PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Premier State
Municipal Bond Fund, Texas Series. For its semi-annual reporting period ended
October 31, 1995, your Series' Class A and Class B shares produced total
returns of 6.70% and 6.37%, respectively.* Federally tax-free income
dividends of approximately $.610 per share for Class A shares and $.555 per
share for Class B shares were paid.** This amounts to an annualized tax-free
distribution rate per share of 5.39% for Class A shares and 5.14% for Class B
shares.*** Class C shares, from their introduction on August 15, 1995 through
October 31, provided a total return of 4.25%,* and paid tax-free income
dividends of approximately $.222 per share** amounting to an annualized
tax-free distribution rate per share of 4.84%.***
THE ECONOMY
Concerns about lagging economic growth prompted the Federal Reserve Board
to ease the Fed Funds rate in July. The bond market has been well ahead of
the Federal Reserve in perceiving that inflation was under control. Long-term
interest rates have fallen for nearly 12 months and, accordingly, bond
investors have enjoyed significant price appreciation. Economic indicators
remain mixed, some causing concern about possible recession, while others
point toward continued expansion.
During times of business uncertainty, attention often shifts to the
consumer sector of the economy, particularly regarding the consumer's ability
to spend. There are some indications that consumers are being pinched. There
is little doubt that the economic recovery has been productivity-driven. That
is, corporations have succeeded in paring expenses from their cost of doing
business. With this reduction in overhead, bottom line profits have grown
dramatically. Yet little of this corporate prosperity has spilled over into
the consumer sector of the economy. Wages and salaries grew less than 3% over
the past year, barely keeping pace with inflation. An additional consumer
concern, new job creation, is at the slowest pace of the post-World War II
era. Recent retail sales reports were the weakest since June 1991, when the
economy was in recession. Also, there is worry that the coming holiday season
will be a poor one for retailers, since debt-burdened consumers may spend
cautiously.
Yet, there are also significant signs of continued growth. Despite
indications of a potential slowdown in consumer spending, measures of
consumer confidence remain high. Business capital spending and home-building
activity have continued, providing substantial fuel for economic growth.
Business investment in durable equipment, when calculated as a percentage of
Gross Domestic Product (GDP), is at a 35-year high with no sign of a letup.
No wonder industrial production is booming! And while job and wage growth is
slow, the index of hours worked (a key determinant of GDP growth and income
generation) is rising. Providing additional confidence is the fact that the
four-and-a-half-year recovery has been well balanced: corporate debt issuance
has been moderate and the banking system is not overstretched.
We are encouraged by the Federal Reserve's successful handling of several
crises (Mexico, derivatives, Japanese banking), any one of which could have
threatened the monetary system in the U.S. and/or abroad.
MARKET ENVIRONMENT
The municipal bond market recovered strongly in 1995 as long-term
interest rates fell. If economic conditions remain sluggish and Congress is
able to arrive at an acceptable budget accord, there may be a good chance
that the Fed will ease further. We believe this indicates a favorable outlook
for bond markets in general, particularly with inflation under control. But
inflation can only go so low, and we are wary that the bond market's strength
may be counting too much on continued improvement on the price front. Thus,
while we remain confident in this market environment, we are alert to the
stimulatory
effect of easing monetary policy and are watchful for any signs of rekindling
inflation. Our primary task -to maximize current income exempt from Federal
personal income taxes to the extent consistent with the preservation of
capital - continues to guide our portfolio management decisions.
While the municipal market and the Series have performed very well this
year, results for municipal securities have been trailing other fixed income
markets. Concerns about tax reform may be limiting investor enthusiasm for
tax exempt securities. Since April, when serious tax reform proposals began
to surface, the municipal rally has lagged, resulting in an increase in
municipal yields as a percentage of comparable taxable bond yields. Today,
long-term municipal bonds are yielding nearly 90% of U.S. Treasuries, which
is a greater yield ratio than existed before the onset of talk about tax
reform. While it could be years before an actual change in the tax code is
adopted, the market's reaction so early in the proposal cycle suggests to us
that the ultimate legislation, if any, may have a less radical effect on the
market than feared.
THE PORTFOLIO
This year's impressive price move has more than offset 1994's decline.
During the summer, in view of both the municipal market's strong showing and
the degree of volatility exhibited in bond prices, we decided to "book some
profits" and take a more cautious approach until a clearer economic picture
developed.
