NATIONS
FUND
ANNUAL REPORT
[PHOTO]
NATIONS INSTITUTIONAL RESERVES
NATIONS CASH RESERVES
NATIONS TREASURY RESERVES
NATIONS GOVERNMENT RESERVES
NATIONS MUNICIPAL RESERVES
FOR THE YEAR ENDED APRIL 30, 1996
NOT MAY LOSE VALUE
FDIC-
INSURED NO BANK GUARANTEE
Nations Institutional Reserves Distributor: Stephens Inc. Stephens Inc., which
is not affiliated with NationsBank, N.A., is not a bank and the securities
offered by it are not guaranteed by any bank or insured by the FDIC. Stephens
Inc., member NYSE-SIPC.
Nations Institutional Reserves Investment Adviser: NationsBanc Advisors, Inc.
Nations Institutional Reserves Investment Sub-Adviser: TradeStreet Investment
Associates, Inc.
DEAR SHAREHOLDER:
We are pleased to present you with the Nations Institutional Reserves (the
"Trust" which consists of four portfolios) Annual Report for the fiscal year
ending April 30, 1996. We hope you find this report a useful tool in your
investment review process.
On a shareholder account basis, institutional money market funds grew faster in
1995 than any other money market category as tracked by IBC Financial Data,
Inc., with institutional fund assets growing by over $50 billion. This growth
has continued into 1996. The declining interest rate environment for most of the
fiscal year positioned institutional money market fund yields well versus
alternative money market instruments (as changes in money market fund yields
tend to lag moves in Federal Funds ("Fed Funds")). While an increase in rates
may become more imminent if the economy continues to escalate, no one can be
absolutely sure what the Federal Open Market Committee ("FOMC") of the Federal
Reserve will do for the rest of this year. We are confident that, even in light
of a possible Fed Funds increase, 1996 will continue to be a favorable year for
institutional money market funds as cash management vehicles and short-term
investments.
Looking back over the past twelve months, we are very pleased with the success
of the portfolios. Total net assets more than doubled for the year, ending at
just over $1.8 billion. We attribute this strong growth to the portfolios'
highly competitive investment performance, to favorable market conditions, and
to the high level of professional service we strive to provide.
Following are performance summaries for each of the Trust's portfolios including
asset breakdowns by security type. We have included commentaries from the
Trust's investment sub-adviser, TradeStreet Investment Associates, Inc.,
providing further insight into the investment strategy and tactics behind each
portfolio.
ECONOMIC OVERVIEW
The FOMC reduced the Fed Funds target rate by 75 basis points during the fiscal
year, from 6.00% to 5.25%. Banks followed suit by lowering their Prime lending
rates 75 basis points, from 9.00% to 8.25%. Gross Domestic Product grew a modest
1.8%.
In light of the FOMC Fed Funds target rate cuts, the short-term money market
yield curve remained relatively flat during the first six months of the fiscal
year and inverted over the next four months. The economy appeared to be on
course for a soft landing with steady but moderate growth. A much stronger than
expected February 1996 employment report suggested an economy growing above
trend and operating at essentially full employment. As a result, the short-term
money market curve steepened significantly during the last two months of the
period. While inflation is currently benign, emergence of some visible
acceleration of inflation is likely to push yields higher. If future data
continues to confirm a strengthening economy or an uptick in inflation, it
becomes more likely the yield curve will steepen further in anticipation of rate
increases by the FOMC.
NATIONS CASH RESERVES
The portfolio maintained a tactical strategy throughout the period to hedge
shifts in the short-term yield curve. Overnight repurchase agreements and
commercial paper were the primary instruments used to provide ongoing daily
liquidity needs. Floating rate notes based on short-term money market indices,
such as London Interbank Offered Rate ("LIBOR") and Fed Funds, were effectively
positioned to hedge interest rate fluctuations while keeping yield levels
attractive. When warranted by break-even analysis, which helps identify the
circumstances in which different securities will perform equally given various
interest rate assumptions, the portfolio purchased securities with longer
maturities to capture greater yield value along the curve. Overall, commercial
paper represented the best value in terms of yield, liquidity and available
supply.
We expect to continue this strategy and remain cautious in light of the current
economic environment and the possibility of future FOMC rate increases. Near
term, the portfolio will increase liquidity, emphasize securities with
maturities of three months or less, and purchase additional floating rate notes
to generate yield if the pricing is attractive.
NATIONS CASH RESERVES* -- 30-DAY CURRENT YIELD COMPARISON
Capital Class Shares
Line graph shown using plot points below:
<TABLE>
<CAPTION>
IBC FIRST TIER
NATIONS CASH INSTITUTIONAL
RESERVES AVERAGE
-------- -------
<S> <C> <C>
Apr 95 6.05% 5.83%
May 95 6.05% 5.81%
Jun 95 6.06% 5.77%
Jul 95 5.91% 5.69%
Aug 95 5.81% 5.55%
Sep 95 5.82% 5.52%
Oct 95 5.74% 5.35%
Nov 95 5.76% 5.37%
Dec 95 5.72% 5.48%
Jan 96 5.56% 5.36%
Feb 96 5.32% 5.12%
Mar 96 5.22% 5.05%
Apr 96 5.21% 5.03%
</TABLE>
Source: IBC Financial Data, Inc.
NATIONS CASH RESERVES -- ASSET ALLOCATION AS OF APRIL 30, 1996
Pie chart divided using figures below:
<TABLE>
<S> <C>
Commercial Paper 62.2%
Corporate Obligations 12.7%
Medium Term Notes 6.8%
U.S. Government Agency Obligations 4.3%
U.S. Treasury Oglibations, Money Market
Funds, and Other Assets and
Liabilities (Net) 3.0%
Certificates of Deposit - Euro 11.0%
</TABLE>
Note: Percentages indicate investments as a percentage of total net
assets.
NATIONS TREASURY RESERVES AND NATIONS GOVERNMENT RESERVES
In the government sector of the money market, finding value along the yield
curve was even more challenging during the past fiscal year. The U.S. Treasury
yield curve remained relatively flat or inverted for most of the fiscal period,
but steepened by the end of April. The market ended calendar year 1995 with the
1-Year U.S. Treasury Bill yielding 5.18% and the 30-Year U.S. Treasury Bond
yielding 5.95%. As of April 30, 1996, the curve steepened with the 1-Year U.S.
Treasury Bill yielding 5.56%, while the 30-Year U.S. Treasury Bond yield rose to
7.00%. The Government Agency yield curve was predominately inverted for much of
the period as well, with very little issuance past six months. As the yield
curve started to steepen, Government Agencies began increasing new issue supply
along the curve. In light of this, dealer inventory continued to offer greater
value relative to new issues.
We believe that a dramatic shift in investor expectations as to the future of
interest rates is largely the cause behind the curve steepening. Until early
February, the market had been factoring in the prospect of continued weak
economic activity, expecting further declines in short-term interest rates for
the balance of 1996. With economic activity now pointing to stronger growth,
market expectations for interest rates have been revised up sharply.
Consequently, new issues have priced in an expected FOMC target rate increase
later this year.
Currently, the Portfolios are being positioned to take advantage of anticipated
further yield curve steepening by focusing on the overnight to three-month
maturity area of the market at least over the short term. We expect that we will
continue to emphasize this maturity range as a defensive strategy designed to
shorten weighted average maturities.
2
NATIONS TREASURY RESERVES* -- 30-DAY CURRENT YIELD COMPARISON
Capital Class Shares
Line graph shown using plot points below:
<TABLE>
<CAPTION>
NATIONS TREASURY IBC TREASURY &
RESERVES REPO AVERAGE
-------- ------------
<S> <C> <C>
Apr 95 5.87% 5.37%
May 95 5.87% 5.36%
Jun 95 5.87% 5.36%
Jul 95 5.75% 5.36%
Aug 95 5.66% 5.11%
Sep 95 5.66% 5.13%
Oct 95 5.62% 5.09%
Nov 95 5.65% 5.11%
Dec 95 5.59% 5.05%
Jan 96 5.40% 4.87%
Feb 96 5.14% 4.62%
Mar 96 5.17% 4.63%
Apr 96 5.14% 4.59%
</TABLE>
Source: IBC Financial Data, Inc.
NATIONS TREASURY RESERVES -- ASSET ALLOCATION AS OF APRIL 30, 1996
Pie chart divided using figures below:
<TABLE>
<S> <C>
Repurchase Agreements and Other Assets
and Liabilities (Net) 70.2%
Money Market Funds 2.5%
U.S. Treasury Strip 2.0%
U.S. Treasury Notes 15.3%
U.S. Treasury Bills 10.0%
</TABLE>
Note: Percentages indicate investments as a percentage of total net
assets.
NATIONS GOVERNMENT RESERVES* -- 30-DAY CURRENT YIELD COMPARISON
Capital Class Shares
Line graph shown using plot points below:
<TABLE>
<CAPTION>
NATIONS IBC GOVERNMENT-ONLY
GOVERNMENT INSTITUTIONAL-ONLY
RESERVES AVERAGE
-------- -------
<S> <C> <C>
Apr 95 5.95% 5.67%
May 95 5.92% 5.65%
Jun 95 5.86% 5.63%
Jul 95 5.81% 5.53%
Aug 95 5.74% 5.41%
Sep 95 5.69% 5.39%
Oct 95 5.65% 5.35%
Nov 95 5.58% 5.37%
Dec 95 5.51% 5.32%
Jan 96 5.40% 5.16%
Feb 96 5.19% 4.93%
Mar 96 5.13% 4.91%
Apr 96 5.10% 4.90%
</TABLE>
Source: IBC Financial Data, Inc.
3
NATIONS GOVERNMENT RESERVES -- ASSET ALLOCATION AS OF APRIL 30, 1996
Pie chart divided using figures below:
<TABLE>
<S> <C>
Federal National Mortgage Association 19.9%
Student Loan Marketing Association 22.8%
Tennessee Valley Authority Discount
Note 1.8%
U.S. Treasury Obligations 6.1%
Money Market Funds 0.6%
Repurchase Agreement and Other Assets
and Liabilities (Net) 16.5%
Federal Farm Credit Bank 1.2%
Federal Home Loan Bank 22.2%
Federal Homke Loan Mortgage Corporation 8.9%
</TABLE>
Note: Percentages indicate investments as a percentage of total net assets.
NATIONS MUNICIPAL RESERVES
Although the FOMC changed its bias from tightening to easing of interest rates
during the past fiscal year, supply issues continued to cause volatility and
higher rates in floating rate tax-exempt money market instruments. When the
Federal Reserve Board began to ease rates, many portfolio managers extended
average maturities in order to lock in yield. The result was a flat to inverted
yield curve for the majority of the year.
The Moody's Municipal Bond 7-Day VMIG-1 Index** fluctuated from a low of 2.90%
in July to a high of 4.92% at the end of December. The average for the year was
3.675%, compared to 3.33% for the prior year. Yields on longer-term paper were
just as volatile, with the Bond Buyer One Year Index** ranging from a low of
3.08% in February, 1996 to a high of 4.15% in May, 1995. The average for the
year was 3.687%, compared to 4.316% for the prior year.
The Portfolio continues to be barbelled, with the percentage of variable rate
securities increased to over 70%. The other major change has been in the mix of
longer-term paper, favoring notes rather than commercial paper to extend the
Portfolio's weighted average maturity. General market notes made up 24.5% of the
portfolio as of the end of April, 1996 compared to 10.0% at the start of the
fiscal year.
NATIONS MUNICIPAL RESERVES* -- 30-DAY CURRENT YIELD COMPARISON
Capital Class Shares
Line graph shown using plot points below:
<TABLE>
<CAPTION>
IBC TAX-FREE
NATIONS MUNICIPAL INSTITUTIONAL-ONLY
RESERVES AVERAGE
-------- -------
<S> <C> <C>
Apr 95 4.00% 3.73%
May 95 4.19% 3.90%
Jun 95 3.70% 3.43%
Jul 95 3.47% 3.23%
Aug 95 3.62% 3.38%
Sep 95 3.70% 3.43%
Oct 95 3.66% 3.41%
Nov 95 3.71% 3.47%
Dec 95 3.97% 3.75%
Jan 96 3.32% 3.18%
Feb 96 3.21% 3.05%
Mar 96 3.18% 3.00%
Apr 96 3.44% 3.18%
</TABLE>
Source: IBC Financial Data, Inc.
** Source: Bloomberg
4
NATIONS MUNICIPAL RESERVES -- ASSET ALLOCATION AS OF APRIL 30, 1996
Pie chart divided using figures below:
<TABLE>
<S> <C>
Demand Notes 70.0%
General Market Notes 24.3%
Commercial Paper 1.5%
Put Bonds 2.7%
Money Market Funds and Other Assets and
Liabilities (Net) 1.5%
</TABLE>
Note: Percentages indicate investments as a percentage of total net assets.
The attached financial report contains more specific information on Nations
Institutional Reserves. We thank you for investing with us and look forward to
helping you with your ongoing short-term investment needs.
Sincerely,
/s/ A. Max Walker /s/ Mark H. Williamson
A. Max Walker Mark H. Williamson
President and Chairman of the Board President, NationsBanc Advisors,
Inc.
