REGIONS FUNDS, 485BPOS, 1999-01-29

REGIONS FUNDS
485BPOS, 1999-01-29

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1933 Act File No. 33-44737
1940 Act File No. 811-6511

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
------

Pre-Effective Amendment No. ........................

Post-Effective Amendment No. 16 ....................... X
-------- ------

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

Amendment No. 17 ...................................... X

REGIONS FUNDS

(formerly, First Priority Funds)

(Exact Name of Registrant as Specified in Charter)

5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7010

(Address of Principal Executive Offices)

(412) 288-1900

(Registrant's Telephone Number)

John W. McGonigle, Esquire,
Federated Investors Tower,

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
_X on January 31, 1999 pursuant to paragraph (b)

60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
75 days after filing pursuant to paragraph (a)(ii)
on _________________ pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Copies To:

Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP

2101 L Street, N.W.
Washington, D.C. 20037

Regions
Family of Funds

Combined Prospectus

Dated January 31, 1999

FIRST PRIORITY FUNDS BECAME REGIONS FUNDS
EFFECTIVE MAY 15, 1998

[Regions Funds logo]

(Formerly, First Priority Funds)
Trust Shares
Investment Shares

. Regions Treasury Money Market Fund . Regions Balanced Fund
. Regions Limited Maturity Government Fund . Regions Value Fund
. Regions Fixed Income Fund . Regions Growth Fund
. Regions Aggressive Growth Fund

Table of Contents

Risk/Return Profile 2
Regions Funds 3
What Are the Fund's Fees and Expenses? 10
Main Risks of Investing in the Regions Funds 12
Principal Strategies 14
Securities Descriptions 16
How to Buy Shares 18
Distribution of Fund Shares 20
How to Exchange Shares 21
How to Redeem Shares 22
Account and Share Information 23
Regions Funds Information 25
Portfolio Managers 26
Financial Highlights 30

Shares of the Regions Funds, like shares of all mutual funds, are not bank
deposits, federally insured, or guaranteed, and may lose value.

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.

Prospectus

January 31, 1999

Risk/Return Profile

The Regions Funds offer investment opportunities to a wide range of investors,
from investors with short-term goals and wish to take little investment risk to
those investors with long-term goals willing to bear the risks of the stock
market for potentially greater rewards. The Capital Management Group, a unit of
the Trust Division of Regions Bank (Adviser), is the investment adviser to the
Regions Funds.

Principal Risks of the Funds

Fixed

Equity Income Mortgage Money
Securities Securities Backed Securities Concentration Market

Risks Risks Risks Risks Risks

<S> <C> <C> <C> <C> <C>
Regions Treasury Money Market Fund X
Regions Limited Maturity Government X X
Fund

Regions Fixed Income Fund X X X
Regions Balanced Fund X X X
Regions Value Fund X X X
Regions Growth Fund X X
Regions Aggressive Growth Fund X X X
- ----------------------------------------------------------------------------------------------------------
</TABLE>

A completed description of these risks can be found in the "Main Risks of
Investing in the Regions Funds" section.

Regions Funds

Treasury Money Market Fund

[Graphic -- See attached appendix]

Goal. To provide current income consistent with stability of principal and
liquidity.
Strategy. The Fund invests in U.S. Treasury obligations maturing in 397 days or
less. The Fund will comply with the requirements of Rule 2a-7 under the
Investment Company Act of 1940, which sets forth portfolio quality and
diversification restrictions for money market mutual funds. Although the Fund
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Fund.

Annual Total Return (calendar years 1993-1998)
[Graphic -- See attached appendix]

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Trust Shares class
total returns on a yearly basis.

Within the period shown in the chart, the Fund's Trust Shares class highest
quarterly return was 1.40% (quarter ended June 30, 1995). Its lowest quarterly
return was 0.66% (quarter ended June 30, 1993).

7-Day Net Yield

<S> <C>
7-Day Net Yield (as of 12/31/98)**
Trust Shares 3.91%
Investment Shares 3.51%
- -------------------------------------------------------------------------------
</TABLE>

Average Annual Total Return through 12/31/98

Calendar Period Trust Shares Investment Shares
<S> <C> <C>
1 Year 4.64% 4.22%
5 Years 4.70% 4.28%
Start of Performance* 4.25% 3.84%
- --------------------------------------------------------------------------------
</TABLE>

* The start of performance date for the Trust Shares and Investment Shares was
April 13, 1992.

** Investors may call the Fund to acquire the current 7-Day Net Yield by calling
1-800-433-2829.

While past performance does not necessarily predict future performance, this
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
rewards.

Limited Maturity Government Fund

[Graphic -- See attached appendix]
Goal. To achieve current income.

Strategy. The Fund invests primarily in securities that are guaranteed as to
payment of principal and interest by the U.S. government or U.S. government
agencies or instrumentalities. Under normal circumstances, at least 65% of the
Fund's total assets will be invested in such securities. The net asset value of
the Fund is expected to fluctuate with changes in interest rates and bond market
conditions. The Adviser will attempt to minimize principal fluctuation and
increase return through, among other things, diversification, careful credit
analysis and security selection, and adjustments of the Fund's average portfolio
maturity. The Fund intends to maintain an average dollar-weighted maturity
between one and one-half and three years, although the Fund may purchase
individual securities with longer maturities.

Annual Total Return (calendar years 1994-1998)

[Graphic -- See attached appendix]

The bar chart shows the variability of the Fund's Investment Shares class total
returns on a yearly basis.

The Fund's Investment Shares are sold subject to a contingent deferred sales
charge (load). The total returns displayed above are based upon the net asset
value. Total returns reflecting the payment of the contingent deferred sales
charge assuming redemption at the end of the period would be lower.

Within the period shown in the chart, the Fund's Investment Shares class highest
quarterly return was 3.39% (quarter ended June 30, 1998). Its lowest quarterly
return was -0.80% (quarter ended March 31, 1994).

Average Annual Return for the Fund's Trust Shares and Investment Shares compared
to the Merrill Lynch 1-3 Year Government/Corporate Index (MLI-3), a broad-based
market index.

Average Annual Total Return through 12/31/98

Calendar Period Trust Shares Investment Shares ML 1-3
<S> <C> <C> <C>
1 Year N/A 2.86% 7.01%
5 Years N/A 5.12% 6.04%
Start of Performance* N/A 5.08% 6.02%

- --------------------------------------------------------------------------------
</TABLE>

* The start of performance dates for the Trust Shares and Investment Shares were
May 20, 1998, and December 12, 1993, respectively.

Fixed Income Fund

[Graphic -- See attached appendix]

Goal. To achieve current income with a secondary goal of capital appreciation.
Strategy. The Fund invests only in high grade debt securities under normal
circumstances, at least 65% of the Fund's total assets will be invested in
fixed-rate bonds and debentures. The Fund also invests in U.S. government
securities. The Fund selects securities based upon fundamental macroeconomic,
credit and market analysis. Normally, the Fund's average maturity will be
between three and ten years.

Annual Total Return (calendar years 1993-1998)
[Graphic -- See attached appendix]

The bar chart shows the variability of the Fund's Investment Shares class total
returns on a yearly basis.

Within the period shown in the chart, the Fund's Investment Shares class highest
quarterly return was 6.26% (quarter ended June 30, 1995). Its lowest quarterly
return was -3.36% (quarter ended March 31, 1994).

Average Annual Return for the Fund's Trust Shares and Investment Shares compared
to the Merrill Lynch 1-10 Year Government/Corporate Index (MLI-10), a broad-
based market index.

Average Annual Total Return through 12/31/98

Calendar Period Trust Shares Investment Shares ML 1-10
<S> <C> <C> <C>
1 Year N/A 3.79% 8.46%
5 Years N/A 5.70% 6.65%
Start of Performance* N/A 6.89% 7.41%

- --------------------------------------------------------------------------------
</TABLE>

* The start of performance dates for the Trust Shares and Investment Shares were
May 20, 1998, and April 20, 1992, respectively.

Balanced Fund

[Graphic -- See attached appendix]

Goal. To provide total return through capital appreciation, dividends and
interest.
Strategy. The Fund invests primarily in common and preferred stock, convertible
securities, and fixed income securities. Under normal market conditions, the
Fund will maintain at least 25% of its assets in fixed-income senior securities
and at least 25% of its assets in common stocks. The remaining 50% may be
invested in these securities, as well as American Depositary Receipts (ADRs),
collateralized mortgage obligations (CMOs), U.S. government securities, or other
investments as determined by the Adviser based on the Adviser's assessment of
the economy and the markets. The Adviser may shift between types of investments
to attempt to maximize returns or reduce risk to the Fund.

Annual Total Return (calendar years 1995-1998)

[Graphic -- See attached appendix]

The bar chart shows the variability of the Fund's Investment Shares class total
returns on a yearly basis.

Within the period shown in the chart, the Fund's Investment Shares class highest
quarterly return was 10.40% (quarter ended June 30, 1997). Its lowest quarterly
return was -2.43% (quarter ended September 30, 1998).

Average Annual Return for the Fund's Trust Shares and Investment Shares compared
to the S&P 500 (S&P 500) and Lehman Brothers Government/Corporate Index (LBGCI),
two separate broad-based market indexes and to the S&P 500/Lehman Brothers
Government/Corporate Index (S&P 500/LB), a blended index comprised of 50% S&P
500 and 50% LBGCI.

Average Annual Total Return through 12/31/98

Trust Investment S&P S&P

Calendar Period Shares Shares 500/LB 500 LBGCI
<S> <C> <C> <C> <C> <C>
1 Year N/A 16.75% 19.03% 28.59% 9.47%
Start of
Performance* N/A 17.63% 20.35% 30.51% 10.19%

- -------------------------------------------------------------------------------
</TABLE>

* The start of performance dates for the Trust Shares and Investment Shares were
May 20, 1998, and December 19, 1994, respectively.

Value Fund

[Graphic -- See attached appendix]

Goal. To provide income and growth of capital.

Strategy. The Fund invests in income-producing equity securities such as common
and preferred stock, warrants, and securities (including debt securities)
convertible into common stocks. Generally, these stocks are issued by companies
with a market capitalization of $1 billion or more. The Fund's investment
approach is based on the conviction that over the long term the economy will
continue to expand and develop and that this economic growth will be reflected
in the growth of the revenues and earnings of major corporations.

The table shows the Fund's average annual returns compared to the S&P / Barra
Value, a broad-based market index.

Annual Total Return (calendar years 1995-1998)
[Graphic -- See attached appendix]

The bar chart shows the variability of the Fund's Investment Shares class total
returns on a yearly basis.

Within the period shown in the chart, the Fund's Investment Shares class highest
quarterly return was 15.60% (quarter ended June 30, 1997). Its lowest quarterly
return was -9.36% (quarter ended September 30, 1998).

Average Annual Return for the Fund's Trust Shares and Investment Shares compared
to the S&P / Barra Value Index (S&P / Barra Value), a broad-based market index.

Average Annual Total Return through 12/31/98

Calendar Period Trust Shares Investment Shares S&P/Barra Value
<S> <C> <C> <C>
1 Year N/A 9.79% 12.47%
Start of Performance* N/A 20.70% 22.28%

- --------------------------------------------------------------------------------
</TABLE>

* The start of performance dates for the Trust Shares and Investment Shares were
May 20, 1998, and December 19, 1994, respectively.

Growth Fund

[Graphic - see attached appendix]

Goal. To provide growth of capital and income.

Strategy. The Fund invests in common stock of companies with market
capitalizations of at least $250 million. Most stocks in which the Fund invests
will be of companies with a market capitalization of $10 billion or more. The
Fund's investment approach is based on the conviction that over the long term
the economy will continue to expand and develop and that this economic growth
will be reflected in the growth of the revenues and earnings of major
corporations.

Annual Total Return (calendar years 1993-1998)
[Graphic -- See attached appendix]

The bar chart shows the variability of the Fund's Investment Shares class total
returns on a yearly basis.

Within the period shown in the chart, the Fund's Investment Shares class highest
quarterly return was 23.93% (quarter ended December 31, 1998). Its lowest
quarterly return was -7.68% (quarter ended September 30, 1998).

Average Annual Return for the Fund's Trust Shares and Investment Shares compared
to the S&P 500 Index (S&P 500), a broad-based market index.

Average Annual Total Return through 12/31/98

Calendar Period Trust Shares Investment Shares S&P 500
<S> <C> <C> <C>
1 Year N/A 38.50% 28.15%
5 Years N/A 22.45% 23.98%
Start of Performance* N/A 18.26% 20.41%

- -------------------------------------------------------------------------------
</TABLE>

* The start of performance dates for the Trust Shares and Investment Shares were
May 20, 1998, and April 20, 1992, respectively.

Aggressive Growth Fund

[Graphic -- See attached appendix]
Goal. To provide long-term capital appreciation.

Strategy. The Fund invests primarily in equity securities of companies with
small to medium-sized market capitalizations of $5 billion or less. The Fund may
also invest in larger companies that, in the opinion of the Adviser, possess
attractive appreciation potential. Under normal market conditions, the Fund
intends to invest in equity securities of companies with prospects for above-
average growth in revenues and/or earnings.

Performance Information for Predecessor Collective Trust Fund

The Fund is the successor to the portfolio of a collective trust fund managed by
the Adviser since June 30, 1993. It is anticipated that, at the Fund's
commencement of operations (expected to take place on or about March 12, 1999),
the assets from the collective trust fund will be transferred to the Fund in
exchange for Fund shares. The performance data includes the performance of the
collective trust fund for periods before the Fund's registration statement
became effective. The past performance data is not necessarily indicative of the
Fund's future performance. The collective trust fund was not registered under
the Investment Company Act of 1940 ("1940 Act") and therefore was not subject to
certain investment restrictions that are imposed by the 1940 Act. If the
collective trust fund had been registered under the 1940 Act, the performance
may have been adversely effected.

Annual Total Return (calendar years 1994-1998)
[Graphic -- See attached appendix]

The bar chart shows the variability of the Predecessor Collective Trust Fund's
total returns on a yearly basis. The total returns do not reflect projected Fund
expenses before waivers.

Within the period shown in the chart, the Predecessor Collective Trust Fund's
highest quarterly return was 29.64% (quarter ended December 31, 1998). Its
lowest quarterly return was -8.26 (quarter ended June 30, 1994.

[Graphic -- See attached appendix]
What Are the FUND'S FEES AND EXPENSES?

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Regions Funds.

Treasury Money Limited Maturity Fixed Income
Market Fund Government Fund Fund

Trust Investment Trust Investment Trust Investment
Shares Shares Shares Shares Shares Shares

<S> <C> <C> <C> <C> <C> <C>
Shareholder Fees

Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on

Purchases (as a percentage of offering price) None None None None None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price

or redemption proceeds, as applicable) None None None 3.00% None 3.00%
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends (and other Distributions)

(as a percentage of offering price) None None None None None None
Redemption Fees (as a percentage of
amount redeemed, if applicable) None None None None None None
Exchange Fee None None None None None None
Annual Fund Operating Expenses (Before Waivers) (1)
Expenses That Are Deducted From Fund Assets
(as a percentage of average net assets)

Management Fee (2) 0.50% 0.50% 0.70% 0.70% 0.75% 0.75%
Distribution (12b-1) Fee (3) None 0.40% None 0.25% None 0.30%
Shareholder Services Fee None None None 0.25% None 0.25%
Other Expenses (4) 0.19% 0.19% 0.33% 0.33% 0.23% 0.23%
Total Annual Fund Operating Expenses 0.69% 1.09% 1.03% 1.53% 0.98% 1.53%
- -------------------------------------------------------------------------------------------------------------------------------

Balanced
Fund

Trust Investment
Shares Shares

Shareholder Fees

Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on

Purchases (as a percentage of offering price) None None
Maximum Deferred Sales Charge (Load)

(as a percentage of original purchase price

or redemption proceeds, as applicable) None 3.00%

Maximum Sales Charge (Load) Imposed on
Reinvested Dividends (and other Distributions)

(as a percentage of offering price) None None

Redemption Fees (as a percentage of

amount redeemed, if applicable) None None

Exchange Fee None None
Annual Fund Operating Expenses (Before Waivers) (1)
Expenses That Are Deducted From Fund Assets
(as a percentage of average net assets)
Management Fee (2) 0.80% 0.80%
Distribution (12b-1) Fee (3) None 0.30%
Shareholder Services Fee None 0.25%
Other Expenses (4) 0.30% 0.30%
Total Annual Fund Operating Expenses 1.10% 1.65%
- --------------------------------------------------------------------------------------

</TABLE>

(1) Although not contractually obligated to do so, the adviser and distributor
expect to waive certain amounts during the fiscal year ended November 30,
1999. These are shown below along with the net expenses the Fund expects to
actually pay for the fiscal year ended November 30, 1999.

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Waivers of Fund Expenses 0.25% 0.40% 0.20% 0.45% 0.25% 0.55% 0.05% 0.35%
Total Actual Annual Fund Operating Expenses 0.44% 0.69% 0.83% 1.08% 0.73% 0.98% 1.05% 1.30%
</TABLE>

(2) The adviser expects to voluntarily waive a portion of the management fee
during the year ended November 30, 1999. The adviser may terminate this
anticipated voluntary waiver at any time. The management fee is expected to
be 0.25%, 0.50%, 0.50%, and 0.75% for the Treasury Money Market Fund,
Limited Maturity Government Fund, Fixed Income Fund, and Balanced Fund,
respectively for the fiscal year ended November 30, 1999.

(3) The Limited Maturity Government Fund, Fixed Income Fund, and Balanced Fund
did not pay or accrue the distribution (12b-1) fee during the year ended
November 30, 1998. The Limited Maturity Government Fund, Fixed Income Fund,
and Balanced Fund do not expect to pay or accrue the distribution (12b-1)
fee during the year ended November 30, 1999.

(4) Other Expenses reflect fees which the Treasury Money Market Fund, Limited
Maturity Government Fund, Fixed Income Fund, and Balanced Fund expect to pay
and accrue during the year ended November 30, 1999.

Example

This Example is intended to help you compare the cost of investing in the
Regions Funds with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Trust Shares and
Investment Shares for the time periods indicated and then redeem all of your
shares at the end of those periods. Expenses assuming no redemption for the
Investment Shares are also shown. The Example also assumes the your investment
has a 5% return each year and that the Fund's Trust Shares and Investment Shares
operating expenses are before waivers as shown in the table and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:

Share Class 1 Year 3 Years 5 Years 10 Years
Trust Shares
<S> <C> <C> <C> <C>
Treasury Money Market Fund $ 70 $221 $384 $ 859
Limited Maturity Government Fund 105 328 569 1259
Fixed Income Fund 100 312 542 1201
Balanced Fund 112 350 606 1340
- -----------------------------------------------------------------------------------
</TABLE>

Share Class 1 Year 3 Years 5 Years 10 Years
Investment Shares
<S> <C> <C> <C> <C>
Treasury Money Market Fund $111 $347 $601 $1329

Limited Maturity Government Fund:

Expenses assuming redemption 466 594 834 1824
Expenses assuming no redemption 156 483 834 1824
Fixed Income Fund:

Expenses assuming redemption 466 594 834 1824
Expenses assuming no redemption 156 483 834 1824
Balanced Fund:

Expenses assuming redemption 478 631 897 1955
Expenses assuming no redemption 168 520 897 1955
- ------------------------------------------------------------------------------------
</TABLE>

Aggressive

Value Fund Growth Fund Growth Fund
Trust Investment Trust Investment

Shares Shares Shares Shares

Shareholder Fees

Fees Paid Directly From Your Investment

Maximum Sales Charge (Load) Imposed on None None None None None
Purchases (as a percentage of offering price)
Maximum Deferred Sales Charge (Load) None 3.00% None 3.00% 3.00%
(as a percentage of original purchase price
or redemption proceeds, as applicable)

Maximum Sales Charge (Load) Imposed on None None None None None
Reinvested Dividends (and other Distributions)
(as a percentage of offering price)
Redemption Fees (as a percentage of None None None None None
amount redeemed, if applicable)
Exchange Fee None None None None None
Annual Fund Operating Expenses
(Before Waivers) (5)

Expenses That Are Deducted From Fund Assets
(as a percentage of average net assets)

Management Fee (6) 0.80% 0.80% 0.80% 0.80% 0.75%
Distribution (12b-1) Fee (7) None 0.30% None 0.30% 0.30%
Shareholder Services Fee None 0.25% None 0.25% None
Other Expenses (8) 0.24% 0.24% 0.19% 0.19% 0.41%
Total Annual Fund Operating Expenses 1.04% 1.59% 0.99 1.54% 1.46%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

(5) Although not contractually obligated to do so, the adviser and distributor
expect to waive certain amounts during the fiscal year ended November 30,
1999. These are shown below along with the net expenses the Fund expects to
actually pay for the fiscal year ended November 30, 1999.