The current environment provides us with an opportunity to rebalance the
portfolio so that it continues to own securities which we believe have the
greatest potential for performance and income. Our trading activity will
continue to concentrate on purchasing bonds which possess desirable
liquidity, call and coupon characteristics.
The municipal market, despite the normal year-end increase in new issue
supply and ongoing concern over tax reform, continues to move higher. We
expect that the issuance of Texas bonds will remain modest next year. This
will provide a positive technical impetus, but will also challenge us in our
search for appropriate securities.
The high level of volatility exhibited by the market in recent years
underscores the need to maintain a disciplined and long-term focus. Solid
market performance thus far in 1995 has rewarded the patient investor.
Included in this report is a series of detailed statements about your
Series' holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the
Series and in The Dreyfus Corporation.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
November 16, 1995
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid, without taking into consideration the maximum initial sales charge in
the case of Class A shares or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B or Class C shares.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders. Income may be subject to some state and local taxes for
non-Texas residents.
***Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period, divided by the maximum
offering price per share in the case of Class A shares or net asset value per
share in the case of Class B and C shares at the end of the period.
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
STATEMENT OF INVESTMENTS OCTOBER 31,1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-96.8% AMOUNT VALUE
------------------- -----------------
<S> <C> <C>
TEXAS-95.5%
Alliance Airport Authority Inc., Special Facilities Revenue
(American Airlines Inc. Project) 7.50%, 12/01/2029...................... $ 3,800,000 $4,033,814
Amarillo Health Facilities Corp., HR (High Plains Baptist Hospital)
6.562%, 1/3/2022 (Insured; FSA)......................................... 4,500,000 4,737,375
Bexar County:
(Detention Facilities) 5.25%, 6/15/2013................................. 1,975,000 1,918,515
Refunding, Limited Tax 5%, 6/15/2010.................................... 5,000,000 4,796,800
Bexar County Health Facilities Development Corp., HR Refunding
(Baptist Memorial Hospital System Project) 6.625%, 2/15/2011 (Insured; MBIA). 2,690,000 2,916,417
Brazos Higher Education Authority Inc., Student Loan Revenue, Refunding:
5.70%, 6/1/2004 (a)..................................................... 3,500,000 3,617,320
6.80%, 12/1/2004........................................................ 850,000 924,953
Clint Independent School District, Refunding
7%, 3/1/2015............................................................ 750,000 817,672
Dallas-Fort Worth Regional Airport, Joint Revenue
6.625%, 11/1/2021 (Insured; FGIC)....................................... 1,250,000 1,323,737
El Paso Housing Authority, Multi-Family Revenue
(Section 8 Projects) 6.25%, 12/1/2009................................... 2,510,000 2,549,959
Grapevine-Colleyville Independent School District,
5.75%, 8/15/2012........................................................ 3,975,000 4,115,794
Gulf Coast Waste Disposal Authority, SWDR
(Champion International Corp. Project) 7.25%, 4/1/2017.................. 1,000,000 1,063,410
Harris County (Toll Road) Senior Lien:
5.30%, 8/15/2013 (Insured; AMBAC)....................................... 2,000,000 1,930,820
6.375%, 8/15/2024 (Insured; MBIA)....................................... 3,000,000 3,174,840
Harris County Health Facilities Development Corp., Health Care System Revenue
(Sisters of Charity) 7.10%, 7/1/2021.................................... 1,000,000 1,091,090
Houston, Refunding 7%, 3/1/2008............................................. 2,000,000 2,329,520
Leander 6.75%, 8/15/2016.................................................... 2,325,000 2,374,941
Leon County, PCR, Refunding (Nucor Corp. Project) 7.375%, 8/1/2009.......... 750,000 826,283
Lewisville Independent School District 5.35%, 8/15/2014..................... 2,750,000 2,690,793
Matagorda County Navigation District No. 1, PCR
(Collateralized Houston Lighting and Power) 7.875%, 2/1/2019............ 500,000 542,360
Montgomery County Health Facilities Development Corp., Hospital Mortgage
Revenue
(Woodlands Medical Center Project) 8.85%, 8/15/2014..................... 580,000 633,111
North Central Health Facility Development Corp., Revenue (Presbyterian Health
Care)
5.90%, 6/1/2021......................................................... 2,300,000 2,275,896
North Texas Higher Education Authority, Inc., Student Loan Revenue