April 30, 1996
MONEY MARKET FUNDS SEEK TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
HOWEVER, THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1.00. YIELDS WILL FLUCTUATE AS MARKET CONDITIONS
CHANGE. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. INVESTMENTS IN
MONEY MARKET FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT.
* The 30-day and 7-day current net annualized yields are based on the average
net income per share for the thirty days ended April 30, 1996 and the seven
days ended on April 30, 1996, respectively, and the offering price on that
date. The yields are annualized and include the effects of voluntary expense
waivers by the Portfolios' investment adviser. If these waivers were not in
effect, the yields would have been lower.
5
STATEMENT OF NET ASSETS NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL MATURITY VALUE
AMOUNT NATIONS CASH RESERVES DATE (NOTE 1)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT -- EURO -- 11.0%
Bayerische Vereinsbank, A.G.,
$35,000,000 5.320% 02/24/97 $ 35,000,000
Industrial Bank of Japan Ltd.,
30,000,000 5.440% 06/14/96 29,999,129
Morgan Guaranty Trust Company (Euro),
20,000,000 4.920% 02/12/97 19,971,616
Sanwa Bank Ltd.,
30,000,000 5.550% 06/20/96 30,003,600
- ---------------------------------------------------------------------------------------------------
Total Certificates of Deposit -- Euro (Cost $114,974,345) 114,974,345
- ---------------------------------------------------------------------------------------------------
COMMERCIAL PAPER -- 62.2%
Abbey National North America Corporation,
40,000,000 Discount note 06/20/96 39,717,222
American Home Products Corporation,
30,000,000 Discount note# 05/30/96 29,870,950
Associates Corporation of North America,
30,000,000 Discount note 06/14/96 29,816,667
Barnett Banks, Inc.,
37,797,000 Discount note 05/02/96 37,791,414
Chrysler Financial Corporation:
25,000,000 Discount note 05/15/96 24,947,500
20,000,000 Discount note 06/24/96 19,838,900
Countrywide Funding Corporation:
35,000,000 Discount note 05/10/96 34,954,938
15,000,000 Discount note 05/17/96 14,964,200
Dresdner Bank, A.G.,
30,000,000 Discount note 05/09/96 29,964,533
Finova Capital Corporation:
24,000,000 Discount note 05/06/96 23,982,000
10,000,000 Discount note 05/24/96 9,965,756
15,000,000 Discount note 06/28/96 14,870,467
General Motors Acceptance Corporation:
10,000,000 Discount note 08/23/96 9,842,617
15,000,000 Discount note 12/13/96 14,491,500
ITT Industries Inc.,
15,000,000 Discount note 05/23/96 14,950,775
Lehman Brothers Holdings Inc.,
50,000,000 Discount note 05/01/96 50,000,000
Mitsubishi Motor Credit of America, Inc.
(Bank of Tokyo, Mitsubishi Bank Ltd., LOC),
40,000,000 Discount note 05/01/96 40,000,000
National Bank of Canada:
25,000,000 Discount note 08/14/96 24,643,437
20,000,000 Discount note 11/26/96 19,426,411
</TABLE>
See Notes to Financial Statements.
6
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL MATURITY VALUE
AMOUNT NATIONS CASH RESERVES DATE (NOTE 1)
<S> <C> <C> <C>
COMMERCIAL PAPER (continued)
Nationwide Building Society,
$30,000,000 Discount note 05/03/96 $ 29,991,033
New Center Asset Trust,
30,000,000 Discount note 10/15/96 29,255,458
NYNEX Corporation,
17,500,000 Discount note 05/10/96 17,476,463
Sherwood Medical Company,**
8,000,000 Discount note 05/29/96 7,967,582
Sumitomo Corporation of America,
20,000,000 Discount note 05/02/96 19,997,111
Toshiba International Finance,
8,500,000 Discount note 06/21/96 8,437,143
Walt Disney Company,
50,000,000 Discount note 05/01/96 50,000,000
- ---------------------------------------------------------------------------------------------------
Total Commercial Paper (Cost $647,164,077) 647,164,077
- ---------------------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS -- 12.7%
Bank of New York,
25,000,000 5.130% 03/07/97 24,985,686
Chrysler Financial Corporation,
5,000,000 6.000% 06/03/96 4,999,730
CIT Group Holdings, Inc.,
7,000,000 8.875% 06/15/96 7,024,010
CS First Boston Inc.:
25,000,000 5.400%+ 05/01/96++ 25,000,000
25,000,000 5.420%+ 05/01/96++ 25,000,000
General Motors Acceptance Corporation,
25,000,000 5.420%+ 05/01/96++ 24,994,675
Merrill Lynch & Company, Inc.,
20,000,000 5.400%+ 05/01/96++ 20,000,000
- ---------------------------------------------------------------------------------------------------
Total Corporate Obligations (Cost $132,004,101) 132,004,101
- ---------------------------------------------------------------------------------------------------
MEDIUM TERM NOTES -- 6.8%
Bank of America,
5,700,000 7.250% 02/03/97 5,792,987
Bear Stearns Companies Inc.,
25,000,000 5.025% 02/10/97 25,000,000
Citicorp,
10,000,000 8.550% 02/12/97 10,267,073
Merrill Lynch & Company, Inc.,
30,000,000 5.738%+ 07/30/96++ 30,000,000
- ---------------------------------------------------------------------------------------------------
Total Medium Term Notes (Cost $71,060,060) 71,060,060
- ---------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
7
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL Maturity Value
AMOUNT NATIONS CASH RESERVES DATE (NOTE 1)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 4.3%
Federal National Mortgage Association (FNMA),
Convertible Note,
$20,000,000 5.435%+ 05/01/96++ $ 19,997,341
Student Loan Marketing Association (SLMA), Note,
25,000,000 5.430%+ 05/07/96++ 24,999,299
- ---------------------------------------------------------------------------------------------------
Total U.S. Government Agency Obligations (Cost $44,996,640) 44,996,640
- ---------------------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 1.0%
U.S. Treasury Notes:
5,000,000 7.875% 07/31/96 5,025,053
5,000,000 8.000% 01/15/97 5,097,087
- ---------------------------------------------------------------------------------------------------
Total U.S. Treasury Obligations (Cost $10,122,140) 10,122,140
- ---------------------------------------------------------------------------------------------------
Shares
- ---------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS -- 2.1%
15,574,548 AIM Liquid Asset Portfolio 15,574,548
5,550,000 Dreyfus Cash Management Plus Fund 5,550,000
227,500 Fidelity Institutional Cash Variable Rate Fund 227,500
- ---------------------------------------------------------------------------------------------------
Total Money Market Funds (Cost $21,352,048) 21,352,048
- ---------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (Cost $1,041,673,411*) 100.1 % 1,041,673,411
- ---------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (0.1)%
Other assets 3,541,921
Dividends payable (3,674,248)
Payable for Portfolio shares redeemed (398,997)
Shareholder servicing and distribution fees payable (Note 3) (90,964)
Administration fee payable (Note 2) (39,271)
Accrued Trustees' fees and expenses (Note 2) (18,575)
Custodian fees payable (Note 2) (8,307)
Investment advisory fee payable (Note 2) (6,566)
Accrued expenses and other payables (79,640)
- ---------------------------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (NET) (774,647)
- ---------------------------------------------------------------------------------------------------
NET ASSETS 100.0 % $1,040,898,764
===================================================================================================
</TABLE>
See Notes to Financial Statements.
8
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
NATIONS CASH RESERVES
- ---------------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
Capital Class Shares (formerly Class A Shares):
($607,642,905 / 607,645,681 shares outstanding) $ 1.00
===================================================================================================
Liquidity Class Shares (formerly Class B Shares):
($35,447,140 / 35,447,302 shares outstanding) $ 1.00
===================================================================================================
Adviser Class Shares (formerly Class C Shares):
($397,808,719 / 397,810,536 shares outstanding) $ 1.00
===================================================================================================
* Aggregate cost for Federal tax purposes.
** Restricted security (Note 5).
+ Floating rate note. The interest rate shown reflects the rate currently in
effect.
++ Reset date.
# Security is not registered under the Securities Act of 1933. These
securities may be resold
in transactions exempt from registration to qualified institutional buyers.
Abbreviation:
LOC -- Letter of credit.
- ---------------------------------------------------------------------------------------------------
AT APRIL 30, 1996 NET ASSETS CONSIST OF:
Accumulated net realized loss on investments sold $ (4,755)
Paid-in capital 1,040,903,519
- ---------------------------------------------------------------------------------------------------
NET ASSETS $1,040,898,764
===================================================================================================
</TABLE>
See Notes to Financial Statements.
9
STATEMENT OF NET ASSETS NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL MATURITY VALUE
AMOUNT NATIONS TREASURY RESERVES DATE (NOTE 1)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -- 27.3%
U.S. TREASURY BILLS -- 10.0%
$ 15,000,000 Discount note# 07/25/96 $ 14,825,042
20,000,000 Discount note# 08/22/96 19,659,116
10,000,000 Discount note# 10/17/96 9,750,959
5,000,000 Discount note# 02/06/97 4,814,618
- ------------------------------------------------------------------------------------------------------
49,049,735
- ------------------------------------------------------------------------------------------------------
U. S. TREASURY NOTES -- 15.3%
5,000,000 5.875% 05/31/96 4,999,697
10,000,000 7.875%# 07/15/96 10,052,608
20,000,000 6.125%# 07/31/96 20,053,895
5,000,000 7.875%# 07/31/96 5,025,053
10,000,000 6.500% 09/30/96 10,034,564
5,000,000 8.000% 01/15/97 5,097,088
20,000,000 6.875%# 02/28/97 20,276,819
- ------------------------------------------------------------------------------------------------------
75,539,724
- ------------------------------------------------------------------------------------------------------
U.S. TREASURY STRIP -- 2.0%
10,000,000 Zero coupon 11/15/96 9,720,213
- ------------------------------------------------------------------------------------------------------
Total U.S. Treasury Obligations (Cost $134,309,672) 134,309,672
- ------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- FIXED RATE -- 87.7%
120,000,000 Agreement with Bankers Trust Company,
5.350% dated 04/30/96 to be repurchased at $120,017,833 on 05/01/96,
collateralized by $126,665,000 U.S. Treasury Notes, 6.500%-7.875% due
02/28/97-11/15/04 (value $122,449,726) 120,000,000
105,244,000 Agreement with CS First Boston Corporation,
Interest is payable monthly. The agreement is terminable by the Fund
daily. The final maturity of the agreement is 07/01/96,
collateralized by $292,110,084 U.S. Government securities due
05/15/98-05/15/20 (value $107,371,428)## 105,244,000
23,000,000 Agreement with Deutsche Bank Financial Inc.,
5.310% dated 04/30/96 to be repurchased at $23,003,393 on 05/01/96,
collateralized by $22,752,000 U.S. Treasury Notes, 5.500%-7.750% due
11/30/97-02/15/01 (value $23,460,865) 23,000,000
22,000,000 Agreement with First Chicago Corporation,
5.300% dated 04/30/96 to be repurchased at $22,003,239 on 05/01/96,
collateralized by $22,187,000 U.S. Treasury Notes, 4.375%-7.250% due
07/31/96-03/31/97 (value $22,441,048) 22,000,000
23,000,000 Agreement with Goldman Sachs & Company,
5.330% dated 04/30/96 to be repurchased at $23,003,405 on 05/01/96,
collateralized by $23,180,000 U.S. Treasury Note, 6.000% due 08/31/97
(value $23,460,331) 23,000,000
23,000,000 Agreement with HSBC Securities,
5.320% dated 04/30/96 to be repurchased at $23,003,399 on 05/01/96,
collateralized by $23,380,000 U.S. Treasury Note, 5.750% due 09/30/97
(value $23,460,968) 23,000,000
</TABLE>
See Notes to Financial Statements.
