4.67+ 3
(0.50) 10.81 15.42 40,383 0.55 (a) 4.76 17
(0.51) 9.82 (4.70) 33,111 0.54 0.55% 4.74 22
(0.53) 10.82 10.43 30,738 0.46 -- 4.57 6
(0.41) 10.29 7.07+++ 20,584 0.20+ -- 5.25+ 12
$(0.51) $10.92 8.24% $ 9,446 0.70% (a) 4.34% 25%
(0.48) 10.58 4.12 8,810 0.70 (a) 4.52 9
(0.16) 10.63 (0.19) 8,625 0.70+ (a) 4.47+ 3
(0.48) 10.81 15.20 9,175 0.75 (a) 4.56 17
(0.49) 9.82 (4.87) 10,401 0.72 0.73% 4.56 22
(0.51) 10.82 10.37 16,752 0.61 -- 4.42 6
(0.30) 10.28 6.12+++ 3,809 0.34+ -- 5.01+ 12
$(0.46) $10.92 7.70% $ 7,378 1.20% (a) 3.84% 25%
(0.45) 10.58 3.81 7,601 1.00 (a) 4.22 9
(0.15) 10.63 (0.29) 8,098 1.00+ (a) 4.17+ 3
(0.45) 10.81 14.85 8,160 1.05 (a) 4.26 17
(0.46) 9.82 (5.17) 7,269 1.04 1.05% 4.24 22
(0.20) 10.82 3.86 4,506 0.96+ -- 4.07+ 6
$(0.46) $10.92 7.70% $ 1,034 1.20% (a) 3.84% 25%
(0.45) 10.58 3.81 1,983 1.00 (a) 4.22 9
(0.15) 10.63 (0.29) 2,445 1.00+ (a) 4.17+ 3
(0.45) 10.81 14.85 2,606 1.05 (a) 4.26 17
(0.45) 9.82 (5.25) 2,397 1.12 1.13% 4.16 22
(0.45) 10.82 9.61 2,990 1.21 -- 3.82 6
(0.20) 10.29 3.82+++ 992 0.91+ -- 4.21+ 12
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF
OPERATING
EXPENSES TO
AVERAGE
NET ASSETS
----------------------
<S> <C>
0.75%
0.80
0.83+
0.80
0.75
0.77
0.77+
0.95%
1.00
1.03+
1.00
0.93
0.92
0.91+
1.45%
1.30
1.33+
1.30
1.25
1.27+
1.45%
1.30
1.33+
1.30
1.33
1.52
1.72+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
209
<PAGE> 214
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GEORGIA MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................................... $ 9.50 $0.47 $ 0.50 $ 0.97 $(0.47)
Year ended 03/31/1997.................................... 9.48 0.47 0.02 0.49 (0.47)
Period ended 03/31/1996(b)............................... 9.72 0.16 (0.24) (0.08) (0.16)
Year ended 11/30/1995.................................... 8.38 0.51 1.34 1.85 (0.51)
Period ended 11/30/1994*................................. 10.02 0.46 (1.64) (1.18) (0.46)
INVESTOR A SHARES
Year ended 03/31/1998.................................... $ 9.50 $0.45 $ 0.50 $ 0.95 $(0.45)
Year ended 03/31/1997.................................... 9.48 0.45 0.02 0.47 (0.45)
Period ended 03/31/1996(b)............................... 9.72 0.14 (0.24) (0.10) (0.14)
Year ended 11/30/1995.................................... 8.38 0.49 1.34 1.83 (0.49)
Period ended 11/30/1994*................................. 9.99 0.47 (1.61) (1.14) (0.47)
INVESTOR B SHARES
Year ended 03/31/1998.................................... $ 9.50 $0.39 $ 0.50 $ 0.89 $(0.39)
Year ended 03/31/1997.................................... 9.48 0.40 0.02 0.42 (0.40)
Period ended 03/31/1996(b)............................... 9.72 0.14 (0.24) (0.10) (0.14)
Year ended 11/30/1995.................................... 8.38 0.44 1.34 1.78 (0.44)
Year ended 11/30/1994.................................... 9.81 0.45 (1.43) (0.98) (0.45)
Period ended 11/30/1993*................................. 10.00 0.04 (0.19) (0.15) (0.04)
INVESTOR C SHARES
Year ended 03/31/1998(c)................................. $ 9.50 $0.40 $ 0.50 $ 0.90 $(0.40)
Year ended 03/31/1997.................................... 9.48 0.42 0.02 0.44 (0.42)
Period ended 03/31/1996(b)............................... 9.72 0.14 (0.24) (0.10) (0.14)
Year ended 11/30/1995.................................... 8.38 0.44 1.34 1.78 (0.44)
Period ended 11/30/1994*................................. 8.45 0.03 (0.07) (0.04) (0.03)
</TABLE>
- ---------------
* Georgia Municipal Bond Primary A, Investor A, Investor B and Investor C
Shares commenced operations on January 13, 1994, December 30, 1993, October
21, 1993 and November 3, 1994, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(c) Per share net investment income has been calculated using the monthly
average shares method.
SEE NOTES TO FINANCIAL STATEMENTS.
210
<PAGE> 215
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
NET ASSETS OPERATING NET INVESTMENT OPERATING
NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE NET ASSETS
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$10.00 10.43% $ 8,138 0.60%(a) 4.82% 30% 1.02%
9.50 5.29 5,550 0.60(a) 4.96 19 1.05
9.48 (0.84) 2,068 0.60+(a) 4.96+ 7 1.14+
9.72 22.48 2,628 0.40(a) 5.42 26 1.09
8.38 (12.07) 232 0.21+(a) 5.60+ 35 1.04+
$10.00 10.22% $ 483 0.80%(a) 4.62% 30% 1.22%
9.50 5.05 208 0.80(a) 4.76 19 1.25
9.48 (1.08) 7 0.80+(a) 4.76+ 7 1.34+
9.72 22.25 7 0.60(a) 5.22 26 1.29
8.38 (11.71) 6 0.39+(a) 5.42+ 35 1.22+
$10.00 9.54% $10,052 1.42%(a) 4.00% 30% 1.84%
9.50 4.50 10,182 1.35(a) 4.21 19 1.80
9.48 (1.09) 12,254 1.35+(a) 4.21+ 7 1.89+
9.72 21.58 13,017 1.15(a) 4.67 26 1.84
8.38 (10.28) 9,500 0.96(a) 4.85 35 1.79
9.81 (1.49) 4,820 0.70+ 3.63+ 30 2.08+
$10.00 9.64% $ 27 1.33%(a) 4.09% 30% 1.75%
9.50 4.77 72 1.10(a) 4.46 19 1.55
9.48 (1.03) 69 1.16+(a) 4.40+ 7 1.70+
9.72 21.59 69 1.15(a) 4.67 26 1.84
8.38 (0.44) 2 0.96+(a) 4.85+ 35 1.79+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
211
<PAGE> 216
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MARYLAND INTERMEDIATE MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................... $10.70 $0.51 $ 0.31 $ 0.82 $(0.51) --
Year ended 03/31/1997.................... 10.80 0.51 (0.10) 0.41 (0.51) --
Period ended 03/31/1996(b)............... 10.95 0.17 (0.15) 0.02 (0.17) --
Year ended 11/30/1995.................... 10.00 0.51 0.98 1.49 (0.51) $(0.03)
Year ended 11/30/1994.................... 11.09 0.50 (0.99) (0.49) (0.50) (0.10)
Year ended 11/30/1993.................... 10.72 0.52 0.44 0.96 (0.52) (0.07)
Year ended 11/30/1992.................... 10.44 0.55 0.31 0.86 (0.55) (0.03)
Year ended 11/30/1991.................... 10.21 0.60 0.24 0.84 (0.60) (0.01)
Period ended 11/30/1990**................ 10.00 0.16 0.21 0.37 (0.16) --
INVESTOR A SHARES
Year ended 03/31/1998.................... $10.70 $0.49 $ 0.31 $ 0.80 $(0.49) --
Year ended 03/31/1997.................... 10.80 0.48 (0.10) 0.38 (0.48) --
Period ended 03/31/1996(b)............... 10.95 0.16 (0.15) 0.01 (0.16) --
Year ended 11/30/1995.................... 10.00 0.48 0.98 1.46 (0.48) $(0.03)
Year ended 11/30/1994.................... 11.09 0.48 (0.99) (0.51) (0.48) (0.10)
Year ended 11/30/1993.................... 10.72 0.51 0.44 0.95 (0.51) (0.07)
Year ended 11/30/1992.................... 10.44 0.54 0.31 0.85 (0.54) (0.03)
Year ended 11/30/1991.................... 10.21 0.60 0.24 0.84 (0.60) (0.01)
Period ended 11/30/1990**................ 10.00 0.16 0.21 0.37 (0.16) --
INVESTOR B SHARES
Year ended 03/31/1998.................... $10.70 $0.43 $ 0.31 $ 0.74 $(0.43) --
Year ended 03/31/1997.................... 10.80 0.45 (0.10) 0.35 (0.45) --
Period ended 03/31/1996 (b).............. 10.95 0.15 (0.15) 0.00 (0.15) --
Year ended 11/30/1995.................... 10.00 0.45 0.98 1.43 (0.45) $(0.03)
Year ended 11/30/1994.................... 11.09 0.45 (0.99) (0.54) (0.45) (0.10)
Period ended 11/30/1993**................ 10.94 0.21 0.17 0.38 (0.21) (0.02)
INVESTOR C SHARES
Year ended 03/31/1998.................... $10.70 $0.43 $ 0.31 $ 0.74 $(0.43) --
Year ended 03/31/1997.................... 10.80 0.45 (0.10) 0.35 (0.45) --
Period ended 03/31/1996(b)............... 10.95 0.15 (0.15) 0.00 (0.15) --
Year ended 11/30/1995.................... 10.00 0.45 0.98 1.43 (0.45) $(0.03)
Year ended 11/30/1994.................... 11.09 0.44 (0.99) (0.55) (0.44) (0.10)
Year ended 11/30/1993.................... 10.72 0.40 0.44 0.84 (0.40) (0.07)
Period ended 11/30/1992**................ 10.58 0.19 0.14 0.33 (0.19) --
</TABLE>
- ---------------
** Maryland Intermediate Municipal Bond Primary A, Investor A, Investor B and
Investor C Shares commenced operations on September 1, 1990, September 1,
1990, June 8, 1993 and June 17, 1992, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
212
<PAGE> 217
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
DISTRIBUTION TOTAL NET ASSETS OPERATING NET INVESTMENT
IN EXCESS OF DIVIDENDS NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO
NET REALIZED AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER
CAPITAL GAINS DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
-- $(0.51) $11.01 7.83% $ 84,715 0.50% 4.63% 12%
-- (0.51) 10.70 3.83 63,549 0.50(a) 4.70 10
-- (0.17) 10.80 0.16 61,337 0.50+(a) 4.62+ 4
-- (0.54) 10.95 15.16 62,460 0.55(a) 4.76 11
$(0.00)# (0.60) 10.00 (4.64) 61,349 0.53(a) 4.73 22
-- (0.59) 11.09 9.11 61,552 0.49 4.73 26
-- (0.58) 10.72 8.41+++ 48,192 0.39 5.12 38
-- (0.61) 10.44 8.46+++ 31,088 0.20 5.76 26
-- (0.16) 10.21 3.72+++ 11,087 0.21+ 6.12+ 49
-- $(0.49) $11.01 7.61% $ 15,558 0.70% 4.43% 12%
-- (0.48) 10.70 3.62 14,988 0.70(a) 4.50 10
-- (0.16) 10.80 0.09 19,456 0.70+(a) 4.42+ 4
-- (0.51) 10.95 14.94 21,208 0.75(a) 4.56 11
$(0.00)# (0.58) 10.00 (4.82) 22,145 0.71(a) 4.55 22
-- (0.58) 11.09 8.96 22,144 0.64 4.58 26
-- (0.57) 10.72 8.32+++ 20,092 0.48 4.98 38
-- (0.61) 10.44 8.46+++ 9,934 0.20 5.76 26
-- (0.16) 10.21 3.72+++ 2,228 0.21+ 6.12+ 49
-- $(0.43) $11.01 7.07% $ 4,804 1.20% 3.93% 12%
-- (0.45) 10.70 3.31 4,299 1.00(a) 4.20 10
-- (0.15) 10.80 (0.01) 4,500 1.00+(a) 4.12+ 4
-- (0.48) 10.95 14.59 4,485 1.05(a) 4.26 11
$(0.00)# (0.55) 10.00 (5.12) 4,368 1.03(a) 4.23 22
-- (0.23) 11.09 3.53 3,234 0.99+ 4.23+ 26
-- $(0.43) $11.01 7.07% $ 840 1.20% 3.93% 12%
-- (0.45) 10.70 3.31 2,017 1.00(a) 4.20 10
-- (0.15) 10.80 (0.01) 2,900 1.00+(a) 4.12+ 4
-- (0.48) 10.95 14.59 2,808 1.05(a) 4.26 11
$(0.00)# (0.54) 10.00 (5.20) 2,570 1.11(a) 4.15 22
-- (0.47) 11.09 8.30 4,424 1.24 3.98 26
-- (0.19) 10.72 3.13+++ 1,796 1.16+ 3.88+ 38
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF
OPERATING
EXPENSES TO
AVERAGE
NET ASSETS
----------------------
<S> <C>
0.80%
0.78
0.81+
0.80
0.73
0.73
0.78
0.71
0.84+
1.00%
0.98
1.01+
1.00
0.91
0.88
0.87
0.71
0.84+
1.50%
1.28
1.31+
1.30
1.23