7.25%, 4/1/2003 (Insured; AMBAC)........................................ 1,000,000 1,080,110
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31,1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
----------------- -----------------
TEXAS (CONTINUED)
Red River Authority, PCR
(Hoechst Celanese Corp. Project) 6.875%, 4/1/2017....................... $ 2,600,000 $ 2,736,162
San Antonio, Water Revenue (Prior Lien)
7.125%, 5/1/2016 (Prerefunded 5/1/1999)(b).............................. 750,000 830,183
Texas A and M University, Revenue (Refunding Financing System)
5.90%, 5/15/2009........................................................ 2,000,000 2,070,600
Texas (Veterans Housing Assistance):
6.80% 12/1/2023......................................................... 3,180,000 3,282,746
6.15%, 12/1/2025 (c).................................................... 2,500,000 2,501,950
Texas City Independent School District 5%, 8/15/2012........................ 940,000 874,219
Texas Health Facilities Development Corp., HR, Refunding
(All Saints Episcopal Hospitals) 6.25%, 8/15/2022 (Insured; MBIA)....... 2,000,000 2,076,120
Texas Higher Education Coordinating Board, College Student Loan Revenue
7.30%, 10/1/2003........................................................ 775,000 826,150
Texas Housing Agency, Single Family Mortgage Revenue
9.375%, 9/1/2016 (Insured; FHA)......................................... 452,000 463,386
Texas Municipal Power Agency, Refunding 5.75%, 9/1/2012 (Insured; MBIA)
(Prerefunded 9/1/2002)(b)............................................... 775,000 830,451
Texas National Research Laboratory Commission, Financing Corp., LR
(Superconducting Super Collider):
6.95%, 12/1/2012...................................................... 700,000 783,965
7.10%, 12/1/2021 (Prerefunded 12/1/2001) (b).......................... 230,000 266,080
Texas Public Property Finance Corp., Revenue
(Mental Health and Retardation) 8.875%, 9/1/2011 (Prerefunded 9/1/2001)(b) 455,000 561,675
Texas Water Development Board, Revenue (State Revolving Fund) Senior Lien
6%, 7/15/2013........................................................... 3,000,000 3,082,530
Texas Water Resources Finance Authority, Revenue 7.625%, 8/15/2008.......... 400,000 432,140
Tomball Hospital Authority, Revenue, Refunding 6%, 7/1/2013................. 5,000,000 4,719,050
Tyler Texas Health Facility Development Corp., HR
(East Texas Medical Center Regional Health) 6.625%, 11/1/2011........... 1,885,000 1,925,735
West Side Calhoun County Navigation District, SWDR:
(Union Carbide Chemical and Plastics)
8.20%, 3/15/2021...................................................... 500,000 565,980
(Union Carbide Chemicals Project)
6.40%, 5/1/2023....................................................... 2,000,000 1,979,580
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31,1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
----------------- ----------------
U.S. RELATED-1.3%
Puerto Rico Public Buildings Authority, Guaranteed
Public Education and Health Facilities
6.875%, 7/1/2012 (Prerefunded 7/1/2002)(b).............................. $ 1,000,000 $ 1,155,320
----------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $80,660,274)...................................................... $83,729,552
================
SHORT-TERM MUNICIPAL INVESTMENTS -3.2%
TEXAS-0.3%
Gulf Coast Industrial Development Authority, SWDR, VRDN
(Citgo Petroleum Corp. Project) 4.10% (LOC; Nationsbank of Texas) (d,e). $ 300,000 $ 300,000
U.S. RELATED-2.9%
Puerto Rico Highway and Transportation Authority, Highway Revenue, VRDN
3.65% (LOC: Swiss Bank Corp., Union Bank of Switzerland,
Landesbank Hessen) (d,e)................................................ 2,475,000 2,475,000
----------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $2,775,000)....................................................... $ 2,775,000
================
TOTAL INVESTMENTS-100.0%
(cost $83,435,274)...................................................... $86,504,552
================
</TABLE>
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LR Lease Revenue
FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
FHA Federal Housing Administration Insurance Corporation
FSA Financial Security Assurance PCR Pollution Control Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
LOC Letter of Credit VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (F) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- -------- -------- ------------------ --------------------
<S> <C> <C> <C>
AAA Aaa AAA 40.9%
AA Aa AA 25.9
A A A 9.3
BBB Baa BBB 19.3
F1 MIG1/P1 SP1/A1 3.2
Not Rated (g) Not Rated (g) Not Rated (g) 1.4
-------
100.0%
=======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Wholly held by custodian as collateral for delayed delivery
security.
(b) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(c) Purchased on a delayed delivery basis.
(d) Secured by letters of credit.