10
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT NATIONS TREASURY RESERVES (NOTE 1)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS--FIXED RATE (continued)
$23,000,000 Agreement with Lehman Government Securities Inc.,
5.330% dated 04/30/96 to be repurchased at $23,003,405 on 05/01/96,
collateralized by $22,940,000 U.S. Treasury Note, 6.375% due 01/15/00
(value $23,451,896) $ 23,000,000
23,000,000 Agreement with Merrill Lynch & Company, Inc.,
5.300% dated 04/30/96 to be repurchased at $23,003,386 on 05/01/96,
collateralized by $21,733,000 U.S. Treasury Notes, 6.250%-8.000% due
04/30/01-11/15/01 (value $23,461,263) 23,000,000
23,000,000 Agreement with Morgan (J.P.) & Company, Inc.,
5.330% dated 04/30/96 to be repurchased at $23,003,405 on 05/01/96,
collateralized by $22,588,000 U.S. Treasury Note, 7.500% due 10/31/99
(value $23,460,886) 23,000,000
23,000,000 Agreement with Smith Barney & Company,
5.320% dated 04/30/96 to be repurchased at $23,003,399 on 05/01/96,
collateralized by $23,541,000 U.S. Treasury Note, 6.250% due 04/30/01
(value $23,460,678) 23,000,000
23,000,000 Agreement with UBS Securities, Inc.,
5.310% dated 04/30/96 to be repurchased at $23,003,393 on 05/01/96,
collateralized by $23,125,000 U.S. Treasury Note, 6.625% due 03/31/97
(value $23,460,088) 23,000,000
- ------------------------------------------------------------------------------------------------------
Total Repurchase Agreements -- Fixed Rate (Cost $431,244,000) 431,244,000
- ------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- TERM -- 4.0% (Cost $20,000,000)
20,000,000 Agreement with Morgan Stanley Group Inc.,
5.300%+, terminable by the Portfolio daily, with a final maturity
date of 07/03/96. Interest receivable as of 04/30/96 was $344,499,
collateralized by $20,890,000 U.S. Treasury Note, 5.500% due 12/31/00
(value $20,565,102) 20,000,000
- ------------------------------------------------------------------------------------------------------
Shares
- ------------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS -- 2.5%
3,507,000 AIM Treasury Fund 3,507,000
2,189,000 Dreyfus Treasury Cash Management Fund 2,189,000
6,453,000 Fidelity Institutional Cash Fund 6,453,000
- ------------------------------------------------------------------------------------------------------
Total Money Market Funds (Cost $12,149,000) 12,149,000
- ------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (Cost $597,702,672*) 121.5 % 597,702,672
- ------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (21.5)%
Other assets 1,759,020
Payable for reverse repurchase agreement (Note 1) (105,244,000)
Dividends payable (2,181,393)
Investment advisory fee payable (Note 2) (63,004)
Shareholder servicing and distribution fees payable (Note 3) (43,457)
Administration fee payable (Note 2) (20,846)
Accrued Trustees' fees and expenses (Note 2) (16,195)
Custodian fees payable (Note 2) (13,204)
Accrued expenses and other payables (42,371)
- ------------------------------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (NET) (105,865,450)
- ------------------------------------------------------------------------------------------------------
NET ASSETS 100.0 % $ 491,837,222
======================================================================================================
</TABLE>
See Notes to Financial Statements.
11
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
NATIONS TREASURY RESERVES
- ------------------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
Capital Class Shares (formerly Class A Shares):
($304,342,074 / 304,363,940 shares outstanding) $ 1.00
======================================================================================================
Liquidity Class Shares (formerly Class B Shares):
($11,804,124 / 11,804,972 shares outstanding) $ 1.00
======================================================================================================
Adviser Class Shares (formerly Class C Shares):
($175,691,024 / 175,703,647 shares outstanding) $ 1.00
======================================================================================================
* Aggregate cost for Federal tax purposes.
+ Rate resets daily. The interest rate shown reflects the rate currently in
effect.
# Denotes securities subject to repurchase under reverse repurchase
agreements as of April 30, 1996 (Note 1).
## Security segregated as collateral for reverse repurchase agreement.
- ------------------------------------------------------------------------------------------------------
AT APRIL 30, 1996 NET ASSETS CONSIST OF:
Accumulated net realized loss on investments sold $ (34,489)
Paid-in capital 491,871,711
- ------------------------------------------------------------------------------------------------------
NET ASSETS $491,837,222
</TABLE>
See Notes to Financial Statements.
12
STATEMENT OF NET ASSETS NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL MATURITY VALUE
AMOUNT NATIONS GOVERNMENT RESERVES DATE (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 76.8%
FEDERAL FARM CREDIT BANK (FFCB) NOTE -- 1.2%
$ 2,000,000 5.750% 08/01/96 $ 1,999,634
- -----------------------------------------------------------------------------------------------------
FEDERAL HOME LOAN BANK (FHLB) -- 22.2%
5,000,000 Discount note 05/28/96 4,980,913
3,000,000 Discount note 06/07/96 2,984,922
3,000,000 Discount note 06/10/96 2,983,733
5,000,000 Discount note 06/19/96 4,965,972
2,000,000 Discount note 06/27/96 1,984,737
Notes:
5,000,000 5.230%+ 05/01/96++ 4,999,858
3,000,000 5.705% 06/10/96 2,999,037
3,000,000 4.860% 02/07/97 2,997,642
5,000,000 5.265% 03/13/97 5,000,000
3,000,000 5.392% 03/18/97 3,000,000
- -----------------------------------------------------------------------------------------------------
36,896,814
- -----------------------------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) -- 8.9%
3,000,000 Discount note 05/28/96 2,988,334
3,000,000 Discount note 05/30/96 2,987,312
3,000,000 Discount note 06/03/96 2,985,508
3,000,000 Discount note 06/21/96 2,979,090
3,000,000 Discount note 07/15/96 2,967,438
- -----------------------------------------------------------------------------------------------------
14,907,682
- -----------------------------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) -- 19.9%
5,000,000 Discount note 05/03/96 4,998,572
8,600,000 Discount note 05/10/96 8,588,716
3,000,000 Discount note 05/17/96 2,993,360
3,000,000 Discount note 05/24/96 2,989,861
3,000,000 Discount note 07/30/96 2,961,000
3,000,000 Discount note 08/26/96 2,946,375
Notes:
5,000,000 5.435%+ 05/01/96++ 5,000,000
2,600,000 5.590% 06/21/96 2,601,800
- -----------------------------------------------------------------------------------------------------
33,079,684
- -----------------------------------------------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION (SLMA) -- 22.8%
5,000,000 Discount note 06/17/96 4,966,056
Notes:
20,000,000 5.300%+ 05/07/96++ 19,956,296
8,000,000 5.320%+ 05/07/96++ 8,000,000
5,000,000 5.430%+ 05/07/96++ 4,999,825
- -----------------------------------------------------------------------------------------------------
37,922,177
- -----------------------------------------------------------------------------------------------------
TENNESSEE VALLEY AUTHORITY (TVA) -- 1.8%
3,000,000 Discount note 07/26/96 2,964,167
- -----------------------------------------------------------------------------------------------------
Total U.S. Government Agency Obligations (Cost $127,770,158) 127,770,158
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
13
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL Maturity Value
AMOUNT NATIONS GOVERNMENT RESERVES DATE (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -- 6.1%
U.S. Treasury Notes:
$ 5,000,000 6.250% 01/31/97 $ 5,042,461
5,000,000 6.750% 02/28/97 5,064,677
- -----------------------------------------------------------------------------------------------------
Total U.S. Treasury Obligations (Cost $10,107,138) 10,107,138
- -----------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 16.5% (Cost $27,526,000)
27,526,000 Agreement with CS First Boston Corporation,
5.350% dated 04/30/96 to be repurchased at $27,530,091 on 05/01/96,
collateralized by $26,593,000 U.S. Treasury Bonds, 7.500%-8.875% due
11/15/16-02/15/19 (value $28,078,388) 27,526,000
- -----------------------------------------------------------------------------------------------------
Shares
- -----------------------------------------------------------------------------------------------------
MONEY MARKET FUND -- 0.6% (Cost $1,012,000)
1,012,000 Dreyfus Treasury Prime Cash Management Fund 1,012,000
- -----------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (Cost $166,415,296*) 100.0 % 166,415,296
- -----------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (0.0)%**
Other assets 748,012
Dividends payable (656,607)
Investment advisory fee payable (Note 2) (26,217)
Shareholder servicing and distribution fees payable (Note 3) (22,871)
Administration fee payable (Note 2) (6,151)
Accrued Trustees' fees and expenses (Note 2) (3,755)
Custodian fees payable (Note 2) (2,537)
Accrued expenses and other payables (26,895)
- -----------------------------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (NET) 2,979
- -----------------------------------------------------------------------------------------------------
NET ASSETS 100.0 % $166,418,275
=====================================================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
Capital Class Shares (formerly Class A Shares):
($58,121,325 / 58,122,320 shares outstanding) $ 1.00
=====================================================================================================
Liquidity Class Shares (formerly Class B Shares):
($129,392 / 129,395 shares outstanding) $ 1.00
=====================================================================================================
Adviser Class Shares (formerly Class C Shares):
($108,167,558 / 108,169,411 shares outstanding) $ 1.00
=====================================================================================================
* Aggregate cost for Federal tax purposes.
** Amount represents less than 0.1% of net assets.
+ Floating rate note. The interest rate shown reflects the rate currently in
effect.
++ Reset date.
- -----------------------------------------------------------------------------------------------------
AT APRIL 30, 1996 NET ASSETS CONSIST OF:
Accumulated net realized loss on investments sold $ (2,062)
Paid-in capital 166,420,337
- -----------------------------------------------------------------------------------------------------
NET ASSETS $166,418,275
=====================================================================================================
</TABLE>
See Notes to Financial Statements.
14
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT NATIONS MUNICIPAL RESERVES (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- 98.5%
ALABAMA -- 2.0%
Homewood, Alabama, Education Building Authority, Educational
Facilities, (Samford University), Series C, (AmSouth Bank N.A.
(Birmingham) LOC),
$1,265,000 4.200% due 12/01/13++ $ 1,265,000
McIntosh, Alabama, Industrial Development Board, PCR, (Ciba-Geigy
Corporation Project), Series A, (Swiss Bank LOC),
1,000,000 4.200% due 12/01/03++ 1,000,000
- -----------------------------------------------------------------------------------------------------
2,265,000
- -----------------------------------------------------------------------------------------------------
ALASKA -- 1.7%
Valdez, Alaska, Marine Terminal Revenue, (Arco Transportation Project),
Series B,
1,900,000 4.200% due 05/01/31++ 1,900,000
- -----------------------------------------------------------------------------------------------------
ARIZONA -- 0.9%
Pinal (County of), Arizona, Industrial Development Authority, PCR,
(Magma Copper Company Project), (Banque Nationale de Paris LOC),
1,000,000 4.150% due 12/01/11++ 1,000,000
- -----------------------------------------------------------------------------------------------------
ARKANSAS -- 2.1%
Little Rock, Arkansas, Metrocenter, Improvement District No. 1 Revenue,
(Little Rock Newspapers Inc. Project), (Bank of New York, N.Y. LOC),
2,300,000 4.500% due 12/01/25+ 2,300,000
- -----------------------------------------------------------------------------------------------------
CALIFORNIA -- 4.2%
Contra Costa (County of), California, TRAN, GO,
1,000,000 4.500% due 07/03/96 1,001,411
San Bernardino (County of), California, TRAN, GO, (Toronto Dominion
Bank, Bank of Nova Scotia and Banque Nationale de Paris LOC),
2,500,000 4.500% due 07/05/96 2,502,348
San Diego, California, Industrial Development Revenue, (Kaiser
Aerospace and Electrical Project), Series A, AMT, (ABN-AMRO Bank LOC),
1,200,000 4.300% due 10/01/07++ 1,200,000
- -----------------------------------------------------------------------------------------------------
4,703,759
- -----------------------------------------------------------------------------------------------------
COLORADO -- 2.7%
Colorado (State of), Health Facilities Authority Revenue, (Goodwill
Industries), (Bank One of Denver LOC),
1,835,000 4.250% due 12/01/04++ 1,835,000
Larimer (County of), Colorado, Industrial Development Revenue,
(Ultimate Support System Project), Series A, (Bank One of Denver LOC),
1,200,000 4.250% due 06/01/10++ 1,200,000
- -----------------------------------------------------------------------------------------------------
3,035,000
- -----------------------------------------------------------------------------------------------------