1.23+
1.50%
1.28
1.31+
1.30
1.31
1.48
1.44+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
213
<PAGE> 218
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MARYLAND MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................................... $ 9.41 $0.45 $ 0.53 $ 0.98 $(0.45)
Year ended 03/31/1997.................................... 9.39 0.46 0.02 0.48 (0.46)
Period ended 03/31/1996(b)............................... 9.63 0.15 (0.24) (0.09) (0.15)
Year ended 11/30/1995.................................... 8.37 0.48 1.26 1.74 (0.48)
Period ended 11/30/1994*................................. 8.90 0.11 (0.53) (0.42) (0.11)
INVESTOR A SHARES
Year ended 03/31/1998.................................... $ 9.41 $0.43 $ 0.53 $ 0.96 $(0.43)
Year ended 03/31/1997.................................... 9.39 0.44 0.02 0.46 (0.44)
Period ended 03/31/1996(b)............................... 9.63 0.14 (0.24) (0.10) (0.14)
Year ended 11/30/1995.................................... 8.37 0.46 1.26 1.72 (0.46)
Year ended 11/30/1994.................................... 9.77 0.49 (1.40) (0.91) (0.49)
Period ended 11/30/1993*................................. 9.80 0.03 (0.03) 0.00 (0.03)
INVESTOR B SHARES
Year ended 03/31/1998.................................... $ 9.41 $0.37 $ 0.53 $ 0.90 $(0.37)
Year ended 03/31/1997.................................... 9.39 0.39 0.02 0.41 (0.39)
Period ended 03/31/1996(b)............................... 9.63 0.13 (0.24) (0.11) (0.13)
Year ended 11/30/1995.................................... 8.37 0.41 1.26 1.67 (0.41)
Year ended 11/30/1994.................................... 9.77 0.44 (1.40) (0.96) (0.44)
Period ended 11/30/1993*................................. 10.00 0.04 (0.23) (0.19) (0.04)
INVESTOR C SHARES
Year ended 03/31/1998.................................... $ 9.41 $0.39 $ 0.53 $ 0.92 $(0.39)
Year ended 03/31/1997.................................... 9.39 0.42 0.02 0.44 (0.42)
Period ended 03/31/1996 (b).............................. 9.63 0.13 (0.24) (0.11) (0.13)
Year ended 11/30/1995.................................... 8.37 0.41 1.26 1.67 (0.41)
Period ended 11/30/1994*................................. 8.44 0.03 (0.07) (0.04) (0.03)
</TABLE>
- ---------------
* Maryland Municipal Bond Primary A, Investor A, Investor B and Investor C
Shares commenced operations on September 20, 1994, November 4, 1993, October
21, 1993 and November 3, 1994, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
214
<PAGE> 219
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
NET ASSETS OPERATING NET INVESTMENT OPERATING
NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE NET ASSETS
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$9.94 10.62% $ 9,049 0.60% 4.61% 17% 1.07%
9.41 5.20 4,596 0.60 4.88 18 1.12
9.39 (0.95) 2,788 0.60+ 4.72+ 7 1.23+
9.63 21.23 2,595 0.40 5.14 11 1.26
8.37 (4.89) 39 0.21+(a) 5.48+ 39 1.30+
$9.94 10.40% $ 1,902 0.80% 4.41% 17% 1.27%
9.41 4.99 1,409 0.80 4.68 18 1.32
9.39 (1.01) 1,086 0.80+ 4.52+ 7 1.43+
9.63 20.99 1,031 0.60 4.94 11 1.46
8.37 (9.59) 9 0.39(a) 5.30 39 1.48
9.77 0.05 6 0.13+ 3.97+ 1 1.76+
$9.94 9.72% $11,071 1.42% 3.79% 17% 1.89%
9.41 4.42 8,099 1.35 4.13 18 1.87
9.39 (1.19) 9,662 1.35+ 3.97+ 7 1.98+
9.63 20.33 10,002 1.15 4.39 11 2.01
8.37 (10.11) 4,819 0.96(a) 4.73 39 2.05
9.77 (1.94) 3,048 0.73+ 3.37+ 1 2.36+
$9.94 9.88% $ 3 1.33% 3.88% 17% 1.80%
9.41 4.73 2 1.10 4.38 18 1.62
9.39 (1.13) 2 1.16+ 4.16+ 7 1.79+
9.63 20.29 2 1.15 4.39 11 2.01
8.37 (0.45) 2 0.96+(a) 4.73+ 39 2.05+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
215
<PAGE> 220
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NORTH CAROLINA INTERMEDIATE MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................... $10.34 $0.49 $ 0.36 $ 0.85 $(0.49) --
Year ended 03/31/1997.................... 10.36 0.47 (0.02) 0.45 (0.47) --
Period ended 03/31/1996 (b).............. 10.51 0.16 (0.15) 0.01 (0.16) --
Year ended 11/30/1995.................... 9.53 0.45 0.99 1.44 (0.45)# $(0.01)
Year ended 11/30/1994.................... 10.46 0.44 (0.88) (0.44) (0.44) (0.05)
Period ended 11/30/1993**................ 10.00 0.43 0.46 0.89 (0.43) --
INVESTOR A SHARES
Year ended 03/31/1998.................... $10.34 $0.47 $ 0.36 $ 0.83 $(0.47) --
Year ended 03/31/1997.................... 10.36 0.45 (0.02) 0.43 (0.45) --
Period ended 03/31/1996(b)............... 10.51 0.15 (0.15) 0.00 (0.15) --
Year ended 11/30/1995.................... 9.53 0.43 0.99 1.42 (0.43)# $(0.01)
Year ended 11/30/1994.................... 10.46 0.42 (0.88) (0.46) (0.42) (0.05)
Period ended 11/30/1993**................ 10.01 0.42 0.45 0.87 (0.42) --
INVESTOR B SHARES
Year ended 03/31/1998.................... $10.34 $0.42 $ 0.36 $ 0.78 $(0.42) --
Year ended 03/31/1997.................... 10.36 0.42 (0.02) 0.40 (0.42) --
Period ended 03/31/1996(b)............... 10.51 0.14 (0.15) (0.01) (0.14) --
Year ended 11/30/1995.................... 9.53 0.40 0.99 1.39 (0.40)# $(0.01)
Year ended 11/30/1994.................... 10.46 0.39 (0.88) (0.49) (0.39) (0.05)
Period ended 11/30/1993**................ 10.31 0.18 0.15 0.33 (0.18) --
INVESTOR C SHARES
Year ended 03/31/1998.................... $10.34 $0.42 $ 0.36 $ 0.78 $(0.42) --
Year ended 03/31/1997.................... 10.36 0.42 (0.02) 0.40 (0.42) --
Period ended 03/31/1996(b)............... 10.51 0.14 (0.15) (0.01) (0.14) --
Year ended 11/30/1995.................... 9.53 0.40 0.99 1.39 (0.40)# $(0.01)
Year ended 11/30/1994.................... 10.46 0.38 (0.88) (0.50) (0.38) (0.05)
Period ended 11/30/1993**................ 9.99 0.35 0.47 0.82 (0.35) --
</TABLE>
- ---------------
** North Carolina Intermediate Municipal Bond Primary A, Investor A, Investor B
and Investor C Shares commenced operations on December 11, 1992, December
14, 1992, June 7, 1993 and December 16, 1992, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Amount includes distributions in excess of net investment income, which were
less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
216
<PAGE> 221
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.49) $10.70 8.39% $179,729 0.50%(a) 4.69% 21% 0.76%
(0.47) 10.34 4.45 25,855 0.50(a) 4.57 26 0.82
(0.16) 10.36 0.05 21,161 0.50+ 4.47+ 3 0.87+
(0.46) 10.51 15.41 20,916 0.57(a) 4.47 57 0.84
(0.49) 9.53 (4.34) 14,148 0.55(a) 4.38 37 0.82
(0.43) 10.46 9.03 11,814 0.42+ 4.23+ 29 0.85+
$(0.47) $10.70 8.17% $ 8,572 0.70%(a) 4.49% 21% 0.96%
(0.45) 10.34 4.25 5,723 0.70(a) 4.37 26 1.02
(0.15) 10.36 (0.01) 7,672 0.70+ 4.27+ 3 1.07+
(0.44) 10.51 15.18 8,525 0.77(a) 4.27 57 1.04
(0.47) 9.53 (4.51) 8,896 0.73(a) 4.20 37 1.00
(0.42) 10.46 8.76 13,749 0.57+ 4.08+ 29 1.00+
$(0.42) $10.70 7.64% $ 6,859 1.20%(a) 3.99% 21% 1.46%
(0.42) 10.34 3.94 6,796 1.00(a) 4.07 26 1.32
(0.14) 10.36 (0.12) 8,102 1.00+ 3.97+ 3 1.37+
(0.41) 10.51 14.84 7,848 1.07(a) 3.97 57 1.34
(0.44) 9.53 (4.82) 5,706 1.05(a) 3.88 37 1.32
(0.18) 10.46 3.23 3,822 0.92+ 3.73+ 29 1.35+
$(0.42) $10.70 7.64% $ 822 1.20%(a) 3.99% 21% 1.46%
(0.42) 10.34 3.94 1,364 1.00(a) 4.07 26 1.32
(0.14) 10.36 (0.12) 1,379 1.00+ 3.97+ 3 1.37+
(0.41) 10.51 14.84 1,366 1.07(a) 3.97 57 1.34
(0.43) 9.53 (4.89) 1,486 1.13(a) 3.80 37 1.40
(0.35) 10.46 8.26 1,592 1.17+ 3.48+ 29 1.60+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
217
<PAGE> 222
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NORTH CAROLINA MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................................... $ 9.47 $0.47 $ 0.54 $ 1.01 $(0.47)
Year ended 03/31/1997.................................... 9.49 0.47 (0.02) 0.45 (0.47)
Period ended 03/31/1996(b)............................... 9.73 0.16 (0.24) (0.08) (0.16)
Year ended 11/30/1995.................................... 8.36 0.50 1.37 1.87 (0.50)
Period ended 11/30/1994*................................. 10.06 0.45 (1.70) (1.25) (0.45)
INVESTOR A SHARES
Year ended 03/31/1998.................................... $ 9.47 $0.45 $ 0.54 $ 0.99 $(0.45)
Year ended 03/31/1997.................................... 9.49 0.45 (0.02) 0.43 (0.45)
Period ended 03/31/1996(b)............................... 9.73 0.15 (0.24) (0.09) (0.15)
Year ended 11/30/1995.................................... 8.36 0.49 1.37 1.86 (0.49)
Year ended 11/30/1994.................................... 9.85 0.50 (1.49) (0.99) (0.50)
Period ended 11/30/1993*................................. 9.97 0.04 (0.12) (0.08) (0.04)
INVESTOR B SHARES
Year ended 03/31/1998.................................... $ 9.47 $0.39 $ 0.54 $ 0.93 $(0.39)
Year ended 03/31/1997.................................... 9.49 0.40 (0.02) 0.38 (0.40)
Period ended 03/31/1996(b)............................... 9.73 0.13 (0.24) (0.11) (0.13)
Year ended 11/30/1995.................................... 8.36 0.43 1.37 1.80 (0.43)
Year ended 11/30/1994.................................... 9.85 0.45 (1.49) (1.04) (0.45)
Period ended 11/30/1993*................................. 10.00 0.04 (0.15) (0.11) (0.04)
INVESTOR C SHARES
Year ended 03/31/1998(c)................................. $ 9.47 $0.40 $ 0.54 $ 0.94 $(0.40)
Year ended 03/31/1997.................................... 9.49 0.42 (0.02) 0.40 (0.42)
Period ended 03/31/1996(b)............................... 9.73 0.14 (0.24) (0.10) (0.14)
Year ended 11/30/1995.................................... 8.36 0.43 1.37 1.80 (0.43)
Period ended 11/30/1994*................................. 8.45 0.03 (0.09) (0.06) (0.03)
</TABLE>
- ---------------
* North Carolina Municipal Bond Primary A, Investor A, Investor B and Investor
C Shares commenced operations on January 11, 1994, November 1, 1993, October
21, 1993 and November 3, 1994, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(c) Per share net investment income has been calculated using the monthly
average shares method.