<TABLE>

<S> <C> <C> <C> <C> <C>
Waiver of Fund Expenses 0.05% 0.35% 0.05% 0.35% 0.30%
Total Actual Annual Fund Operating Expenses 0.99% 1.24% 0.94% 1.19% 1.16%
</TABLE>

(6) The adviser expects to voluntarily waive a portion of the management fee
during the year ended for the Value Fund and Growth Fund. The adviser may
terminate this anticipated voluntary waiver at any time. The management fee
is expected to be 0.75% and 0.75% for the Value Fund and Growth Fund,
respectively for the fiscal year ended November 30, 1999.

(7) The Value Fund and Growth Fund did not pay or accrue the distribution (12b-
1) fee during the year ended November 30, 1998. The Value Fund, Growth Fund,
and Aggressive Growth Fund do not expect to pay or accrue the distribution
(12b-1) fee during the year ended November 30, 1999.

(8) Other Expenses reflect fees which the Value Fund, Growth Fund, and
Aggressive Growth Fund expect to pay and accrue during the year ended
November 30, 1999.

Example

This Example is intended to help you compare the cost of investing in the
Regions Funds with the cost of investing in other mutual funds.

Share Class 1 Year 3 Years 5 Years 10 Years
Trust Shares
<S> <C> <C> <C> <C>
Value Fund $106 $331 $574 $1271
Growth Fund 101 315 547 1213

- -----------------------------------------------------------------------------------
</TABLE>

Share Class 1 Year 3 Years 5 Years 10 Years
Investment Shares
Value Fund:

<S> <C> <C> <C> <C>
Expenses assuming redemption $472 $612 $866 $1889
Expenses assuming no redemption 162 502 866 1889

Growth Fund:

Expenses assuming redemption 467 597 839 1834
Expenses assuming no redemption 157 486 839 1834
Aggressive Growth Fund:

Expenses assuming redemption 459 573 797 1746
Expenses assuming no redemption 149 462 797 1746
- -----------------------------------------------------------------------------------
</TABLE>

Main Risks of Investing in the Regions Funds

General Risks. An investment in any of the Regions Funds is not a deposit of a
bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. Loss of money is a risk of
investing in any of the Regions Funds.

Equity Securities Risks. The FIXED INCOME FUND, BALANCED FUND, VALUE FUND,
GROWTH FUND, and AGGRESSIVE GROWTH FUND are subject to fluctuations in the
stock markets, which have periods of increasing and decreasing values.
Stocks have greater volatility than debt securities. While greater
volatility increases risk, it offers the potential for greater reward.

Equity risk is also related to the size of the company issuing stock.
Companies may be categorized as having a small, medium, or large
capitalization (market value). The potential risks are higher with small-
and medium-capitalization companies and generally lower with large-
capitalization companies. Therefore, you should expect that investments in
the GROWTH FUND, the BALANCED FUND and, particularly, AGGRESSIVE GROWTH
FUND will be more volatile than broad stock market indices such as the S&P
500 or funds that invest in large-capitalization companies.

Fixed Income Securities Risks. Risks of fixed income securities will impact the
FIXED INCOME FUND and LIMITED MATURITY FUND, but might also affect the
BALANCED FUND, VALUE FUND and AGGRESSIVE GROWTH FUND.

Prices of fixed-rate debt securities generally move in the opposite
direction of interest rates. The interest payments on fixed-rate debt
securities do not change when interest rates change. Therefore, since the
price of these securities can be expected to decrease when interest rates
increase, you can expect that value of investments in a Fund may go down.
Although the Adviser attempts to anticipate interest rate movements, there
is no guarantee that it will be able to do so.

In addition, longer term debt securities will experience greater price
volatility than debt securities with shorter maturities. You can expect the
net asset values of a Fund to fluctuate accordingly.

The credit quality of a debt security is based upon the issuer's ability to
repay the security. If payments on a debt security are not paid when due,
that may cause the net asset value of a Fund holding the security to go
down.

If interest rates decline, an issuer may repay a debt security held by a
Fund prior to its maturity. If this occurs, the Adviser may have to
reinvest the proceeds in debt securities paying lower interest rates. If
this happens, a Fund may have a lower yield.

Mortgage-Backed Securities Risks. Mortgage-backed securities are subject to
risks of prepayment. This is more likely to occur when interest rates fall
because many borrowers refinance mortgages to take advantage of more
favorable rates. Prepayments on mortgage-backed securities are also
affected by other factors, such as the volume of home sales. A Fund's yield
will be reduced if cash from prepaid securities are reinvested in
securities with lower interest rates. The risk of prepayment may also
decrease the value of mortgage-backed securities, as will mortgage
foreclosures or defaults on the underlying obligations.

Futures and Options Risks. On behalf of a Fund, the Adviser may trade in options
or futures in order to hedge the Fund's portfolio against market shifts as
well as to increase returns. However, if the Adviser does not correctly
anticipate market movements or is unable to close an option or futures
position due to conditions in the market, the Fund could lose money. Funds
that use options and futures contracts to protect their investments or
increase their income take a risk that the prices of securities subject to
the futures or options may not correlate with the prices of the securities
in a Fund's portfolio.

Sector Risks. When the Fund emphasizes its investments in securities of issuers
in a particular industry, the Fund's performance is closely tied to events
in that industry. For example, the VALUE FUND is expected to be
overweighted in the utility, energy, transportation, basic industry and
financial sectors. The GROWTH FUND is expected to be weighted in the
technology, consumer services, consumer non-durables and consumer staples
sectors. The AGGRESSIVE GROWTH FUND will emphasize technology stocks.

Money Market Risks. Prices of fixed income securities rise and fall in response
to interest rate changes for similar securities. Generally, when interest
rates rise, prices of fixed income securities fall. Interest rate changes
have a greater effect on the price of fixed income securities with longer
maturities. Money market funds try to minimize this risk by purchasing
short-term securities. A Fund can also be affected by the credit quality of
the securities in its portfolio. The credit quality of a security is based
upon the ability of the issuer to repay the security. Money market funds
attempt to minimize this risk by investing in securities with high credit
quality.

Any of these risks have an adverse affect on a Fund's total return or
yield.

Principal Strategies

Treasury Money Market Fund. The Fund invests primarily in short-term obligations
of the U.S. Treasury. The Fund may also invest in short-term AAA-rated
securities of other investment companies, and engage in when-issued and
delayed-delivery transactions. Consistent with the Fund's AAA rating by
Standard & Poor's, the Fund will maintain an average maturity of 60 days or
less.

The Fund's primary objective is the production of current income while
maintaining liquidity and stability of principal. To the extent that Fund
income is derived from investments in U.S. Treasury securities, interest
earned from the Fund may be exempt from state income taxation.

Limited Maturity Government Fund. The Fund invests in high-grade debt securities
and will, under normal market conditions, have at least 65% of its total
assets invested in U.S. government securities. The Fund manager employs a
"top down" strategy in selecting investment securities. Key factors include
economic trends, inflation expectations, interest rate momentum, and yield
spreads. The Fund generally will invest in debt securities of the U.S.
Treasury and government agencies, mortgage-backed securities, and
investment-grade corporate bonds. When investing in non-governmental
securities, the Fund manager will conduct a thorough credit analysis of the
issuer, and will compare current yield spreads to historical norms.

The average maturity of the Fund's debt securities generally will be in the
range of 1.5 to 3 years. When interest rates are at higher levels and lower
rates are forecasted for the future, the Fund manager may choose to
lengthen the Fund's effective duration. Likewise, when rising interest
rates are expected, the duration of the Fund's bond portfolio may be
shortened.

Consistent with the Fund's primary objective of producing current income,
the Fund will focus on investment-grade fixed-income securities with short-
to intermediate-term maturities.

Fixed Income Fund. The Fund invests in high-grade debt securities and will,
under normal market conditions, have at least 65% of its total assets
invested in fixed-rate bonds. The Fund manager employs a "top down"
strategy in selecting investment securities. Key factors include economic
trends, inflation expectations, interest rate momentum, and yield spreads.
The Fund generally will invest in debt securities of the U.S. Treasury and
government agencies, mortgage-backed securities, and investment-grade
corporate bonds. When investing in non-governmental securities, the Fund
manager will conduct a thorough credit analysis of the issuer, and will
compare current yield spreads to historical norms.

The average maturity of the Fund's debt securities generally will be in the
range of 3 to 10 years. When interest rates are at higher levels and lower
rates are forecasted for the future, the Fund manager may choose to
lengthen the Fund's effective duration. Likewise, when rising interest
rates are expected, the duration of the Fund's bond portfolio may be
shortened.

Consistent with the Fund's primary objective of producing current income,
the Fund will focus on investment-grade, intermediate-term, fixed-income
securities.

Balanced Fund. The Fund invests in both equity and fixed-income investments, and
will maintain a minimum of 25% of Fund assets in each asset class. The
remaining 50% of Fund assets may be allocated between stocks and bonds, at
the discretion of the Fund manager.

The Fund's equity allocation will focus on high-quality, large-
capitalization companies. Using a blend of growth and value styles, the
Fund manager seeks to identify companies which have clearly defined
business strategies, produce consistent revenue streams from an established
customer base, enjoy significant market share in their respective
industries, produce healthy cashflows, achieve consistent increases in
sales, operating margins, and corporate earnings, and have experienced
management teams with consistent records of delivering shareholder value.
The Fund manager periodically reviews market prices in relation to the
stock's intrinsic value, and adjusts the Fund's holdings accordingly.

The Fund's fixed income allocation focuses on intermediate-term debt
securities, with an emphasis on U.S. Treasury and governmental agency
issues. Corporate bond issues with a minimum credit rating of "A" (S & P/
Moody's) at the time of purchase may also be included as yield spreads
become attractive.

Value Fund. The Fund invests in common and preferred stocks according to a
sector-weighting strategy in which attractive market valuation levels are
assigned priority over prospects for future earnings growth. The Fund
manager attempts to identify those sectors of the economy which, given the
current phase of the business cycle, are likely to realize gains in share
prices as market valuation factors re-adjust over time. Selected sectors
and companies will tend to possess price-to-earnings (P/E) and price-to-
book ratios below broad market averages, while dividend yields generally
will be higher than market averages. Common and preferred stocks are
expected to produce dividends, and will generally possess market
capitalizations of at least $250 million. Convertible securities of smaller
companies may also be included in the Fund's portfolio.

The Fund manager seeks to identify companies which have clearly defined
business strategies, produce consistent revenue streams from an established
customer base, enjoy significant market share in their respective
industries, produce healthy cashflows, achieve consistent increases in
sales, operating margins, and corporate earnings, and have experienced
management teams with consistent records of delivering shareholder value.
The Fund manager periodically reviews market prices in relation to the
stock's intrinsic value, and adjusts the Fund's holdings accordingly.

Growth Fund. The Fund invests in the common stocks of companies expecting to
achieve above-average growth in earnings. The Fund manager selects industry
sectors which expect favorable earnings growth, given the current phase of
the business cycle. Future growth prospects take precedence over current
valuation levels in the stock selection process. Selected companies are
expected to exhibit large market capitalizations and above-average
price/earnings (P/E), price-to-book, and return on assets ratios. Dividend
yields may be lower than market averages, owing to the growth emphasis of
the Fund.

In addition to seeking companies with above-average potential for growth,
the Fund manager will seek to identify companies which have clearly defined
business strategies, produce consistent revenue streams from an established
customer base, enjoy significant market share in their respective
industries, produce healthy cashflows, achieve consistent increases in
sales, operating margins, and corporate earnings, and have experienced
management teams with consistent records of delivering shareholder value.
The Fund manager periodically reviews market prices in relation to the
stock's target price, and adjusts the Fund's holdings accordingly.

Aggressive Growth Fund. The Fund invests primarily in equities of small- to
medium-sized companies whose market capitalization ranges from $300 million
to $5 billion. The Fund may, as market conditions warrant, invest a portion
of is assets in large-capitalization companies exhibiting above-average
potential. The Fund manager seeks to identify companies with superior
prospects for growth in revenues and earnings. Given recent market trends
and expectations, the Fund may invest a substantial portion of its assets
in the equities of technology and technology-related companies. These
sectors have achieved substantial market growth in recent years, but
exhibit greater volatility in earnings, dividends, and share prices than
major market indices such as the S & P 500.

[Graphic -- See attached appendix]
Securities Descriptions

Equity securities are the fundamental unit of ownership in a company. They
represent a share of the issuer's earnings and assets, after the issuer
pays its liabilities. Generally, issuers have discretion as to the payment
of any dividends or distributions. As a result, investors cannot predict
the income they will receive from equity securities. However, equity
securities offer greater potential for appreciation than many other types
of securities, because their value increases directly with the value of the
issuer's business. The following describes the types of equity securities
in which the BALANCED FUND, VALUE FUND, GROWTH FUND, and AGGRESSIVE GROWTH
FUND invest.

Common stocks are the most prevalent type of equity security. Common
stockholders are entitled to the net value of the issuer's earnings and
assets after the issuer pays its creditors and any preferred stockholders.
As a result, changes in an issuer's earnings directly influence the value
of its common stock.

Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be fixed or adjusted periodically. Generally, investors
in fixed income securities are creditors of the issuer. The issuer must
repay the principal amount of the security, normally within a specified
time. Fixed income securities provide more regular income than equity
securities. However, the returns on fixed income securities are limited and
normally do not increase with the issuer's earnings. This limits the
potential appreciation of fixed income securities as compared to equity
securities.

A security's yield measures the annual income earned on a security as a
percentage of its price. Securities with higher credit risks generally have
higher yields. A security's yield will increase or decrease depending upon
whether it costs less (a discount) or more (a premium) than the principal
amount. Under normal market conditions, securities with longer maturities
will also have higher yields. If the issuer is entitled to redeem the
security before its scheduled maturity, the price and yield on the security
may change based upon the probability of an early redemption.

The following describes the types of fixed income securities in which the
Funds invest.

Treasury securities are direct obligations of the federal government of the
United States. Investors regard treasury securities as having the lowest
credit risk.

Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority. Some
government entities are supported by the full, faith and credit of the
United States. Other government entities receive support through federal
subsidies, loans or other benefits. A few government entities have no
explicit financial support, but are regarded as having implied support
because the federal government sponsors their activities. Investors regard
agency securities as having low credit risk, but not as low as Treasury
securities.

The Funds treat mortgage-backed securities guaranteed by a government
sponsored entity as if issued or guaranteed by a federal agency. Although
such a guarantee protects against credit risk, it does not reduce the
market and prepayment risks.

Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most common types of
corporate debt security. The credit risks of corporate debt securities vary
widely among issuers.

Mortgage-backed securities represent interests in pools of mortgages. The
underlying mortgages normally have similar interest rates, maturities and
other terms. Mortgages may have fixed or adjustable interest rates.
Interests in pools of adjustable rate mortgages are known as ARMs.

Mortgage-backed securities come in a variety of forms. Many have
extremely complicated terms. The simplest form of mortgage-backed
securities is a "pass-through certificate." Holders of pass-through
certificates receive a pro rata share of the payments from the underlying
mortgages. Holders also receive a pro rata share of any prepayments, so
they assume all the prepayment risk of the underlying mortgages.

Collateralized mortgage obligations (CMOs) are complicated instruments
that allocate payments and prepayments from an underlying pass-through
certificate among holders of different classes of mortgage-backed
securities. This creates different prepayment and market risks for each CMO
class.

In addition, CMOs may allocate interest payments to one class (IOs) and
principal payments to another class (POs). POs increase in value when
prepayment rates increase. In contrast, IOs decrease in value when
prepayments increase, because the underlying mortgages generate less
interest payments. However, IOs prices tend to increase when interest rates
rise (and prepayments fall), making IOs a useful hedge against market risk.

Demand Master Notes. Demand master notes are short-term borrowing arrangements
between a corporation or government agency and an investor. These notes are
payable (in full or in part) on demand by either party, usually with one to
seven days notice. They generally pay a floating or variable interest rate,
and the principal amount may be periodically increased or decreased at the
investor's option.

Portfolio Turnover. Although the Funds do not intend to invest for the purpose
of seeking short-term profits, securities will be sold without regard to
the length of time they have been held when the Funds' Adviser believes it
is appropriate to do so in light of a Fund's investment goal. A higher
portfolio turnover rate involves greater transaction expenses which must be
borne directly by a Fund (and thus, indirectly by its shareholders), and
impact Fund performance. In addition, a high rate of portfolio turnover may
result in the realization of larger amounts of capital gains which, when
distributed to that Fund's shareholders, are taxable to them.

Temporary Defensive Investments. To minimize potential losses and maintain
liquidity to meet shareholder redemptions during adverse market conditions,
the Funds may temporarily depart from its principal investment strategy by
investing up to 100% of Fund assets in cash or short-term, high quality
money market instruments (e.g., commercial paper, repurchase agreements,
etc.). This may cause a Fund to temporarily forego greater investment
returns for the safety of principal.

[Graphic -- See attached appendix]
How to Buy Shares

What Do Shares Cost? You can buy shares of a Fund at net asset value (NAV),
without a sales charge, on any day the New York Stock Exchange (NYSE) is open
for business. When the Fund receives your transaction request in proper form, it
is processed at the next determined public offering price. NAV is determined for
the Funds (other than TREASURY MONEY MARKET FUND) at the end of regular trading
(normally 3:00 p.m. Central Time) each day the NYSE is open. The NAV for the
TREASURY MONEY MARKET FUND is determined twice daily at 11:00 a.m. (Central
Time) and 3:00 p.m. (Central Time).

To open an account with the Regions Funds, your first investment must be
at least $25,000 for Trust Shares and $1,000 for Investment Shares. If you
are an officer, director, employee or retired employee of Regions Bank, or
would like to open an IRA account, the minimum initial investment is $500
for Investment Shares. However, you can add to your existing Regions Funds
account directly or through the Funds' Systematic Investment Program for as
little at $100. In special circumstances, these minimums may be waived or
lowered at the Funds' discretion. Keep in mind that investment
professionals may charge you fees for their services in connection with
your share transaction.

Sales Charge When You Redeem Aggressive Growth Fund and Investment Shares Only.
Your redemption proceeds may be reduced by a sales charge, commonly
referred to as a contingent deferred sales charge (CDSC). A CDSC applies to
the Aggressive Growth Fund and the Funds that offer Investment Shares, with
the exception of the TREASURY MONEY MARKET FUND, is as follows:

Shares Held Up To: CDSC
<S> <C>
1 year 3.00%
2 years 2.00%
3 years 1.00%
4 years 0.00%
- ---------------------------------------------------------------------
</TABLE>

You will not be charged a CDSC when redeeming Shares:

.if you are an officer, director, employee or retired employee of Regions
Bank, or its affiliates, and your spouse and dependent children;

.if you are a Regions Management Account customer; or

.if you are a trust customer redeeming through the Trust departments of
Regions Bank, or its affiliates. The Trust departments may charge fees for
services provided.