CONNECTICUT -- 1.5%
Mashantucket (Western), Connecticut, Pequot Tribe, Series A, (Bank of
America LOC),
1,700,000 3.400% due 08/30/96 1,700,000
- -----------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA -- 1.4%
District of Columbia, Hospital Revenue, (Columbia Women's Hospital),
Series A, (Mitsubishi Bank Ltd. LOC),
1,500,000 4.350% due 07/01/20++ 1,500,000
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
15
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT NATIONS MUNICIPAL RESERVES (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES (continued)
FLORIDA -- 4.6%
Gulf Breeze, Florida, Local Government Loan Program, Series B, (FGIC
Insured), (SBPA), (Credit Local de France LOC),
$1,555,000 4.150% due 12/01/15++ $ 1,555,000
Orange (County of), Florida, Health Facilities Authority Revenue,
(Mayflower Retirement Community Project), (Rabobank Nederland LOC),
1,000,000 4.300% due 03/01/18++ 1,000,000
Orange (County of), Florida, Housing Finance Agency, Series B, AMT,
2,500,000 3.650% due 04/01/97 2,500,000
- -----------------------------------------------------------------------------------------------------
5,055,000
- -----------------------------------------------------------------------------------------------------
GEORGIA -- 6.4%
Crisp County-Cordele, Georgia, Industrial Development Authority
Revenue, (Florida Seed Company Inc. Project), AMT, (SouthTrust Bank of
Alabama LOC),
1,200,000 4.500% due 12/01/10++ 1,200,000
De Kalb (County of), Georgia, Housing Authority, Multi-family Housing
Revenue:
(Cedar Creek Apartments Project), AMT, (General Electric Capital
Corporation LOC),
1,400,000 4.450% due 12/01/20++ 1,400,000
(Terrace Club Project), Series A , (AmSouth Bank N.A. LOC),
1,000,000 4.350% due 11/01/15++ 1,000,000
De Kalb (County of), Georgia, Private Hospital Authority, Revenue
Anticipation Certificates, (Egleston Children's Health Center
Project), Series A, (SunTrust Bank of Atlanta LOC),
1,500,000 4.100% due 12/01/17++ 1,500,000
Smyrna, Georgia, Multi-family Housing Authority Revenue, (Hills of Post
Village Project), (FNMA Collateral Agreement),
2,000,000 4.050% due 06/01/25++ 2,000,000
- -----------------------------------------------------------------------------------------------------
7,100,000
- -----------------------------------------------------------------------------------------------------
ILLINOIS -- 4.7%
Burbank, Illinois, Industrial Development Revenue, (Service
Merchandise, Inc. Project), (Canadian Imperial Bank of Commerce LOC),
400,000 3.500% due 09/15/24+++ 400,000
Illinois (State of), Development Financial Authority, Industrial
Development Revenue, (Randolph Pickle Corporation Project), AMT,
(American National Bank and Trust Company (Chicago) LOC),
900,000 4.300% due 06/01/12++ 900,000
Illinois (State of), Education Facilities Authority Revenue,
(Northwestern University), (SBPA), (First National Bank (Chicago)
LOC),
1,400,000 4.150% due 12/01/25++ 1,400,000
Illinois (State of), Health Facilities Authority Revenue, Health,
Hospital & Nursing Home Improvements, (Streeterville Corporation
Project), Series B, (First National Bank (Chicago) LOC),
1,000,000 4.100% due 08/15/23++ 1,000,000
Lombard Village, Illinois, Industrial Project Revenue, B&H Partnership,
(Comerica Bank LOC),
1,500,000 4.475% due 10/01/13++ 1,500,000
- -----------------------------------------------------------------------------------------------------
5,200,000
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
16
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL Value
AMOUNT NATIONS MUNICIPAL RESERVES (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES (continued)
INDIANA -- 4.6%
Carmel Clay, Indiana, Schools Tax Anticipation Warrants, Transportation
Fund,
$1,200,000 3.740% due 12/31/96 $ 1,201,075
Indiana Bond Bank, Advance Funding Notes,
650,000 4.250% due 01/09/97 653,151
Indianapolis, Indiana, Local Public Improvement, Bond Bank Notes,
Series A,
830,000 6.640% due 12/01/96 831,532
Indianapolis, Indiana, Multi-family Housing Revenue, (Canal Square
Project), (Societe Generale de France LOC),
1,300,000 4.000% due 12/01/15++ 1,300,000
Kendallville, Indiana, Revenue, (McCray Memorial Hospital Project),
(First National Bank (Chicago) LOC),
1,085,000 4.150% due 01/01/04++ 1,085,000
- -----------------------------------------------------------------------------------------------------
5,070,758
- -----------------------------------------------------------------------------------------------------
IOWA -- 1.8%
Iowa (State of), School Corporations, Warrant Certificates, (Iowa
School Cash Anticipation Program), Series B, (FSA Insured),
2,000,000 4.250% due 01/30/97 2,012,330
- -----------------------------------------------------------------------------------------------------
KENTUCKY -- 2.1%
Jefferson (County of), Kentucky, Industrial Development Board, Economic
Development Revenue, (Ball Corporation Project), AMT, (PNC Bank of
Ohio LOC),
1,000,000 4.300% due 04/01/98++ 1,000,000
Jeffersontown, Kentucky, Industrial Building Revenue, (Raque Food
System Inc. Project), AMT, (PNC Bank LOC),
1,300,000 4.300% due 04/01/20++ 1,300,000
- -----------------------------------------------------------------------------------------------------
2,300,000
- -----------------------------------------------------------------------------------------------------
LOUISIANA -- 1.1%
East Baton Rouge Parish, Louisiana, PCR, (Exxon Corporation Project),
1,200,000 4.000% due 03/01/22+ 1,200,000
- -----------------------------------------------------------------------------------------------------
MAINE -- 1.8%
Maine (State of), TAN,
2,000,000 4.500% due 06/28/96 2,002,293
- -----------------------------------------------------------------------------------------------------
MARYLAND -- 2.0%
Montgomery (County of), Maryland, Industrial Development Revenue,
(Information Systems and Network Corporation Project), (PNC Bank LOC),
200,000 3.550% due 04/01/14+++ 200,000
Prince Georges (County of), Maryland, Housing Authority Mortgage
Revenue, (Laurel-Oxford Project), (Bankers Trust Company LOC),
2,000,000 4.225% due 10/01/07++ 2,000,000
- -----------------------------------------------------------------------------------------------------
2,200,000
- -----------------------------------------------------------------------------------------------------
MICHIGAN -- 2.3%
Jackson (County of), Michigan, Economic Development Corporation,
Economic Development Revenue, (Sealed Power Corporation Project),
(National Bank of Detroit LOC),
1,000,000 3.500% due 10/01/19+++ 1,000,000
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
17
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL Value
AMOUNT NATIONS MUNICIPAL RESERVES (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES (continued)
MICHIGAN (continued)
Michigan (State of), Municipal Bond Authority Revenue Notes, Series B,
$1,500,000 4.500% due 07/03/96 $ 1,501,740
- -----------------------------------------------------------------------------------------------------
2,501,740
- -----------------------------------------------------------------------------------------------------
MINNESOTA -- 1.3%
Chaska, Minnesota, Industrial Development Revenue, (Pies Inc. Project),
AMT, (Trust Company Bank (Atlanta) LOC),
1,425,000 4.250% due 02/01/17++ 1,425,000
MISSOURI -- 1.2%
Missouri (State of), Health and Educational Facilities Authority,
Educational Facilities Revenue, (Washington University), (SBPA),
(Morgan Guaranty Trust Company),
1,300,000 4.200% due 09/01/09++ 1,300,000
- -----------------------------------------------------------------------------------------------------
OHIO -- 3.6%
Centerville, Ohio, Health Care Revenue, (Bethany Lutheran Village
Project), (PNC Bank of Ohio LOC),
1,000,000 4.000% due 11/01/13++ 1,000,000
Cuyhoga (County of), Ohio, Industrial Development Revenue, (Pleasant
Lake Project), (Society National Bank),
995,000 4.150% due 05/01/11++ 995,000
Greene (County of), Ohio, Industrial Development Revenue, (AFC Stamping
Project), AMT, (Society National Bank LOC),
1,000,000 4.300% due 09/01/16++ 1,000,000
Trumbull (County of), Ohio, Industrial Development Revenue, (ATD
Corporation Project), AMT, (Society National Bank LOC),
1,000,000 4.300% due 08/01/10++ 1,000,000
- -----------------------------------------------------------------------------------------------------
3,995,000
- -----------------------------------------------------------------------------------------------------
OKLAHOMA -- 0.9%
Tulsa (County of), Oklahoma, Independent School District No. 5, GO,
(AMBAC Insured),
1,000,000 5.200% due 04/01/97 1,016,950
- -----------------------------------------------------------------------------------------------------
PENNSYLVANIA -- 4.6%
Chester (County of), Pennsylvania, Industrial Development Revenue,
(Keystone Foods Corporation Project), (Bank of Scotland LOC),
400,000 3.950% due 10/15/99+++ 400,000
Montgomery (County of), Pennsylvania, Higher Education and Health
Authority Hospital Revenue, (AMBAC Insured), (SBPA), (Swiss Bank),
2,400,000 4.100% due 09/01/18++ 2,400,000
Schuylkill (County of), Pennsylvania, Industrial Development Authority,
Industrial Development Revenue, (PNC Bank LOC):
(Bon-Ton Stores Project),
1,000,000 4.300% due 02/01/12++ 1,000,000
(Grumbacher & Son Project),
1,240,000 4.150% due 02/01/12++ 1,240,000
- -----------------------------------------------------------------------------------------------------
5,040,000
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
18
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL Value
AMOUNT NATIONS MUNICIPAL RESERVES (NOTE 1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES (continued)
SOUTH CAROLINA -- 0.9%
Cherokee (County of), South Carolina, Industrial Development Revenue,
(Holmberg Electric Corporation Project), (Wachovia Bank LOC),
$1,000,000 4.150% due 11/01/04++ $ 1,000,000
- -----------------------------------------------------------------------------------------------------
SOUTH DAKOTA -- 0.9%
South Dakota (State of), Economic Development Finance Authority,
Industrial Development Revenue, (Lomar Development Company Project),
Series B, AMT, (First Bank LOC),
1,000,000 4.500% due 08/01/08++ 1,000,000
- -----------------------------------------------------------------------------------------------------
TENNESSEE -- 5.0%
Chattanooga, Tennessee, Industrial Development Board, (Seaboard Farms
of Chattanooga Project), (Bank of Nova Scotia LOC),
2,000,000 4.100% due 06/01/04++ 2,000,000
Jefferson City, Tennessee, Industrial Development Board, (BA Property
Project), AMT, (American National Bank and Trust Company (Chicago)
LOC),
1,000,000 4.200% due 11/01/24++ 1,000,000
Knoxville, Tennessee, Refunding & Improvement Revenue, GO, Series A,
(MBIA Insured),
2,505,000 3.800% due 05/01/97 2,505,000
- -----------------------------------------------------------------------------------------------------
5,505,000
- -----------------------------------------------------------------------------------------------------
TEXAS -- 22.6%
Austin (County of), Texas, Industrial Development Corporation,
Industrial Development Revenue, (Justin Industries Inc. Project),
(Citibank (New York) LOC),
1,900,000 4.200% due 12/01/14++ 1,900,000
Dallas, Texas, GO, Pre-refunded,
1,000,000 7.000% due 02/15/97 1,041,423
El Paso, Texas, Housing Finance Corporation, (Viva Apartments Project),
AMT, (General Electric Capital Corporation LOC),
3,000,000 4.250% due 09/01/23# 3,000,000
Harris (County of), Texas, Health Facilities Development Corporation,
Hospital Revenue, (Methodist Hospital Project), (SBPA), (Morgan
Guaranty Trust Company),
600,000 4.100% due 12/01/25+ 600,000
Harris (County of), Texas, Industrial Development Corporation, PCR,
(Exxon Corporation Project), Series A,
2,000,000 4.000% due 03/01/24+ 2,000,000
Harris (County of), Texas, (Toll Road Multimode Project), Senior Lien,
Series A, Pre-refunded,
2,000,000 7.400% due 02/15/97 2,122,440
North Central, Texas, Health Facilities Development Corporation
Revenue, (Methodist Hospitals of Dallas Project), Series B, (MBIA
Insured), (SBPA), (Chemical Bank),
4,000,000 4.200% due 10/01/15+ 4,000,000
Nueces (County of), Texas, Health Facilities Development Corporation
Revenue, (Driscoll Foundation Children's Project), (Bank One of Texas
LOC),
1,200,000 4.150% due 07/01/15++ 1,200,000
</TABLE>
See Notes to Financial Statements.
19
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT NATIONS MUNICIPAL RESERVES (NOTE 1)
- -----------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES (continued)
TEXAS (continued)
<S> <C> <C>
Sabine River Authority, Texas, Pcr, Daily Collection, (Texas Utilities
Electric Company Project), Series A, (Ambac Insured), (Sbpa), (Bank Of
New York),
$3,200,000 4.100% due 03/01/26+ $ 3,200,000
Texas (State of), TRAN, Series A,
5,000,000 4.750% due 08/30/96 5,011,136
Trinity River, Texas, Industrial Development Authority, Industrial
Development Revenue Bond, (Toys "R" Us Project), Series 1994, (Bankers
Trust Company LOC),
1,000,000 3.775% due 11/01/14++ 1,000,000
- -----------------------------------------------------------------------------------------------------
25,074,999
- -----------------------------------------------------------------------------------------------------
UTAH -- 2.1%
Salt Lake City, Utah, Industrial Development Revenue, (SPS Technologies
Inc. Project), AMT, (National Australia Bank LOC),
1,000,000 4.300% due 12/01/12++ 1,000,000
Utah (County of), Utah, Industrial Development Revenue, (McWare Inc.