(e) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(f) Fitch currently provides creditworthiness information for a limited
number of investments.
(g) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the Series may invest.
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $83,435,274)-see statement...................................... $86,504,552
Interest receivable..................................................... 1,478,296
Receivable for shares of Beneficial Interest subscribed................. 76,573
Prepaid expenses........................................................ 1,921
----------------
88,061,342
LIABILITIES:
Due to Distributor...................................................... $ 25,453
Due to Custodian........................................................ 204,537
Payable for investment securities purchased............................. 2,510,250
Payable for shares of Beneficial Interest redeemed...................... 140,225
Accrued expenses........................................................ 26,452 2,906,917
-------------- ---------------
NET ASSETS.................................................................. $85,154,425
===============
REPRESENTED BY:
Paid-in capital......................................................... $80,898,853
Accumulated undistributed net realized gain on investments.............. 1,186,294
Accumulated net unrealized appreciation on investments-Note 3........... 3,069,278
----------------
NET ASSETS at value......................................................... $85,154,425
================
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 3,148,177
================
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 822,285
================
Class C Shares
(unlimited number of $.001 par value shares authorized)............... 48
================
NET ASSET VALUE per share:
Class A Shares
($67,519,970 / 3,148,177 shares)...................................... $21.45
================
Class B Shares
($17,633,426 / 822,285 shares)........................................ $21.44
================
Class C Shares
($1,029 / 48 shares).................................................. $21.44
================
</TABLE>
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
STATEMENT OF OPERATIONS SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $2,612,566
EXPENSES:
Management fee-Note 2(a).............................................. $ 235,634
Shareholder servicing costs-Note 2(c)................................. 128,954
Distribution fees-Note 2(b)........................................... 43,352
Professional fees..................................................... 9,460
Prospectus and shareholders' reports.................................. 6,252
Custodian fees........................................................ 5,084
Trustees' fees and expenses-Note 2(d)................................. 513
Registration fees..................................................... 418
Miscellaneous......................................................... 5,670
--------------
435,337
Less-Management fee waived due to
undertaking-Note 2(a)............................................. 235,634
--------------
TOTAL EXPENSES.................................................. 199,703
----------------
INVESTMENT INCOME-NET........................................... 2,412,863
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3................................. $ 996,532
Net unrealized appreciation on investments.............................. 2,076,018
----------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 3,072,550
----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $5,485,413
================
</TABLE>
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED Six Months Ended
April 30 October 31, 1995
1995 (UNAUDITED)
----------------- -------------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 5,213,354 $ 2,412,863
Net realized gain on investments........................................ 336,502 996,532
Net unrealized appreciation on investments for the period............... 460,699 2,076,018
----------------- -------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 6,010,555 5,485,413
----------------- -------------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (4,315,213) (1,960,368)
Class B shares........................................................ (898,141) (452,485)
Class C shares........................................................ --- (10)
----------------- -------------------
TOTAL DIVIDENDS................................................... (5,213,354) (2,412,863)
----------------- -------------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 1,872,238 845,903
Class B shares........................................................ 1,960,522 447,658
Class C shares........................................................ --- 1,000
Dividends reinvested:
Class A shares........................................................ 1,978,459 891,572
Class B shares........................................................ 498,663 250,880
Class C shares........................................................ --- 10
Cost of shares redeemed:
Class A shares........................................................ (12,622,094) (4,775,112)
Class B shares........................................................ (1,719,028) (501,228)
----------------- -------------------
(DECREASE) IN NET ASSETS FROM BENEFICIAL
INTEREST TRANSACTIONS........................................... (8,031,240) (2,839,317)
----------------- -------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS......................... (7,234,039) 233,233
NET ASSETS:
Beginning of period..................................................... 92,155,231 84,921,192
----------------- -------------------
End of period........................................................... $ 84,921,192 $ 85,154,425
================= ===================
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------- ------------------------------- ------------------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED PERIOD ENDED
APRIL 30, OCTOBER 31, 1995 APRIL 30, OCTOBER 31, 1995 OCTOBER 31, 1995
1995 (UNAUDITED) 1995 (UNAUDITED) (UNAUDITED)*
------------ ------------------- -------------- ---------------- ------------------------
<S> <C> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold.......... 92,136 40,165 96,542 21,221 48
Shares issued for
dividends reinvested 97,778 42,060 24,656 11,838 ---
Shares redeemed...... (636,330) (225,451) (86,401) (23,697) ---
------------ ------------------- -------------- ---------------- ------------------------
NET INCREASE
(DECREASE) IN SHARES
OUTSTANDING.... (446,416) (143,226) 34,797 9,362 48
============ =================== ============== ================ ========================
*From August 15, 1995 (commencement of initial offering) to October 31, 1995.