In addition, you will not be charged a CDSC:

.on the portion of redemption proceeds attributable to increases in the
value of your account due to increases in the NAV;

.on shares acquired through reinvestment of dividends and capital gains;

.on shares held more than 3 years after the end of the calendar month of
acquisition;

.if your redemption is a required distribution and you are over the age
of 70//1/2// from an individual retirement account or other retirement
plan;

.upon the death or disability of the last surviving shareholder(s) of the
account;

.on shares purchased prior to June 1, 1997; or

.if the Fund redeems your Shares and closes your account for not meeting
the minimum balance requirement.

If your redemption qualifies the Distributor must be notified at the time
of redemption to eliminate the CDSC.
To keep the sales charge as low as possible, the Funds will sell your
shares in the following order:

.Shares that are not subject to a CDSC;

.Shares held the longest; and

.then, the CDSC is based on the NAV at the time you purchased or redeemed
those Shares, whichever is lower.

Dealer Concessions: For Aggressive Growth Fund shares and Investment Shares
redeemed, with the exception of the TREASURY MONEY MARKET FUND, a dealer
may receive up to 100% of the CDSC. The dealer may be advanced a portion of
the CDSC at the time of purchase or upon payment arrangements made between
the dealer and the Distributor. Such payments may be in the form of cash or
promotional incentives.

How Do I Purchase Shares? Trust customers may purchase shares of any Fund by
contacting their local Trust Administrator or by telephoning Regions Bank
at 1-800-433-2829.

You may purchase the AGGRESSIVE GROWTH FUND and Investment Shares by
contacting your local Regions Investment Company, Inc. (RICI) office or
telephone RICI at 1-800-456-3244. Texas residents must purchase shares
through Federated Securities Corp. at 1-800-356-2805.

You may purchase shares through a broker-dealer, investment professional,
or financial institution (Authorized Dealers). Some Authorized Dealers may
charge a transaction fee for this service. If you purchase shares of a Fund
through a program of services offered or administered by a Authorized
Dealer or other service provider, you should read the program materials,
including information relating to fees, in conjunction with the Funds'
prospectus. Certain features of a Fund may not be available or may be
modified in connection with the program of services provided.

Your purchase order must be received by the Fund by 11:00 a.m. (Central
Time) for the TREASURY MONEY MARKET FUND or 3:00 p.m. (Central Time) for
all other Funds to get that day's NAV. Payment for the purchase of TREASURY
MONEY MARKET FUND shares is normally required the same business day. For
settlement of an order for the other Funds, payment must be received within
three business days of receipt of the order. Each Fund reserves the right
to reject any purchase request. It is the responsibility of the Trust
Administrator, RICI, any Authorized Dealer or other service provider that
has entered into an agreement with the Funds, its distributor, or
administrative or shareholder services agent, to promptly submit purchase
orders to the Funds. Orders placed through one of these entities are
considered received when the Funds are notified of the purchase or
redemption order. However, you are not the owner of Fund shares (and
therefore will not receive dividends) until payment for the shares is
received.

Distribution of Fund Shares

Federated Securities Corp., a subsidiary of Federated Investors, Inc., is the
principal distributor for shares of the Funds and a number of other investment
companies. The Distributor may offer certain items of nominal value from time to
time to any shareholder or investor in connection with the sale of Fund shares.
The Distributor may select brokers, dealers and administrators (including
depository or other institutions such as commercial banks and savings
associations) to provide distribution and/or administrative services for which
they will receive fees from the distributor based upon shares owned by their
clients or customers. These services include general marketing services
distributing prospectuses and other information, providing account assistance,
and communicating or facilitating purchases and redemptions of the Funds'
shares.

Rule 12b-1 Plan (Aggressive Growth Fund and Investment Shares only). The Regions
Funds has adopted a Rule 12b-1 Plan on behalf of the AGGRESSIVE GROWTH FUND and
Investment Shares of the Funds. The 12b-1 fee paid by the AGGRESSIVE GROWTH FUND
and Investment Shares of the other Fund's is as follows:

12b-1 Fee Paid as a Percentage

Fund Investment Shares Assets
<S> <C>
Limited Maturity Government Fund 0.25%
Fixed Income Fund 0.30%
Balanced Fund 0.30%
Value Fund 0.30%
Growth Fund 0.30%
Aggressive Growth Fund 0.30%
Treasury Money Market Fund 0.40%
- --------------------------------------------------------------------------------------------
</TABLE>

The Distributor and financial intermediaries are paid a 12b-1 fee for the sale,
distribution and customer servicing of the AGGRESSIVE GROWTH FUND and Investment
Shares of the Funds. Because these shares pay marketing fees on an ongoing
basis, your investment cost may be higher over time than shares with different
sales charges and marketing fees.

How to Exchange Shares

[Graphic -- See attached appendix]

Exchange Privilege. You may exchange Shares of a Fund into Shares of the same
class of another Fund at NAV by calling or writing to Regions Bank or
RICI, as appropriate. AGGRESSIVE GROWTH FUND shareholders may exchange
their shares for Shares of any of the other Regions Funds. Shareholders
of AGGRESSIVE GROWTH FUND should contact their Trust Administrator or
RICI representative, as appropriate, to determine which class of shares
of the other Regions Funds they are eligible to acquire by exchange.
Texas residents must telephone Federated Securities Corp. at 1-800-356-
2805 to exchange shares. To do this, you must:

.meet any minimum initial investment requirements; and

.receive a prospectus for the Fund into which you wish to exchange.

Signatures must be guaranteed if you request an exchange into
another Fund with a different shareholder registration.

Investment Shares of any Fund may be exchanged-for Investment Shares of
another Fund without the imposition of a contingent deferred sales
charge. However, if the shareholder redeems the exchange-for shares
within three years of the original purchase of exchanged shares, a
contingent deferred sales charge will be imposed.

The Fund may modify or terminate the exchange privilege at any time.
Shareholders will be notified of the modification or termination of the
exchange privilege. The Fund's management or Adviser may determine from
the amount, frequency and pattern of exchanges that a shareholder is
engaged in excessive trading which is detrimental to the Fund and other
shareholders. If this occurs, the Fund may terminate the availability of
exchanges to that shareholder and may bar that shareholder from
purchasing other Funds.

Shareholders contemplating exchanges into the Regions Funds should
consult their tax advisers since the tax advantages of each Fund may
vary. An exchange is treated as a redemption and a subsequent purchase,
and is a taxable transaction.

By Telephone: Telephone exchange instructions must be received before
3:00 p.m. (Central Time) for Shares to be exchanged that day. Orders for
exchange received after 3:00 p.m. (Central Time) on any business day
will be executed at the close of the next business day.

Your telephone instructions may be recorded. If a Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized
or fraudulent telephone instructions. The Funds will notify you if it
changes telephone transaction privileges.

How to Redeem Shares

You may redeem your Fund shares by several methods. You should note that
redemptions will be made only on days when the Fund computes its NAV.
When your redemption request is received in proper form, it is processed
at the next determined NAV.

Additional Conditions for Redemptions

Signature Guarantees. In the following instances, you must have a signature
guarantee on written redemption requests:

-when you want a redemption to be sent to an address other than
the one you have on record with the Fund;

-when you want the redemption payable to someone other than the
shareholder of record; or

-when your redemption is to be sent to an address of record that
was changed within the last 90 days.

A signature guarantee is designed to protect your account from
fraud. Obtain a signature guarantee from a bank or trust company, savings
association, credit union, or broker, dealer, or securities exchange
member. A notary public cannot provide a signature guarantee.

Limitations on Redemption Proceeds. Redemption proceeds normally are wired or
mailed within one business day after receiving a request in proper form.
However, payment may be delayed up to seven days:

.to allow your purchase payment to clear;
.during periods of market volatility; or

.when a shareholder's trade activity or amount adversely impacts the
Fund's ability to manage its assets.

To redeem Trust Shares, trust customers of Regions Bank should
telephone their Trust Administrator. Investment Shares may be redeemed by
telephoning their local RICI office. Shareholders of AGGRESSIVE GROWTH FUND
should contact their Trust Administrator or RICI representative, as
appropriate. Shareholders who purchased shares through an Authorized Dealer
should contact their Authorized Dealer for specific instructions on how to
redeem by telephone.

To redeem Shares by mail, written requests must be received in
proper form and can be made through the trust Department, RICI or any
Authorized Dealer. The redemption request should include the shareholder's
name, Fund name and class of shares, account number and the share or dollar
amount to be redeemed. It is the responsibility of the service provider to
promptly submit redemption requests to the Fund. Shareholders are
encouraged to telephone the Trust Department, or RICI for assistance in
redeeming by mail.

Redemption requests for the Funds must be received by 11:00 a.m.
(Central Time) for the TREASURY MONEY MARKET FUND or 3:00 p.m. (Central
Time) for all other Funds in order for shares to be redeemed at that day's
NAV. Redemption proceeds will normally be mailed, or wired to the
shareholder's account at Regions Bank within five business days, but in no
event more than seven days, after the request is made.

Will I be Charged a Fee for Redemption? Trust Shares of any of the Funds and
Investment Shares of the TREASURY MONEY MARKET FUND are not subject to a
redemption fee. Depending on when you redeem your AGGRESSIVE GROWTH FUND
and Investment Shares of the other Funds, you may be charged a fee by the
Fund for redeeming your shares. See "How to Buy Shares" - "Sales Charge
When You Redeem Aggressive Growth Fund and Investment Shares Only." You may
also be charged a transaction fee if you redeem Fund shares through an
Authorized Dealer or service provider (other than RICI or the Regions
Banks). Consult your Authorized Dealer or service provider for more
information, including applicable fees.

Account and Share Information

[Graphic -- See attached appendix]

Conformation and Account Statements. You will receive confirmation of purchases,
redemptions and exchanges (except for systematic program transactions). The
TREASURY MONEY MARKET FUND sends you monthly confirmations to report all
transactions including dividends paid during the month. In addition, you
will receive periodic statements reporting all account activity, including
systematic program transactions, dividends and capital gains paid.

You may request photocopies of historical confirmations from
prior years. The Funds may charge a fee for this service.

Dividends and Capital Gains

Fund Dividends Declared and Paid
Balanced Fund
Value Fund
Growth Fund quarterly
Aggressive Growth Fund
Treasury Money Market Fund
Fixed Income Fund monthly
Limited Maturity Government Fund
- --------------------------------------------------------------------

Dividends are declared and paid to shareholders invested in a
Fund on the record date.

In addition, each Fund pays any capital gains at least annually.
Your dividends and capital gains distributions will be automatically
reinvested in additional Shares, unless you elect cash payments.

If you purchase shares just before a Fund declares a dividend or
capital gain distribution, you will pay the full price for the shares and
then receive a portion of the price back in the form of a distribution,
whether or not you reinvest the distribution in shares. Therefore, you
should consider the tax implications of purchasing shares shortly before
the Fund declares a dividend or capital gain. Contact your investment
professional or the Fund for information concerning when dividends and
capital gains will be paid.

Accounts with Low Balances. Due to the high cost of maintaining accounts with
low balances, a Fund may redeem shares in your account and pay you the
proceeds if your account balance falls below the required minimum initial
investment amount. Before shares are redeemed to close an account, you will
be notified in writing and allowed 30 days to purchase additional shares to
meet the minimum.

Year 2000 Readiness

The "Year 2000" problem is the potential for computer errors or failures
because certain computer systems may be unable to interpret dates after
December 31, 1999. The Year 2000 problem may cause systems to process
information incorrectly and could disrupt businesses that rely on
computers, like the Fund.

While it is impossible to determine in advance all of the risks
to the Fund, the Fund could experience interruptions in basic financial and
operational functions. Fund shareholders could experience errors or
disruptions in Fund share transactions or Fund communications.

The Fund's service providers are making changes to their computer
systems to fix any Year 2000 problems. In addition, they are working to
gather information from third-party providers to determine their Year 2000
readiness.

Year 2000 problems would also increase the risks of the Fund's
investments. To assess the potential effect of the Year 2000 problem, the
Adviser is reviewing information regarding the Year 2000 readiness of
issuers of securities the Fund may purchase.

However, this may be difficult with certain issuers. For example,
funds dealing with foreign service providers or investing in foreign
securities, will have difficulty determining the Year 2000 readiness of
those entities. This is especially true of entities or issuers in emerging
markets.

The financial impact of these issues for the Fund is still being
determined. There can be no assurance that potential Year 2000 problems
would not have a material adverse effect on the Fund.

Tax Information

Federal Income Tax. The Funds send you a timely statement of your account
activity to assist you in completing your federal, state and local tax
returns. Fund distributions of dividends and capital gains are taxable to
you whether paid in cash or reinvested in the Fund. Capital gains
distributions are taxable at different rates depending upon the length of
time a Fund holds its assets.

Fund distributions are expected to be primarily dividends for the
TREASURY MONEY MARKET FUND and LIMITED MATURITY GOVERNMENT FUND and both
dividends and capital gains for all other Funds. Redemptions and exchanges
are taxable sales.

Please consult your tax adviser regarding your federal, state,
and local tax liability.

Regions Fund Information
[Graphic -- See attached appendix]

Management of the Regions Funds. The Board of Trustees governs the Trust. The
Board selects and oversees the Adviser, The Capital Management Group, a
unit of the Trust Division of Regions Bank. The Adviser manages each Fund's
assets, including buying and selling portfolio securities. The Adviser's
address is 417 North 20th Street, 12th Floor, Birmingham, Alabama, 35203.

Advisory Fees. The Adviser is entitled to receive an annual investment advisory
fee equal to a percentage of each Fund's average daily net assets as
follows:

FUND ADVISORY FEE
<S> <C>
TREASURY MONEY MARKET FUND 0.50%
LIMITED MATURITY GOVERNMENT FUND 0.70%
FIXED INCOME FUND 0.75%
GROWTH FUND 0.80%
BALANCED FUND 0.80%
VALUE FUND 0.80%
AGGRESSIVE GROWTH FUND 0.75%
- ----------------------------------------------------------------------------------
</TABLE>

The Adviser has the discretion to voluntarily waive a portion of its fee.
However, any waivers by the Adviser are voluntary and may be terminated at any
time in its sole discretion.

Adviser's Background. The Capital Management Group is a unit of the Trust
Division of Regions Bank, which is a wholly owned subsidiary of Regions
Financial Corp., a bank holding company organized under the laws of the
State of Delaware. Regions Financial Corporation has achieved Thomson Bank
Watch's highest rating of "A," a distinction earned by less than 1% of U.S.
financial institutions. Regions Bank was selected for inclusion in the S&P
500-Standard & Poor's widely followed index of the 500 most prominent
companies in the nation. As of December 31, 1998, Regions Financial Corp.
was one of the 25 largest bank holding companies in the United States with
total assets of approximately $35 billion.

Performance Information for Predecessor Collective Trust Fund

The Fund's average annual compounded total returns for the one-, three-, five-
and since inception periods ended October 31, 1998, reflecting the contingent
deferred sales charge (See the section entitled "How to Buy Shares--What Do
Shares Cost" in this prospectus) were -7.24%, 14.26%, 11.54% and 11.02%,
respectively. The Fund's average annual compounded total returns for the one-,
three-, five-, and since inception periods ended October 31, 1998, without
reflecting the contingent deferred sales charge were -4.37%, 14.65%, 11.54% and
11.02%, respectively. The quoted performance data includes the performance of
the collective trust fund for periods before the Fund's registration statement
became effective and reflects projected Fund expenses absent waivers. The past
performance data shown above is not necessarily indicative of the Fund's future
performance. The collective trust fund was not registered under the Investment
Company Act of 1940 ("1940 Act") and therefore was not subject to certain
investment restrictions that are imposed by the 1940 Act. If the collective
trust fund had been registered under the 1940 Act, the performance may have been
adversely effected.

Portfolio Managers

Portfolio Manager Funds Managed Biography
<S> <C> <C>

J. Kenneth Alderman, CFA Regions Funds Senior Vice President and Director. Manager of the Capital Management
[Graphic -- See attached appendix] Group; responsible for the comprehensive
investment policy of the group
and the Regions Family of Mutual Funds (1992-present). Experience: 16
years investment experience, including ten years of investment experience
with the Trust Division of Regions Bank; two years commercial bank
experience. Education: B.S., Accounting, Auburn University, 1973; M.B.A.,
Florida State University, 1976; Certified Public Accountant, 1975;
National Graduate Trust School, 1985; Chartered Financial Analyst, 1989.
Affiliations: Member, Institute of Chartered Financial Analysts,
Association for Investment Management and Research, and American Institute
of Certified Public Accountants.

Mary Lynn Bronner, CFA Fixed Income Fund Vice President, Chief Investment Strategist and Senior
[Graphic -- See attached appendix] Balanced Fund (co-manager) Fixed Income Portfolio Manager. Responsible for
the day-to-day management
of Regions Fixed Income Fund (July, 1997) and co-manager of the Regions
Balanced Fund. Ms. Bronner served as portfolio manager for Regions Limited
Maturity Government Fund from January, 1997 until taking over the Fixed
Income Fund in July, 1997. She also serves as a member of the Capital
Management Group and assists other portfolio and Fund managers in the
management of institutional portfolios. Experience: 19 years investment
experience, specifically seven years as Portfolio Manager for Regions
Financial Corporation under its predecessor, First Alabama Bank (April
1996 to the present and 1981 - 1986); seven years as a Registered
Investment Advisor with The Bronner Group (September 1989 - March 1996).
Education: B.S., Finance, University of Tennessee, 1977; M.B.A., Auburn
University at Montgomery, 1980; Jurisdoctor Law, Jones Law Institute,
1984; and Chartered Financial Analyst, 1982. Affiliations: Member, Alabama
State Bar, Institute of Chartered Financial Analysts, and Association for
Investment Management and Research.

John M. Haigler Limited Maturity Vice President and Portfolio Manager. Responsible for the
[Graphic -- See attached appendix] Government Fund day-to-day management of Regions Limited Maturity Government
Fund (July,
1997). Mr. Haigler previously served as portfolio manager of Regions
Treasury Money Market Fund (April, 1992-December, 1993) and as portfolio
manager of Regions Limited Maturity Government Fund (December,
1993-January, 1997). He is responsible for management of the Trust
Division's short-term income funds and for commercial paper and
certificates of deposit investments. Mr. Haigler also serves as an active
member of the Capital Management Group and as portfolio manager and
analyst. Experience: 20 years investment experience, 27 years with Regions
Bank. Education: B.A., Huntington College, 1963. Affiliations: Member,
Alabama Society of Financial Analysts and Association of Investment
Management and Research.

John E. Steiner, CFA Growth Fund Vice President and Senior Equity Portfolio Manager.
Balanced Fund Responsible for day-to-day management of the Regions Growth Fund and co-
manager of the Regions Balanced Fund. Served as portfolio manager of the

[Graphic -- See attached appendix] Regions Treasury Money Market Fund from December,
1993 until taking over
the Balanced Fund on June 1, 1996. He actively manages employee benefit and
personal trust accounts as well as contributes to the formulation of equity
and fixed income strategies. Experience: 12 years investment experience,
specifically Employee Benefits, Personal Trust, and Endowments; 13 years
with Regions Bank. Education: B.S., Industrial Management, Auburn
University, 1981; Chartered Financial Analyst, 1996. Affiliations: Member,
Chartered Financial Analyst, and the Association for Investment Management
and Research.