Project), (AmSouth Bank N.A. (Birmingham) LOC),
1,380,000 4.350% due 02/01/98++ 1,380,000
- -----------------------------------------------------------------------------------------------------
2,380,000
-----------------------------------------------------------------------------------------------------
VERMONT -- 1.9%
Vermont (State of), Education and Health Buildings, Finance Agency
Revenue, (VHA New England Project), Series F, (AMBAC Insured), (SBPA),
(First National Bank (Chicago) LOC),
2,100,000 4.100% due 12/01/25++ 2,100,000
- -----------------------------------------------------------------------------------------------------
VIRGINIA -- 3.0%
Albemarle (County of ),Virginia, Industrial Development Authority,
Health Services Revenue, (University of Virginia Services Foundation),
(First Union National Bank (North Carolina) LOC),
2,000,000 4.000% due 02/01/26++ 2,000,000
Bedford (County of ),Virginia, Industrial Development Revenue, (Nekoosa
Packaging Corporation Project), (Industrial Bank of Japan Ltd. LOC),
1,300,000 4.300% due 10/01/04++ 1,300,000
- -----------------------------------------------------------------------------------------------------
3,300,000
- -----------------------------------------------------------------------------------------------------
WASHINGTON -- 1.8%
Port Skagit (County of), Washington, Industrial Development Authority
Revenue, (Cascade Clear Water Company Project), AMT, (Key Bank of
Washington LOC),
1,000,000 4.300% due 12/01/20++ 1,000,000
Washington (State of), Public Power Supply Systems, (Nuclear Project
No. 3), Revenue Refunding,
1,000,000 6.700% due 07/01/96 1,004,379
- -----------------------------------------------------------------------------------------------------
2,004,379
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
20
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL Value
AMOUNT NATIONS MUNICIPAL RESERVES (NOTE 1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS AND NOTES (continued)
WEST VIRGINIA -- 0.8%
Ohio (County of), West Virginia, Industrial Development Revenue, (Ohio
Valley Clarksburg Drug Company Project), (PNC Bank LOC),
$ 900,000 3.800% due 12/01/01+++ $ 900,000
- -----------------------------------------------------------------------------------------------------
Total Municipal Bonds and Notes (Cost $109,087,208) 109,087,208
- -----------------------------------------------------------------------------------------------------
Shares
- -----------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS -- 0.1%
50,000 AIM Tax-Exempt Fund 50,000
80,000 Fidelity Institutional Tax-Exempt Cash Management Fund 80,000
- -----------------------------------------------------------------------------------------------------
Total Money Market Funds (Cost $130,000) 130,000
- -----------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (Cost $109,217,208*) 98.6% 109,217,208
- -----------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) 1.4%
Other assets 1,859,792
Dividends payable (300,922)
Shareholder servicing and distribution fees payable (Note 3) (13,891)
Administration fee payable (Note 2) (4,575)
Accrued Trustees' fees and expenses (Note 2) (2,732)
Custodian fees payable (Note 2) (2,355)
Accrued expenses and other payables (25,370)
- -----------------------------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (NET) 1,509,947
- -----------------------------------------------------------------------------------------------------
NET ASSETS 100.0% $110,727,155
=====================================================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
Capital Class Shares (formerly Class A Shares):
($48,482,184 / 48,482,689 shares outstanding) $ 1.00
=====================================================================================================
Liquidity Class Shares (formerly Class B Shares):
($6,733,502 / 6,733,572 shares outstanding) $ 1.00
=====================================================================================================
Adviser Class Shares (formerly Class C Shares):
($55,511,469 / 55,512,046 shares outstanding) $ 1.00
=====================================================================================================
* Aggregate cost for Federal tax purposes.
+ Variable rate demand notes are payable upon not more than one business
day's notice. The interest rate shown reflects the rate currently in
effect.
++ Variable rate demand notes are payable upon not more than seven calendar
days' notice. The interest rate shown reflects the rate currently in
effect.
+++ Variable rate demand notes are payable upon not more than thirty calendar
days' notice. The interest rate shown reflects the rate currently in
effect.
# "Put" bonds and notes have demand features which may be exercised within one
year. The interest rate shown reflects the rate currently in effect.
</TABLE>
See Notes to Financial Statements.
21
STATEMENT OF NET ASSETS (continued) NATIONS INSTITUTIONAL RESERVES
April 30, 1995
NATIONS MUNICIPAL RESERVES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Nations Municipal Reserves had the following industry concentrations greater
than 10% at April 30, 1996 (as a percentage of net assets) (unaudited):
Hospital Revenue 14.6%
Housing Revenue 11.9%
Abbreviations:
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
FGIC -- Federal Guaranty Insurance Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GO -- General Obligation Bonds
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PCR -- Pollution Control Revenue
SBPA -- Standby Bond Purchase Agreement
TAN -- Tax Anticipation Notes
TRAN -- Tax and Revenue Anticipation Notes
- -----------------------------------------------------------------------------------------------------
AT APRIL 30, 1996 NET ASSETS CONSIST OF:
Accumulated net realized loss on investments sold $ (1,152)
Paid-in capital 110,728,307
- -----------------------------------------------------------------------------------------------------
NET ASSETS $110,727,155
=====================================================================================================
</TABLE>
See Notes to Financial Statements.
22
STATEMENTS OF OPERATIONS NATIONS INSTITUTIONAL RESERVES
For the Year Ended April 30, 1996
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS
CASH TREASURY GOVERNMENT MUNICIPAL
RESERVES RESERVES RESERVES RESERVES
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Interest $29,165,735 $27,048,096 $7,270,018 $4,088,690
Dividends 979,787 925,290 139,716 113,807
- -----------------------------------------------------------------------------------------------------
Total Investment Income 30,145,522 27,973,386 7,409,734 4,202,497
- -----------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fee (Note 2) 1,577,889 1,472,072 391,486 331,160
Administration fee (Note 2) 525,963 490,691 130,495 110,387
Transfer agent fees (Note 2) 39,515 57,695 31,094 30,157
Custodian fees (Note 2) 83,469 131,982 27,189 22,832
Trustees' fees and expenses (Note 2) 28,954 28,469 6,551 5,172
Registration and filing fees 343,785 192,163 66,235 98,102
Legal and audit fees 65,323 88,812 22,132 30,619
Amortization of organization costs (Note
6) 5,213 8,341 -- 1,043
Other 37,834 39,271 9,802 8,285
- -----------------------------------------------------------------------------------------------------
Subtotal 2,707,945 2,509,496 684,984 637,757
Shareholder servicing and distribution
fees (Note 3):
Liquidity Class Shares 30,902 4,201 29 6,521
Adviser Class Shares 344,610 318,359 255,654 166,337
Fees waived and/or expenses reimbursed by
investment adviser and administrator (1,657,640) (1,532,474) (423,266) (416,450)
- -----------------------------------------------------------------------------------------------------
Total Expenses 1,425,817 1,299,582 517,401 394,165
- -----------------------------------------------------------------------------------------------------
Net Investment Income 28,719,705 26,673,804 6,892,333 3,808,332
- -----------------------------------------------------------------------------------------------------
Net Realized Loss on Investments (Note
1) (467) (21,910) (1,654) --
- -----------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
From Operations $28,719,238 $26,651,894 $6,890,679 $3,808,332
=====================================================================================================
</TABLE>
See Notes to Financial Statements.
23
STATEMENT OF CASH FLOWS NATIONS INSTITUTIONAL RESERVES
For the Year Ended April 30, 1996
<TABLE>
<CAPTION>
NATIONS TREASURY RESERVES
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating and investing activities:
Investment income received $ 20,708,777
Payment of operating expenses (1,108,644)
Net purchases of short-term investments (282,471,141)
- -----------------------------------------------------------------------------------------------------
Cash used by operating and investing activities $(262,871,008)
Cash flows from financing activities:
Proceeds from shares sold 2,324,121,214
Payments on shares redeemed (2,140,536,770)
Cash provided from reverse repurchase agreements 105,244,000
Distributions paid* (25,956,920)
- -----------------------------------------------------------------------------------------------------
Cash provided by financing activities 262,871,524
- -----------------------------------------------------------------------------------------------------
Increase in cash 516
Cash at beginning of year 18
- -----------------------------------------------------------------------------------------------------
Cash at end of year $ 534
======================================================================================================
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATIONS TO
CASH USED BY OPERATING AND
INVESTING ACTIVITIES:
Net increase in net assets resulting from operations $ 26,651,894
Increase in investments $ (288,411,854)
Increase in interest and dividends receivable (1,301,986)
Decrease in other assets 85,938
Increase in accrued expenses 105,000
- -----------------------------------------------------------------------------------------------------
Cash used by operating and investing activities $(262,871,008)
======================================================================================================
</TABLE>
* Non cash activities include reinvestment of dividends of $145,061.
See Notes to Financial Statements.
24
STATEMENTS OF CHANGES IN NET ASSETS NATIONS INSTITUTIONAL RESERVES
For the Year Ended April 30, 1996
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS
CASH TREASURY GOVERNMENT MUNICIPAL
RESERVES RESERVES RESERVES RESERVES
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income $ 28,719,705 $ 26,673,804 $ 6,892,333 $ 3,808,332
Net realized loss on investments (467) (21,910) (1,654) --
- -----------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 28,719,238 26,651,894 6,890,679 3,808,332
Distributions to shareholders from net
investment income:
Capital Class Shares (20,455,385) (19,934,505) (1,507,329) (1,408,074)
Liquidity Class Shares (1,102,564) (145,195) (989) (144,956)
Adviser Class Shares (7,161,756) (6,594,104) (5,384,015) (2,255,302)
Net increase/(decrease) in net assets from
shares of beneficial interest transactions
(Note 4):
Capital Class Shares 473,578,788 52,659,758 58,120,309 16,129,224
Liquidity Class Shares 35,445,236 11,130,769 127,332 4,142,504
Adviser Class Shares 350,127,136 119,938,978 8,921,865 (8,611,389)
- -----------------------------------------------------------------------------------------------------------
Net increase in net assets 859,150,693 183,707,595 67,167,852 11,660,339
Net Assets:
Beginning of year 181,748,071 308,129,627 99,250,423 99,066,816
- -----------------------------------------------------------------------------------------------------------
End of year $1,040,898,764 $491,837,222 $166,418,275 $110,727,155
===========================================================================================================
</TABLE>
See Notes to Financial Statements.
25
STATEMENTS OF CHANGES IN NET ASSETS NATIONS INSTITUTIONAL RESERVES
For the Year Ended April 30, 1995
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS
CASH TREASURY GOVERNMENT MUNICIPAL
RESERVES RESERVES RESERVES RESERVES
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income $ 8,016,550 $ 15,603,639 $ 5,980,505 $ 2,272,365
Net realized gain/(loss) on investments 465 -- (408) --
- -----------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 8,017,015 15,603,639 5,980,097 2,272,365
Distributions to shareholders from net
investment income:
Capital Class Shares (6,283,716) (14,047,209) (117,060) (1,076,833)
Liquidity Class Shares (527,606) (120,316) (2,762,795) (92,633)
Adviser Class Shares (1,205,320) (1,436,114) (3,100,650) (1,102,899)
Net increase/(decrease) in net assets from
shares of beneficial interest transactions
(Note 4):
Capital Class Shares 24,211,274 (86,813,062) (10,816,825) (3,345,368)
Liquidity Class Shares (69,785,073) (13,553,102) (259,835,082) (11,213,995)
Adviser Class Shares 47,683,400 55,764,669 99,247,546 64,123,435
- ----------------------------------------------------------------------------------------------------------
Net increase/(decrease) in net assets 2,109,974 (44,601,495) (171,404,769) 49,564,072
Net Assets:
Beginning of year 179,638,097 352,731,122 270,655,192 49,502,744
- -----------------------------------------------------------------------------------------------------------
End of year $ 181,748,071 $ 308,129,627 $ 99,250,423 $ 99,066,816
===========================================================================================================
</TABLE>
See Notes to Financial Statements.
26
FINANCIAL HIGHLIGHTS NATIONS INSTITUTIONAL RESERVES
For a Capital Class Share outstanding throughout each year.
<TABLE>
<CAPTION>
NATIONS CASH RESERVES
- ----------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
04/30/96 04/30/95 04/30/94 04/30/93 04/30/92 04/30/91*
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Capital Class Shares:
Net asset value, beginning of
year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.0570 0.0480 0.0283 0.0315 0.0492 0.0392
Dividends from net investment
income (0.0570) (0.0480) (0.0283) (0.0315) (0.0492) (0.0392)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==========================================================================================================
Total Return++ 5.84% 4.91% 2.87% 3.19% 5.03% 7.35%+
==========================================================================================================
Ratios to average net assets/
supplemental data:
Net assets, end of year
(000's) $607,643 $ 134,064 $ 109,852 $ 55,739 $ 100,943 $ 19,387
Ratio of operating expenses to
average net assets 0.20% 0.29% 0.45% 0.45% 0.45% 0.45%+
Ratio of net investment income
to average net assets 5.53% 4.96% 2.83% 3.15% 4.61% 7.04%+
Ratio of operating expenses to
average net assets without
waivers 0.51% 0.52% 0.56% 0.59% 0.74% 0.79%+
Ratio of net investment income
to average net assets without
waivers 5.22% 4.73% 2.72% 3.01% 4.32% 6.70%+
Net investment income per
share without waivers $ 0.0538 $ 0.0458 $ 0.0272 $ 0.0298 $ 0.0455 $ 0.0373
========================================================================================================
</TABLE>
* The Nations Cash Reserves Capital Class Shares commenced operations on
October 10, 1990.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated.
See Notes to Financial Statements.
27
FINANCIAL HIGHLIGHTS NATIONS INSTITUTIONAL RESERVES
For a Liquidity Class Share outstanding throughout each year.
<TABLE>
<CAPTION>
NATIONS CASH RESERVES
- ----------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
04/30/96 04/30/95 04/30/94 04/30/93 04/30/92 04/30/91*
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Liquidity Class Shares:
Net asset value, beginning of
year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------------
Net investment income 0.0555 0.0471 0.0273 0.0305 0.0482 0.0197
Dividends from net investment
income (0.0555) (0.0471) (0.0273) (0.0305) (0.0482) (0.0197)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==========================================================================================================
Total Return++ 5.70% 4.81% 2.77% 3.09% 4.92% 6.44%+
==========================================================================================================
Ratios to average net assets/
supplemental data:
Net assets, end of year
(000's) $ 35,447 $ 2 $ 69,786 $ 19,411 $ 4,776 $ 10,361
Ratio of operating expenses to
average net assets 0.35% 0.38% 0.55% 0.55% 0.55% 0.55%+
Ratio of net investment income
to average net assets 5.38% 4.87% 2.74% 2.96% 4.94% 6.41%+
Ratio of operating expenses to
average net assets without
waivers 0.66% 0.61% 0.65% 0.68% 0.85% 0.87%+
Ratio of net investment income
to average net assets without
waivers 5.07% 4.64% 2.64% 2.82% 4.64% 6.09%+
Net investment income per
share without waivers $ 0.0523 $ 0.0448 $ 0.0262 $ 0.0287 $ 0.0447 $ 0.0186
=========================================================================================================
</TABLE>
* The Nations Cash Reserves Liquidity Class Shares commenced operations
on January 9, 1991.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated.