</TABLE>
See independent accountants' review report and notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Series' financial statements.
<TABLE>
<CAPTION>
CLASS A SHARES
-----------------------------------------------------------------------------
SIX MONTHS ENDED
YEAR ENDED APRIL 30, OCTOBER 31, 1995
--------------------------------------------------
PER SHARE DATA: 1991 1992 1993 1994 1995 (UNAUDITED)
------- -------- --------- -------- -------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $18.58 $19.25 $19.89 $21.23 $20.41 $20.69
------- -------- --------- -------- -------- -------------------
INVESTMENT OPERATIONS:
Investment income-net................. 1.40 1.36 1.29 1.25 1.22 .61
Net realized and unrealized gain (loss)
on investments...................... .67 .69 1.37 (.66) .28 .76
------- -------- --------- -------- -------- -------------------
TOTAL FROM INVESTMENT OPERATIONS.... 2.07 2.05 2.66 .59 1.50 1.37
------- -------- --------- -------- -------- -------------------
DISTRIBUTIONS:
Dividends from investment income-net.. (1.40) (1.36) (1.29) (1.25) (1.22) (.61)
Dividends from net realized gain
on investments...................... --- (.05) (.03) (.13) --- ---
Dividends in excess of net realized gain
on investments...................... --- --- --- (.03) --- ---
------- -------- --------- -------- -------- -------------------
TOTAL DISTRIBUTIONS................. (1.40) (1.41) (1.32) (1.41) (1.22) (.61)
------- -------- --------- -------- -------- -------------------
Net asset value, end of period........ $19.25 $19.89 $21.23 $20.41 $20.69 $21.45
======= ======== ========= ======== ======== ===================
TOTAL INVESTMENT RETURN (1)............... 11.54% 10.97% 13.80% 2.62% 7.63% 13.29%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets --- .15% .36% .39% .37% .36%(2)
Ratio of net investment income to
average net assets.................. 7.29% 6.78% 6.18% 5.78% 6.01% 5.72%(2)
Decrease reflected in above expense ratios due
to undertakings by the Manager...... 1.27% .88% .62% .55% .55% .55%(2)
Portfolio Turnover Rate............... 1.95% 7.49% 14.94% 9.68% 38.68% 27.70%(3)
Net Assets, end of period (000's Omitted) $15,139 $37,208 $72,037 $76,277 $68,103 $67,520
(1) Exclusive of sales load.
(2) Annualized.
(3) Not annualized.
</TABLE>
See independent accountants' review report and notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Series' financial statements.
<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES
-------------------------------------------------- -------------------
SIX MONTHS ENDED PERIOD ENDED
YEAR ENDED APRIL 30, OCTOBER 31, 1995 OCTOBER 31, 1995
--------------------------------
PER SHARE DATA: 1993(1) 1994 1995 (UNAUDITED) (UNAUDITED)(2)
------- -------- -------- ------------------- -------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $20.52 $21.23 $20.41 $20.69 $20.78
------- -------- -------- ------------------- -------------------
INVESTMENT OPERATIONS:
Investment income-net................... .33 1.13 1.10 .56 .22
Net realized and unrealized gain (loss)
on investments........................ .71 (.66) .28 .75 .66
------- -------- -------- ------------------- -------------------
TOTAL FROM INVESTMENT OPERATIONS...... 1.04 .47 1.38 1.31 .88
------- -------- -------- ------------------- -------------------
DISTRIBUTIONS:
Dividends from investment income-net.... (.33) (1.13) (1.10) (.56) (.22)
Dividends from net realized gain
on investments........................ --- (.13) --- --- ---
Dividends in excess of net realized gain
on investments........................ --- (.03) --- --- ---
------- -------- -------- ------------------- -------------------
TOTAL DISTRIBUTIONS................... (.33) (1.29) (1.10) (.56) (.22)
------- -------- -------- ------------------- -------------------
Net asset value, end of period.......... $21.23 $20.41 $20.69 $21.44 $21.44
======= ======== ======== =================== ===================
TOTAL INVESTMENT RETURN (3)................. 17.60%(4) 2.05% 7.05% 12.64%(4) 19.89%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets. .82%(4) .94% .89% .88%(4) 1.22%(4)
Ratio of net investment income to
average net assets.................... 4.81%(4) 5.15% 5.46% 5.20%(4) 4.49%(4)
Decrease reflected in above expense ratios due
to undertakings by the Manager........ .49%(4) .54% .55% .55%(4) .58%(4)
Portfolio Turnover Rate................. 14.94% 9.68% 38.68% 27.70%(5) 27.70%(5)
Net Assets, end of period (000's Omitted) $6,373 $15,878 $16,818 $17,633 $1
(1) From January 15, 1993 (commencement of initial offering) to April 30, 1993.