James L. Savage, CFA Value Fund Vice President and Senior Equity Analyst. Responsible for the day-to-day
[Graphic -- See attached appendix] management of the Regions Value Fund (January,
1996). Also serves as an
active member of the Capital Management Group as portfolio manager and
analyst. Experience: eight years investment analysis and portfolio
management. Joined Regions Bank (November, 1995) to bring further expertise
to investment team. Previously had been a trust portfolio manager for a
large regional bank in the Southeast which utilized a value style of equity
management (March, 1992 - October, 1995). Education: B.S., Finance, Auburn
University, 1987; M.S., Finance, Georgia State University, 1991; Chared
Financial Analyst, 1995. Affiliations: Member, Chartered Financial
Analysts, Member & Board of Directors, Alabama Society of Financial
Analysts, Association of Investment Management and Research.

Charles A. Murray, CFA Aggressive Growth Fund Vice President and Portfolio Manager. Served as Portfolio Manager and
[Graphic -- See attached appendix] Analyst in the Capital Management Group managing equity

portfolios and balanced accounts since 1974. Joined Regions Bank in June,
1972. Served as a Portfolio Manager for small/mid-cap common trust funds, a
convertible income fund and a fixed income fund from 1978 through 1992.
Education: B.S., University of Alabama, 1970; Chartered Financial Analyst,
1993. Affiliations: Member, Alabama Society of Financial Analysts,
Association for Investment Management and Research.

Terry K. Albano Treasury Money Market Fund Portfolio Manager. Responsible for the day-to-day management of the Regions
[Graphic -- See attached appendix] Treasury Money Market Fund (July, 1996). Also
serves as an active member of
the Capital Management Group as portfolio manager and analyst. Experience:
nine years investment analysis and portfolio management including serving
as director of cash management for a publicly-held food service company
(August, 1991 - June, 1996). Education: B.S. Finance, University of South
Alabama, 1989. Affiliations: Member, Alabama Society of Financial Analysts,
Association for Investment Management and Research.

</TABLE>

Financial Highlights

The Financial Highlights will help you understand a Fund's financial performance
for its past five fiscal years or since inception, if the life of a Fund is
shorter. Some of the information is presented on a per share basis. Total
returns represent the rate an investor would have earned (or lost) on an
investment in a Fund, assuming reinvestment of any dividends and capital gains.

The following table has been audited by Deloitte & Touche LLP, the Funds'
independent auditors. Their report dated January 14, 1999 is included in the
Annual Report for the Funds, which is incorporated by reference. This table
should be read in conjunction with the Funds' financial statements and notes
thereto, which may be obtained free of charge from the Funds. Further
information about the performance of the Funds is contained in the Funds' Annual
Report dated November 30, 1998, which may be obtained free of charge.

For a share outstanding throughout each period.

Distributions

Net Asset Net realized Distributions from net realized
Value, Net and unrealized Total from from net gain on investment

beginning investment gain/(loss) on investment investment transactions

Year Ended November 30, of period income investments operations income

<S> <C> <C> <C> <C> <C> <C>
Treasury Money Market Fund - Trust Shares

1994 $ 1.00 0.04 - 0.04 (0.04) -
1995 $ 1.00 0.05 - 0.05 (0.05) -
1996 $ 1.00 0.05 - 0.05 (0.05) -
1997 $ 1.00 0.05 - 0.05 (0.05) -
1998 $ 1.00 0.05 - 0.05 (0.05) -
Treasury Money Market Fund - Investment Shares

1994 $ 1.00 0.03 - 0.03 (0.03) -
1995 $ 1.00 0.04 - 0.04 (0.04) -
1996 $ 1.00 0.04 - 0.04 (0.04) -
1997 $ 1.00 0.04 - 0.04 (0.04) -
1998 $ 1.00 0.04 - 0.04 (0.04) -
Limited Maturity Government Fund - Trust Shares

1998(a) $ 9.96 0.25 0.11 0.36 (0.25) -
Limited Maturity Government Fund - Investment Shares

1994(b) $10.00 0.42 (0.40) 0.02 (0.42) -
1995 $ 9.60 0.51 0.44 0.95 (0.51) -
1996 $10.04 0.50 (0.08) 0.42 (0.50) -
1997 $ 9.96 0.49 (0.02) 0.47 (0.49) -
1998 $ 9.94 0.46 0.13 0.59 (0.46) -
Fixed Income Fund - Trust Shares

1992(c) $ 9.90 0.38 0.37 0.75 (0.38) -
1993 $10.27 0.51 0.50 1.01 (0.51) (0.10)
1994 $10.67 0.54 (1.01) (0.47) (0.53) (0.20)
1995(d) $ 9.46 0.09 0.11 0.20 (0.09) -
1998(a) $10.39 0.28 0.22 0.50 (0.28) -
Fixed Income Fund - Investment Shares

1994 $10.67 0.51 (1.01) (0.50) (0.50) (0.20)
1995 $ 9.46 0.52 0.90 1.42 (0.54) -
1996 $10.34 0.54 0.02 0.56 (0.54) -
1997 $10.36 0.58 0.02 0.60 (0.59) -
1998 $10.37 0.53 0.24 0.77 (0.53) -

Distributions in Ratios to Average Net Assets
excess of net Net Asset Net Expense

investment Total Value, end Total Investment waiver/

Year Ended November 30, income distributions of period return (f) Expenses Income reimbursement(h)
<S> <C> <C> <C> <C> <C> <C> <C>
Treasury Money Market Fund - Trust Shares

1994 - (0.04) $ 1.00 3.59% 0.32% 3.49% 0.50%
1995 - (0.05) $ 1.00 5.48% 0.33% 5.35% 0.50%
1996 - (0.05) $ 1.00 4.83% 0.52% 4.71% 0.29%
1997 - (0.05) $ 1.00 4.81% 0.52% 4.71% 0.25%
1998 - (0.05) $ 1.00 4.71% 0.47% 4.57% 0.25%
Treasury Money Market Fund - Investment Shares

1994 - (0.03) $ 1.00 3.18% 0.72% 3.09% 0.50%
1995 - (0.04) $ 1.00 5.06% 0.73% 4.98% 0.50%
1996 - (0.04) $ 1.00 4.41% 0.92% 4.31% 0.29%
1997 - (0.04) $ 1.00 4.39% 0.92% 4.31% 0.25%
1998 - (0.04) $ 1.00 4.30% 0.87% 4.17% 0.25%
Limited Maturity Government Fund - Trust Shares

1998(a) - (0.25) $10.07 3.59% 1.04%(g) 4.73%(g) -
Limited Maturity Government Fund - Investment Shares

1994(b) - (0.42) $ 9.60 0.19% 0.38%(g) 4.45%(g) 0.70%(g)
1995 - (0.51) $10.04 10.12% 0.61% 5.26% 0.49%
1996 - (0.50) $ 9.96 4.37% 1.01% 5.09% 0.08%
1997 - (0.49) $ 9.94 4.81% 0.99% 4.91% -
1998 - (0.46) $10.07 6.05% 1.12% 4.65% -
Fixed Income Fund - Trust Shares

1992(c) - (0.38) $10.27 7.66% 0.77%(g) 6.02%(g) 0.29%(g)
1993 - (0.61) $10.67 10.14% 0.84% 4.80% 0.25%
1994 (0.01)(e) (0.74) $ 9.46 (4.55%) 0.79% 5.44% 0.25%
1995(d) - (0.09) $ 9.57 2.11% 0.82%(g) 5.79%(g) 0.25%(g)
1998(a) - (0.28) $10.61 4.87% 0.97%(g) 5.19%(g) -
Fixed Income Fund - Investment Shares

1994 (0.01)(e) (0.71) $ 9.46 (4.83%) 1.09% 5.14% 0.25%
1995 - (0.54) $10.34 15.37% 1.02% 5.25% -
1996 - (0.54) $10.36 5.66% 1.02% 5.38% -
1997 - (0.59) $10.37 5.99% 0.97% 5.73% -
1998 - (0.53) $10.61 7.60% 0.99% 5.17% -

Net

assets,

end of

period
(000 Portfolio

Year Ended November 30, omitted) turnover

Treasury Money Market Fund - Trust Shares
1994 $ 91,008 -
1995 $109,368 -
1996 $101,786 -
1997 $166,035 -
1998 $524,592 -
Treasury Money Market Fund - Investment Shares
1994 $ 16,571 -
1995 $ 28,930 -
1996 $ 40,619 -
1997 $ 45,960 -
1998 $ 89,673 -
Limited Maturity Government Fund - Trust Shares
1998(a) $ 55,627 69%

Limited Maturity Government Fund - Investment Shares
1994(b) $ 48,526 3%
1995 $ 63,078 26%
1996 $ 63,732 48%
1997 $ 79,621 40%
1998 $ 33,456 69%

Fixed Income Fund - Trust Shares

1992(c) $ 96,354 44%
1993 $169,881 83%
1994 $153,289 24%
1995(d) - -
1998(a) $193,351 64%
Fixed Income Fund - Investment Shares
1994 $ 9,645 24%
1995 $160,286 45%
1996 $152,940 52%
1997 $184,064 37%
1998 $ 23,992 64%
</TABLE>

Net Asset Net realized Distributions Distributions
Value, Net and unrealized Total from from net from net realized

beginning investment gain/(loss) on investment investment gain on investment

Year Ended November 30, of period income investments operations income transactions
<S> <C> <C> <C> <C> <C> <C>
Balanced Fund - Trust Shares

1998(a) $14.52 0.19 0.80 0.99 (0.19) -
Balanced Fund - Investment Shares

1995(i) $10.00 0.44 1.38 1.82 (0.36) -
1996 $11.46 0.41 1.27 1.68 (0.42) (0.21)
1997 $12.51 0.36 1.60 1.96 (0.37) (0.31)
1998 $13.79 0.35 1.96 2.31 (0.37) (0.41)
Value Fund - Trust Shares

1998(a) $17.31 0.10 (0.02) 0.08 (0.11) -
Value Fund - Investment Shares

1995(i) $10.00 0.40 1.98 2.38 (0.34) -
1996 $12.04 0.27 2.22 2.49 (0.29) (0.35)
1997 $13.89 0.22 2.94 3.16 (0.21) (0.66)
1998 $16.18 0.22 1.50 1.72 (0.21) (0.42)
Growth Fund - Trust Shares

1992(c) $ 9.86 0.14 0.77 0.91 (0.11) -
1993 $10.66 0.18 (0.03) 0.15 (0.18) (0.12)
1994 $10.51 0.25 (0.10) 0.15 (0.23) (0.07)
1995(d) $10.36 0.08 0.02 0.10 (0.08) (0.33)
1998(a) $17.81 0.02 2.27 2.29 (0.02) -
Growth Fund - Investment Shares

1994 $10.51 0.21 (0.09) 0.12 (0.20) (0.07)
1995 $10.36 0.18 2.10 2.28 (0.21) (0.33)
1996 $12.10 0.12 3.12 3.24 (0.15) (0.55)
1997 $14.64 0.07 3.01 3.08 (0.07) (0.76)
1998 $16.89 0.02 5.00 5.02 (0.03) (1.80)

Distributions in Ratios to Average Net Assets
excess of net Net Asset Net Expense

investment Total Value, end Total Investment waiver/

Year Ended November 30, income distributions of period return (f) Expenses Income reimbursement(h)
<S> <C> <C> <C> <C> <C> <C> <C>
Balanced Fund - Trust Shares

1998(a) - (0.19) $15.32 6.89% 1.11%(g) 2.56%(g) -
Balanced Fund - Investment Shares

1995(i) - (0.36) $11.46 18.50% 0.61%(g) 4.34%(g) 0.56%(g)
1996 - (0.63) $12.51 15.35% 1.13% 3.60% 0.09%
1997 - (0.68) $13.79 16.34% 1.11% 2.73% -
1998 - (0.78) $15.32 17.49% 1.25% 2.42% -
Value Fund - Trust Shares

1998(a) - (0.11) $17.28 0.50% 1.06%(g) 1.29%(g) -
Value Fund - Investment Shares

1995(i) - (0.34) $12.04 24.14% 0.69%(g) 3.93%(g) 0.55%(g)
1996 - (0.64) $13.89 21.72% 1.11% 2.29% 0.06%
1997 - (0.87) $16.18 24.08% 1.04% 1.50% -
1998 - (0.63) $17.27 11.00% 1.11% 1.24% -
Growth Fund - Trust Shares

1992(c) - (0.11) $10.66 9.28% 0.76%(g) 2.28%(g) 0.35%(g)
1993 - (0.30) $10.51 1.43% 0.84% 1.85% 0.30%
1994 - (0.30) $10.36 1.42% 0.79% 2.32% 0.30%
1995(d) - (0.41) $10.05 1.00% 0.83%(g) 2.76%(g) 0.30%(g)
1998(a) - (0.02) $20.08 12.85% 1.00%(g) 0.22%(g) -
Growth Fund - Investment Shares

1994 - (0.27) $10.36 1.11% 1.09% 2.02% 0.30%
1995 - (0.54) $12.10 23.01% 1.03% 1.61% 0.05%
1996 - (0.70) $14.64 28.22% 1.05% 0.98% 0.01%
1997 - (0.83) $16.89 22.37% 1.01% 0.45% -
1998 - (1.83) $20.08 33.81% 1.08% 0.12% -

Net

assets,

end of

period
(000 Portfolio

Year Ended November 30, omitted) turnover

Balanced Fund - Trust Shares

1998(a) $ 10,409 31%
Balanced Fund - Investment Shares

1995(i) $ 51,197 49%
1996 $ 59,321 41%
1997 $ 83,073 34%
1998 $112,260 31%
Value Fund - Trust Shares

1998(a) $157,990 63%
Value Fund - Investment Shares

1995(i) $ 45,424 76%
1996 $ 83,572 58%
1997 $152,531 31%
1998 $ 47,815 63%
Growth Fund - Trust Shares

1992(c) $102,822 30%
1993 $154,185 74%
1994 $143,876 66%
1995(d) - -
1998(a) $246,613 41%
Growth Fund - Investment Shares

1994 $ 6,131 66%
1995 $154,297 110%
1996 $175,521 56%
1997 $275,006 40%
1998 $140,922 41%
</TABLE>

(a) Reflects operations for the period from May 20, 1998 (date of initial
public investment) to November 30, 1998.

(b) Reflects operations for the period from December 12, 1993 (date of initial
public investment) to November 30,
1994.

(d) Reflects operations for the two month period ended January 31, 1995. Prior
to February 1, 1995 the Fund offered two classes of shares: Investment
Shares and Trust Shares. On February 1, 1995, the Fund exchanged all
outstanding Trust Shares for Investment Shares and no longer offered Trust
Shares. The fund resumed offering Trust Shares as of May 20, 1998.

(e) Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
distributions do not represent a return of capital for federal income tax
purposes.

(f) Based on net asset value, which does no reflect the sales charge or
contingent deferred sales charge, if applicable.

(g) Computed on an annualized basis.

(h) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.

(i) Reflects operations for the period from December 19, 1994 (date of initial
public investment) to November 30, 1995.

Regions Funds

A Statement of Additional Information (SAI) dated January 31, 1999 is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is available in the Funds' annual report to shareholders. The
annual report discusses market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. To
obtain the SAI, the annual report and other information without charge write to
or call Regions Funds at 1-800-433-2829.

You can obtain information about the Regions Funds (including the SAI) by
visiting or writing the Public Reference Room of the Securities and Exchange
Commission in Washington, D.C., 20549-6009, or from the SEC's Internet Web site
at: http://www.sec.gov. You can call 1-800-SEC-0330 for information on the
Public Reference Room's operations and copying charges.

Regions Funds
417 North 20th Street
12th Floor

P.O. Box 10247 (Zip code: 35202)
Birmingham, Alabama 35203

1-800-433-2829

Federated Securities Corp.
Distributor

007576 (1/99)

SEC File No. 811-6511

Federated Securities Corp., Distributor

Cusip 75913Q886 Cusip 75913Q878
Cusip 75913Q860 Cusip 75913Q852
Cusip 75913Q704 Cusip 75913Q803
Cusip 75913Q100 Cusip 75913Q209
Cusip 75913Q506 Cusip 75913Q605
Cusip 75913Q308 Cusip 75913Q407
Cusip 75913Q845

007576 (1/99)

[Regions Funds logo]

REGIONS FUNDS

(FORMERLY, FIRST PRIORITY FUNDS)

TRUST SHARES

INVESTMENT SHARES

STATEMENT OF ADDITIONAL INFORMATION

January 31, 1999

OREGIONS TREASURY MONEY MARKET FUND O REGIONS BALANCED FUND

OREGIONS LIMITED MATURITY GOVERNMENT FUND O REGIONS VALUE FUND

OREGIONS FIXED INCOME FUND O REGIONS GROWTH FUND

O REGIONS AGGRESSIVE GROWTH FUND

This Statement of Additional Information (SAI) is not a prospectus. Read
this SAI in conjunction with the prospectus for the Regions Funds, dated January
31, 1999. This SAI incorporates by reference the Funds' Annual Report. You may
obtain the prospectus or Annual Report, without charge by calling the Trust at
1-800-433-2829.

5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237-7010

CUSIP

75913Q886 75913Q878
75913Q860 75913Q852
75913Q704 75913Q803
75913Q100 75913Q209
75913Q506 75913Q605
75913Q308 75913Q407

75913Q845

G0_____(1/99)

FEDERATED SECURITIES CORP.

Distributor

A subsidiary of FEDERATED INVESTORS, INC.

<PAGE>

TABLE OF CONTENTS

- -------------------------------------------------------------

HOW ARE THE FUNDS ORGANIZED 1

- -------------------------------------------------------------

SECURITIES IN WHICH THE FUNDS INVEST 1
- -------------------------------------------------------------

SECURITIES DESCRIPTIONS, TECHNIQUES AND RISKS 2

- -------------------------------------------------------------

INVESTMENT LIMITATIONS 10

- -------------------------------------------------------------

DETERMINING MARKET VALUE OF SECURITIES 12

- -------------------------------------------------------------

WHO DO SHARES COST? 13

- -------------------------------------------------------------

HOW IS THE FUND SOLD? 13

- -------------------------------------------------------------

HOW TO BUY SHARES 14

- -------------------------------------------------------------

ACCOUNT AND SHARE INFORMATION 15

- -------------------------------------------------------------

WHAT ARE THE TAX CONSEQUENCES 15

WHO MANAGES THE FUNDS 15

- -------------------------------------------------------------

HOW DOES THE FUND MEASURE PERFORMANCE 20
- -------------------------------------------------------------

PERFORMANCE COMPARISONS 22

- -------------------------------------------------------------

ECONOMIC AND MARKET INFORMATION 25

- -------------------------------------------------------------

FINANCIAL STATEMENTS 25

- -------------------------------------------------------------

APPENDIX 26

- -------------------------------------------------------------

ADDRESSES 28

- -------------------------------------------------------------

<PAGE>

- -------------------------------------------------------------
HOW ARE THE FUNDS ORGANIZED

- -------------------------------------------------------------

The Regions Funds (Trust) was established as a Massachusetts business trust
under a Declaration of Trust dated October 15, 1991. Effective May 15, 1998, the
Trust changed its name from "First Priority Funds" to "Regions Funds." As of the
date of this Statement, the Trust consists of seven separate portfolios of
securities (Funds) which are as follows: Regions Treasury Money Market Fund
(Treasury Money Market Fund); Regions Limited Maturity Government Fund (Limited
Maturity Government Fund); Regions Fixed Income Fund (Fixed Income Fund);
Regions Balanced Fund (Balanced Fund); Regions Value Fund, (Value Fund,
formerly, Regions Equity Income Fund); Regions Growth Fund, (Growth Fund,
formerly, Regions Equity Fund); and Regions Aggressive Growth Fund (Aggressive
Growth Fund). Shares of the Funds, except the Aggressive Growth Fund, are
offered in two classes of shares, Trust Shares and Investment Shares
(individually and collectively referred to as "Shares" as the context may
require). This SAI relates to both classes of the above-mentioned Shares of the
Funds. The Funds (other than Treasury Money Market Fund and Aggressive Growth
Fund) did not offer the Trust Shares class until January 1998.