See Notes to Financial Statements.
28
FINANCIAL HIGHLIGHTS NATIONS INSTITUTIONAL RESERVES
For an Adviser Class Share outstanding throughout each year.
<TABLE>
<CAPTION>
NATIONS CASH RESERVES
- ------------------------------------------------------------------------------------------------------
YEAR PERIOD
ENDED ENDED
04/30/96 04/30/95*
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Adviser Class Shares:
Net asset value, beginning of year $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------
Net investment income 0.0545 0.0316
Dividends from net investment income (0.0545) (0.0316)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00
======================================================================================================
Total Return++ 5.58% 3.20%
======================================================================================================
Ratios to average net assets/supplemental data:
Net assets, end of year (000's) $ 397,809 $ 47,682
Ratio of operating expenses to average net assets 0.45% 0.54%+
Ratio of net investment income to average net assets 5.28% 4.71%+
Ratio of operating expenses to average net assets without waivers 0.76% 0.77%+
Ratio of net investment income to average net assets without waivers 4.97% 4.48%+
Net investment income per share without waivers $ 0.0513 $ 0.0300
======================================================================================================
</TABLE>
* The Nations Cash Reserves Adviser Class Shares commenced operations on
September 22, 1994.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated.
See Notes to Financial Statements.
29
FINANCIAL HIGHLIGHTS NATIONS INSTITUTIONAL RESERVES
For a Capital Class Share outstanding throughout each year.
<TABLE>
<CAPTION>
NATIONS TREASURY RESERVES
- ------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
04/30/96 04/30/95 04/30/94 04/30/93 04/30/92 04/30/91*
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Capital Class Shares:
Net asset value, beginning of
year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.0556 0.0480 0.0298 0.0323 0.0481 0.0176
Net realized gain on investments -- -- -- 0.0001 0.0003 --
- ------------------------------------------------------------------------------------------------------
Total from investment operations 0.0556 0.0480 0.0298 0.0324 0.0484 0.0176
- ------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment
income (0.0556) (0.0480) (0.0298) (0.0323) (0.0481) (0.0176)
Distributions from net realized
gains -- -- -- (0.0001) (0.0003) --
- ------------------------------------------------------------------------------------------------------
Total distributions (0.0556) (0.0480) (0.0298) (0.0324) (0.0484) (0.0176)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======================================================================================================
Total Return++ 5.71% 4.91% 3.02% 3.29% 4.92% 5.89%+
======================================================================================================
Ratios to average net assets/
supplemental data:
Net assets, end of year
(000's) $ 304,342 $ 251,694 $ 338,504 $ 418,644 $ 19,587 $ 4,519
Ratio of operating expenses to
average net assets 0.20% 0.20% 0.20% 0.20% 0.26% 0.45%+
Ratio of net investment income
to average net assets 5.50% 4.79% 2.99% 2.99% 4.39% 5.85%+
Ratio of operating expenses to
average net assets without
waivers 0.51% 0.50% 0.52% 0.72% 1.06% 0.94%+
Ratio of net investment income
to average net assets without
waivers 5.19% 4.50% 2.67% 2.48% 3.59% 5.36%+
Net investment income per
share without waivers $ 0.0525 $ 0.0451 $ 0.0267 $ 0.0251 $ 0.0368 $ 0.0161
======================================================================================================
</TABLE>
* The Nations Treasury Reserves Capital Class Shares commenced
operations on January 11, 1991.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated.
See Notes to Financial Statements.
30
FINANCIAL HIGHLIGHTS NATIONS INSTITUTIONAL RESERVES
For a Liquidity Class Share outstanding throughout each year.
<TABLE>
<CAPTION>
NATIONS TREASURY RESERVES
- ---------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
04/30/96 04/30/95 04/30/94 04/30/93 04/30/92 04/30/91*
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Liquidity Class Shares:
Net asset value, beginning of
year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.0541 0.0462 0.0263 0.0288 0.0454 0.0173
Net realized gain on
investments -- -- -- 0.0001 0.0003 --
- -----------------------------------------------------------------------------------------------------
Total from investment
operations 0.0541 0.0462 0.0263 0.0289 0.0457 0.0173
- -----------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment
income (0.0541) (0.0462) (0.0263) (0.0288) (0.0454) (0.0173)
Distributions from net realized
gains -- -- -- (0.0001) (0.0003) --
- -----------------------------------------------------------------------------------------------------
Total distributions (0.0541) (0.0462) (0.0263) (0.0289) (0.0457) (0.0173)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=====================================================================================================
Total Return++ 5.57% 4.71% 2.67% 2.93% 4.64% 5.79%+
=====================================================================================================
Ratios to average net assets/
supplemental data:
Net assets, end of year
(000's) $ 11,804 $ 674 $ 14,227 $ 3,369 $ 2,807 $ 2,891
Ratio of operating expenses to
average net assets 0.35% 0.49% 0.55% 0.55% 0.52% 0.55%+
Ratio of net investment income
to average net assets 5.35% 4.50% 2.67% 2.89% 4.62% 5.75%+
Ratio of operating expenses to
average net assets without
waivers 0.66% 0.79% 0.87% 1.07% 1.32% 1.04%+
Ratio of net investment income
to average net assets without
waivers 5.04% 4.21% 2.35% 2.37% 3.82% 5.26%+
Net investment income per
share without waivers $ 0.0510 $ 0.0431 $ 0.0232 $ 0.0213 $ 0.0349 $ 0.0160
=====================================================================================================
</TABLE>
* The Nations Treasury Reserves Liquidity Class Shares commenced
operations on January 11, 1991.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated.
See Notes to Financial Statements.
31
FINANCIAL HIGHLIGHTS NATIONS INSTITUTIONAL RESERVES
For an Adviser Class Share outstanding throughout each year.
<TABLE>
<CAPTION>
NATIONS TREASURY RESERVES
- ------------------------------------------------------------------------------------------------------
YEAR PERIOD
ENDED ENDED
04/30/96 04/30/95*
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Adviser Class Shares:
Net asset value, beginning of year $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------
Net investment income 0.0531 0.0308
Dividends from net investment income (0.0531) (0.0308)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00
======================================================================================================
Total Return++ 5.45% 3.11%
======================================================================================================
Ratios to average net assets/supplemental data:
Net assets, end of year (000's) $ 175,691 $ 55,762
Ratio of operating expenses to average net assets 0.45% 0.45%+
Ratio of net investment income to average net assets 5.25% 4.54%+
Ratio of operating expenses to average net assets without waivers 0.76% 0.75%+
Ratio of net investment income to average net assets without waivers 4.94% 4.25%+
Net investment income per share without waivers $ 0.0500 $ 0.0288
======================================================================================================
</TABLE>
* The Nations Treasury Reserves Adviser Class Shares commenced
operations on September 22, 1994.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated.
See Notes to Financial Statements.
32
FINANCIAL HIGHLIGHTS NATIONS INSTITUTIONAL RESERVES
For a Capital Class Share outstanding throughout each year.
<TABLE>
<CAPTION>
NATIONS GOVERNMENT RESERVES
- ----------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
04/30/96 04/30/95 04/30/94 04/30/93 04/30/92 04/30/91*
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Capital Class Shares:
Net asset value, beginning of
year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.0556 0.0463 0.0278 0.0312 0.0343 0.0168
Net realized gain on
investments -- -- -- -- 0.0023 --
- ----------------------------------------------------------------------------------------------------
Total from investment
operations 0.0556 0.0463 0.0278 0.0312 0.0366 0.0168
- ----------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment
income (0.0556) (0.0463) (0.0278) (0.0312) (0.0343) (0.0168)
Distributions from net realized
gains -- -- -- -- (0.0023) --
- -----------------------------------------------------------------------------------------------------
Total distributions (0.0556) (0.0463) (0.0278) (0.0312) (0.0366) (0.0168)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=====================================================================================================
Total Return++ 5.71% 4.72% 2.82% 3.15% 3.71% 5.57%+
=====================================================================================================
Ratios to average net assets/
supplemental data:
Net assets, end of year
(000's) $ 58,121 $ 2 $ 10,819 $ 7,396 $ 1,800 $ 295
Ratio of operating expenses to
average net assets 0.20% 0.32% 0.45% 0.45% 0.45% 0.45%+
Ratio of net investment income
to average net assets 5.48% 4.35% 2.78% 3.07% 4.24% 5.89%+
Ratio of operating expenses to
average net assets without
waivers 0.53% 0.54% 0.51% 0.64% 0.76% 0.80%+
Ratio of net investment income
to average net assets without
waivers 5.15% 4.13% 2.72% 2.88% 3.93% 5.54%+
Net investment income per
share without waivers $ 0.0523 $ 0.0439 $ 0.0272 $ 0.0288 $ 0.0313 $ 0.0158
=====================================================================================================
</TABLE>
* The Nations Government Reserves Capital Class Shares commenced
operations on January 17, 1991.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated.
See Notes to Financial Statements.
33
FINANCIAL HIGHLIGHTS NATIONS INSTITUTIONAL RESERVES
For a Liquidity Class Share outstanding throughout each year.
<TABLE>
<CAPTION>
NATIONS GOVERNMENT RESERVES
- ------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
04/30/96 04/30/95 04/30/94 04/30/93 04/30/92 04/30/91*
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Liquidity Class Shares:
Net asset value, beginning of
year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.0537 0.0453 0.0268 0.0302 0.0461 0.0176
Net realized gain on
investments -- -- -- -- 0.0023 --
- ----------------------------------------------------------------------------------------------------
Total from investment
operations 0.0537 0.0453 0.0268 0.0302 0.0484 0.0176
- ----------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment
income (0.0537) (0.0453) (0.0268) (0.0302) (0.0461) (0.0176)
Distributions from net realized
gains -- -- -- -- (0.0023) --
- ----------------------------------------------------------------------------------------------------
Total distributions (0.0537) (0.0453) (0.0268) (0.0302) (0.0484) (0.0176)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=====================================================================================================
Total Return++ 5.51% 4.59% 2.71% 3.05% 4.70% 6.04%+
=====================================================================================================
Ratios to average net assets/
supplemental data:
Net assets, end of year
(000's) $ 129 $ 2 $ 259,836 $ 149,252 $ 12,486 $ 5,589
Ratio of operating expenses to
average net assets 0.35% 0.40% 0.55% 0.55% 0.55% 0.55%+
Ratio of net investment income
to average net assets 5.33% 4.27% 2.68% 2.71% 4.46% 5.86%+
Ratio of operating expenses to
average net assets without
waivers 0.68% 0.62% 0.61% 0.74% 0.86% 0.94%+
Ratio of net investment income
to average net assets without
waivers 5.00% 4.05% 2.62% 2.52% 4.18% 5.47%+
Net investment income per
share without waivers $ 0.0504 $ 0.0430 $ 0.0262 $ 0.0274 $ 0.0422 $ 0.0170
=====================================================================================================
</TABLE>
* The Nations Government Reserves Liquidity Class Shares commenced
operations on January 11, 1991.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated.
See Notes to Financial Statements.
34
FINANCIAL HIGHLIGHTS NATIONS INSTITUTIONAL RESERVES
For an Adviser Class Share outstanding throughout each year.
<TABLE>
<CAPTION>
NATIONS GOVERNMENT RESERVES
-------------------------------------------------------------------------------------------------------
YEAR PERIOD
ENDED ENDED
04/30/96 04/30/95*
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Adviser Class Shares:
Net asset value, beginning of year $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------------------------
Net investment income 0.0527 0.0299
Dividends from net investment income (0.0527) (0.0299)
- -------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00
=======================================================================================================
Total Return++ 5.39% 3.04%
=======================================================================================================
Ratios to average net assets/supplemental data:
Net assets, end of year (000's) $ 108,168 $ 99,246
Ratio of operating expenses to average net assets 0.45% 0.57%+
Ratio of net investment income to average net assets 5.23% 4.10%+
Ratio of operating expenses to average net assets without waivers 0.78% 0.79%+
Ratio of net investment income to average net assets without waivers 4.90% 3.88%+
Net investment income per share without waivers $ 0.0494 $ 0.0283
=======================================================================================================
</TABLE>
* The Nations Government Reserves Adviser Class Shares commenced
operations on September 22, 1994.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated.
See Notes to Financial Statements.
35
FINANCIAL HIGHLIGHTS NATIONS INSTITUTIONAL RESERVES
For a Capital Class Share outstanding throughout each year.