(2) From August 15, 1995 (commencement of initial offering) to October 31, 1995.
(3) Exclusive of sales load.
(4) Annualized.
(5) Not Annualized.
</TABLE>
See independent accountants' review report and notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier State Municipal Bond Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering fifteen series including the Texas Series (the "Series"). Premier
Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of
the Fund's shares. The Distributor, located at One Exchange Place,
Boston, Massachusetts 02109, is a wholly-owned subsidiary of
FDI Distribution Services, Inc., a provider of mutual fund administration
services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc.,
the parent company of which is Boston Institutional Group, Inc. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A.
The Fund accounts separately for the assets, liabilities and operations
of each series. Expenses directly attributable to each series are charged to
that series' operations; expenses which are applicable to all series are
allocated among them on a pro rata basis.
The Series offers Class A, Class B and Class C shares. Class A shares are
subject to a sales charge imposed at the time of purchase, Class B shares are
subject to a contingent deferred sales charge imposed at the time of
redemption on redemptions made within five years of purchase and Class C
shares are subject to a contingent deferred sales charge imposed at the time
of redemption on redemptions made within one year of purchase. Other
differences between the three Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: The Series' investments (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
The Series follows an investment policy of investing primarily in
municipal obligations of one state. Economic changes affecting the state and
certain of its public bodies and municipalities may affect the ability of
issuers within the state to pay interest on, or repay principal of, municipal
obligations held by the Series.
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Series may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Series not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Series to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .55 of 1% of the average
daily value of the Series' net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Series'
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Series for any full fiscal year. However, the Manager
has undertaken from May 1, 1995 to waive receipt of the management fee
payable to it by the Series until such time as the net assets of the Series
exceed $100 million, regardless of whether they remain at that level. The
management fee waived, pursuant to the undertaking, amounted to $235,634 for
the six months ended October 31, 1995.
The undertaking may be modified by the Manager from time to time,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
(B) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the
Act, the Series pays the Distributor for distributing the Series' Class B and
Class C shares at an annual rate of .50 of 1% of the value of the average
daily net assets of Class B shares and .75 of 1% of the value of the average
daily net assets of Class C shares. During the period ended October 31, 1995,
$43,350 was charged to the Series for the Class B shares and $2 was charged
to the Series for the Class C shares.
(C) Under the Shareholder Services Plan, the Series pays the Distributor
at an annual rate of .25 of 1% of the value of the average daily net assets
of Class A, Class B and Class C shares for the provision of certain services.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Series and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. For the period ended October 31, 1995,
$85,430, $21,675 and $1 were charged to Class A, Class B and Class C shares,
respectively, by the Distributor pursuant to the Shareholder Services Plan.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $38,528,972 and $38,361,304, respectively, for the six months
ended October 31, 1995, and consisted entirely of long-term and short-term
municipal investments.
At October 31, 1995, accumulated net unrealized appreciation on
investments was $3,069,278, consisting of $3,296,203 gross unrealized
appreciation and $226,925 gross unrealized depreciation.
At October 31, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER STATE MUNICIPAL BOND FUND, TEXAS SERIES
We have reviewed the accompanying statement of assets and liabilities,
including the statement of investments, of Premier State Municipal Bond Fund,
Texas Series (one of the Series constituting the Premier State Municipal Bond
Fund) as of October 31, 1995, and the related statements of operations and
changes in net assets and financial highlights for the six month period ended
October 31, 1995. These financial statements and financial highlights are the
responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
April 30, 1995 and financial highlights for each of the five years in the
period ended April 30, 1995 and in our report dated June 6, 1995, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young LLP signature)
New York, New York
December 7, 1995
[Dreyfus lion "d" logo]
Premier State Municipal
Bond Fund, Texas Series
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
First Data Investor Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 061/621/681SA9510
[Dreyfus logo]
Semi-Annual Report
Premier State
Municipal Bond Fund
Texas Series
October 31, 1995