SECURITIES IN WHICH THE FUNDS INVEST

Following is a table that indicates which types of securities are a:
o P = PRINCIPAL investment of a Fund; (shaded in chart)
o A = ACCEPTABLE (but not principal) investment of a Fund; or
o N = NOT AN ACCEPTABLE investment of a Fund.

SECURITIES TREASURY LIMITED FIXED BALANCED VALUE GROWTH AGGRESSIVE
MONEY MATURITY INCOME FUND FUND FUND GROWTH
MARKET GOVERNMENT FUND FUND
FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------- ----------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
AMERICAN DEPOSITARY RECEIPTS N N N A A A A
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
ASSET-BACKED SECURITIES N A A A N N N
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
BANK INSTRUMENTS N A A A A A A
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
BORROWING1 A A A A A A A
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
COMMERCIAL PAPER N A A A A A A
- --------------------------------------- ---------- ----------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
COMMON STOCK2 N N N P P P P
- --------------------------------------- ---------- ----------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
CONVERTIBLE SECURITIES3 N N N A A A A
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- ------- ---------- ---------
DERIVATIVE CONTRACTS AND SECURITIES N A A A A A A
- --------------------------------------- ---------- ----------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
CORPORATE FIXED RATE DEBT OBLIGATIONS4 N A P P N N N
- --------------------------------------- ---------- ----------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
CORPORATE FLOATING RATE DEBT N A A P N N N
OBLIGATIONS4
- --------------------------------------- ---------- ----------- -------- -------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
FOREIGN SECURITIES N A A A A A A
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
FUTURES AND OPTIONS TRANSACTIONS N A A A A A A
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
ILLIQUID AND RESTRICTED SECURITIES5 N A A A A A A
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
LENDING OF PORTFOLIO SECURITIES N A A A A A A
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
MORTGAGE-BACKED SECURITIES N A A A N N N
- --------------------------------------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
MUNICIPAL DEBT OBLIGATIONS N A A A N N N
- --------------------------------------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
OTHER MONEY MARKET INSTRUMENTS N A A A A A A
- --------------------------------------- ----------- -------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
PREFERRED STOCKS N N N A A A A
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
REPURCHASE AGREEMENTS N A A A A A A
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
SECURITIES OF OTHER INVESTMENT A A A A A A A
COMPANIES

- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
STRIPPED BONDS N A A A N N N
- --------------------------------------- ----------- -------- ------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
U.S. GOVERNMENT SECURITIES P P P P A A A
- --------------------------------------- ----------- -------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
WARRANTS N N N A A A A
- --------------------------------------- ---------- ----------- -------- -------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
WHEN-ISSUED AND DELAYED DELIVERY A A A A A A A
TRANSACTIONS

- --------------------------------------- ---------- ----------- -------- ---------- ---------
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------
ZERO COUPON CONVERTIBLE SECURITIES N N N A A A A
- --------------------------------------- ---------- ----------- -------- -------- ------- ---------- ---------

</TABLE>

1. The TREASURY MONEY MARKET FUND, FIXED INCOME FUND AND GROWTH FUND may
pledge 10% (15% for LIMITED MATURITY GOVERNMENT FUND)of their respective
total assets as collateral for such borrowings.

2. The BALANCED FUND will invest in common stocks of companies with market
capitalizations of $1 billion or less (small-cap stocks), the GROWTH FUND
will invest in common stocks of companies with market capitalizations of at
least $250 million and the AGGRESSIVE GROWTH FUND will invest will invest
in common stocks of companies with market capitalizations of at least $5
billion or less.

3. The BALANCED FUND and VALUE FUND may invest up to 25% of their respective
total assets in below investment grade convertible securities (rated BB and
below by a nationally recognized statistical rating organization (NRSRO)).
An NRSRO is Moody's, S&P and Fitch

4. The Corporate Debt Obligations that the Funds invest will be rated in one
of the three highest rating categories by an NRSRO.

5. ALL FUNDS, except the TREASURY MONEY MARKET FUND, may invest up to 15% of
their respective assets in illiquid securities except that the GROWTH FUND
are limited to 10%. The TREASURY MONEY MARKET FUND cannot invest in
illiquid and restricted securities.

SECURITIES DESCRIPTIONS, TECHNIQUES AND RISKS

EQUITY SECURITIES

Equity securities represent a share of an issuer's earnings and assets,
after the issuer pays its liabilities. The Fund cannot predict the income it
will receive from equity securities because issuers generally have discretion as
to the payment of any dividends or distributions. However, equity securities
offer greater potential for appreciation than many other types of securities,
because their value increases directly with the value of the issuer's business.
The following describes the types of equity securities in which the Fund
invests.

COMMON STOCKS

Common stocks are the most prevalent type of equity security. Common stocks
receive the issuer's earnings after the issuer pays its creditors and any
preferred stockholders. As a result, changes in an issuer's earnings directly
influence the value of its common stock.

PREFERRED STOCKS

Preferred stocks have the right to receive specified dividends or
distributions before the issuer makes payments on its common stock. Some
preferred stocks also participate in dividends and distributions paid on common
stock. Preferred stocks may also permit the issuer to redeem the stock. The Fund
may also treat such

redeemable preferred stock as a fixed income security.

INTERESTS IN OTHER LIMITED LIABILITY COMPANIES

Entities such as limited partnerships, limited liability companies,
business trusts and companies organized outside the United States may issue
securities comparable to common or preferred stock.

REAL ESTATE INVESTMENT TRUSTS (REITS)

REITs are real estate investment trusts that lease, operate and finance
commercial real estate. REITs are exempt from federal corporate income tax if
they limit their operations and distribute most of their income. Such tax
requirements limit a REIT's ability to respond to changes in the commercial real
estate market.

WARRANTS

Warrants give the Fund the option to buy the issuer's equity securities at
a specified price (the exercise price) at a specified future date (the
expiration date). The Fund may buy the designated securities by paying the
exercise price before the expiration date. Warrants may become worthless if the
price of the stock does not rise above the exercise price by the expiration
date. This increases the market risks of warrants as compared to the underlying
security. Rights are the same as warrants, except companies typically issue
rights to existing stockholders.

FIXED INCOME SECURITIES

Fixed income securities pay interest, dividends or distributions at a
specified rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities. A security's yield measures the
annual income earned on a security as a percentage of its price. A security's
yield will increase or decrease depending upon whether it costs less (a
discount) or more (a premium) than the principal amount. If the issuer may
redeem the security before its scheduled maturity, the price and yield on a
discount or premium security may change based upon the probability of an early
redemption. Securities with higher risks generally have higher yields. The
following describes the types of fixed income securities in which the Fund
invests.

TREASURY SECURITIES

Treasury securities are direct obligations of the federal government of the
United States. Investors regard treasury securities as having the lowest credit
risks.

AGENCY SECURITIES

Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). The United
States supports some GSEs with its full, faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities. Agency securities are
generally regarded as having low

credit risks, but not as low as treasury securities.

The Fund treats mortgage backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risks, it does not
reduce the market and prepayment risks of these mortgage backed securities.

CORPORATE DEBT SECURITIES

Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies. The credit risks of corporate debt securities vary widely amount
issuers. The credit risk of an issuer's debt security may also vary based on its
priority for repayment. For example, higher ranking (senior) debt securities
have a higher priority than lower ranking (subordinated) securities. This means
that the issuer might not make payments on subordinated securities while
continuing to make payments on senior securities. In addition, in the event of
bankruptcy, holders of senior securities may receive amounts otherwise payable
to the holders of subordinated securities. Some subordinated securities, such as
trust preferred and capital securities notes, also permit the issuer to defer
payments under certain circumstances. For example, insurance companies issue
securities known as surplus notes that permit the insurance company to defer any
payment that would reduce its capital below regulatory requirements.

COMMERCIAL PAPER

Commercial paper is an issuer's obligation with a maturity of less than
nine months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds or bank loans to repay maturing paper. If the issuer cannot continue to
obtain liquidity in this fashion, its commercial paper may default. The short
maturity of commercial paper reduces both the market and credit risks as
compared to other debt securities of the same issuer.

DEMAND INSTRUMENTS

Demand instruments are corporate debt securities that the issuer must repay
upon demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year.

MUNICIPAL SECURITIES

Municipal securities are issued by states, counties, cities and other
political subdivisions and authorities. Although many municipal securities are
exempt from federal income tax, the Fund may invest in taxable municipal
securities.

MORTGAGE BACKED SECURITIES

Mortgage backed securities represent interests in pools of mortgages. The
mortgages that comprise a pool normally have similar interest rates, maturities
and other terms. Mortgages may have fixed or adjustable interest rates.
Interests in pools of adjustable rate mortgages are know as ARMs. Mortgage
backed securities come in a variety of forms. Many have extremely complicated
terms. The simplest form of mortgage backed securities are pass-through
certificates. An issuer of pass-through certificates gathers monthly payments
from an underlying pool of mortgages. Then, the issuer deducts its fees and
expenses and passes the balance of the payments onto the certificate holders
once a month. Holders of pass-through certificates receive a pro rata share of
all payments and pre-payments from the underlying mortgages. As a result, the
holders assume all the prepayment risks of the underlying mortgages.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)

CMOs, including interests in real estate mortgage investment conduits
(REMICs), allocate payments and prepayments from an underlying pass-through
certificate among holders of different classes of mortgage backed securities.
This creates different prepayment and market risks for each CMO class.

SEQUENTIAL CMOS

In a sequential pay CMO, one class of CMOs receives all principal payments
and prepayments. The next class of CMOs receives all principal payments after
the first class is paid off. This process repeats for each sequential class of
CMO. As a result, each class of sequential pay CMOs reduces the prepayment risks
of subsequent classes.

PACS, TACS AND COMPANION CLASSES

More sophisticated CMOs include planned amortization classes (PACs) and
targeted amortization classes (TACs). PACs and TACs are issued with companion
classes. PACs and TACs receive principal payments and prepayments at a specified
rate. The companion classes receive principal payments and prepayments in excess
of the specified rate. In addition, PACs will receive the companion classes'
share of principal payments, if necessary, to cover a shortfall in the
prepayment rate. This helps PACs and TACs to control prepayment risks by
increasing the risks to their companion classes.

IOS AND POS

CMOs may allocate interest payments to one class (Interest Only or IOs) and
principal payments to another class (Principal Only or POs). POs increase in
value when prepayment rates increase. In contrast, IOs decrease in value when
prepayments increase, because the underlying mortgages generate less interest
payments. However, IOs tend to increase in value when interest rates rise (and
prepayments decrease), making IOs a useful hedge against market risks.

FLOATERS AND INVERSE FLOATERS

Another variant allocates interest payments between two classes of CMOs.
One class (Floaters) receives a share of interest payments based upon a market
index such as LIBOR. The other class (Inverse Floaters) receives any remaining
interest payments from the underlying mortgages. Floater classes receive more
interest (and Inverse Floater classes receive correspondingly less interest) as
interest rates rise. This shifts prepayment and market risks from the Floater to
the Inverse Floater class, reducing the price volatility of the Floater class
and increasing the price volatility of the Inverse Floater class.

Z CLASSES AND RESIDUAL CLASSES

CMOs must allocate all payments received from the underlying mortgages to
some class. To capture any unallocated payments, CMOs generally have an accrual
(Z) class. Z classes do not receive any payments from the underlying mortgages
until all other CMO classes have been paid off. Once this happens, holders of Z
class CMOs receive all payments and prepayments. Similarly, REMICs have residual
interests that receive any mortgage payments not allocated to another REMIC
class.

The degree of increased or decreased prepayment risks depends upon the
structure of the CMOs. However, the actual returns on any type of mortgage
backed security depend upon the performance of the underlying pool of mortgages,
which no one can predict and will vary among pools.

ASSET BACKED SECURITIES

Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than ten years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities have prepayment risks. Like most CMOs,
asset backed securities may be structured like Floaters, Inverse Floaters, IOs
and POs. Historically, borrowers are more likely to refinance their mortgage
than any other type of consumer or commercial debt. In addition, some asset
backed securities use prepayment to buy additional assets, rather than paying
off the securities. Therefore, while asset backed securities may have some
prepayment risks, they generally do not present the same degree of risk as
mortgage backed securities.

ZERO COUPON SECURITIES

Zero coupon securities do not pay interest or principal until final
maturity unlike debt securities that provide periodic payments of interest
(referred to as a coupon payment). Investors buy zero coupon securities at a
price below the amount payable at maturity. The difference between the purchase
price and the amount paid at maturity represents interest on the zero coupon
security. An investor must wait until maturity to receive interest and
principal, which increases the market and credit risks of a zero coupon
security. There are many forms of zero coupon securities. Some are issued at a
discount and are referred to as zero coupon or capital appreciation bonds.
Others are created from interest bearing bonds by separating the right to
receive the bond's coupon payments from the right to receive the bond's
principal due at maturity, a process known as coupon stripping. Treasury STRIPs,
IOs and POs are the most common forms of stripped zero coupon securities. In
addition, some securities give the issuer the option to deliver additional
securities in place of cash interest payments, thereby increasing the amount
payable at maturity. These are referred to as pay-in-kind or PIK securities.

BANK INSTRUMENTS

Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances. Yankee instruments are denominated in U.S. dollars and
issued by U.S. branches of foreign banks. Eurodollar instruments are denominated
in U.S. dollars and issued by non-U.S. branches of U.S. or foreign banks.

CREDIT ENHANCEMENT

Credit enhancement consists of an arrangement in which a company agrees to
pay amounts due on a fixed income security after the issuer defaults. In some
cases the company providing credit enhancement makes all payments directly to
the security holders and receives reimbursement from the issuer. Normally, the
credit enhancer has greater financial resources and liquidity than the issuer.
For this reason, the Adviser may evaluate the credit risk of a fixed income
security based solely upon its credit enhancement.

Common types of credit enhancement include guarantees, letters of credit,
bond insurance and surety bonds. Credit enhancement also includes arrangements
where securities or other liquid assets secure payment of a fixed income
security. Following a default, these assets may be sold and the proceeds paid to
security's holders. Either form of credit enhancement reduces credit risks by
providing another source of payment for a fixed income security.

CONVERTIBLE SECURITIES

Convertible securities are fixed income securities that the Fund has the
option to exchange for equity securities at a specified conversion price. The
option allows the Fund to realize additional returns if the market price of the
equity securities exceeds the conversion price. For example, the Fund may hold
fixed income securities that are convertible into shares of common stock at a
conversion price of $10 per share. If the market value of the shares of common
stock reached $12, the Fund could realize an additional $2 per share by
converting its fixed income securities.

Convertible securities have lower yields than comparable fixed income
securities. In addition, at the time a convertible security is issued the
conversion price exceeds the market value of the underlying equity securities.
Thus, convertible securities may provide lower returns than non-convertible
fixed income securities or equity securities depending upon changes in the price
of the underlying equity securities. However, convertible securities permit the
Fund to realize some of the potential appreciation of the underlying equity
securities with less risk of losing its initial investment. The Fund treats
convertible securities as both fixed income and equity securities for purposes
of its investment policies and limitations, because of their unique
characteristics.

FOREIGN SECURITIES

Foreign securities are securities of issuers based outside the United
States. The Fund considers an issuer to be based outside the United States if:

o it is organized under the laws of, or has a principal office located in,
another country;

o the principal trading market for its securities is in another country; or

o it (or its subsidiaries) derived in its most current fiscal year at least
50% of its total assets, capitalization, gross revenue or profit from goods
produced,

services performed, or sales made in another country.

Foreign securities are primarily denominated in foreign currencies. Along
with the risks normally associated with domestic securities of the same type,
foreign securities are subject currency risks and risks of foreign investing.
Trading in certain foreign markets is also subject to liquidity risks.

<PAGE>

DEPOSITARY RECEIPTS

Depositary receipts represent interests in underlying securities issued by
a foreign company. Depositary receipts are not traded in the same market as the
underlying security. The foreign securities underlying American Depositary
Receipts (ADRs) are traded in the United States. ADRs provide a way to buy
shares of foreign-based companies in the United States rather than in overseas
markets. ADRs are also traded in U.S. dollars, eliminating the need for foreign
exchange transactions. The foreign securities underlying European Depositary
Receipts (EDRs), Global Depositary Receipts (GDRs), and International Depositary
Receipts (IDRs), are traded globally or outside the United States. Depositary
Receipts involve many of the same risks of investing directly in foreign
securities, including currency risks and risks of foreign investing.

DERIVATIVE CONTRACTS

Derivative contracts are financial instruments that require payments based
upon changes in the values of designated (or underlying) securities, currencies,
commodities, financial indices or other assets. Some derivative contracts (such
as futures, forwards and options) require payments relating to a future trade
involving the underlying asset. Other derivative contracts (such as swaps)
require payments relating to the income or returns from the underlying asset.
The other party to a derivative contract is referred to as a counterparty.

Many derivative contracts are traded on securities or commodities
exchanges. In this case, the exchange sets all the terms of the contract except
for the price. Investors make payments due under their contracts through the
exchange. Most exchanges require investors to maintain margin accounts through
their brokers to cover their potential obligations to the exchange. Parties to
the contract make (or collect) daily payments to the margin accounts to reflect
losses (or gains) in the value of their contracts. This protects investors
against potential defaults by the counterparty. Trading contracts on an exchange
also allows investors to close out their contracts by entering into offsetting
contracts.

For example, the Fund could close out an open contract to buy an asset at a
future date by entering into an offsetting contract to sell the same asset on
the same date. If the offsetting sale price is more than the original purchase
price, the Fund realizes a gain; if it is less, the Fund realizes a loss.
Exchanges may limit the amount of open contracts permitted at any one time. Such
limits may prevent the Fund from closing out a position. If this happens, the
Fund will be required to keep the contract open (even if it is losing money on
the contract), and to make any payments required under the contract (even if it
has to sell portfolio securities at unfavorable prices to do so). Inability to
close out a contract could also harm the Fund by preventing it from disposing of
or trading any assets it has been using to secure its obligations under the
contract.

The Fund may also trade derivative contracts over-the-counter (OTC) in
transactions negotiated directly between the Fund and the counterparty. OTC
contracts do not necessarily have standard terms, so they cannot be directly
offset with other OTC contracts. In addition, OTC contracts with more
specialized terms may be more difficult to price than exchange traded contracts.

Depending upon how the Fund uses derivative contracts and the relationships
between the market value of a derivative contract and the underlying asset,
derivative contracts may increase or decrease the Fund's exposure to market and
currency risks, and may also expose the Fund to liquidity and leverage risks.
OTC contracts also expose the Fund to credit risks in the event that a
counterparty defaults on the contract. The Fund may trade in the following types
of derivative contracts.

FUTURES CONTRACTS

Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of an underlying asset at a specified price,
date, and time. Entering into a contract to buy an underlying asset is commonly
referred to as buying a contract or holding a long position in the asset.
Entering into a contract to sell an underlying asset is commonly referred to as
selling a contract or holding a short position in the asset. Futures CONTRACTS
are considered to be commodity contracts. Futures contracts traded OTC are
frequently referred to as forward contracts.