<TABLE>
<CAPTION>
NATIONS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
04/30/96 04/30/95 04/30/94 04/30/93 04/30/92 04/30/91*
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Capital Class Shares:
Net asset value, beginning of
year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------
Net investment income 0.0362 0.0313 0.0198 0.0231 0.0356 0.0245
Dividends from net investment
income (0.0362) (0.0313) (0.0198) (0.0231) (0.0356) (0.0245)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=====================================================================================================
Total Return++ 3.70% 3.19% 2.00% 2.34% 3.62% 4.62%+
=====================================================================================================
Ratios to average net assets/
supplemental data:
Net assets, end of year
(000's) $ 48,482 $ 32,353 $ 35,698 $ 26,145 $ 18,150 $ 5,064
Ratio of operating expenses to
average net assets 0.20% 0.23% 0.45% 0.45% 0.45% 0.45%+
Ratio of net investment income
to average net assets 3.61% 3.36% 1.98% 2.27% 3.38% 4.70%+
Ratio of operating expenses to
average net assets without
waivers and/or expenses
reimbursed 0.58% 0.59% 0.58% 0.66% 0.89% 0.99%+
Ratio of net investment income
to average net assets without
waivers and/or expenses
reimbursed 3.23% 2.99% 1.85% 2.05% 2.94% 4.16%+
Net investment income per
share without waivers and/or
expenses reimbursed $ 0.0324 $ 0.0279 $ 0.0186 $ 0.0203 $ 0.0296 $ 0.0216
=====================================================================================================
</TABLE>
* The Nations Municipal Reserves Capital Class Shares commenced
operations on October 23, 1990.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated.
See Notes to Financial Statements.
36
FINANCIAL HIGHLIGHTS NATIONS INSTITUTIONAL RESERVES
For a Liquidity Class Share outstanding throughout each year.
<TABLE>
<CAPTION>
NATIONS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
04/30/96 04/30/95 04/30/94 04/30/93 04/30/92 04/30/91*
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Liquidity Class Shares:
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of
year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------
Net investment income 0.0347 0.0304 0.0188 0.0221 0.0346 0.0478
Dividends from net investment
income (0.0347) (0.0304) (0.0188) (0.0221) (0.0346) (0.0478)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=====================================================================================================
Total Return++ 3.52% 3.09% 1.90% 2.24% 3.52% 4.60%+
=====================================================================================================
Ratios to average net assets/
supplemental data:
Net assets, end of year
(000's) $ 6,734 $ 2,591 $ 13,805 $ 10,766 $ 11,473 $ 8,927
Ratio of operating expenses to
average net assets 0.35% 0.33% 0.55% 0.55% 0.55% 0.55%+
Ratio of net investment income
to average net assets 3.46% 3.26% 1.86% 2.21% 3.36% 5.22%+
Ratio of operating expenses to
average net assets without
waivers and/or expenses
reimbursed 0.73% 0.69% 0.67% 0.76% 0.99% 0.81%+
Ratio of net investment income
to average net assets without
waivers and/or expenses
reimbursed 3.08% 2.89% 1.74% 2.00% 2.92% 4.96%+
Net investment income per
share without waivers and/or
expenses reimbursed $ 0.0309 $ 0.0270 $ 0.0176 $ 0.0192 $ 0.0285 $ 0.0455
=====================================================================================================
</TABLE>
* The Nations Municipal Reserves Liquidity Class Shares commenced
operations on June 1, 1990.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated.
See Notes to Financial Statements.
37
FINANCIAL HIGHLIGHTS NATIONS INSTITUTIONAL RESERVES
For an Adviser Class Share outstanding throughout each year.
<TABLE>
<CAPTION>
NATIONS MUNICIPAL RESERVES
- -----------------------------------------------------------------------------------------------------
YEAR PERIOD
ENDED ENDED
04/30/96 04/30/95*
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Adviser Class Shares:
Net asset value, beginning of year $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------
Net investment income 0.0337 0.0199
Dividends from net investment income (0.0337) (0.0199)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00
======================================================================================================
Total Return++ 3.43% 2.02%
======================================================================================================
Ratios to average net assets/supplemental data:
Net assets, end of year (000's) $ 55,511 $ 64,123
Ratio of operating expenses to average net assets 0.45% 0.48%+
Ratio of net investment income to average net assets 3.36% 3.11%+
Ratio of operating expenses to average net assets without waivers
and/or expenses reimbursed 0.83% 0.84%+
Ratio of net investment income to average net assets without waivers
and/or expenses reimbursed 2.98% 2.74%+
Net investment income per share without waivers and/or expenses
reimbursed $ 0.0299 $ 0.0176
======================================================================================================
</TABLE>
* The Nations Municipal Reserves Adviser Class Shares commenced
operations on September 22, 1994.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated.
See Notes to Financial Statements.
38
NOTES TO FINANCIAL STATEMENTS NATIONS INSTITUTIONAL RESERVES
1. Significant Accounting Policies.
NATIONS INSTITUTIONAL RESERVES (formerly known as The Capitol Mutual Funds) (the
"Trust") is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as an open-end management investment company. As of the date of
this report, the Trust currently offers four portfolios: Nations Cash Reserves
(formerly, Cash Reserves), Nations Treasury Reserves (formerly, Treasury
Reserves), Nations Government Reserves (formerly, Government Reserves) and
Nations Municipal Reserves (formerly, Tax Free Reserves) (individually, a
"Portfolio", collectively, the "Portfolios"). The Portfolios currently offer
three classes of shares: Capital Class Shares (formerly, Class A Shares),
Liquidity Class Shares (formerly, Class B Shares), and Adviser Class Shares
(formerly, Class C Shares). The Board of Trustees has authorized the issuance of
Market Class Shares (formerly, Class D Shares). As of April 30, 1996, no Market
Class Shares have been sold to the public. Matters affecting each class will be
voted on exclusively by its shareholders. 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 Portfolios in the preparation of their financial statements.
Securities Valuation -- The portfolio securities of each Portfolio are
valued on the basis of amortized cost, which approximates market value.
Amortized cost valuation involves valuing an instrument at its cost
initially and thereafter assuming a constant amortization to maturity of any
discount or premium, as long as the effect of fluctuating interest rates on
the market value of the instrument is not significant.
Repurchase Agreements -- Each Portfolio may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the
Portfolio takes possession of an underlying debt obligation subject to an
obligation of the seller to repurchase, and the Portfolio to resell, the
obligation at an agreed- upon price and time, thereby determining the yield
during the Portfolio's holding period. This arrangement results in a fixed
rate of return that is not subject to market fluctuations during the
Portfolio's holding period. The value of the collateral is at least equal at
all times to the total amount of the repurchase obligations, including
interest. In the event of counterparty default, the Portfolio has the right
to use the collateral to offset losses incurred. There is potential loss to
the Portfolio in the event the Portfolio is delayed or prevented from
exercising its rights to dispose of the collateral securities, including the
risk of a possible decline in the value of the underlying securities during
the period while the Portfolio seeks to assert its rights. Unless permitted
by the Securities and Exchange Commission, a Portfolio will not enter into
repurchase agreements with the investment adviser, the distributor or any of
their affiliates. The Portfolios' investment adviser, acting under the
supervision of the Board of Trustees, reviews the value of the collateral
and the creditworthiness of those banks and dealers with which the
Portfolios enter into repurchase agreements to evaluate potential risks.
Reverse Repurchase Agreements -- Nations Cash Reserves, Nations Treasury
Reserves and Nations Government Reserves may enter into reverse repurchase
agreements with institutions that the Portfolios' investment adviser has
determined are credit worthy. Under a reverse repurchase agreement, a
Portfolio sells securities and agrees to repurchase them at a mutually
agreed upon date and price. At the time the Portfolio enters into a reverse
repurchase agreement, it establishes a segregated account with its custodian
bank in which it will maintain cash, U.S. Government securities or other
liquid high grade debt obligations equal in value to its obligations arising
under the reverse repurchase agreement. Reverse repurchase agreements
involve the risk that the market value of the securities purchased with the
proceeds from the sale of securities received by the Portfolio may decline
below the price of the securities the Portfolio is obligated to repurchase.
Securities subject to repurchase under reverse repurchase agreements are
designated in the Statement of Net Assets.
At April 30, 1996, Nations Treasury Reserves had reverse repurchase
agreements outstanding as follows:
<TABLE>
<S> <C>
Maturity Amount $105,244,000
Maturity Date 07/01/96
Market Value of Assets Sold Under Agreements $104,458,110
</TABLE>
The average daily balance of reverse repurchase agreements outstanding
during the year ended April 30, 1996 was $90,066,658. Nations Cash Reserves
and Nations Government Reserves did not enter into any reverse repurchase
agreements during the year ended April 30, 1996.
39
NOTES TO FINANCIAL STATEMENTS (continued) NATIONS INSTITUTIONAL RESERVES
The proceeds received by Nations Treasury Reserves under the reverse
repurchase agreements were reinvested in a tri-party repurchase agreement.
Net fees earned during the year, representing the difference between
interest rates on the reverse repurchase and repurchase agreements, amounted
to $119,765 and have been included in interest income in the Statement of
Operations.
Securities Transactions and Investment Income -- Securities transactions are
accounted for on a trade date basis. Realized gains and losses are computed
on the specific identification of the securities sold. Interest income,
adjusted for amortization of discounts and premiums on investments to
maturity, is earned from settlement date and is recorded on the accrual
basis. Dividend income is recorded on the ex- dividend date. Each
Portfolio's investment income and realized gains and losses are allocated
among the classes based upon the relative average net assets of each class.
Dividends and Distributions to Shareholders -- It is the policy of each
Portfolio to declare dividends daily from net investment income and to pay
such dividends monthly. Each Portfolio will distribute net realized
short-term capital gains, unless offset by any available capital loss
carryforward, annually after the fiscal year in which earned or more
frequently to maintain a net asset value of $1.00 per share. 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 Portfolio level are determined in accordance with income
tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to timing differences and
differing characterization of distributions made by the Portfolio as a
whole.
Federal Income Tax -- Each Portfolio intends to qualify as a regulated
investment company by complying with the requirements of the Internal
Revenue Code of 1986, as amended, applicable to regulated investment
companies and by distributing substantially all of its earnings to its
shareholders. Therefore, no Federal income or excise tax provision is
required.
Expenses -- General expenses of the Trust are allocated to the Portfolios
based upon relative net assets. Operating expenses directly attributable to
a class of shares are charged to that class' operations. Expenses of each
Portfolio not directly attributable to the operations of any class of shares
are prorated among the classes to which the expense relates based on the
relative average net assets of each class.
Cash Flow Information -- Cash, as used in the Statement of Cash Flows, is
the amount of cash on hand at custodian banks. The Trust issues and redeems
shares, invests in securities, and distributes dividends from net investment
income and net capital gains (which are either paid in cash or reinvested at
the discretion of shareholders). These activities are reported in the
Statements of Changes in Net Assets. Information on cash payments is
presented in the Statement of Cash Flows.
2. Investment Advisory Fee, Administrative Fee and Related Party Transactions.
The Trust has, on behalf of its Portfolios, entered into an Investment Advisory
Agreement with NationsBanc Advisors, Inc. ("NBAI"), a wholly-owned subsidiary of
NationsBank, N.A. Prior to January 1, 1996, NationsBank, N.A. acted as
investment adviser. The investment advisory fees under the new Investment
Advisory Agreement are the same as those under the prior agreements.
Under the terms of the Investment Advisory Agreement, NBAI is entitled to
receive an advisory fee from the Portfolios equal to 0.30%, on an annualized
basis, of the average daily net assets of each Portfolio.
The Trust and NBAI have entered into a Sub-Advisory Agreement with TradeStreet
Investment Associates, Inc. ("TradeStreet"), a wholly-owned subsidiary of
NationsBank, N.A. Under the terms of the Sub-Advisory Agreement, TradeStreet is
entitled to receive from NBAI a sub-advisory fee for each Portfolio at the
annual rate of 0.033% of such Portfolio's average daily net assets.
Stephens Inc. ("Stephens") serves as the administrator of the Trust pursuant to
an Administration Agreement. First Data Investor Services Group, Inc., a
wholly-owned subsidiary of First Data Corporation, serves as the
co-administrator of the Trust pursuant to a Co-Administration Agreement.
Pursuant to the Administration and
40
NOTES TO FINANCIAL STATEMENTS (continued) NATIONS INSTITUTIONAL RESERVES
Co-Administration Agreements, the administrator and the co-administrator 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 the Portfolios on a combined
basis.
For the year ended April 30, 1996, Stephens earned $125,786 (after fee waivers)
from the Portfolios for its administration services.
The investment adviser, sub-adviser, administrator and co-administrator may,
from time to time, reduce their fees (either voluntarily or pursuant to
applicable state limitations). For the year ended April 30, 1996, the investment
adviser and administrator voluntarily waived fees and reimbursed expenses as
follows:
<TABLE>
<CAPTION>
FEES FEES EXPENSES
WAIVED WAIVED BY REIMBURSED
BY ADVISER ADMINISTRATOR BY ADVISER
---------- ------------- ----------
<S> <C> <C> <C>
Nations Cash Reserves $1,397,982 $259,658 --
Nations Treasury Reserves 1,308,255 224,219 --
Nations Government Reserves 365,169 58,097 --
Nations Municipal Reserves 331,160 47,362 $37,928
</TABLE>
No officer, director or employee of NationsBank, N.A., NBAI, TradeStreet,
Stephens or First Data Investor Services Group, Inc., or any affiliate thereof,
receives any compensation from the Trust for serving as Trustee, officer or
employee of the Trust. The Trust pays each Trustee an annual fee of $1,000
($3,000 for the Chairman of the Board), plus $500 per Portfolio 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 the
Trustees in attending such meetings.