SEE NOTES TO FINANCIAL STATEMENTS.
218
<PAGE> 223
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
NET ASSETS OPERATING NET INVESTMENT OPERATING
NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
END OF PERIOD RETURN+ (IN 000'S) ASSETS ASSETS RATE NET ASSETS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$10.01 10.86% $ 6,452 0.60%(a) 4.78% 20% 0.93%
9.47 4.84 3,095 0.60(a) 4.95 28 0.94
9.49 (0.87) 1,593 0.60+ 4.86+ 22 0.99+
9.73 22.87 1,293 0.38(a) 5.43 40 0.96
8.36 (12.65) 531 0.21+(a) 5.53+ 29 0.92+
$10.01 10.64% $ 609 0.80%(a) 4.58% 20% 1.13%
9.47 4.62 594 0.80(a) 4.75 28 1.14
9.49 (0.94) 448 0.80+ 4.66+ 22 1.19+
9.73 22.63 347 0.58(a) 5.23 40 1.16
8.36 (10.41) 1,161 0.39(a) 5.35 29 1.10
9.85 (0.80) 1,085 0.09+ 3.97+ 10 1.21+
$10.01 9.96% $25,187 1.42%(a) 3.96% 20% 1.75%
9.47 4.06 23,863 1.35(a) 4.20 28 1.69
9.49 (1.12) 28,298 1.35+ 4.11+ 22 1.74+
9.73 21.96 30,048 1.13(a) 4.68 40 1.71
8.36 (10.92) 23,659 0.96(a) 4.78 29 1.67
9.85 (1.11) 11,395 0.69+ 3.37+ 10 1.81+
$10.01 10.07% $ 3 1.33%(a) 4.05% 20% 1.66%
9.47 4.32 18 1.10(a) 4.45 28 1.44
9.49 (1.04) 17 1.14+ 4.32+ 22 1.53+
9.73 21.93 2 1.13(a) 4.68 40 1.71
8.36 (0.67) 2 0.96+(a) 4.78+ 29 1.67+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
219
<PAGE> 224
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SOUTH CAROLINA INTERMEDIATE MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................... $10.50 $0.52 $ 0.29 $ 0.81 $(0.52) $(0.00)(c)
Year ended 03/31/1997.................... 10.52 0.51 (0.02) 0.49 (0.51) --
Period ended 03/31/1996(b)............... 10.69 0.17 (0.17) 0.00 (0.17) --
Year ended 11/30/1995.................... 9.76 0.51 0.93 1.44 (0.51) --
Year ended 11/30/1994.................... 10.61 0.50 (0.84) (0.34) (0.50)# (0.01)
Year ended 11/30/1993.................... 10.18 0.50 0.43 0.93 (0.50) --
Period ended 11/30/1992**................ 10.00 0.47 0.18 0.65 (0.47) --
INVESTOR A SHARES
Year ended 03/31/1998.................... $10.50 $0.50 $ 0.29 $ 0.79 $(0.50) $(0.00)(c)
Year ended 03/31/1997.................... 10.52 0.49 (0.02) 0.47 (0.49) --
Period ended 03/31/1996(b)............... 10.69 0.16 (0.17) (0.01) (0.16) --
Year ended 11/30/1995.................... 9.76 0.49 0.93 1.42 (0.49) --
Year ended 11/30/1994.................... 10.61 0.48 (0.84) (0.36) (0.48)# (0.01)
Year ended 11/30/1993.................... 10.18 0.48 0.43 0.91 (0.48) --
Period ended 11/30/1992**................ 9.98 0.30 0.20 0.50 (0.30) --
INVESTOR B SHARES
Year ended 03/31/1998.................... $10.50 $0.44 $ 0.29 $ 0.73 $(0.44) $(0.00)(c)
Year ended 03/31/1997.................... 10.52 0.45 (0.02) 0.43 (0.45) --
Period ended 03/31/1996(b)............... 10.69 0.15 (0.17) (0.02) (0.15) --
Year ended 11/30/1995.................... 9.76 0.46 0.93 1.39 (0.46) --
Year ended 11/30/1994.................... 10.61 0.45 (0.84) (0.39) (0.45)# (0.01)
Period ended 11/30/1993**................ 10.47 0.20 0.14 0.34 (0.20) --
INVESTOR C SHARES
Year ended 03/31/1998.................... $10.50 $0.44 $(0.29) $ 0.73 $(0.44) $(0.00)(c)
Year ended 03/31/1997.................... 10.52 0.45 (0.02) 0.43 (0.45) --
Period ended 03/31/1996(b)............... 10.69 0.15 (0.17) (0.02) (0.15) --
Year ended 11/30/1995.................... 9.76 0.46 0.93 1.39 (0.46) --
Year ended 11/30/1994.................... 10.61 0.44 (0.84) (0.40) (0.44)# (0.01)
Year ended 11/30/1993.................... 10.18 0.42 0.43 0.85 (0.42) --
Period ended 11/30/1992**................ 10.05 0.20 0.13 0.33 (0.20) --
</TABLE>
- ---------------
** South Carolina Intermediate Municipal Bond Primary A, Investor A, Investor B
and Investor C Shares commenced operations on January 6, 1992, May 5, 1992,
June 8, 1993 and June 17, 1992, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Amount includes distributions in excess of net investment income which were
$0.01 per share.
## Amount represents less than 0.01%.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(c) Amount represents less than $0.01 per share.
SEE NOTES TO FINANCIAL STATEMENTS.
220
<PAGE> 225
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.52) $10.79 7.88% $253,090 0.50%(a) 4.86% 16% 0.75%
(0.51) 10.50 4.71 48,918 0.50(a) 4.80 13 0.79
(0.17) 10.52 0.00## 41,817 0.50+(a) 4.81+ 6 0.82+
(0.51) 10.69 15.02 45,255 0.55(a) 4.92 11 0.75
(0.51) 9.76 (3.37) 49,030 0.54(a) 4.82 30 0.75
(0.50) 10.61 9.32 56,995 0.45 4.68 11 0.75
(0.47) 10.18 6.62+++ 39,535 0.20+ 4.11+ 7 0.74+
$(0.50) $10.79 7.67% $ 13,945 0.70%(a) 4.66% 16% 0.95%
(0.49) 10.50 4.51 10,465 0.70(a) 4.60 13 0.99
(0.16) 10.52 (0.07) 14,288 0.70+(a) 4.61+ 6 1.02+
(0.49) 10.69 14.79 14,452 0.75(a) 4.72 11 0.95
(0.49) 9.76 (3.54) 16,378 0.72(a) 4.64 30 0.93
(0.48) 10.61 9.16 20,024 0.60 4.53 11 0.90
(0.30) 10.18 5.03+++ 7,414 0.33+ 4.83+ 7 0.85+
$(0.44) $10.79 7.13% $ 6,819 1.20%(a) 4.16% 16% 1.45%
(0.45) 10.50 4.19 5,738 1.00(a) 4.30 13 1.29
(0.15) 10.52 (0.17) 6,968 1.00+(a) 4.31+ 6 1.32+
(0.46) 10.69 14.45 6,457 1.05(a) 4.42 11 1.25
(0.46) 9.76 (3.85) 5,740 1.04(a) 4.32 30 1.25
(0.20) 10.61 3.23 4,057 0.95+ 4.18+ 11 1.25+
$(0.44) $10.79 7.13% $ 2,698 1.20%(a) 4.16% 16% 1.45%
(0.45) 10.50 4.20 5,089 1.00(a) 4.30 13 1.29
(0.15) 10.52 (0.17) 5,409 1.00+(a) 4.31+ 6 1.32+
(0.46) 10.69 14.45 5,527 1.05(a) 4.42 11 1.25
(0.45) 9.76 (3.94) 6,167 1.12(a) 4.24 30 1.33
(0.42) 10.61 8.51 8,499 1.20 3.93 11 1.50
(0.20) 10.18 3.27+++ 4,436 0.88+ 4.10+ 7 1.48+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
221
<PAGE> 226
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SOUTH CAROLINA MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................... $ 9.79 $0.49 $ 0.47 $ 0.96 $(0.49) $(0.00)#
Year ended 03/31/1997.................... 9.77 0.49 0.02 0.51 (0.49) --
Period ended 03/31/1996(b)............... 9.99 0.17 (0.22) (0.05) (0.17) --
Year ended 11/30/1995.................... 8.65 0.52 1.34 1.86 (0.52) --
Period ended 11/30/1994*................. 10.02 0.48 (1.37) (0.89) (0.48) --
INVESTOR A SHARES
Year ended 03/31/1998.................... $ 9.79 $0.47 $ 0.47 $ 0.94 $(0.47) $(0.00)#
Year ended 03/31/1997.................... 9.77 0.47 0.02 0.49 (0.47) --
Period ended 03/31/1996(b)............... 9.99 0.16 (0.22) (0.06) (0.16) --
Year ended 11/30/1995.................... 8.65 0.50 1.34 1.84 (0.50) --
Year ended 11/30/1994.................... 9.86 0.50 (1.21) (0.71) (0.50) --
Period ended 11/30/1993*................. 9.87 0.03 (0.01) 0.02 (0.03) --
INVESTOR B SHARES
Year ended 03/31/1998.................... $ 9.79 $0.40 $ 0.47 $ 0.87 $(0.40) $(0.00)#
Year ended 03/31/1997.................... 9.77 0.42 0.02 0.44 (0.42) --
Period ended 03/31/1996(b)............... 9.99 0.14 (0.22) (0.08) (0.14) --
Year ended 11/30/1995.................... 8.65 0.45 1.34 1.79 (0.45) --
Year ended 11/30/1994.................... 9.86 0.45 (1.21) (0.76) (0.45) --
Period ended 11/30/1993*................. 10.00 0.04 (0.14) (0.10) (0.04) --
INVESTOR C SHARES
Year ended 03/31/1998.................... $ 9.79 $0.42 $ 0.47 $ 0.89 $(0.42) $(0.00)#
Year ended 03/31/1997.................... 9.77 0.44 0.02 0.46 (0.44) --
Period ended 03/31/1996(b)............... 9.99 0.15 (0.22) (0.07) (0.15) --
Year ended 11/30/1995.................... 8.65 0.45 1.34 1.79 (0.45) --
Period ended 11/30/1994*................. 8.73 0.03 (0.08) (0.05) (0.03) --
</TABLE>
- ---------------
<TABLE>
<C> <S>
* South Carolina Municipal Bond Primary A, Investor A,
Investor B and Investor C Shares commenced operations on
December 27, 1993, November 8, 1993, October 21, 1993 and
November 3, 1994, respectively.
+ Annualized.