OPTIONS

Options are rights to buy or sell an underlying asset for a specified price
(the exercise price) during, or at the end of, a specified period. A call option
gives the holder (buyer) the right to buy the underlying asset from the seller
(writer) of the option. A put option gives the holder the right to sell the
underlying asset to the writer of the option. The writer of the option receives
a payment, or premium, from the buyer, which the writer keeps regardless of
whether the buyer uses (or exercises) the option.

The Fund may:

Buy call options on securities, securities indices and futures contracts in
anticipation of an increase in the value of the underlying asset. Buy put
options on securities, securities indices and futures contracts in anticipation
of a decrease in the value of the underlying asset. Write call options on
securities, securities indices and futures contracts to generate income from
premiums, and in anticipation of a decrease or only limited increase in the
value of the underlying asset. If a call written by the Fund is exercised, the
Fund foregoes any possible profit from an increase in the market price of the
underlying asset over the exercise price plus the premium received.

Write put options on securities, securities indices and futures contracts
(to generate income from premiums, and in anticipation of an increase or only
limited decrease in the value of the underlying asset). In writing puts, there
is a risk that the Fund may be required to take delivery of the underlying asset
when its current market price is lower than the exercise price.

When the Fund writes options on futures contracts, it will be subject to
margin requirements similar to those applied to futures contracts. Buy or write
options to close out existing options positions.

SPECIAL TRANSACTIONS
REPURCHASE AGREEMENTS

Repurchase agreements are transactions in which the Fund buys a security
from a dealer or bank and agrees to sell the security back at a mutually agreed
upon time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.

The Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price. Repurchase agreements
are subject to credit risks.

REVERSE REPURCHASE AGREEMENTS

Reverse repurchase agreements are repurchase agreements in which the Fund
is the seller (rather than the buyer) of the securities, and agrees to
repurchase them at an agreed upon time and price. A reverse repurchase agreement
may be viewed as a type of borrowing by the Fund. Reverse repurchase agreements
are subject to credit risks. In addition, reverse repurchase agreements create
leverage risks because the Fund must repurchase the underlying security at a
higher price, regardless of the market value of the security at the time of
repurchase.

DELAYED DELIVERY TRANSACTIONS

When issued transactions are arrangements in which the Fund buys securities
for a set price, with payment and delivery of the securities scheduled for a
future time. During the period between purchase and settlement, no payment is
made by the Fund to the issuer and no interest accrues to the Fund. The Fund
records the transaction when it agrees to buy the securities and reflects their
value in determining the price of its shares. Settlement dates may be a month or
more after entering into these transactions so that the market values of the
securities bought may vary from the purchase prices. Therefore, when issued
transactions create market risks for the Fund. When issued transactions also
involve credit risks in the event of a counterparty default. Some Funds may have
leverage risks.

TO BE ANNOUNCED SECURITIES (TBAS)

As with other when issued transactions, a seller agrees to issue a TBA
security at a future date. However, the seller does not specify the particular
securities to be delivered. Instead, the Fund agrees to accept any security that
meets specified terms. For example, in a TBA mortgage backed transaction, the
Fund and the seller would agree upon the issuer, interest rate and terms of the
underlying mortgages. However, the seller would not identify the specific
underlying mortgages until it issues the security. TBA mortgage backed
securities increase market risks because the underlying mortgages may be less
favorable than anticipated by the Fund.

SECURITIES LENDING

The Fund may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, the Fund receives cash or liquid securities from the
borrower as collateral. The borrower must furnish additional collateral if the
market value of the loaned securities increases. Also, the borrower must pay the
Fund the equivalent of any dividends or interest received on the loaned
securities. The Fund will reinvest cash collateral in securities that qualify as
an acceptable investment for the Fund. However, the Fund must pay interest to
the borrower for the use of cash collateral.

Loans are subject to termination at the option of the Fund or the borrower.
The Fund will not have the right to vote on securities while they are on loan,
but it will terminate a loan in anticipation of any important vote. The Fund may
pay administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash collateral to a securities
lending agent or broker. Securities lending activities are subject to market
risks and credit risks. Some Funds may have leverage risks.

ASSET COVERAGE

In order to secure its obligations in connection with derivatives contracts
or special transactions, the Fund will either own the underlying assets, enter
into an offsetting transaction or set aside readily marketable securities with a
value that equals or exceeds the Fund's obligations. Unless the Fund has other
readily marketable assets to set aside, it cannot trade assets used to secure
such obligations entering into an offsetting derivative contract or terminating
a special transaction. This may cause the Fund to miss favorable trading
opportunities or to realize losses on derivative contracts or special
transactions.

STOCK MARKET RISKS

o The value of equity securities in the Fund's portfolio will rise and fall.
These fluctuations could be a sustained trend or a drastic movement. The
Fund's portfolio will reflect changes in prices of individual portfolio
stocks or general changes in stock valuations. Consequently, the Fund's
share price may decline.

o The Adviser attempts to manage market risk by limiting the amount the Fund
invests in each company's equity securities. However, diversification will
not protect the Fund against widespread or prolonged declines in the stock
market.

LIQUIDITY RISKS

o Trading opportunities are more limited for equity securities that are not
widely held. This may make it more difficult to sell or buy a security at a
favorable price or time. Consequently, the Fund may have to accept a lower
price to sell a security, sell other securities to raise cash or give up an
investment opportunity, any of which could have a negative effect on the
Fund's performance. Infrequent trading of securities may also lead to an
increase in their price volatility.

o Liquidity risk also refers to the possibility that the Fund may not be able
to sell a security or close out a derivative contract when it wants to. If
this happens, the Fund will be required to continue to hold the security or
keep the position open, and the Fund could incur losses.

o OTC derivative contracts generally carry greater liquidity risk than
exchange-traded contracts.

RISKS RELATED TO INVESTING FOR GROWTH

o Due to their relatively high valuations, growth stocks are typically more
volatile than value stocks. For instance, the price of a growth stock may
experience a larger decline on a forecast of lower earnings, a negative
fundamental development, or an adverse market development. Further, growth
stocks may not pay dividends or may pay lower dividends than value stocks.
This means they depend more on price changes for returns and may be more
adversely affected in a down market compared to value stocks that pay
higher dividends.

RISKS RELATED TO INVESTING FOR VALUE

o Due to their relatively low valuations, value stocks are typically less
volatile than growth stocks. For instance, the price of a value stock may
experience a smaller increase on a forecast of higher earnings, a positive
fundamental development, or positive market development. Further, value
stocks tend to have higher dividends than growth stocks. This means they
depend less on price changes for returns and may lag behind growth stocks
in an up market.

CREDIT RISKS

o Credit risk includes the possibility that a party to a transaction
involving the Fund will fail to meet its obligations. This could cause the
Fund to lose the benefit of the transaction or prevent the Fund from
selling or buying other securities to implement its investment strategy.

BOND MARKET RISKS

o Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise,
prices of fixed income securities fall.

O Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity
of a fixed income security to changes in interest rates.

CREDIT RISKS

o Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the
Fund will lose money.

o Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not
received a rating, the Fund must rely entirely upon the Adviser's credit
assessment.

o Fixed income securities generally compensate for greater credit risk by
paying interest at a higher rate. The difference between the yield of a
security and the yield of a U.S. Treasury security with a comparable
maturity (the spread) measures the additional interest paid for risk.
Spreads may increase generally in response to adverse economic or market
conditions. A security's spread may also increase if the security's rating
is lowered, or the security is perceived to have an increased credit risk.
An increase in the spread will cause the price of the security to decline.

CALL RISKS

o Call risk is the possibility that an issuer may redeem a fixed income
security before maturity (a call) at a price below its current market
price. An increase in the likelihood of a call may reduce the security's
price.

o If a fixed income security is called, the Fund may have to reinvest the
proceeds in other fixed income securities with lower interest rates, higher
credit risks, or other less favorable characteristics.

PREPAYMENT RISKS

o Generally, homeowners have the option to prepay their mortgages at any time
without penalty. Homeowners frequently refinance high interest rate
mortgages when mortgage rates fall. This results in the prepayment of
mortgage backed securities with higher interest rates. Conversely,
prepayments due to refinancings decrease when mortgage rates increase. This
extends the life of mortgage backed securities with lower interest rates.
As a result, increases in prepayments of high interest rate mortgage backed
securities, or decreases in prepayments of lower interest rate mortgage
backed securities, may reduce their yield and price. This relationship
between interest rates and mortgage prepayments makes the price of mortgage
backed securities more volatile than most other types of fixed income
securities with comparable credit risks.

o Fixed income securities generally compensate for greater prepayment risk by
paying interest at a higher rate. The difference between the yield of a
security and the yield of a U.S. Treasury security with a comparable
maturity (the spread) measures the additional interest paid for risk.
Spreads may increase generally in response to adverse economic or market
conditions. A security's spread may also increase if the security's rating
is lowered, or the security is perceived to have an increased credit risk.
An increase in the spread will cause the price of the security to decline.

RISKS ASSOCIATED WITH COMPLICATED CMOS

o CMOs with complicated terms, such as companion classes, IOs, POs, Inverse
Floaters and residuals, generally entail greater market, prepayment and
liquidity risks than other mortgage backed securities. For example, their
prices are more volatile and their trading market may be more limited.

INVESTMENT LIMITATIONS

FUNDAMENTAL LIMITATIONS

The following investment limitations are fundamental and cannot be changed
without shareholder approval.

SELLING SHORT AND BUYING ON MARGIN

The Funds will not sell any securities short or purchase any securities on
margin, but may obtain such short-term credits as may be necessary for clearance
of purchases and sales of portfolio securities. A deposit or payment by a Fund
of initial or variation margin in connection with futures contracts, forward
contracts or related options transactions is not considered the purchase of a
security on margin.

ISSUING SENIOR SECURITIES AND BORROWING MONEY

The Funds will not issue senior securities except that a Fund may borrow
money directly (or with respect to the BALANCED FUND and VALUE FUND, through
reverse repurchase agreements) in amounts up to one-third of the value of their
respective total including the amounts borrowed (except to the extent that FIXED
INCOME FUND, GROWTH FUND and AGGRESSIVE GROWTH FUND may enter into futures
contracts). The Funds will not borrow money except as a temporary,
extraordinary, or emergency measure or to facilitate management of the portfolio
by enabling a Fund to meet redemption requests when the liquidation of portfolio
securities is deemed to be inconvenient or disadvantageous. The Funds will not
purchase any securities while borrowings in excess of 5% of their respective
total assets are outstanding. PLEDGING ASSETS

The Funds will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. However, the TREASURY MONEY MARKET FUND, LIMITED
MATURITY GOVERNMENT FUND, FIXED INCOME FUND, GROWTH FUND and AGGRESSIVE GROWTH
FUND may pledge assets having a market value not exceeding the lesser of the
dollar amounts borrowed or 10% (15% with respect to the LIMITED MATURITY
GOVERNMENT FUND) of the value of total assets at the time of the pledge. (For
purposes of this limitation, the following are not deemed to be pledges: margin
deposits for the purchase and sale of financial future contracts and related
options and the segregation or collateral arrangements made in connection with
options activities or the purchase of securities on a when-issued basis).
LENDING CASH OR SECURITIES

The Funds will not lend any of their assets, except, that each Fund, other
than TREASURY MONEY MARKET FUND, will lend portfolio securities (limited with
respect to LIMITED MATURITY GOVERNMENT FUND, FIXED INCOME FUND, GROWTH FUND and
AGGRESSIVE GROWTH FUND to one-third of the value of its respective total
assets). This shall not prevent a Fund from purchasing or holding U.S.
government obligations, money market instruments, variable rate demand notes,
bonds, debentures, notes, certificates of indebtedness, or other debt
securities, entering into repurchase agreements, or engaging in other
transactions where permitted by each Fund's investment objective, policies, and
limitations or the Trust's Declaration of Trust.

The TREASURY MONEY MARKET FUND will not lend any of its assets, except that
it may purchase or hold U.S. Treasury obligations permitted by its investment
objective, policies and limitations, or Declaration of Trust. INVESTING IN
COMMODITIES

The Funds will not purchase or sell commodities, commodity contracts, or
commodity futures contracts (except to the extent that a Fund may engage in
transactions involving futures contracts or options on futures contracts and
related options with respect to financial instruments, securities, or securities
indices). INVESTING IN REAL ESTATE

The Funds will not purchase or sell real estate, including limited
partnership interests, although the Funds (except for TREASURY MONEY MARKET
FUND) may invest in the securities of companies whose business involves the
purchase or sale of real estate or in securities which are secured by real
estate or interests in real estate. DIVERSIFICATION OF INVESTMENTS

With respect to securities comprising 75% of the value of each Fund's total
assets, the Funds will not purchase securities issued by any one issuer (other
than cash, cash items or securities issued or guaranteed by the government of
the United States or its agencies or instrumentalities and repurchase agreements
collateralized by such securities) if, as a result, more than 5% of the value of
its total assets would be invested in the securities of that issuer. In
addition, each Fund will not acquire more than 10% of the outstanding voting
securities of that issuer. (For purposes of this limitation, the BALANCED FUND,
VALUE FUND, GROWTH FUND and AGGRESSIVE GROWTH FUND consider common stock and all
preferred stock of an issuer each as a single class, regardless of priorities,
series, designations, or other differences.) CONCENTRATION OF INVESTMENTS

A Fund will not invest 25% or more of its total assets in securities of
issuers having their principal business activities in the same industry (other
than securities issued by the U.S. government, its agencies or
instrumentalities).

Due to the limited focus of its investment objective, this limitation has
no applicability to TREASURY MONEY MARKET FUND.

UNDERWRITING

The Funds will not underwrite any issue of securities, except as a Fund may
be deemed to be an underwriter under the Securities Act of 1933 in connection
with the sale of securities which the Funds may purchase pursuant to its
investment objective, policies, and limitations. NON-FUNDAMENTAL LIMITATIONS

The following investment limitations are non-fundamental and, therefore,
may be changed by the Trustees without shareholder approval. Shareholders will
be notified before any material change in these limitations becomes effective.

INVESTING IN ILLIQUID AND RESTRICTED SECURITIES

A Fund will not invest more than 15% (10% with respect to TREASURY MONEY
MARKET FUND) of its respective net assets in illiquid securities, including
certain restricted securities not determined to be liquid under criteria
established by the Trustees, repurchase agreements providing for settlement in
more than seven days after notice, non-negotiable fixed time deposits with
maturities over seven days, and over-the-counter options.

PURCHASING SECURITIES
TO EXERCISE CONTROL

The Funds will not purchase securities of a company for the purpose of
exercising control or management.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Funds may invest in the securities of affiliated money market funds as
an efficient means of managing a Fund's uninvested cash.

INVESTING IN OPTIONS

A Fund will not purchase put options on securities unless the securities
are held in the Fund's portfolio and not more than 5% of the value of the Fund's
respective total assets would be invested in premiums on put option positions.

WRITING COVERED CALL OPTIONS

A Fund will not write call options on securities unless the securities are
held in the Fund's portfolio or unless the Fund is entitled to them in
deliverable form without further payment or after segregating cash in the amount
of any further payment.

ARBITRAGE TRANSACTIONS

The Funds will not enter into transactions for the purpose of engaging in
arbitrage.

Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in percentage
resulting from any

change in value or net assets will not result in a violation of such
restriction. For purposes of its policies and limitations, the Fund considers
instruments (such as certificates of deposit and demand and time deposits)
issued by a U.S. branch of a domestic bank or savings and loan having capital,
surplus, and undivided profits in excess of $100,000,000 at the time of
investment to be cash items.

REGULATORY COMPLIANCE. The TREASURY MONEY MARKET FUND may follow
non-fundamental operational policies that are more restrictive than its
fundamental investment limitations, as set forth in the prospectus and this
statement of additional information, in order to comply with applicable laws and
regulations. In particular, the TREASURY MONEY MARKET FUND will comply with the
various requirements of Rule 2a-7 under the Act, which regulates money market
mutual funds. For example, Rule 2a-7 generally prohibits the investment of more
than 5% of the TREASURY MONEY MARKET FUND'S total assets in the securities of
any one issuer, although the TREASURY MONEY MARKET FUND'S fundamental investment
limitation only requires such 5% diversification with respect to 75% of its
assets. The TREASURY MONEY MARKET FUND will also determine the effective
maturity of its investments, as well as its ability to consider a security as
having received the requisite short-term ratings by NRSROs, according to Rule
2a-7. The TREASURY MONEY MARKET FUND may change these operational policies to
reflect changes in the laws and regulations without shareholder approval.

PORTFOLIO TURNOVER. For the fiscal years ended November 30, 1998 and 1997,
the portfolio turnover rates were 69% and 40%, respectively, for LIMITED
MATURITY GOVERNMENT

Fund; 64% and 37%, respectively, for the FIXED INCOME FUND; 41% and 40%,
respectively, for the GROWTH FUND; 63% and 31%, respectively, for the VALUE
FUND; and 31% and 34%, respectively, for the BALANCED FUND.

DETERMINING MARKET VALUE OF SECURITIES

USE OF THE AMORTIZED COST METHOD (TREASURY MONEY MARKET FUND ONLY)

The Trustees have decided that the best method for determining the value of
portfolio instruments for the TREASURY MONEY MARKET FUND is amortized cost.
Under this method, portfolio instruments are valued at the acquisition cost as
adjusted for amortization of premium or accumulation of discount rather than at
current market value.

The TREASURY MONEY MARKET FUND's use of the amortized cost method of
valuing portfolio instruments depends on its compliance with the provisions of
Rule 2a-7 (the Rule) promulgated by the Securities and Exchange Commission under
the Act. Under the Rule, the Trustees must establish procedures reasonably
designed to stabilize the net asset value per share, as computed for purposes of
distribution and redemption, at $1.00 per share, taking into account current
market conditions and the Fund's investment objective.

Under the Rule, the TREASURY MONEY MARKET FUND is permitted to purchase
instruments which are subject to demand features or standby commitments. As
defined by the Rule, a demand feature entitles the Fund to receive the principal
amount of the instrument from the issuer or a third party on (1) no more than 30
days' notice or (2) at specified intervals not exceeding 397 days on no more
than 30 days' notice. A standby commitment entitles the Fund to achieve same-day
settlement and to receive an exercise price equal to the amortized cost of the
underlying instrument plus accrued interest at the time of exercise. The
TREASURY MONEY MARKET FUND acquires instruments subject to demand features and
standby commitments to enhance the instrument's liquidity. The Fund treats
demand features and standby commitments as part of the underlying instruments,
because the Fund does not acquire them for speculative purposes and cannot
transfer them separately from the underlying instruments. Therefore, although
the Fund defines demand features and standby commitments as puts, the Fund does
not consider them to be corporate investments for purposes of its investment
policies.

MONITORING PROCEDURES. The Trustees' procedures include monitoring the
relationship between the amortized cost value per share and the net asset value
per share based upon available indications of market value. The Trustees will
decide what, if any, steps should be taken if there is a difference of more than
0.5 of 1% between the two values. The Trustees will take any steps they consider
appropriate (such as redemption in kind or shortening the average portfolio
maturity) to minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.

INVESTMENT RESTRICTIONS. The Rule requires that the TREASURY MONEY MARKET
FUND limit its investments to instruments that, in the opinion of the Trustees,
present minimal credit risks and have received the requisite rating from one or
more NRSROs. If the instruments are not rated, the Trustees must determine that
they are of comparable quality. The Rule also requires the Fund to maintain a
dollar-weighted average portfolio maturity (not more than 90 days) appropriate
to the objective of maintaining a stable net asset value of $1.00 per share. In
addition, no instrument with a remaining maturity of more than 397 days can be
purchased by the Fund. Should the disposition of a portfolio security result in
a dollar-weighted average portfolio maturity of more than 90 days, the TREASURY
MONEY MARKET FUND will invest its available cash to reduce the average maturity
to 90 days or less as soon as possible. Shares of investment companies purchased
by the Fund will meet these same criteria and will have investment policies
consistent with Rule 2a-7.