The Portfolios' eligible Trustees may participate in a nonqualified deferred
compensation plan 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 each Portfolio's 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 participant or, if no funds are selected,
to the rate of return of Nations Treasury Fund, a fund of Nations Fund, Inc. The
expense for the deferred compensation plan is included in the "Trustees' fees
and expenses" line of the Statements of Operations.
NationsBank of Texas, N.A. acts as the custodian for the Portfolios and, for the
year ended April 30, 1996, earned $271,096 for providing such services. First
Data Investor Services Group, Inc. serves as the transfer agent for the
Portfolios' shares. Nations Bank of Texas, N.A. acts as the sub-transfer agent
for the Capital Class Shares of the Portfolios and, for the year ended April 30,
1996, earned approximately $20,974 for providing such services. Stephens acts as
distributor of the Portfolios' shares.
3. Shareholder Servicing and Distribution Plans.
The Trust has adopted a distribution plan ("Liquidity Class Shares Plan")
pursuant to Rule 12b-1 under the 1940 Act for the Liquidity Class Shares of the
Portfolios. Under the Liquidity Class Shares Plan, the Trust may reimburse
Stephens for actual expenses incurred by Stephens in connection with the
distribution of Liquidity Class Shares up to 0.30% of the average daily net
assets of the Liquidity Class Shares of the Portfolios. Currently, the Trust is
not reimbursing Stephens for any portion of such expenses for Liquidity Class
Shares. Unreimbursed expenses incurred by Stephens in a given year may not be
recovered by Stephens in subsequent years.
In addition, the Liquidity Class Shares Plan permits the Trust to pay Stephens
an annual fee of up to 0.30% of the average daily net assets of the Liquidity
Class Shares of Nations Cash Reserves, Nations Government Reserves, and Nations
Municipal Reserves and 0.35% of the average daily net assets of the Liquidity
Class Shares of Nations Treasury Reserves. Stephens may use this fee to
compensate certain financial institutions, with which it has entered into
servicing agreements, that provide administrative and/or distribution services
to Liquidity Class Shares shareholders. Currently, the Trust is not accruing
fees pursuant to the Liquidity Class Shares Plan.
41
NOTES TO FINANCIAL STATEMENTS (continued) NATIONS INSTITUTIONAL RESERVES
The Trust also has adopted shareholder servicing plans ("Servicing Plans") for
the Adviser Class Shares of the Portfolios. Effective January 12, 1996, the
Trust also has adopted Servicing Plans for the Liquidity Class Shares of the
Portfolios. Under the Servicing Plans, a Portfolio may pay servicing agents that
have entered into a shareholder servicing agreement with the Trust for certain
shareholder support services that are provided by the servicing agents to
holders of Adviser Class Shares and Liquidity Class Shares. Payments under the
Servicing Plans are accrued daily and paid monthly at rates that will not exceed
0.25%, on an annualized basis, of the average daily net assets of the Adviser
Class Shares and Liquidity Class Shares of the Portfolios. Fees paid pursuant to
the Servicing Plans are charged as expenses of Adviser Class Shares and
Liquidity Class Shares, respectively, of each Portfolio as accrued.
For the year ended April 30, 1996, the effective annualized rates paid by the
Portfolios, as a percentage of average daily net assets, pursuant to the plans
are as follows:
<TABLE>
<CAPTION>
LIQUIDITY CLASS ADVISER CLASS
LIQUIDITY CLASS SHARES SHARES
SHARES SERVICING SERVICING
PORTFOLIO PLAN PLAN PLAN
--------- ---- ---- ----
<S> <C> <C> <C>
Nations Cash Reserves 0.05% 0.10% 0.25%
Nations Treasury Reserves 0.07% 0.08% 0.25%
Nations Government Reserves 0.01% 0.14% 0.25%
Nations Municipal Reserves 0.07% 0.08% 0.25%
</TABLE>
A substantial portion of the fees paid pursuant to the plans described above are
paid to affiliates of NationsBank, N.A.
4. Shares of Beneficial Interest.
As of April 30, 1996, 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. Since the Portfolios have
sold and redeemed shares only at a constant net asset value of $1.00 per share,
the number of shares represented by such sales and redemptions is the same as
the amounts shown below for such transactions.
Changes in capital stock for each Portfolio were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1996 1995
---- ----
<S> <C> <C>
NATIONS CASH RESERVES:
Capital Class Shares:
Sold $1,186,447,620 $ 223,577,458
Issued as reinvestment of dividends 1,201,076 21,277
Redeemed (714,069,908) (199,387,461)
Net increase $ 473,578,788 $ 24,211,274
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1996 1995
---- ----
<S> <C> <C>
Liquidity Class Shares:
Sold $ 316,764,360 $ 60,277,929
Issued as reinvestment of dividends 842,517 66
Redeemed (282,161,641) (130,063,068)
Net increase/ (decrease) $ 35,445,236 $ (69,785,073)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30,
1996 1995*
---- -----
<S> <C> <C>
Adviser Class Shares:
Sold $ 764,101,646 $ 167,716,490
Issued as reinvestment of dividends 78,897 65
Redeemed (414,053,407) (120,033,155)
Net increase $ 350,127,136 $ 47,683,400
</TABLE>
- ----------
* The Nations Cash Reserves Adviser Class Shares commenced operations on
September 22, 1994.
42
NOTES TO FINANCIAL STATEMENTS (continued) NATIONS INSTITUTIONAL RESERVES
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1996 1995
---- ----
<S> <C> <C>
NATIONS TREASURY RESERVES:
Capital Class Shares:
Sold $ 1,731,309,808 $ 1,677,277,600
Redeemed (1,678,650,050) (1,764,090,662)
Net increase/ (decrease) $ 52,659,758 $ (86,813,062)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1996 1995
---- ----
<S> <C> <C>
Liquidity Class Shares:
Sold $ 23,746,115 $ 17,013,126
Issued as reinvestment of dividends 113,655 11,987
Redeemed (12,729,001) (30,578,215)
Net increase/(decrease) $ 11,130,769 $ (13,553,102)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30,
1996 1995*
---- -----
<S> <C> <C>
Adviser Class Shares:
Sold $ 569,065,291 $ 152,926,823
Issued as reinvestment of dividends 31,406 63
Redeemed (449,157,719) (97,162,217)
Net increase $ 119,938,978 $ 55,764,669
</TABLE>
- ----------
* The Nations Treasury Reserves Adviser Class Shares commenced operations on
September 22, 1994.
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1996 1995
---- ----
<S> <C> <C>
NATIONS GOVERNMENT RESERVES:
Capital Class Shares:
Sold $154,655,322 $ 4,497,797
Issued as reinvestment of dividends 30,543 53
Redeemed (96,565,556) (15,314,675)
Net increase/(decrease) $ 58,120,309 $ (10,816,825)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1996 1995
---- ----
<S> <C> <C>
Liquidity Class Shares:
Sold $ 346,343 $ 243,816,794
Issued as reinvestment of dividends 989 424
Redeemed (220,000) (503,652,300)
Net increase/(decrease) $ 127,332 $(259,835,082)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30,
1996 1995*
---- -----
<S> <C> <C>
Adviser Class Shares:
Sold $ 327,190,413 $ 328,245,819
Issued as reinvestment of dividends 14,421 21
Redeemed (318,282,969) (228,998,294)
Net increase $ 8,921,865 $ 99,247,546
</TABLE>
- ----------
* The Nations Government Reserves Adviser Class Shares commenced operations on
September 22, 1994.
43
NOTES TO FINANCIAL STATEMENTS (continued) NATIONS INSTITUTIONAL RESERVES
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1996 1995
---- ----
<S> <C> <C>
NATIONS MUNICIPAL RESERVES:
Capital Class Shares:
Sold $ 176,646,799 $ 48,532,498
Redeemed (160,517,575) (51,877,866)
Net increase/(decrease) $ 16,129,224 $ (3,345,368)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1996 1995
---- ----
<S> <C> <C>
Liquidity Class Shares:
Sold $ 60,121,685 $ 31,268,170
Issued as reinvestment of dividends 135,917 21,817
Redeemed (56,115,098) (42,503,982)
Net increase/(decrease) $ 4,142,504 $ (11,213,995)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30,
1996 1995*
---- -----
<S> <C> <C>
Adviser Class Shares:
Sold $ 265,087,129 $ 237,647,735
Issued as reinvestment of dividends 71 40
Redeemed (273,698,589) (173,524,340)
Net increase/(decrease) $ (8,611,389) $ 64,123,435
</TABLE>
- ----------
* The Nations Municipal Reserves Adviser Class Shares commenced operations on
September 22, 1994.
5. Restricted Security.
The following security is illiquid and restricted as to resale and, accordingly,
is valued at fair value in good faith by or under the direction of the Trust's
Board of Trustees taking into consideration such factors as the Board deems
appropriate.
The following table shows the acquisition date, the par value, value per unit,
value, the percentage of Nations Cash Reserves total net assets that the
security comprises as well as the aggregate cost of such security at April 30,
1996.
<TABLE>
<CAPTION>
ACQUISITION VALUE 04/30/96 PERCENTAGE OF
SECURITY DATE PAR VALUE PER UNIT VALUE NET ASSETS COST
-------- ---- --------- -------- ----- ---------- ----
<S> <C> <C> <C> <C> <C> <C>
Sherwood Medical Company,
Discount note 01/31/96 $8,000,000 $1.00 $7,967,582 0.77% $7,967,582
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Certain securities may be sold only pursuant to certain legal restrictions, and
may be difficult to sell. No Portfolio will invest more than 10% of the value of
its respective net assets in securities that are illiquid.
6. Organization Costs.
Expenses incurred in connection with the organization of each of the Portfolios,
including the fees and expenses of registering and qualifying its shares for
distribution under Federal and state securities regulations, are being amortized
on a straight-line basis over a period of five years from commencement of
operations of each Portfolio, respectively. At April 30, 1996, all such costs
have been fully amortized for all the Portfolios.
44
NOTES TO FINANCIAL STATEMENTS (continued) NATIONS INSTITUTIONAL RESERVES
7. Concentration of Credit.
The Portfolios invest primarily in money market instruments maturing in one year
or less whose ratings are within the highest ratings categories by a nationally
recognized statistical rating agency or, if not rated, are believed by NBAI or
TradeStreet to be of comparable quality. The ability of the issuers of the
securities held by the Portfolios to meet their obligations may be affected by
economic and political developments in a specific industry, state or region.
8. Capital Loss Carryforward.
As of April 30, 1996, the Portfolios had available for Federal income tax
purposes unused capital losses as follows:
<TABLE>
<CAPTION>
EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING
IN 1998 IN 1999 IN 2000 IN 2001 IN 2002 IN 2003 IN 2004
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Nations Cash Reserves -- $270 $2,594 $850 $ 574 -- --
Nations Treasury Reserves -- -- -- -- 9,255 $3,324 --
Nations Government Reserves -- -- -- -- -- 408 $1,654
Nations Municipal Reserves $72 -- -- -- -- 1,080 --
</TABLE>
Under current tax law, capital losses realized after October 31 may be deferred
and treated as occuring on the first day of the following fiscal year. For the
fiscal year ended April 30, 1996, the following Portfolios have elected to defer
losses occurring between November 1, 1995 and April 30, 1996 under these rules,
as follows:
<TABLE>
<CAPTION>
CAPITAL
LOSSES
DEFERRED
--------
<S> <C>
Nations Cash Reserves $ 467
Nations Treasury Reserves 21,910
</TABLE>
45
REPORT OF INDEPENDENT ACCOUNTANTS NATIONS INSTITUTIONAL RESERVES
To the Shareholders and Trustees of Nations Institutional Reserves:
In our opinion, the accompanying statements of net assets and the related
statements of operations, the statement of cash flows for Nations Treasury
Reserves, the statements of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of Nations Cash
Reserves, Nations Treasury Reserves, Nations Government Reserves and Nations
Municipal Reserves (each a series of Nations Institutional Reserves (formerly
known as The Capitol Mutual Funds), hereafter referred to as the "Trust") at
April 30, 1996, the results of each of their operations, the cash flows for
Nations Treasury Reserves, 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 April 30, 1996 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
June 19, 1996
46
TAX INFORMATION (UNAUDITED) NATIONS INSTITUTIONAL RESERVES
For the year ended April 30, 1996, all of the distributions made from Nations
Municipal Reserves are tax exempt for regular Federal income tax purposes. A
portion of this income may be subject to Federal Alternative Minimum Tax.
47
NATIONS BULK RATE
FUND U.S. POSTAGE
P.O. Box 34602 PAID
Charlotte, NC 28234-4602 BOSTON, MA
Toll Free 1-800-982-2271 PERMIT NO.
54201
AR7 CN-96335-596