++ Total return represents aggregate total return for the
period indicated and does not reflect the deduction of any
applicable sales charges.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense
ratio was less than 0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the
fiscal year end was November 30.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
222
<PAGE> 227
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.49) $10.26 10.04% $ 9,455 0.60%(a) 4.79% 9% 0.99%
(0.49) 9.79 5.32 5,113 0.60(a) 4.99 30 1.00
(0.17) 9.77 (0.57) 2,058 0.60+(a) 4.96+ 20 1.13+
(0.52) 9.99 21.99 1,782 0.40(a) 5.44 13 1.08
(0.48) 8.65 (9.12) 400 0.21+(a) 5.48+ 14 1.12+
$(0.47) $10.26 9.82% $ 1,517 0.80%(a) 4.59% 9% 1.19%
(0.47) 9.79 5.12 811 0.80(a) 4.79 30 1.20
(0.16) 9.77 (0.64) 1,219 0.80+(a) 4.76+ 20 1.33+
(0.50) 9.99 21.74 1,238 0.60(a) 5.24 13 1.28
(0.50) 8.65 (7.45) 140 0.39(a) 5.30 14 1.30
(0.03) 9.86 0.21 14 0.10+ 4.16+ 8 1.63+
$(0.40) $10.26 9.15% $10,394 1.42%(a) 3.97% 9% 1.81%
(0.42) 9.79 4.54 12,104 1.35(a) 4.24 30 1.75
(0.14) 9.77 (0.82) 12,991 1.35+(a) 4.21+ 20 1.88+
(0.45) 9.99 21.08 12,670 1.15(a) 4.69 13 1.83
(0.45) 8.65 (7.97) 8,263 0.96(a) 4.73 14 1.87
(0.04) 9.86 (1.00) 4,048 0.70+ 3.56+ 8 2.23+
$(0.42) $10.26 9.29% $ 28 1.33%(a) 4.06% 9% 1.72%
(0.44) 9.79 4.80 247 1.10(a) 4.49 30 1.50
(0.15) 9.77 (0.76) 264 1.17+(a) 4.39+ 20 1.70+
(0.45) 9.99 21.01 20 1.15(a) 4.69 13 1.83
(0.03) 8.65 (0.52) 2 0.96+(a) 4.73+ 14 1.87+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
223
<PAGE> 228
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TENNESSEE INTERMEDIATE MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................... $10.08 $0.47 $ 0.32 $ 0.79 $(0.47) --
Year ended 03/31/1997.................... 10.09 0.46 (0.01) 0.45 (0.46) --
Period ended 03/31/1996(b)............... 10.23 0.15 (0.14) 0.01 (0.15) --
Year ended 11/30/1995.................... 9.30 0.46 0.93 1.39 (0.46) --
Year ended 11/30/1994.................... 10.18 0.45 (0.87) (0.42) (0.45)# $(0.01)
Period ended 11/30/1993**................ 10.06 0.29 0.12 0.41 (0.29) --
INVESTOR A SHARES
Year ended 03/31/1998.................... $10.08 $0.45 $ 0.32 $ 0.77 $(0.45) --
Year ended 03/31/1997.................... 10.09 0.44 (0.01) 0.43 (0.44) --
Period ended 03/31/1996(b)............... 10.23 0.15 (0.14) 0.01 (0.15) --
Year ended 11/30/1995.................... 9.30 0.44 0.93 1.37 (0.44) --
Year ended 11/30/1994.................... 10.18 0.43 (0.87) (0.44) (0.43)# $(0.01)
Period ended 11/30/1993**................ 10.00 0.29 0.18 0.47 (0.29) --
INVESTOR B SHARES
Year ended 03/31/1998.................... $10.08 $0.40 $ 0.32 $ 0.72 $(0.40) --
Year ended 03/31/1997.................... 10.09 0.41 (0.01) 0.40 (0.41) --
Period ended 03/31/1996(b)............... 10.23 0.14 (0.14) 0.00 (0.14) --
Year ended 11/30/1995.................... 9.30 0.41 0.93 1.34 (0.41) --
Year ended 11/30/1994.................... 10.18 0.40 (0.87) (0.47) (0.40)# $(0.01)
Period ended 11/30/1993**................ 10.03 0.17 0.15 0.32 (0.17) --
INVESTOR C SHARES
Year ended 03/31/1998.................... $10.08 $0.40 $ 0.32 $ 0.72 $(0.40) --
Year ended 03/31/1997.................... 10.09 0.42 (0.01) 0.41 (0.42) --
Period ended 03/31/1996(b)............... 10.23 0.14 (0.14) 0.00 (0.14) --
Year ended 11/30/1995.................... 9.30 0.41 0.93 1.34 (0.41) --
Period ended 11/30/1994**................ 9.38 0.03 (0.08) (0.05) (0.03) --
</TABLE>
- ---------------
<TABLE>
<C> <S>
** Tennessee Intermediate Municipal Bond Primary A, Investor A,
Investor B and Investor C Shares commenced operations on
April 13, 1993, April 2, 1993,June 10, 1993 and November 3,
1994, respectively.
+ Annualized.
++ Total return represents aggregate total return for the
period indicated and does not reflect the deduction of any
applicable sales charges.
# Amount includes distributions in excess of net investment
income which were less than $0.01 per share.
(a) The effect of interest expense on the operating expense
ratio was less than 0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the
fiscal year end was November 30.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
224
<PAGE> 229
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF
OPERATING
EXPENSES TO
RATIO OF AVERAGE NET RATIO OF
TOTAL NET ASSETS OPERATING ASSETS NET INVESTMENT
DIVIDENDS NET ASSET END OF EXPENSES TO INCLUDING INCOME TO PORTFOLIO
AND VALUE TOTAL PERIOD AVERAGE NET INTEREST AVERAGE NET TURNOVER
DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS EXPENSES ASSETS RATE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.47) $10.40 7.99% $39,091 0.50% (a) 4.58% 38%
(0.46) 10.08 4.54 8,869 0.50 (a) 4.55 28
(0.15) 10.09 0.12 8,408 0.50+ -- 4.51+ 3
(0.46) 10.23 15.22 7,160 0.57 (a) 4.65 34
(0.46) 9.30 (4.24) 4,116 0.52 0.53% 4.56 41
(0.29) 10.18 4.09 2,123 0.27+ -- 4.31+ 16
$(0.45) $10.40 7.77% $ 8,061 0.70% (a) 4.38% 38%
(0.44) 10.08 4.33 6,840 0.70 (a) 4.35 28
(0.15) 10.09 0.06 7,439 0.70+ -- 4.31+ 3
(0.44) 10.23 15.00 7,573 0.77 (a) 4.45 34
(0.44) 9.30 (4.41) 7,831 0.70 0.71% 4.38 41
(0.29) 10.18 4.68 15,573 0.42+ -- 4.16+ 16
$(0.40) $10.40 7.24% $ 2,924 1.20% (a) 3.88% 38%
(0.41) 10.08 4.02 3,050 1.00 (a) 4.05 28
(0.14) 10.09 (0.04) 3,528 1.00+ -- 4.01+ 3
(0.41) 10.23 14.65 3,573 1.07 (a) 4.15 34
(0.41) 9.30 (4.72) 3,368 1.02 1.03% 4.06 41
(0.17) 10.18 3.32 2,210 0.77+ -- 3.81+ 16
$(0.40) $10.40 7.29% $ 3 1.20% (a) 3.88% 38%
(0.42) 10.08 4.08 2 1.00 (a) 4.05 28
(0.14) 10.09 (0.02) 2 1.00+ -- 4.01+ 3
(0.41) 10.23 14.62 2 1.07 (a) 4.15 34
(0.03) 9.30 (0.53) 2 1.02+ 1.03%+ 4.06+ 41
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
- ----------------------
RATIO OF
OPERATING
EXPENSES TO
AVERAGE
NET ASSETS
- --------------------
<S> <C>
0.84%
0.93
1.02+
0.92
0.89
0.94+
1.04%
1.13
1.22+
1.12
1.07
1.09+
1.54%
1.43
1.52+
1.42
1.39
1.44+
1.54%
1.43
1.52+
1.42
1.39+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
225
<PAGE> 230
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TENNESSEE MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................................... $ 9.70 $0.48 $ 0.52 $ 1.00 $(0.48)
Year ended 03/31/1997.................................... 9.68 0.48 0.02 0.50 (0.48)
Period ended 03/31/1996(b)............................... 9.87 0.16 (0.19) (0.03) (0.16)
Year ended 11/30/1995.................................... 8.58 0.52 1.29 1.81 (0.52)
Period ended 11/30/1994*................................. 9.59 0.39 (1.01) (0.62) (0.39)
INVESTOR A SHARES
Year ended 03/31/1998.................................... $ 9.70 $0.46 $ 0.52 $ 0.98 $(0.46)
Year ended 03/31/1997.................................... 9.68 0.46 0.02 0.48 (0.46)
Period ended 03/31/1996(b)............................... 9.87 0.15 (0.19) (0.04) (0.15)
Year ended 11/30/1995.................................... 8.58 0.50 1.29 1.79 (0.50)
Year ended 11/30/1994.................................... 9.80 0.50 (1.22) (0.72) (0.50)
Period ended 11/30/1993*................................. 9.88 0.04 (0.08) (0.04) (0.04)
INVESTOR B SHARES
Year ended 03/31/1998.................................... $ 9.70 $0.40 $ 0.52 $ 0.92 $(0.40)
Year ended 03/31/1997.................................... 9.68 0.40 0.02 0.42 (0.40)
Period ended 03/31/1996(b)............................... 9.87 0.14 (0.19) (0.05) (0.14)
Year ended 11/30/1995.................................... 8.58 0.45 1.29 1.74 (0.45)
Year ended 11/30/1994.................................... 9.80 0.45 (1.22) (0.77) (0.45)
Period ended 11/30/1993*................................. 10.00 0.04 (0.20) (0.16) (0.04)
INVESTOR C SHARES
Year ended 03/31/1998(c)................................. $ 9.70 $0.40 $ 0.52 $ 0.92 $(0.40)
Year ended 03/31/1997.................................... 9.68 0.43 0.02 0.45 (0.43)
Period ended 03/31/1996(b)............................... 9.87 0.14 (0.19) (0.05) (0.14)
Year ended 11/30/1995.................................... 8.58 0.45 1.29 1.74 (0.45)
Period ended 11/30/1994*................................. 8.62 0.03 (0.04) (0.01) (0.03)
</TABLE>
- ---------------
* Tennessee Municipal Bond Primary A, Investor A, Investor B and Investor C
Shares commenced operations on March 2, 1994, November 2, 1993, October 21,
1993 and November 3, 1994, respectively.
+ Annualized.
++ ++ Total return represents aggregate total return for the period indicated
and does not reflect the deduction of any applicable sales charges.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(c) Per share net investment income has been calculated using the monthly
average shares method.
SEE NOTES TO FINANCIAL STATEMENTS.