Under the amortized cost method of valuation, neither the amount of daily
income nor the net asset value is affected by any unrealized appreciation or
depreciation of the portfolio. In periods of declining interest rates, the
indicated daily yield on shares of the TREASURY MONEY MARKET FUND, computed
based upon amortized cost valuation, may tend to be higher than a similar
computation made by using a method of valuation based upon market prices and
estimates. In periods of rising interest rates, the indicated daily yield on
shares of the Fund computed the same way may tend to be lower than a similar
computation made by using a method of calculation based upon market prices and
estimates.

MARKET VALUES (ALL OTHER FUNDS)

Market values of portfolio securities are determined as follows:

o for equity securities, according to the last sale price in the market in
which they are primarily traded (either a national securities exchange or
the over-the-counter market), if available;

o in the absence of recorded sales for equity securities, according to the
mean between the last closing bid and asked prices;

o for bonds and other fixed income securities, at the last sale price on a
national securities exchange, if available, otherwise, as determined by an
independent pricing service;

o for short-term obligations, according to the mean between bid and asked
prices as furnished by an independent pricing service, except that
short-term obligations with remaining maturities of less than 60 days at
the time of purchase may be valued at amortized cost or at fair market
value as determined in good faith by the Board; and

o for all other securities, at fair value as determined in good faith by the
Board.

Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may consider: institutional trading in
similar groups of securities, yield, quality, stability, risk, coupon rate,
maturity, type of issue, trading characteristics, and other market data or
factors.

A Fund values futures contracts and options at their market values
established by the exchanges on which they are traded at the close of trading on
such exchanges. Options traded in the over-the-counter market are valued
according to the mean between the last bid and the last asked price for the
option as provided by an investment dealer or other financial institution that
deals in the option. The Board may determine in good faith that another method
of valuing such investments is necessary to appraise their fair market value.

WHAT DO SHARES COST?

The TREASURY MONEY MARKET FUND attempts to stabilize the net asset value
(NAV) of Shares at $1.00 by valuing its portfolio securities using the amortized
cost method. Shares of the other Funds are sold at their NAV and redeemed at NAV
less any applicable Contingent Deferred Sales Charge (CDSC) (applies to
Investment Shares and AGGRESSIVE GROWTH FUND only) on days on which the New York
Stock Exchange is open for business. The NAV for each class of Shares may differ
due to the variance in daily net income realized by each class. Such variance
will reflect only accrued net income to which the shareholders of a particular
class are entitled.

REDUCING OR ELIMINATING THE CONTINGENT DEFERRED SALES CHARGE

These reductions or eliminations are offered because: no sales commissions
have been advanced to the investment professional selling Share; the shareholder
has already paid a CDSC; or nominal sales efforts are associated with the
original purchase of Shares.

Upon notification to the Distributor or the Funds' transfer agent, no CDSC
will be imposed on redemptions:

o if you are an officer, director, employee or retired employee of Regions
Bank, or its affiliates, and your spouse and dependent children;

o if you are a Regions Management Account customer;

o if you are a trust customer redeeming through the Trust departments of
Regions Bank, or its affiliates. The Trust departments may charge fees for
services provided;

o on the portion of redemption proceeds attributable to increases in the
value of your account due to increases in the NAV;

o on shares acquired through reinvestment of dividends and capital gains;

o on shares held more than 3 years after the end of the calendar month of
acquisition;

o upon the death or disability of the last surviving shareholder(s) of the
account;

o if your redemption is a required distribution and you are over the age of
70-1/2 from an individual retirement account or other retirement plan;

o on shares purchased prior to June 1, 1997; or

o when the Fund redeems your Shares and closes your account for failing to
meet the minimum balance requirement.

HOW IS THE FUND SOLD?

Under the Distributor's Contract with the Funds, the Distributor (Federated
Securities Corp.), located at Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, PA 15222-3779, offers Shares on a continuous, best-efforts basis.

RULE 12B-1 PLAN (AGGRESSIVE GROWTH FUND AND INVESTMENT SHARES ONLY)

As a compensation-type plan, the Rule 12b-1 Plan is designed to pay the
Distributor (who may then pay investment professional such as banks,
broker/dealers, trust departments of bank, and registered investment advisers)
for marketing activities (such as advertising, printing and distributing
prospectuses, and providing incentives to investment professional) to promote
sales of Shares so that overall Fund assets are maintained or increased. This
helps the Fund achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and Share redemptions. Also, the
Fund's service providers that receive asset-based fees also benefit from stable
or increasing Fund assets.

The Funds may compensate the Distributor more or less than its actual
marketing expenses. In no event will a Fund pay for any expenses of the
Distributor that exceed the maximum Rule 12b-1 Plan fee.

SHAREHOLDER SERVICES

The Funds (except the AGGRESSIVE GROWTH FUND and TREASURY MONEY MARKET
FUND) may pay Federated Shareholder Services, a subsidiary of Federated
Investors, Inc., for providing shareholder services and maintaining shareholder
accounts. Federated Shareholder Services may select others, including Regions
Bank and RICI, to perform these services for their customers and may pay them
fees.

SUPPLEMENTAL PAYMENTS

Investment professionals may be paid fees out of the assets of the
Distributor and/or Federated Shareholder Services (but not out of Fund assets).
The Distributor and/or Federated Shareholder Services may be reimbursed by the
Adviser or its affiliates.

Investment professional receive such fees for providing
distribution-related or shareholder services such as sponsoring sales, providing
sales literature, conducting training seminars for employees, and engineering
sales-related computer software programs and systems. Also, investment
professionals may be paid cash or promotional incentives, such as reimbursement
of certain expenses relating to attendance at informational meetings about the
Fund or other special events at recreational-type facilities, or items of
material value. These payments will be based upon the amount of Shares the
investment professional sells or may sell and/or upon the type and nature of
sales or marketing support furnished by the investment professional.

HOW TO BUY SHARES

EXCHANGING SECURITIES FOR FUND SHARES

You may contact the Distributor to request a purchase of Shares in an
exchange for securities you own. The Fund reserves the right to determine
whether to accept your securities and the minimum market value to accept. The
Fund will value your securities in the same manner as it values its assets. This
exchange is treated as a sale of your securities for federal tax purposes.

EXCHANGE PRIVILEGE

Before the exchange, the shareholder must receive a copy of the Prospectus.
Please refer to the "How to Exchange Shares" section in the Prospectus.

REDEMPTION IN KIND

Although the Funds intend to pay share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of

the Fund's portfolio securities.

Because the Trust has elected to be governed by Rule 18f-1 under the
Investment Company Act or 1940, the Funds are obligated to pay share redemptions
to any one shareholder in cash only up to the lesser of $250,000 or 1% of a
Fund's net assets represented by such share class during any 90-day period.

Any share redemption payment greater than this amount will also be in cash
unless the Funds' Trustees determine that payment should be in kind. In such a
case, a Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its net
asset value. The portfolio securities will be selected in a manner that the
Funds' Trustees deems fair and equitable and, to the extent available, such
securities will be readily marketable.

Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving their portfolio securities and selling them
before their maturity could receive less than the redemption value of their
securities and could incur transaction costs.

MASSACHUSETTS PARTNERSHIP LAW

Under certain circumstances, shareholders may be held personally liable
under Massachusetts law for acts or obligations of the Trust. To protect
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of shareholders for such acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign. In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required to use its property to protect or
compensate the shareholder. On request, the Trust will defend any claim made and
pay any judgment against a shareholder for any act or obligation of the Trust.
Therefore, financial loss resulting from liability as a shareholder will occur
only if the Trust cannot meet its obligations to indemnify shareholders and pay
judgments against them.

ACCOUNT AND SHARE INFORMATION

VOTING RIGHTS

Each Share of a Fund gives the shareholder one vote in Trustee elections
and other matters submitted to shareholders for vote. All classes of each Fund
in a Trust have equal voting rights, except that in matters affecting only a
particular Fund or class, only Shares of that Fund or class are entitled to
vote. Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of shareholders will be called by the Trustees upon
the written request of shareholders who own at least 10% of each Trust's
outstanding shares of all series entitled to vote.

As of December 31, 1998, the following list indicates the shareholders who
owned of record, beneficially or both 5% or more of the outstanding shares of
the following portfolios: Federated Administrative Services, Pittsburgh, PA
owned approximately 10 Shares (100%) of the AGGRESSIVE GROWTH FUND; HUBCO, c/o
Regions Financial Corp., Birmingham, AL owned approximately 529,635,234 Trust
Shares (99.45%) of the TREASURY MONEY MARKET FUND; approximately 5,536,279 Trust
Shares (99.90%) and 3,085,123 Investment Shares (91.15%) of LIMITED MATURITY
GOVERNMENT FUND; approximately 18,190,027 Trust Shares (100%) and 1,431,402
Investment Shares (58.77%) of FIXED INCOME FUND; approximately 671,039 Trust
Shares (100%) and 5,931,660 Investment Shares of the BALANCED FUND;
approximately 9,613,269 Trust Shares (100%) and 2,300,241 Investment Shares
(76.83%) of VALUE FUND; and approximately 12,763,295 Trust Shares (100%) and
5,332,448 Investment Shares (68.71%) of GROWTH FUND.

Shareholders owing 25% or more of outstanding Shares may be in control and
be able to affect the outcome of certain mattes presented for a vote of
shareholders.

WHAT ARE THE TAX CONSEQUENCES?

FEDERAL INCOME TAX

The Funds will pay no federal income tax because each Fund expects to meet
the requirements of Subchapter M of the Internal Revenue Code (Code) applicable
to regulated investment companies and to receive the special tax treatment
afforded to such companies. Each Fund will be treated as a single, separate
entity for federal income tax purposes so that income earned and capital gains
and losses realized by the Trust's other portfolios will be separate from those
realized by each Fund. Each Fund is entitled to a loss carry-forward, which may
reduce the taxable income or gain that each Fund would realize, and to which the
shareholder would be subject, in the future. The dividends received deduction
for corporations will apply to ordinary income distributions to the extent the
distribution represents amounts that would qualify for the dividends received
deduction to the Funds if the Funds were a regular corporation, and to the
extent designated by the Funds as so qualifying. Otherwise, these dividends and
any short-term capital gains are taxable as ordinary income. No portion of any
income dividends paid by the other Funds is eligible for the dividends received
deduction available to corporations. These dividends, and any short-term capital
gains, are taxable as ordinary income. CAPITAL GAINS

Capital gains, when experienced by the Funds, could result in an increase
in dividends. Capital losses could result in a decrease in dividends. When a
Fund realizes net long-term capital gains, it will distribute them at least once
every 12 months.

WHO MANAGES THE FUNDS?

OFFICERS AND TRUSTEES

The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birthdate, present position(s) held with the Trust,
principal occupations for the past five years, total compensation received as a
Trustee from the Trust for its most recent fiscal year. The Trust is comprised
of seven funds. As of December 31, 1998, the Funds' Board and Officers as a
group owned less than 1% of the Fund's outstanding Shares.

An asterisk (*) denotes a Trustee who is deemed to be an interested person
as defined in the Investment Company Act of 1940. The following symbol (#)
denotes a Member of the Board's Executive Committee, which handles the Board's
responsibilities between its meetings.

NAME AGGREGATE
BIRTHDATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS FROM
POSITION WITH TRUST FOR PAST 5 YEARS TRUST

JOHN F. DONAHUE*## Chief Executive Officer and Director or $0
Birthdate: July 28, 1924 Trustee of the Federated Fund Complex.
Federated Investors Chairman and Director, Federated Investors,
Tower Inc.; Chairman and Trustee, Federated
1001 Liberty Avenue Advisers, Federated Management, and
Pittsburgh, PA Federated Research; Chairman and Director,
TRUSTEE AND CHAIRMAN Federated Research Corp., and Federated
Global Investment Management Corp.;
Chairman, Passport Research, Ltd.

- -------------------------
THOMAS G. BIGLEY Director or Trustee of the Federated Fund $1,732.86
Birthdate: February 3, Complex; Director, Member of Executive
1934 Committee, Children's Hospital of
15 Old Timber Trail Pittsburgh; formerly: Senior Partner, Ernst
Pittsburgh, PA & Young LLP; Director, MED 3000 Group,
TRUSTEE Inc.; Director, Member of Executive
Committee, University of Pittsburgh.

- -------------------------
JOHN T. CONROY, JR. Director or Trustee of the Federated Fund $1,906.42
Birthdate: June 23, 1937 Complex; President, Investment Properties
Wood/IPC Commercial Corporation; Senior Vice President,
Dept. John R. Wood and Associates, Inc.,
John R. Wood Realtors; Partner or Trustee in private
Associates, Inc. real estate ventures in Southwest Florida;
Realtors formerly: President, Naples Property
3255 Tamiami Trial Management, Inc. and Northgate Village
North Naples, FL Development Corporation.
TRUSTEE

- -------------------------
NICHOLAS CONSTANTAKIS Director or Trustee of the Federated Fund $1,732.86
Birthdate: September 3, Complex; formerly: Partner, Andersen
1939 Worldwide SC.
175 Woodshire Drive

Pittsburgh, PA

TRUSTEE

- -------------------------
WILLIAM J. COPELAND Director or Trustee of the Federated Fund $1,906.42
Birthdate: July 4, 1918 Complex; Director and Member of the
One PNC Plaza-23rd Floor Executive Committee, Michael Baker, Inc.;
Pittsburgh, PA formerly: Vice Chairman and Director, PNC
TRUSTEE Bank, N.A., and PNC Bank Corp.; Director,

Ryan Homes, Inc.

Retired: Director, United Refinery;
Director, Forbes Fund; Chairman, Pittsburgh
Foundation; Chairman, Pittsburgh Civic

Light Opera.

- -------------------------
JAMES E. DOWD, ESQ. Director or Trustee of the Federated Fund $1,906.42
Birthdate: May 18, 1922 Complex; Attorney-at-law; Director, The
571 Hayward Mill Road Emerging Germany Fund, Inc.

Concord, MA

TRUSTEE Retired: President, Boston Stock Exchange,
Inc.; Regional Administrator, United States
Securities and Exchange Commission.

- -------------------------
LAWRENCE D. ELLIS, M.D.* Director or Trustee of the Federated Fund $1,732.86
Birthdate: October 11, Complex; Professor of Medicine, University
1932 of Pittsburgh; Medical Director, University
3471 Fifth Avenue of Pittsburgh Medical Center - Downtown;
Suite 1111 Hematologist, Oncologist, and Internist,
Pittsburgh, PA Presbyterian and Montefiore Hospitals;
TRUSTEE Member, National Board of Trustees,
Leukemia Society of America.

- -------------------------
EDWARD L. FLAHERTY, Director or Trustee of the Federated Fund $1,906.42
JR., ESQ. # Complex; Attorney, of Counsel, Miller,

Birthdate: June 18, 1924 Ament, Henny & Kochuba; Director, Eat'N
Miller, Ament, Henny & Park Restaurants, Inc.; formerly: Counsel,
Kochuba Horizon Financial, F.A., Western Region;
205 Ross Street Partner, Meyer and Flaherty.

Pittsburgh, PA

TRUSTEE

- -------------------------

<PAGE>

EDWARD C. GONZALES* Trustee or Director of some of the Funds in $0
Birthdate: October 22, the Federated Fund Complex; President,
1930 Executive Vice President and Treasurer of
Federated Investors some of the Funds in the Federated Fund
Tower Complex; Vice Chairman, Federated
1001 Liberty Avenue Investors, Inc.; Vice President, Federated
Pittsburgh, PA Advisers, Federated Management, Federated
TRUSTEE Research, Federated Research Corp.,
Federated Global Investment Management
Corp. and Passport Research, Ltd.;
Executive Vice President and Director,
Federated Securities Corp.; Trustee,
Federated Shareholder Services Company.

- -------------------------
PETER E. MADDEN Director or Trustee of the Federated Fund $1,732.86
Birthdate: March 16, Complex; formerly: Representative,
1942 Commonwealth of Massachusetts General
One Royal Palm Way Court; President, State Street Bank and
100 Royal Palm Way Trust Company and State Street Corporation.

Palm Beach, FL

TRUSTEE Retired: Director, VISA USA and VISA
International; Chairman and Director,
Massachusetts Bankers Association;
Director, Depository Trust Corporation.

- -------------------------
JOHN E. MURRAY, JR., Director or Trustee of the Federated Fund $1,732.86
J.D., S.J.D. Complex; President, Law Professor, Duquesne
Birthdate: December 20, University; Consulting Partner, Mollica &

1932 Murray.
President, Duquesne

University Retired: Dean and Professor of Law,
Pittsburgh, PA University of Pittsburgh School of Law;
TRUSTEE Dean and Professor of Law, Villanova

University School of Law.

- -------------------------
WESLEY W. POSVAR Director or Trustee of the Federated Fund $1,732.86
Birthdate: September Complex; President, World Society of
14, 1925 Ekistics, Athens; Professor, International
1202 Cathedral of Politics; Management Consultant; Trustee,
Learning Carnegie Endowment for International Peace,
University of Pittsburgh RAND Corporation, Online Computer Library
Pittsburgh, PA Center, Inc., National Defense University
TRUSTEE and U.S. Space Foundation; President
Emeritus, University of Pittsburgh;
Founding Chairman, National Advisory
Council for Environmental Policy and
Technology, Federal Emergency Management
Advisory Board and Czech Management Center,

Prague.

Retired: Professor, United States Military
Academy; Professor, United States Air Force

Academy.

- -------------------------
MARJORIE P. SMUTS Director or Trustee of the Federated Fund $1,732.86
Birthdate: June 21, 1935 Complex; Public

4905 Bayard Street Relations/Marketing/Conference Planning.
Pittsburgh, PA
TRUSTEE Retired: National Spokesperson, Aluminum

Company of America; business owner.

- -------------------------
JOHN S. WALSH Director or Trustee of the Federated Fund $0
Birthdate: November 28, Complex; President and Director, Heat
1957 Wagon, Inc.; President and Director,
2007 Sherwood Drive Manufacturers Products, Inc.; President,
Valparaiso, IN Portable Heater Parts, a division of
TRUSTEE Manufacturers Products, Inc.; Director,
Walsh & Kelly, Inc.; Formerly, Vice
President, Walsh & Kelly, Inc.

- -------------------------
President or Executive Vice President of $0
J. CHRISTOPHER DONAHUE## the Federated Fund Complex; Director or
Birthdate: April 11, Trustee of some of the Funds in the
1949 Federated Fund Complex; President and
Federated Investors Director, Federated Investors, Inc.;
Tower President and Trustee, Federated Advisers,
1001 Liberty Avenue Federated Management, and Federated
Pittsburgh, PA Research; President and Director, Federated
EXECUTIVE VICE PRESIDENT Research Corp. and Federated Global
Investment Management Corp.; President,
Passport Research, Ltd.; Trustee, Federated
Shareholder Services Company; Director,
Federated Services Company.

- -------------------------
JOHN W. MCGONIGLE Executive Vice President and Secretary of $0
Birthdate: October 26, the Federated Fund Complex; Executive Vice
1938 President, Secretary, and Director,
Federated Investors Federated Investors, Inc.; Trustee,
Tower Federated Advisers, Federated Management,
1001 Liberty Avenue and Federated Research; Director, Federated
Pittsburgh, PA Research Corp. and Federated Global
EXECUTIVE VICE PRESIDENT Investment Management Corp.; Director,

Federated Services Company; Director,
Federated Securities Corp.