226
<PAGE> 231
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF WITHOUT WAIVERS AND/OR
OPERATING EXPENSE REIMBURSEMENTS
EXPENSES TO ----------------------
RATIO OF AVERAGE NET RATIO OF RATIO OF
NET ASSETS OPERATING ASSETS NET INVESTMENT OPERATING
NET ASSET END OF EXPENSES TO INCLUDING INCOME TO PORTFOLIO EXPENSES TO
VALUE TOTAL PERIOD AVERAGE NET INTEREST AVERAGE NET TURNOVER AVERAGE
END OF PERIOD RETURN++ (IN 000'S) ASSETS EXPENSES ASSETS RATE NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$10.22 10.45% $4,559 0.60% (a) 4.74% 19% 1.20%
9.70 5.23 2,594 0.60 (a) 4.91 31 1.24
9.68 (0.30) 975 0.60+ 0.61%+ 4.92+ 2 1.47+
9.87 21.52 768 0.40 (a) 5.49 45 1.27
8.58 (6.66) 311 0.21+ (a) 5.56+ 38 1.20+
$10.22 10.23% $1,440 0.80% (a) 4.54% 19% 1.40%
9.70 5.02 1,018 0.80 (a) 4.71 31 1.44
9.68 (0.37) 973 0.80+ 0.81%+ 4.72+ 2 1.67+
9.87 21.28 203 0.60 (a) 5.29 45 1.47
8.58 (7.58) 43 0.39 (a) 5.38 38 1.38
9.80 (0.43) 34 0.17+ -- 4.31+ 3 1.86+
$10.22 9.56% $4,915 1.42% (a) 3.92% 19% 2.02%
9.70 4.45 5,319 1.35 (a) 4.16 31 1.99
9.68 (0.55) 6,761 1.35+ 1.36%+ 4.17+ 2 2.22+
9.87 20.63 6,619 1.15 (a) 4.74 45 2.02
8.58 (8.10) 5,504 0.96 (a) 4.81 38 1.95
9.80 (1.61) 3,284 0.77+ -- 3.71+ 3 2.46+
$10.22 9.65% $ 42 1.33% (a) 4.01% 19% 1.93%
9.70 4.71 38 1.10 (a) 4.41 31 1.74
9.68 (0.49) 37 1.18+ 1.18%+ 4.34+ 2 2.05+
9.87 20.62 64 1.15 (a) 4.74 45 2.02
8.58 (0.07) 2 0.96+ (a) 4.81+ 38 1.95+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
227
<PAGE> 232
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TEXAS INTERMEDIATE MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................... $10.18 $0.49 $ 0.32 $ 0.81 $(0.49) --
Year ended 03/31/1997.................... 10.21 0.47 (0.03) 0.44 (0.47) --
Period ended 03/31/1996(b)............... 10.36 0.16 (0.15) 0.01 (0.16) --
Year ended 11/30/1995.................... 9.53 0.46 0.83 1.29 (0.46) --
Year ended 11/30/1994.................... 10.35 0.44 (0.79) (0.35) (0.44)# $(0.03)
Period ended 11/30/1993**................ 10.00 0.41 0.35 0.76 (0.41) --
INVESTOR A SHARES
Year ended 03/31/1998.................... $10.18 $0.47 $ 0.32 $ 0.79 $(0.47) --
Year ended 03/31/1997.................... 10.21 0.45 (0.03) 0.42 (0.45) --
Period ended 03/31/1996(b)............... 10.36 0.15 (0.15) 0.00 (0.15) --
Year ended 11/30/1995.................... 9.53 0.44 0.83 1.27 (0.44) --
Year ended 11/30/1994.................... 10.35 0.42 (0.79) (0.37) (0.42)# $(0.03)
Period ended 11/30/1993**................ 10.15 0.37 0.20 0.57 (0.37) --
INVESTOR B SHARES
Year ended 03/31/1998.................... $10.18 $0.42 $ 0.32 $ 0.74 $(0.42) --
Year ended 03/31/1997.................... 10.21 0.42 (0.03) 0.39 (0.42) --
Period ended 03/31/1996(b)............... 10.36 0.14 (0.15) (0.01) (0.14) --
Year ended 11/30/1995.................... 9.53 0.41 0.83 1.24 (0.41) --
Year ended 11/30/1994.................... 10.35 0.39 (0.79) (0.40) (0.39)# $(0.03)
Period ended 11/30/1993**................ 10.25 0.17 0.10 0.27 (0.17) --
INVESTOR C SHARES
Year ended 03/31/1998.................... $10.18 $0.42 $ 0.32 $ 0.74 $(0.42) --
Year ended 03/31/1997.................... 10.21 0.42 (0.03) 0.39 (0.42) --
Period ended 03/31/1996(b)............... 10.36 0.14 (0.15) (0.01) (0.14) --
Year ended 11/30/1995.................... 9.53 0.41 0.83 1.24 (0.41) --
Period ended 11/30/1994**................ 9.55 0.03 (0.02) 0.01 (0.03)# --
</TABLE>
- ---------------
** Texas Intermediate Municipal Bond Primary A, Investor A, Investor B and
Investor C Shares commenced operations on January 12, 1993, February 4,
1993, June 22, 1993 and November 3, 1994, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Amount includes distributions in excess of net investment income which were
less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
228
<PAGE> 233
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.49) $10.50 8.09% $385,770 0.50% 4.74% 19% 0.75%
(0.47) 10.18 4.37 24,764 0.50 4.59 34 0.84
(0.16) 10.21 0.05 27,176 0.50+ 4.52+ 11 0.89+
(0.46) 10.36 13.83 26,382 0.57(a) 4.62 64 0.83
(0.47) 9.53 (3.48) 24,066 0.55(a) 4.40 61 0.78
(0.41) 10.35 7.72 31,875 0.44+ 4.43+ 63 0.82+
$(0.47) $10.50 7.87% $ 2,666 0.70% 4.54% 19% 0.95%
(0.45) 10.18 4.17 909 0.70 4.39 34 1.04
(0.15) 10.21 (0.02) 801 0.70+ 4.32+ 11 1.09+
(0.44) 10.36 13.60 806 0.77(a) 4.42 64 1.03
(0.45) 9.53 (3.66) 718 0.73(a) 4.22 61 0.96
(0.37) 10.35 5.64 968 0.59+ 4.28+ 63 0.97+
$(0.42) $10.50 7.34% $ 2,184 1.20% 4.04% 19% 1.45%
(0.42) 10.18 3.87 2,182 1.00 4.09 34 1.34
(0.14) 10.21 (0.12) 2,845 1.00+ 4.02+ 11 1.39+
(0.41) 10.36 13.27 3,136 1.07(a) 4.12 64 1.33
(0.42) 9.53 (3.96) 2,774 1.05(a) 3.90 61 1.28
(0.17) 10.35 2.61 1,330 0.94+ 3.93+ 63 1.32+
$(0.42) $10.50 7.34% $ 293 1.20% 4.04% 19% 1.45%
(0.42) 10.18 3.87 591 1.00 4.09 34 1.34
(0.14) 10.21 (0.12) 569 1.00+ 4.02+ 11 1.39+
(0.41) 10.36 13.27 570 1.07(a) 4.12 64 1.33
(0.03) 9.53 0.08 2 1.05+(a) 3.90+ 61 1.28+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
229
<PAGE> 234
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TEXAS MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998(c)................................. $ 9.48 $0.48 $ 0.56 $ 1.04 $(0.48)
Year ended 03/31/1997.................................... 9.49 0.48 (0.01) 0.47 (0.48)
Period ended 03/31/1996(b)............................... 9.70 0.16 (0.21) (0.05) (0.16)
Year ended 11/30/1995.................................... 8.39 0.50 1.31 1.81 (0.50)
Period ended 11/30/1994*................................. 10.01 0.42 (1.62) (1.20) (0.42)
INVESTOR A SHARES
Year ended 03/31/1998(c)................................. $ 9.48 $0.46 $ 0.56 $ 1.02 $(0.46)
Year ended 03/31/1997.................................... 9.49 0.46 (0.01) 0.45 (0.46)
Period ended 03/31/1996(b)............................... 9.70 0.15 (0.21) (0.06) (0.15)
Year ended 11/30/1995.................................... 8.39 0.49 1.31 1.80 (0.49)
Period ended 11/30/1994*................................. 9.92 0.47 (1.53) (1.06) (0.47)
INVESTOR B SHARES
Year ended 03/31/1998(c)................................. $ 9.48 $0.39 $ 0.56 $ 0.95 $(0.39)
Year ended 03/31/1997.................................... 9.49 0.40 (0.01) 0.39 (0.40)
Period ended 03/31/1996(b)............................... 9.70 0.13 (0.21) (0.08) (0.13)
Year ended 11/30/1995.................................... 8.39 0.43 1.31 1.74 (0.43)
Year ended 11/30/1994.................................... 9.78 0.44 (1.39) (0.95) (0.44)
Period ended 11/30/1993*................................. 10.00 0.04 (0.22) (0.18) (0.04)
INVESTOR C SHARES
Year ended 03/31/1998(c)................................. $ 9.48 $0.40 $ 0.56 $ 0.96 $(0.40)
Year ended 03/31/1997.................................... 9.49 0.43 (0.01) 0.42 (0.43)
Period ended 03/31/1996(b)............................... 9.70 0.14 (0.21) (0.07) (0.14)
Year ended 11/30/1995.................................... 8.39 0.43 1.31 1.74 (0.43)
Period ended 11/30/1994*................................. 8.46 0.03 (0.07) (0.04) (0.03)
</TABLE>
- ---------------
* Texas Municipal Bond Primary A, Investor A, Investor B and Investor C Shares
commenced operations on February 3, 1994, December 17, 1993, October 21,
1993 and November 3, 1994, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(c) Per share net investment income has been calculated using the monthly
average shares method.
SEE NOTES TO FINANCIAL STATEMENTS.
230
<PAGE> 235
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
----------------------
RATIO OF RATIO OF RATIO OF
NET ASSETS OPERATING NET INVESTMENT OPERATING
NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE NET ASSETS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$10.04 11.12% $ 7,615 0.60%(a) 4.83% 33% 1.07%
9.48 5.00 5,675 0.60(a) 4.99 52 1.03
9.49 (0.55) 5,138 0.60+ 4.92+ 6 1.11+
9.70 22.09 4,613 0.39(a) 5.45 50 1.05
8.39 (12.21) 2,285 0.22+(a) 5.52+ 107 1.06+
$10.04 10.90% $ 419 0.80%(a) 4.63% 33% 1.27%
9.48 4.78 371 0.80(a) 4.79 52 1.23
9.49 (0.62) 317 0.80+ 4.72+ 6 1.31+
9.70 21.85 351 0.59(a) 5.25 50 1.25
8.39 (10.98) 55 0.40+(a) 5.34+ 107 1.24+
$10.04 10.23% $ 8,804 1.42%(a) 4.01% 33% 1.89%
9.48 4.21 10,090 1.35(a) 4.24 52 1.78
9.49 (0.80) 11,838 1.35+ 4.17+ 6 1.86+
9.70 21.19 12,587 1.14(a) 4.70 50 1.80
8.39 (9.98) 10,812 0.97(a) 4.77 107 1.81
9.78 (1.82) 6,154 0.70+ 3.32+ 5 2.05+
$10.04 10.31% $ 80 1.33%(a) 4.10% 33% 1.80%
9.48 4.47 73 1.10(a) 4.49 52 1.53
9.49 (0.74) 70 1.16+ 4.36+ 6 1.67+
9.70 21.15 70 1.14(a) 4.70 50 1.80
8.39 (0.43) 2 0.97+(a) 4.77+ 107 1.81+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
231
<PAGE> 236
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
VIRGINIA INTERMEDIATE MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998.................... $10.59 $0.51 $ 0.33 $ 0.84 $(0.51) --
Year ended 03/31/1997.................... 10.69 0.51 (0.10) 0.41 (0.51) --
Period ended 03/31/1996(b)............... 10.83 0.17 (0.14) 0.03 (0.17) --
Year ended 11/30/1995.................... 9.94 0.51 0.89 1.40 (0.51) $(0.00)#
Year ended 11/30/1994.................... 10.99 0.50 (0.96) (0.46) (0.50) (0.09)
Year ended 11/30/1993.................... 10.59 0.48 0.42 0.90 (0.48) (0.02)
Year ended 11/30/1992.................... 10.34 0.54 0.29 0.83 (0.54) (0.04)
Year ended 11/30/1991.................... 10.14 0.58 0.21 0.79 (0.58) (0.01)
Year ended 11/30/1990.................... 10.08 0.61 0.11 0.72 (0.66) --
Period ended 11/30/1989**................ 10.00 0.12 0.03 0.15 (0.07) --
INVESTOR A SHARES
Year ended 03/31/1998.................... $10.59 $0.49 $ 0.33 $ 0.82 $(0.49) --
Year ended 03/31/1997.................... 10.69 0.49 (0.10) 0.39 (0.49) --
Period ended 03/31/1996(b)............... 10.83 0.16 (0.14) 0.02 (0.16) --
Year ended 11/30/1995.................... 9.94 0.49 0.89 1.38 (0.49) $(0.00)#
Year ended 11/30/1994.................... 10.99 0.48 (0.96) (0.48) (0.48) (0.09)
Year ended 11/30/1993.................... 10.59 0.51 0.42 0.93 (0.51) (0.02)
Year ended 11/30/1992.................... 10.34 0.54 0.29 0.83 (0.54) (0.04)
Year ended 11/30/1991.................... 10.14 0.58 0.21 0.79 (0.58) (0.01)
Period ended 11/30/1990**................ 10.08 0.61 0.11 0.72 (0.66) --
INVESTOR B SHARES
Year ended 03/31/1998(c)................. $10.59 $0.44 $ 0.33 $ 0.77 $(0.44) --
Year ended 03/31/1997.................... 10.69 0.46 (0.10) 0.36 (0.46) --
Period ended 03/31/1996(b)............... 10.83 0.15 (0.14) 0.01 (0.15) --
Year ended 11/30/1995.................... 9.94 0.46 0.89 1.35 (0.46) $(0.00)#
Year ended 11/30/1994.................... 10.99 0.45 (0.96) (0.51) (0.45) (0.09)
Period ended 11/30/1993**................ 10.83 0.21 0.16 0.37 (0.21) --
INVESTOR C SHARES
Year ended 03/31/1998(c)................. $10.59 $0.44 $ 0.33 $ 0.77 $(0.44) --
Year ended 03/31/1997.................... 10.69 0.46 (0.10) 0.36 (0.46) --
Period ended 03/31/1996(b)............... 10.83 0.15 (0.14) 0.01 (0.15) --
Year ended 11/30/1995.................... 9.94 0.46 0.89 1.35 (0.46) $(0.00)#
Year ended 11/30/1994.................... 10.99 0.44 (0.96) (0.52) (0.44) (0.09)
Year ended 11/30/1993.................... 10.59 0.44 0.42 0.86 (0.44) (0.02)
Period ended 11/30/1992**................ 10.44 0.19 0.15 0.34 (0.19) --
</TABLE>
- ---------------
** Virginia Intermediate Municipal Bond Primary A, Investor A, Investor B and
Investor C Shares commenced operations on September 20, 1989, December 5,
1989, June 7, 1993 and June 17, 1992, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Amount represents less than $0.01 per share.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(c) Per share net investment income has been calculated using the monthly
average shares method.
SEE NOTES TO FINANCIAL STATEMENTS.
232
<PAGE> 237
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
DISTRIBUTION TOTAL NET ASSETS OPERATING NET INVESTMENT
IN EXCESS OF DIVIDENDS NET ASSET END OF EXPENSES TO INCOME TO PORTFOLIO
NET REALIZED AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER
CAPITAL GAINS DISTRIBUTIONS END OF PERIOD RETURN++ (IN 000'S) ASSETS ASSETS RATE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
-- $(0.51) $10.92 8.12% $170,969 0.50%(a) 4.77% 21%
-- (0.51) 10.59 3.92 148,701 0.50(a) 4.79 20
-- (0.17) 10.69 0.27 155,464 0.50+(a) 4.72+ 2
-- (0.51) 10.83 14.39 157,252 0.56(a) 4.87 22
$(0.00)# (0.59) 9.94 (4.35) 167,405 0.61(a) 4.76 14
-- (0.50) 10.99 9.08 193,084 0.57 4.80 26
-- (0.58) 10.59 8.28+++ 157,773 0.56 5.17 13
-- (0.59) 10.34 8.04+++ 119,757 0.45 5.67 24
-- (0.66) 10.14 7.41+++ 75,962 0.26 6.09 19
-- (0.07) 10.08 1.46+++ 46,560 0.16+ 6.09+ 12
-- $(0.49) $10.92 7.91% $ 54,080 0.70%(a) 4.57% 21%
-- (0.49) 10.59 3.71 55,791 0.70(a) 4.59 20
-- (0.16) 10.69 0.20 68,003 0.70+(a) 4.52+ 2
-- (0.49) 10.83 14.16 73,253 0.76(a) 4.67 22
$(0.00)# (0.57) 9.94 (4.52) 79,412 0.79(a) 4.58 14
-- (0.53) 10.99 8.91 103,689 0.72 4.65 26
-- (0.58) 10.59 8.18+++ 76,650 0.65 5.04 13
-- (0.59) 10.34 8.04+++ 44,540 0.45 5.67 24
-- (0.66) 10.14 7.41+++ 24,303 0.26+ 6.09+ 19
-- $(0.44) $10.92 7.37% $ 9,643 1.20%(a) 4.07% 21%
-- (0.46) 10.59 3.40 10,516 1.00(a) 4.29 20
-- (0.15) 10.69 0.10 11,926 1.00+(a) 4.22+ 2
-- (0.46) 10.83 13.82 12,163 1.06(a) 4.37 22
$(0.00)# (0.54) 9.94 (4.82) 9,690 1.11(a) 4.26 14
-- (0.21) 10.99 3.48 5,249 1.07+ 4.30+ 26
-- $(0.44) $10.92 7.37% $ 1,949 1.20%(a) 4.07% 21%
-- (0.46) 10.59 3.40 6,463 1.00(a) 4.29 20
-- (0.15) 10.69 0.10 6,909 1.00+(a) 4.22+ 2
-- (0.46) 10.83 13.82 7,152 1.06(a) 4.37 22
$(0.00)# (0.53) 9.94 (4.90) 8,372 1.19(a) 4.18 14
-- (0.46) 10.99 8.25 11,176 1.32 4.05 26
-- (0.19) 10.59 3.36+++ 4,769 1.28+ 3.99+ 13
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
- ----------------------
RATIO OF
OPERATING
EXPENSES TO
AVERAGE
NET ASSETS
- -------------------
<S> <C>
0.74%
0.74
0.76+
0.74
0.73
0.69
0.68
0.73
0.80
0.81+
0.94%
0.94
0.96+
0.94
0.91
0.84
0.97
0.73
0.80+
1.44%
1.24
1.26+
1.24
1.23
1.19+
1.44%
1.24
1.26+
1.24
1.31
1.44
2.80+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
233
<PAGE> 238
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE DIVIDENDS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON NET ASSET VALUE INVESTMENT
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
VIRGINIA MUNICIPAL BOND
PRIMARY A SHARES
Year ended 03/31/1998................................ $ 9.40 $0.47 $ 0.55 $ 1.02 $(0.47)
Year ended 03/31/1997................................ 9.38 0.48 0.02 0.50 (0.48)
Period ended 03/31/1996(b)........................... 9.62 0.16 (0.24) (0.08) (0.16)
Year ended 11/30/1995................................ 8.29 0.51 1.33 1.84 (0.51)
Period ended 11/30/1994*............................. 10.00 0.45 (1.71) (1.26) (0.45)
INVESTOR A SHARES
Year ended 03/31/1998(c)............................. $ 9.40 $0.45 $ 0.55 $ 1.00 $(0.45)
Year ended 03/31/1997................................ 9.38 0.46 0.02 0.48 (0.46)
Period ended 03/31/1996(b)........................... 9.62 0.16 (0.24) (0.08) (0.16)
Year ended 11/30/1995................................ 8.29 0.49 1.33 1.82 (0.49)
Year ended 11/30/1994................................ 9.77 0.49 (1.48) (0.99) (0.49)
Period ended 11/30/1993*............................. 9.84 0.03 (0.07) (0.04) (0.03)
INVESTOR B SHARES
Year ended 03/31/1998(c)............................. $ 9.40 $0.39 $ 0.55 $ 0.94 $(0.39)
Year ended 03/31/1997................................ 9.38 0.41 0.02 0.43 (0.41)
Period ended 03/31/1996(b)........................... 9.62 0.14 (0.24) (0.10) (0.14)
Year ended 11/30/1995................................ 8.29 0.44 1.33 1.77 (0.44)
Year ended 11/30/1994................................ 9.77 0.44 (1.48) (1.04) (0.44)
Period ended 11/30/1993*............................. 10.00 0.04 (0.23) (0.19) (0.04)
INVESTOR C SHARES
Year ended 03/31/1998(c)............................. $ 9.40 $0.40 $ 0.55 $ 0.95 $(0.40)
Year ended 03/31/1997................................ 9.38 0.43 0.02 0.45 (0.43)
Period ended 03/31/1996(b)........................... 9.62 0.14 (0.24) (0.10) (0.14)
Year ended 11/30/1995................................ 8.29 0.44 1.33 1.77 (0.44)
Period ended 11/30/1994*............................. 8.38 0.03 (0.09) (0.06) (0.03)
</TABLE>
- ---------------
* Virginia Municipal Bond Primary A, Investor A, Investor B and Investor C
Shares commenced operations on January 11, 1994, November 8, 1993, October
21, 1993 and November 3, 1994, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
(a) The effect of interest expense on the operating expense ratio was less than
0.01%.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(c) Per share net investment income has been calculated using the monthly
average shares method.
SEE NOTES TO FINANCIAL STATEMENTS.
234
<PAGE> 239
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF WITHOUT WAIVERS AND/OR
OPERATING EXPENSE REIMBURSEMENTS
EXPENSES TO ----------------------
RATIO OF AVERAGE NET RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING ASSETS NET INVESTMENT OPERATING
VALUE END OF EXPENSES TO INCLUDING INCOME TO PORTFOLIO EXPENSES TO
END OF TOTAL PERIOD AVERAGE NET INTEREST AVERAGE NET TURNOVER AVERAGE
PERIOD RETURN++ (IN 000'S) ASSETS EXPENSE ASSETS RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$9.95 11.11% $11,026 0.59% (a) 4.86% 9% 0.96%
9.40 5.44 5,726 0.60 (a) 5.10 37 0.98
9.38 (0.84) 3,296 0.60+ 0.61%+ 5.06+ 8 1.07+
9.62 22.63 3,527 0.39 (a) 5.51 16 1.04
8.29 (12.86) 432 0.21+ (a) 5.52+ 61 0.99+
$9.95 10.88% $ 1,222 0.79% (a) 4.66% 9% 1.16%
9.40 5.23 726 0.80 (a) 4.90 37 1.18
9.38 (0.91) 661 0.80+ 0.81%+ 4.86+ 8 1.27+
9.62 22.39 650 0.59 (a) 5.31 16 1.24
8.29 (10.44) 168 0.39 (a) 5.34 61 1.17
9.77 (0.42) 25 0.10+ -- 3.88+ 0 1.30+
$9.95 10.21% $13,082 1.41% (a) 4.04% 9% 1.78%
9.40 4.65 13,972 1.35 (a) 4.35 37 1.73
9.38 (1.09) 15,938 1.35+ 1.36%+ 4.31+ 8 1.82+
9.62 21.72 16,489 1.14 (a) 4.76 16 1.79
8.29 (10.95) 12,738 0.96 (a) 4.77 61 1.74
9.77 (1.93) 6,580 0.70+ -- 3.28+ 0 1.90+
$9.95 10.31% $ 3 1.32% (a) 4.13% 9% 1.69%
9.40 4.92 45 1.10 (a) 4.60 37 1.48
9.38 (1.03) 43 1.16+ 1.17%+ 4.50+ 8 1.63+
9.62 21.71 34 1.14 (a) 4.76 16 1.79
8.29 (0.67) 2 0.96+ (a) 4.77+ 61 1.74+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
235
<PAGE> 240
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Nations Fund Trust (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end investment company. At
March 31, 1998, the Trust offered thirty-seven separate portfolios. Information
presented in these financial statements pertains only to the municipal bond
portfolios of the Trust (each a "Fund" and collectively, the "Funds"). The
financial statements for the other portfolios of the Trust are presented under
separate cover. The Funds currently offer four classes of shares: Primary A
Shares, Investor A Shares, Investor B Shares (formerly Investor N Shares) and
Investor C Shares. Shareholders of a Fund have equal voting rights on matters
affecting all shareholders of the Fund. In addition, each class of shares of a
Fund has exclusive voting rights on matters that relate solely to its class and
separate voting rights on matters in which the interests of one class of shares
differ from the interests of any other class.
1. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Funds in the preparation of
their financial statements.
Securities Valuation: Investments in municipal bonds are valued by an
independent pricing service approved by the Board of Trustees. Valuations are
based upon a matrix system and/or appraisals provided by the pricing service
which takes into consideration such factors as yields, prices, maturities,
redemption features and credit ratings on comparable securities. Certain
securities may be valued by one or more principal market makers. Restricted
securities, securities for which market quotations are not readily available,
and other assets are valued by the investment adviser under the supervision of
the Board of Trustees. Short-term investments that mature in 60 days or less are
valued at amortized cost.
Certain states' municipal obligations may be obligations of issuers that rely in
whole or in part on state specific revenues, real property taxes and revenues
from health care institutions, as appropriate, or obligations secured by
mortgages on real property. Consequently, state law affecting these obligations
and the possible effects on these obligations of economic conditions in such
states must be considered.
Securities Transactions and Investment Income: Securities transactions are
accounted for on a trade date basis. Realized gains and losses are computed
based on the specific identification of the securities sold. Interest income,
adjusted for accretion of discounts and amortization of premiums, is earned from
settlement date and is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date. Each Fund's investment income and realized and
unrealized gains and losses are allocated among its classes based upon the
relative net assets of each class of shares.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income is not accrued
until the settlement date.
Dividends and Distributions to Shareholders: It is the policy of each Fund to
declare dividends daily from net investment income and pay such dividends
monthly. Each Fund will distribute net realized capital gains annually after the
fiscal year in which the capital gains were earned, unless offset by any
available capital loss carryforward. Additional distributions of net investment
income and capital gains may be made at the discretion of the Board of Trustees
in order to avoid application of the 4% non-deductible Federal excise tax.
Income distributions and capital gain distributions on a Fund level are
determined in accordance with Federal income tax regulations which may differ
from generally accepted accounting principles.
Certain reclassifications are made to each Fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryforwards) under Federal income tax regulations. These reclassifications are
due to different book and tax accounting for market discount and amortization of
organization costs.
236
<PAGE> 241
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Reclassifications for the year ended March 31, 1998 were as follows:
<TABLE>
<CAPTION>
INCREASE/
(DECREASE) INCREASE/
INCREASE/ UNDISTRIBUTED (DECREASE)
(DECREASE) NET ACCUMULATED
PAID-IN INVESTMENT NET REALIZED
CAPITAL INCOME GAIN/(LOSS)
-----------------------------------------
<S> <C> <C> <C>
Short-Term Municipal Income....... $ -- $ 47,424 $ (47,424)
Intermediate Municipal Bond....... -- 491,702 (491,702)
Municipal Income.................. -- 409,400 (409,400)
Florida Municipal Bond............ -- 1,196 (1,196)
Georgia Intermediate Municipal
Bond............................. -- 5,883 (5,883)
Maryland Intermediate Municipal
Bond............................. (28,424) 28,424 --
Georgia Municipal Bond............ -- 137 (137)
North Carolina Intermediate
Municipal Bond................... -- 70,049 (70,049)
South Carolina Intermediate
Municipal Bond................... 2 20,138 (20,140)
Tennessee Intermediate Municipal
Bond............................. -- 2,711 (2,711)
Tennessee Municipal Bond.......... (681) 8,147 (7,466)
Texas Intermediate Municipal
Bond............................. -- 6,777 (6,777)
Texas Municipal Bond.............. (1,106) 13,328 (12,222)
</TABLE>
Federal Income Tax: It is the policy of each Fund to continue to qualify as a
regulated investment company by complying with the requirements of the Internal
Revenue Code of 1986, as amended, and by distributing substantially all of its
earnings to its shareholders. Therefore, no Federal income or excise tax
provision is applicable.
Expenses: General expenses of the Trust are allocated to the relevant Funds
based upon relative net assets. Operating expenses directly attributable to a
Fund or class of shares are charged to such Fund's or class's operations.
Expenses of each Fund not directly attributable to the operations of any class
of shares are prorated among the classes based on the relative net assets of
each class of shares. The Funds bear all costs in connection with their
organization, including the fees and expenses of registering and qualifying
their shares for distribution under Federal and state securities regulations.
All such costs are being amortized on a straight-line basis over a period of
five years from commencement of operations.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS
The Trust has, on behalf of the Funds, entered into an investment advisory
agreement (the "Investment Advisory Agreement") with NationsBanc Advisors, Inc.
("NBAI"), a wholly-owned subsidiary of NationsBank, N.A. ("NationsBank"),
pursuant to which NBAI provides investment advisory services to the Funds. Under
the terms of this Investment Advisory Agreement, NBAI is entitled to receive an
advisory fee calculated daily and payable monthly based on the following annual
rates multiplied by the average daily net assets of each Fund:
<TABLE>
<CAPTION>
ANNUAL
RATE
------
<S> <C>
Short-Term Municipal Income, Intermediate Municipal Bond
and eight single-state Intermediate Municipal Bond
Funds................................................... 0.50%
Municipal Income and eight single-state Municipal Bond
Funds................................................... 0.60%
</TABLE>
The Trust has, on behalf of the Funds, entered into a sub-advisory agreement
with NBAI and TradeStreet Investment Associates, Inc. ("TradeStreet"), a
wholly-owned subsidiary of NationsBank, pursuant to which TradeStreet is
entitled to receive a sub-advisory fee from NBAI at the annual rate of 0.07% of
each Fund's average daily net assets.
Stephens Inc. ("Stephens") serves as the administrator of the Trust. First Data
Investor Services Group, Inc. ("First Data"), a wholly-owned subsidiary of First
Data Corporation, serves as the co-administrator of the Trust. Stephens and
First Data are entitled to receive a combined fee, computed daily and paid
monthly, at the annual rate of 0.10% of average daily net assets of each fund.
Effective November 18, 1997, NBAI became the sub-administrator of the Trust
pursuant to a sub-administration agreement with Stephens. Prior to that date
NationsBank served as sub-administrator. For the year ended March 31, 1998,
Stephens earned $912,938 from the Funds for its administration services, of
which $107,581 and $146,251 was paid to NBAI and NationsBank, respectively, for
their services as sub-administrator.
NationsBank of Texas, N.A. ("NationsBank of Texas") served as custodian of the
Trust's assets for the year ended March 31, 1998, and earned $126,450 for
providing such services. The Bank of New York ("BONY") has entered into an
agreement with each of the Funds and NationsBank of Texas, whereby BONY serves
as sub-custodian for the Funds.
237
<PAGE> 242
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The investment adviser, sub-adviser, administrator and custodian may, from time
to time, voluntarily reduce their fees payable by each Fund. For the year ended
March 31, 1998, fee waivers and expense reimbursements were as follows:
<TABLE>
<CAPTION>
FEES WAIVED BY
--------------------------
ADVISER ADMINISTRATOR
--------------------------
<S> <C> <C>
Short-Term Municipal Income................................. $ 357,577 $ 20,059
Intermediate Municipal Bond................................. $1,420,175 $129,378
Municipal Income............................................ $ 865,120 $ 78,672
Florida Intermediate Municipal Bond......................... $ 371,186 $ 31,419
Florida Municipal Bond...................................... $ 123,106 $ 8,920
Georgia Intermediate Municipal Bond......................... $ 267,367 $ 22,914
Georgia Municipal Bond...................................... $ 66,122 $ 3,320
Maryland Intermediate Municipal Bond........................ $ 251,773 $ 26,201
Maryland Municipal Bond..................................... $ 82,546 $ 3,619
North Carolina Intermediate Municipal Bond.................. $ 325,600 $ 27,061
North Carolina Municipal Bond............................... $ 94,452 $ 5,922
South Carolina Intermediate Municipal Bond.................. $ 471,252 $ 40,150
South Carolina Municipal Bond............................... $ 72,257 $ 3,836
Tennessee Intermediate Municipal Bond....................... $ 121,971 $ 7,566
Tennessee Municipal Bond.................................... $ 57,822 $ 1,990
Texas Intermediate Municipal Bond........................... $ 601,927 $ 51,598
Texas Municipal Bond........................................ $ 72,988 $ 3,301
Virginia Intermediate Municipal Bond........................ $ 484,093 $ 44,703
Virginia Municipal Bond..................................... $ 81,176 $ 4,598
</TABLE>
First Data serves as the transfer agent for the Funds' shares. NationsBank of
Texas served as the sub-transfer agent for the Primary Shares of the Funds for
the year ended March 31, 1998, and earned approximately $150,134 for providing
such services.
Stephens serves as distributor of the Funds' shares. For the year ended March
31, 1998, the Funds were informed that the distributor received $449,909 in
contingent deferred sales charges from shares which were subject to such
charges. A substantial portion of these fees were paid to affiliates of
NationsBank and NBAI.
The Trust pays each unaffiliated Trustee an annual fee of $1,000 ($3,000 for the
Chairman of the Board), plus $500 per Fund and an additional $1,000 for each
in-person board meeting, and $500 for each telephonic board meeting attended.
The Trust also reimburses expenses incurred by each unaffiliated Trustee in
attending such meetings.
The Trust's eligible Trustees may participate in non-qualified deferred
compensation and retirement plans which may be terminated at any time. All
benefits provided under these plans are unfunded and any payments to plan
participants are paid solely out of the Funds' assets. Income earned on each
plan participant's deferral account is tied to the rate of return of the
eligible mutual funds selected by the participants or, if no funds are selected,
to the rate of return of Nations Treasury Fund, a portfolio of Nations Fund,
Inc. The expense for the deferred compensation and retirement plans is included
in "Trustees' fees and expenses" in the Statements of Operations.
A significant portion of each Fund's Primary A Shares represent investments by
fiduciary accounts over which NationsBank has either sole or joint investment
discretion.
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS
The Trust has adopted shareholder servicing plans and distribution plans for the
Investor A, Investor B and Investor C Shares of each Fund. The shareholder
servicing plans permit the Funds to compensate or reimburse servicing agents for
shareholder services provided by the servicing agents. The distribution plans,
adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Funds to
compensate or reimburse the distributor (and for Investor A Shares, the
distributor and/or selling agents) for activities or expenses primarily intended
to result in the sale of the class's shares. Payments under the Investor A
shareholder servicing and distribution plan are limited to 0.25% of Investor A
Shares average daily
238
<PAGE> 243
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
net assets. Payments under the shareholder servicing plan and distribution plan,
respectively, for both Investor B and Investor C shares are limited to 0.25% and
0.75% of each respective class's average daily net assets. Actual rates charged
are set from time to time by the Board of Trustees. A substantial portion of the
expenses incurred pursuant to these plans are paid to affiliates of NationsBank
and NBAI.
At March 31, 1998, the actual rates in effect, as a percentage of average daily
net assets, were as follows:
<TABLE>
<S> <C>
Investor A Shareholder Servicing and Distribution Plan... 0.20%*
Investor B and Investor C Shareholder Servicing Plans.... 0.25%
Investor B and Investor C Distribution Plans:
Short-Term Municipal Income............................. 0.10%
Intermediate Municipal Bond and the eight single-state
Intermediate Municipal Bond funds..................... 0.55%**
Municipal Income and the eight single-state Municipal
Bond funds -- Investor B.............................. 0.60%***
Municipal Income and the eight single-state Municipal
Bond funds -- Investor C.............................. 0.60%**
</TABLE>
- ---------------
* In addition, a separate shareholder servicing plan has been adopted for the
Investor A Shares of Short-Term Municipal Income. No expenses were incurred
by the Fund pursuant to this plan during the year ended March 31, 1998.
** Reflects a rate change effective August 1, 1997 from 0.25%.
*** Reflects a rate change effective August 1, 1997 from 0.50%.
4. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the year ended March 31, 1998 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
---------------------------
<S> <C> <C>
Short-Term Municipal Income............. $123,628,893 $91,602,316
Intermediate Municipal Bond............. $306,077,951 286,817,751
Municipal Income........................ $150,271,612 133,834,855
Florida Intermediate Municipal Bond..... 33,071,355 20,004,326
Florida Municipal Bond.................. 13,200,889 8,194,468
Georgia Intermediate Municipal Bond..... 30,862,069 27,550,258
Georgia Municipal Bond.................. 6,747,931 4,781,760
Maryland Intermediate Municipal Bond.... 25,975,039 11,060,186
Maryland Municipal Bond................. 9,367,772 2,950,708
North Carolina Intermediate Municipal
Bond................................... 39,269,007 26,857,314
North Carolina Municipal Bond........... 8,796,141 5,598,724
South Carolina Intermediate Municipal
Bond................................... 30,872,250 31,408,828
South Carolina Municipal Bond........... 3,186,280 1,681,878
Tennessee Intermediate Municipal Bond... 18,769,885 13,345,800
Tennessee Municipal Bond................ 3,004,676 1,810,574
Texas Intermediate Municipal Bond....... 51,195,507 46,556,921
Texas Municipal Bond.................... 5,335,705 5,320,230
Virginia Intermediate Municipal Bond.... 49,998,014 45,127,325
Virginia Municipal Bond................. 5,615,953 1,987,051
</TABLE>
5. SHARES OF BENEFICIAL INTEREST
As of March 31, 1998, an unlimited number of shares without par value were
authorized for the Trust. The Trust's Declaration of Trust authorizes the Board
of Trustees to classify or reclassify any authorized but unissued shares into
one or more additional classes or series of shares. See Schedule of Capital
Stock Activity.
6. PRINCIPAL SHAREHOLDERS
At March 31, 1998 shareholders holding more than 10% of shares outstanding are
as follows:
<TABLE>
<CAPTION>
% OF TOTAL
FUND NUMBER OF SHAREHOLDERS SHARES OUTSTANDING
- -----------------------------------------------------------------------
<S> <C> <C>
Tennessee Municipal Bond.. 1 11%
</TABLE>
7. LINE OF CREDIT
The Trust participates in an uncommitted line of credit provided by BONY under a
line of credit agreement dated March 12, 1998 (the "Agreement"). Advances under
the Agreement are taken primarily for temporary or emergency purposes, including
the meeting of redemption requests that otherwise might require the untimely
disposition of securities. Interest on borrowings is payable at the Federal
Funds Rate plus 0.50% on an annualized basis which was 6.38% at March 31, 1998.
The Agreement requires, among other things, that each participating Fund
maintain a ratio of no less than 4 to 1 net assets (not including funds borrowed
pursuant to the Agreement) to the aggregate amount of indebtedness pursuant to
the Agreement.
239
<PAGE> 244
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the year ended March 31, 1998, borrowings by the Funds under the Agreement
were as follows:
<TABLE>
<CAPTION>
AVERAGE
AVERAGE DEBT
AMOUNT AVERAGE PER
FUND OUTSTANDING SHARES SHARE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Short-Term Municipal Income................................. $49,370 10,036,699 $.0049
Intermediate Municipal Bond................................. 22,466 61,374,655 .0004
Municipal Income............................................ 23,836 33,973,911 .0007
Florida Intermediate Municipal Bond......................... 1,918 14,343,257 .0001
Florida Municipal Bond...................................... 7,397 4,516,712 .0016
Georgia Intermediate Municipal Bond......................... 7,315 10,316,029 .0007
Georgia Municipal Bond...................................... 4,658 12,009,327 .0004
North Carolina Intermediate Municipal Bond.................. 4,384 12,414,729 .0004
North Carolina Municipal Bond............................... 1,096 3,017,900 .0004
South Carolina Intermediate Municipal Bond.................. 21,644 18,266,280 .0012
South Carolina Municipal Bond............................... 4,932 1,905,788 .0026
Tennessee Intermediate Municipal Bond....................... 9,863 3,612,075 .0027
Tennessee Municipal Bond.................................... 1,764 986,910 .0018
Texas Municipal Bond........................................ 8,767 1,677,441 .0052
Virginia Intermediate Municipal Bond........................ 26,027 20,636,103 .0013
Virginia Municipal Bond..................................... 1,644 2,345,482 .0007
</TABLE>
The average amount outstanding was calculated based on daily balances in the
period.
8. CAPITAL LOSS CARRYFORWARD
At March 31, 1998, the following Funds had available for Federal income tax
purposes the following unused capital losses expiring March 31:
<TABLE>
<CAPTION>
NAME OF FUND 2002 2003 2004 2005 2006
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Short-Term Municipal Income................................. $ 47,525 $373,533 -- -- --
Florida Intermediate Municipal Bond......................... 37,474 752,907 -- $ 22,078 --
Florida Municipal Bond...................................... 531,197 354,485 -- 133,293 $71,588
Georgia Municipal Bond...................................... 17,927 222,938 -- -- --
Maryland Intermediate Municipal Bond........................ -- 949,130 -- -- --
Maryland Municipal Bond..................................... -- -- -- 36,671 --
North Carolina Municipal Bond............................... 287,483 425,261 -- 206,767 --
Tennessee Intermediate Municipal Bond....................... 130,776 53,285 -- 1,009 --
South Carolina Municipal Bond............................... -- -- -- -- 39,476
Tennessee Municipal Bond.................................... -- 150,025 -- -- --
Texas Intermediate Municipal Bond........................... -- 110,112 -- -- --
Texas Municipal Bond........................................ 429,766 131,901 -- -- --
Virginia Intermediate Municipal Bond........................ -- 263,038 -- -- --
Virginia Municipal Bond..................................... 464,533 77,074 $12,358 62,619 --
</TABLE>
240
<PAGE> 245
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
9. REORGANIZATIONS
CONVERSION OF COMMON TRUST FUNDS
On August 8, 1997 the Funds, as listed below (each an "Acquiring Fund"),
acquired the assets of certain common trust funds managed by NationsBank, also
listed below (each an "Acquired Fund"), in a tax-free conversion in exchange for
shares of the Acquiring Fund. The number and value of shares issued by the
Acquiring Fund are presented in the Schedule of Capital Stock Activity. Net
assets as of the conversion date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS
TOTAL NET ASSETS TOTAL NET ASSETS OF ACQUIRING FUND ACQUIRED FUND
ACQUIRING FUND ACQUIRED FUND OF ACQUIRED FUND OF ACQUIRING FUND AFTER ACQUISITION UNREALIZED APPRECIATION
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NationsBank Common
Intermediate Trust Intermediate
Municipal Bond Municipal Bond Fund $502,040,580 $350,318,892 $852,359,472 $ 23,696,304
NationsBank Common
Trust Municipal
Municipal Income Bond Fund 159,211,714 327,035,347 486,247,061 9,642,639
NationsBank Common
Florida Intermediate Trust Florida
Municipal Bond Municipal Bond Fund 136,392,214 69,327,604 205,719,818 7,072,545
NationsBank Common
Trust Tax- Free
Georgia Intermediate Income Fund for
Municipal Bond Personal Trusts 26,050,446 66,470,897 92,521,343 813,939
NationsBank Common
Georgia Intermediate Trust Georgia
Municipal Bond Municipal Bond Fund 52,612,527 92,521,343 145,133,870 2,973,209
NationsBank Common
North Carolina Trust North
Intermediate Carolina Municipal
Municipal Bond Bond Fund 141,744,830 42,540,924 184,285,754 6,801,572
NationsBank Common
Trust Old Colony
South Carolina South Carolina
Intermediate Tax-Exempt Bond
Municipal Bond Fund 68,635,591 70,529,321 139,164,912 5,052,630
NationsBank Common
South Carolina Trust South
Intermediate Carolina Municipal
Municipal Bond Bond Fund 137,649,419 139,164,912 276,814,331 6,746,626
Tennessee NationsBank Common
Intermediate Trust Tennessee
Municipal Bond Municipal Bond Fund 25,428,706 20,695,671 46,124,377 1,048,569
NationsBank Common
Texas Intermediate Trust Texas
Municipal Bond Municipal Bond Fund 357,784,093 30,219,011 388,003,104 15,314,786
</TABLE>
241
<PAGE> 246
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ACQUISITION OF PILOT FUNDS
On May 16, 1997, certain Nations Funds, as listed below (each an "Acquiring
Fund"), acquired the assets and certain liabilities of the Pilot Funds, also
listed below (each an "Acquired Fund"), in a tax-free reorganization in exchange
for shares of the Acquiring Fund, pursuant to a plan of reorganization approved
by the Trustees of the Acquired Funds. The number and value of shares issued by
the Acquiring Fund are presented in the Schedule of Capital Stock Activity. Net
assets of the reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS
TOTAL NET ASSETS TOTAL NET ASSETS OF ACQUIRING FUND ACQUIRED FUND
ACQUIRING FUND ACQUIRED FUND OF ACQUIRED FUND OF ACQUIRING FUND AFTER ACQUISITION UNREALIZED APPRECIATION
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Intermediate Pilot Intermediate
Municipal Bond Municipal Bond Fund $218,884,238 $119,774,610 $338,658,848 $5,841,379
Pilot Municipal Bond
Municipal Income Fund 201,343,712 109,547,454 310,891,166 9,978,682
</TABLE>
ACQUISITION OF PEACHTREE FUND
On September 27, 1996, Nations Georgia Intermediate Municipal Bond Fund (the
"Acquiring Fund"), acquired the assets and certain liabilities of Peachtree
Georgia Tax-Free Income Fund (the "Acquired Fund"), listed below, in a tax-free
reorganization in exchange for shares of the Acquiring Fund, pursuant to a plan
of reorganization approved by the Acquired Fund's shareholders. The total net
assets of the Acquired Fund and the Acquiring Fund, and any unrealized
appreciation included in the Acquired Fund's total net assets at the
reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS
TOTAL NET ASSETS OF ACQUIRING
TOTAL NET ASSETS OF ACQUIRING FUND ACQUIRED FUND
ACQUIRING FUND ACQUIRED FUND OF ACQUIRED FUND FUND AFTER ACQUISITION UNREALIZED APPRECIATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nations Georgia Peachtree Georgia
Intermediate Municipal Tax-Free
Bond Fund Income Fund $1,278,074 $56,411,252 $57,689,326 $28,589
</TABLE>
10. SUBSEQUENT EVENTS
The Trust is party to an Agreement and Plan of Reorganization with The Emerald
Funds (which are advised by Barnett Capital Advisors, Inc., an indirect wholly-
owned subsidiary of NationsBank Corporation) pursuant to which the assets and
liabilities (net) of the Emerald Florida Tax-Exempt Fund of $118,966,436 were
acquired in a tax-free reorganization in exchange of shares by the Florida
Municipal Bond Fund on May 15, 1998.
In addition, NationsBank of Texas merged into
NationsBank on May 6, 1998. NationsBank began serving as custodian of the
Trust's assets and sub-transfer agent for the Primary Shares of the Funds on
that date and is providing the same services as were previously provided by
NationsBank of Texas.
242
<PAGE> 247
NATIONS FUNDS
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES OF NATIONS FUND TRUST
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments (except for bond ratings), and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
each of the nineteen Tax-Exempt Income Funds that constitute part of Nations
Fund Trust ("the Trust") at March 31, 1998, and the results of each of their
operations, the changes in each of their net assets and the financial highlights
for the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at March 31, 1998 by correspondence with the
custodian and the application of alternative auditing procedures where
securities purchased had not been received by the custodian, provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
May 28, 1998
243
<PAGE> 248
NATIONS FUNDS
- --------------------------------------------------------------------------------
TAX INFORMATION (UNAUDITED)
For the year ended March 31, 1998, all of the distributions made from investment
income of the Nations Municipal Bond Funds, are tax exempt for regular Federal
income tax purposes. A portion of this income may be subject to Federal
Alternative Minimum Tax. For the year ended March 31, 1998 the amount of long
term capital gain designated by the Trust is as follows:
<TABLE>
<CAPTION>
TOTAL LONG TERM
CAPITAL GAIN
FUND 28% RATE GAIN 20% RATE GAIN DISTRIBUTION DESIGNATION
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Intermediate Municipal Bond
$ -- $2,593,512 $2,593,512
Municipal Income
-- 2,172,222 2,172,222
Georgia Intermediate Municipal Bond
-- 591,838 591,838
South Carolina Intermediate Municipal Bond
-- 127,495 127,495
South Carolina Municipal Bond
15,898 -- 15,898
</TABLE>
244
<PAGE> 249
[BACKGROUND DEPICTING BASKETS]
<PAGE> 250
[NATIONS FUNDS LOGO] BULK RATE
U.S. POSTAGE
P.O. BOX 32602 PAID
Charlotte, NC 28234-4602 N READING, MA
Toll Free 1-800-982-2271 PERMIT NO.
105
AR4 IN96119 3/98