- -------------------------
RICHARD B. FISHER President or Vice President of some of the $0
Birthdate: May 17, 1923 Funds; Director or Trustee of some of the

Federated Investors Funds; Executive Vice President, Federated
Tower Investors, Inc.; Chairman and Director,
1001 Liberty Avenue Federated Securities Corp.

Pittsburgh, PA

VICE PRESIDENT

- -------------------------
RICHARD J. THOMAS Treasurer of the Federated Fund Complex; $0
Birthdate: June 17, Vice President - Funds Financial Services
1954 Division, Federated Investors, Inc.;
Federated Investors Formerly: various management positions
Tower within Funds Financial Services Division of
1001 Liberty Avenue Federated Investors, Inc.

Pittsburgh, PA

TREASURER

- -------------------------
CHARLES L. DAVIS, JR. Vice President and Assistant Treasurer of $0
Birthdate: March 23, some of the Funds.
1960
Federated Investors
Tower
1001 Liberty Avenue
Pittsburgh, PA
VICE PRESIDENT AND
ASSISTANT TREASURER

</TABLE>

## Mr. Donahue is the father of J. Christopher Donahue, Executive Vice
President of the Trust.

ADVISER TO THE FUNDS

The Funds' investment adviser is the Capital Management Group, a unit of
the Trust Division of Regions Bank (Adviser), which is a wholly-owned subsidiary
of Regions Financial Corp. Because of internal controls maintained by Regions
Bank to restrict the flow of non-public information, Fund investments are
typically made without any knowledge of Regions Bank or its affiliates' lending
relationships with an issuer.

The Adviser shall not be liable to the Trust, the Funds or any shareholder
of the Funds for any losses that may be sustained in the purchase, holding, or
sale of any security, or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with the Trust.

BANKING LAWS

Banking laws and regulations presently prohibit a bank holding company
registered under the federal Bank Holding Company Act of 1956 or any bank or
non-bank affiliate thereof from sponsoring, organizing, controlling or
distributing the shares of a registered, open-end management investment company
continuously engaged in the issuance of its shares, and prohibit banks generally
from issuing, underwriting, or distributing securities. However, such banking
laws and regulations do not prohibit such a holding company, affiliate, or banks
generally from acting as investment adviser, transfer agent or custodian to such
an investment company or from purchasing shares of such a company as agent for
and upon the order of such a customer. Regions Bank is subject to such banking
laws and regulations. Regions Bank believes, based on the advice of its counsel,
that it may perform the services contemplated by the investment advisory and
custody agreement with the Trust without violation of the Glass-Steagall Act or
other applicable banking laws or regulations. Changes in either federal or state
statutes and regulations relating to the permissible activities of banks and
their subsidiaries or affiliates, as well as further judicial or administrative
decisions or interpretations of such present or future statutes and regulations,
could prevent Regions Bank from continuing to perform all or a part of the
services described in the prospectus for its customers and/or the Fund. If
Regions Bank were prohibited from engaging in these activities, the Trustees
would consider alternative service providers and means of continuing available
investment services. In such event, changes in the operation of the Fund may
occur, including possible termination of any automatic or other Fund share
investment and redemption services then being provided by Regions Bank. It is
not expected that existing shareholders would suffer any adverse financial
consequences if another adviser with equivalent abilities to Capital Management
Group is found as a result of any of these occurrences.

BROKERAGE TRANSACTIONS

The Adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to a Fund or the Adviser, and
may include: advice as to the advisability of investing in securities; security
analysis and reports; economic studies; industry studies; receipt of quotations
for portfolio evaluations; and similar services. The Adviser and its affiliates
exercise reasonable business judgment in selecting brokers who offer brokerage
and research services to execute securities transactions. They determine in good
faith that commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided. Research services
provided by brokers and dealers may be used by the Adviser in advising the Funds
and other accounts. To the extent that receipt of these services may supplant
services for which the Adviser or its affiliates might otherwise have paid, it
would tend to reduce their expenses.

For the fiscal year ended November 30, 1998, the Funds' Adviser directed
brokerage transactions to certain brokers due to research services they
provided. The total amount of these transactions was $529,838,284 for which the
Funds paid $810,735 in brokerage commissions.

ADMINISTRATOR

Federated Administrative Services, a subsidiary of Federated Investors,
Inc., provides administrative personnel and services to the Funds for a fee at
an annual rate as specified below:

MAXIMUM AVERAGE AGGREGATE DAILY NET
ADMINISTRATIVE FEE ASSETS OF THE TRUST

.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million

The administrative fee received during any fiscal year shall be at least
$50,000 per Fund. Federated Administrative Services may choose voluntarily to
reimburse a portion of its fee at any time.

The functions performed by FAS, as administrator include, but are not
limited to the following:

o preparation, filing and maintenance of the Trust's governing documents,
minutes of Trustees' meetings and shareholder meetings;

o preparation and filing with the SEC and state regulatory authorities the
Trust's registration statement and all amendments, and any other documents
required for the Funds to make a continuous offering of their shares;

o prepare, negotiate and administer contracts on behalf of the Fund;

o supervision of the preparation of financial reports;

o preparation and filing of federal and state tax returns;

o assistance with the design, development and operation of a Fund; and

o providing advice to the Funds and Trustees.

TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND PORTFOLIO ACCOUNTING SERVICES

Federated Services Company, Pittsburgh, Pennsylvania, through its
registered transfer agent, Federated Shareholder Services Company, maintains all
necessary shareholder records. For its services, the transfer agent receives a
fee based on the size, type and number of accounts and transactions made by
shareholders. The fee is based on the level of the Funds' average net assets for
the period plus out-of-pocket expenses.

CUSTODIAN

Regions Bank, Birmingham, Alabama, is custodian for the securities and cash
of the Funds. Under the custodian agreement, Regions Bank holds the each Fund's
portfolio securities and keeps all necessary records and documents relating to
its duties. Regions Bank's fees for custody services are based upon the market
value of Fund securities held in custody plus certain securities transaction
charges.

INDEPENDENT AUDITORS

Deloitte & Touche LLP, Pittsburgh, Pennsylvania, is the independent auditor
for the Funds.

FEES PAID BY THE FUNDS FOR SERVICES

<TABLE>
<CAPTION>
<S> <C> <C> <C>
- --------------------- ------------------------------- --------------------------- ---------------------------
FUND ADVISORY FEE PAID/ BROKERAGE COMMISSIONS PAID ADMINISTRATIVE FEE PAID
ADVISORY FEE WAIVED

--------------------------- ---------------------------
------------------------------- --------------------------- ---------------------------
FOR THE FISCAL YEAR ENDED FOR THE FISCAL YEAR ENDED FOR THE FISCAL YEAR ENDED
NOVEMBER 30, 1998 NOVEMBER 30, 1998 NOVEMBER 30, 1998

------------------------------- --------------------------- ---------------------------
----------------------------------------------------------------------------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
- ---------------------
----------------------------------------------------------------------------------------
TREASURY MONEY $1,530,439$923,323 $735,258 N/A N/A N/A $322,494 $218,861 $190,715
MARKET FUND $765,219 $461,662 $427,681

- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
LIMITED MATURITY $613,188 $554,567 $448,104 N/A N/A N/A $93,041 $94,304 $83,044
GOVERNMENT FUND $0 $0 $48,135
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
FIXED INCOME FUND $1,631,732$1,272,862 $1,135,766 N/A N/A N/A $230,969 $201,589 $196,480
$0 $0 $0
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
BALANCED FUND $813,891 $576,963 $436,997 $30,423 $45,727 $38,576 $107,768 $85,552 $70,893
$0 $0 $48,034
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
VALUE FUND $1,464,460$875,092 $528,160 $394,549 $178,390 $135,984 $194,105 $129,340 $85,580
$0 $0 $42,523
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
GROWTH FUND $2,552,575$1,925,571 $1,242,921 $337,246 $382,723 $269,887 $338,064 $285,419 $201,629
$0 $0 $12,959
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH N/A N/A N/A N/A N/A N/A N/A N/A N/A

FUND*

- -------------------------------------------------------------------------------------------------------------

------------------------------------------
FOR THE FISCAL YEAR ENDED NOVEMBER 30,
1998

- --------------------------------- ------------------------------------------
- --------------------------------- ------------- ----------------------------
FUND 12B-1 FEE SHAREHOLDER SERVICES FEE

- --------------------------------- ------------- ----------------------------
- --------------------------------- ------------- -------------- -------------
INVESTMENT TRUST SHARES INVESTMENT
SHARES SHARES

- --------------------------------- ------------- -------------- -------------
- --------------------------------- ------------- -------------- -------------
TREASURY MONEY MARKET FUND $231,884 N/A N/A
- --------------------------------- ------------- -------------- -------------
- --------------------------------- ------------- -------------- -------------
LIMITED MATURITY GOVERNMENT FUND N/A N/A $42,235

- --------------------------------- ------------- -------------- -------------
- --------------------------------- ------------- -------------- -------------
FIXED INCOME FUND N/A N/A $28,164
- --------------------------------- ------------- -------------- -------------
- --------------------------------- ------------- -------------- -------------
BALANCED FUND N/A N/A $133,862
- --------------------------------- ------------- -------------- -------------
- --------------------------------- ------------- -------------- -------------
VALUE FUND N/A N/A $52,705
- --------------------------------- ------------- -------------- -------------
- --------------------------------- ------------- -------------- -------------
GROWTH FUND N/A N/A $151,720
- --------------------------------- ------------- -------------- -------------
- --------------------------------- ------------- -------------- -------------
AGGRESSIVE GROWTH FUND* N/A N/A N/A

- --------------------------------- ------------- -------------- -------------
* The Aggressive Growth Fund was not effective until December 1, 1998.
N/A - Not Applicable.
</TABLE>

HOW DO THE FUNDS MEASURE PERFORMANCE?

The Funds may advertise each Fund's share performance by using the
Securities and Exchange Commission's (SEC) standard method for calculating
performance applicable to all mutual funds. The SEC also permits this standard
performance information to be accompanied by non-standard performance
information.

Unless otherwise stated, any quoted share performance reflects the effect
of non-recurring charges, such as maximum sales charges, which, if excluded,
would increase the total return and yield. The performance of shares depends
upon such variables as: portfolio quality; average portfolio maturity; type and
value of portfolio securities; changes in interest rates; changes or differences
in a Fund's or any class of shares' expenses; and various other factors.

Share performance fluctuates on a daily basis largely because net earnings
and offering price per share fluctuate daily. Both net earnings and offering
price per share are factors in the computation of yield and total return.

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value
of shares over a specific period of time, and includes the investment of income
and capital gains distributions.

The average annual total return for a Fund shares is the average compounded
rate of return for a given period that would equate a $1,000 initial investment
to the ending redeemable value of that investment. The ending redeemable value
is computed by multiplying the number of shares owned at the end of the period
by the net asset value per share at the end of the period. The number of shares
owned at the end of the period is based on the number of shares purchased at the
beginning of the period with $1,000, less any contingent deferred sales charge,
adjusted over the period by any additional shares, assuming the quarterly
reinvestment of any dividends and distributions.

YIELD

The TREASURY MONEY MARKET FUND calculates the yield for both classes of
shares daily, based upon the seven days ending on the day of the calculation,
called the base period. This yield is computed by:

o determining the net change in the value of a hypothetical account with a
balance of one Share at the beginning of the base period, with the net
change excluding capital changes but including the value of any additional
Shares purchased with dividends earned from the original one Share and all
dividends declared on the original and any purchased shares;

o dividing the net change in the account's value by the value of the account
at the beginning of the base period to determine the base period return;
and

o multiplying the base period return by 365/7.

The yield for the other Funds shares is calculated by dividing: (i)the net
investment income per share earned by a Fund's shares over a thirty-day period;
by (ii) the maximum offering price per share of the Fund on the last day of the
period. This number is then annualized using semi-annual compounding. This means
that the amount of income generated during the thirty-day period is assumed to
be generated each month over a 12-month period and is reinvested every six
months. To the extent that financial institutions and broker/dealers charge fees
in connection with services provided in conjunction with an investment in a
Fund's shares, the Fund's shares performance is lower for shareholders paying
those fees.

EFFECTIVE YIELD (TREASURY MONEY MARKET FUND ONLY)

The TREASURY MONEY MARKET FUND's effective yield for both classes of shares
is computed by compounding the unannualized base period return by: adding 1 to
the base period return; raising the sum to the 365/7th power; and subtracting 1
from the result. The TREASURY MONEY MARKET FUND's effective yield for Trust
Shares for the seven-day period ended November 30, 1998, was 4.04%. The TREASURY
MONEY MARKET FUND's effective yield for Investment Shares was 3.62% for the same
period.

<PAGE>

<S> <C> <C>
- ---------------------- ------------------------------------ ------------------------------------
FUND AVERAGE ANNUAL TOTAL RETURN YIELD
for the following periods ended for the 30-day period ended

November 30, 1998 November 30, 1998
------------------------------------ ------------------------------------
----------------- ------------------ ----------------- ------------------
TRUST SHARES INVESTMENT SHARES TRUST SHARES INVESTMENT SHARES

One Year One Year
Five Year Five Year

Since Inception Since Inception

- ---------------------- ----------------- ------------------ ----------------- ------------------
- ---------------------- ----------------- ------------------ ----------------- ------------------
TREASURY MONEY 4.71% 4.30% 3.96% 3.56%
MARKET FUND 4.68% 4.27%
4.25%(a) 3.84%(a)
- ---------------------- ----------------- ------------------ ----------------- ------------------
- ---------------------- ----------------- ------------------ ----------------- ------------------
LIMITED MATURITY N/A 3.05% 4.01% 3.76%
GOVERNMENT FUND N/A N/A
3.59%(b) 5.10%(c)
- ---------------------- ----------------- ------------------ ----------------- ------------------
- ---------------------- ----------------- ------------------ ----------------- ------------------
FIXED INCOME FUND N/A 4.60% 4.61% 4.39%
N/A 5.76%
4.87%(b) 6.97%(d)
- ---------------------- ----------------- ------------------ ----------------- ------------------
- ---------------------- ----------------- ------------------ ----------------- ------------------
BALANCED FUND N/A 14.49% 1.98% 1.73%
N/A N/A
6.89%(b) 17.14%(e)
- ---------------------- ----------------- ------------------ ----------------- ------------------
- ---------------------- ----------------- ------------------ ----------------- ------------------
VALUE FUND N/A 8.00% 0.92% 0.67%
N/A N/A
0.50%(b) 20.38%(e)
- ---------------------- ----------------- ------------------ ----------------- ------------------
- ---------------------- ----------------- ------------------ ----------------- ------------------
GROWTH FUND N/A 30.81% 0.15% 0.00%
N/A 21.17%
12.85%(b) 17.35%(d)

FUND*

- ---------------------- ----------------- ------------------ ----------------- ------------------
(a) April 14, 1992
(b) May 20, 1998

* The Aggressive Growth Fund was not effective and offered until December 1998.
</TABLE>

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or
performance comparisons of the Funds' shares to certain indices;

o charts, graphs and illustrations using the Funds' returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;

o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Funds; and

o information about the mutual fund industry from sources such as the
Investment Company Institute.

The Funds may compare their performance, or performance for the types of
securities in which it invests, to a variety of other investments, including
federally insured bank products such as bank savings accounts, certificates of
deposit, and Treasury bills.

The Funds may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

You may use financial publications and/or indices to obtain a more complete
view of share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Funds' use in advertising may include: LIPPER
ANALYTICAL SERVICES, INC., ranks funds in various fund categories by making
comparative calculations using total return. Total return assumes the
reinvestment of all capital gains distributions and income dividends and takes
into account any change in net asset value over a specific period of time. From
time to time, a Fund will quote its Lipper ranking in the appropriate category
in advertising and sales literature.

MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly MUTUAL FUND VALUES. MUTUAL FUND VALUES rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for two
weeks.

TREASURY MONEY MARKET FUND:

o SALOMON 30-DAY TREASURY BILL INDEX is a weekly quote of the most
representative yields for selected securities, issued by the U.S. Treasury,
maturing in 30 days.

o LEHMAN BROTHERS TREASURY BOND INDEX comprised entirely of U.S. Treasury
obligations. Flower bonds and foreign issues are excluded.

o IBC/DONOHUE'S MONEY FUND REPORT publishes annualized yields of hundreds of
money market funds on a weekly basis and through its Money Market Insight
publication reports monthly reinvestment of dividends over a specified
period of time.

LIMITED MATURITY GOVERNMENT FUND:

o MERRILL LYNCH 1-3 YEAR TREASURY INDEX is an unmanaged index tracking
short-term U.S. government securities with maturities between 1 and 2.99
years. The index is produced by Merrill Lynch, Pierce, Fenner & Smith, Inc.

o MERRILL LYNCH CORPORATE AND GOVERNMENT INDEX includes issues which must be
in the form of publicly placed, nonconvertible, coupon-bearing domestic
debt with maturities between 1 and 4.99 years. Par amounts outstanding must
be no less than $10 million at the start and at the close of the
performance measurement period. Corporate instruments must be rated by S&P
or by Moody's as investment grade issues (i.e., BBB/Baa or better).

o MERRILL LYNCH 1-10 YEAR GOVERNMENT INDEX is an unmanaged index comprised of
U.S. government securities with maturities between 1 and 10 years. Index
returns are calculated as total returns for periods of one, six and twelve
months, as well as year-to-date. The index is produced by Merrill Lynch,
Pierce, Fenner & Smith, Inc.

o LEHMAN BROTHERS INTERMEDIATE GOVERNMENT INDEX is an unmanaged index
comprised of all publicly issued, non-convertible domestic debt of the U.S.
government. Only notes and bonds with minimum outstanding principal of $1
million and minimum maturity of one year and maximum maturity of ten years
are included.

o MERRILL LYNCH 2-YEAR TREASURY CURVE INDEX is comprised of the most recently
issued 2-year U.S. Treasury notes. Index returns are calculated as total
returns for periods of one, three, six, and twelve months as well as
year-to-date.

o 2-YEAR TREASURY NOTE-Source: Wall Street Journal, Bloomberg Financial
Markets, and Telerate.

Investors may use such a reporting service or indices in addition to the
Fund's prospectus to obtain a more complete view of the Fund's performance
before investing.

FIXED INCOME FUND:

O LEHMAN BROTHERS GOVERNMENT/CORPORATE TOTAL INDEX is comprised of
approximately 5,000 issues which include non-convertible bonds publicly
issued by the U.S. government or its agencies; corporate bonds guaranteed
by the U.S. government and quasi-federal corporations; and publicly issued,
fixed-rate, non-convertible domestic bonds of maturity of nine years. It
calculates total return for one month, three month, twelve month, and ten
year periods, and year-to-date.

o MERRILL LYNCH GOVERNMENT/CORPORATE INDEX is comprised of approximately
4,800 issues which include publicly placed, nonconvertible coupon-bearing
domestic debt carrying a term to maturity of at least one year, with par
amounts outstanding at no less than $10 million at the start and close of
the performance measurement period, and which must be rated by S&P or
Moody's as investment grade issues (i.e., BBB/Baa or better).

o MERRILL LYNCH 1-10 YEAR GOVERNMENT INDEX is an unmanaged index comprised of
U.S. Government securities with maturities between 1 and 10 years. Index
returns are calculated as total returns for periods of one, three, six and
twelve months as well as year-to-date. The index is produced by Merrill
Lynch, Pierce, Fenner & Smith, Inc.

o LEHMAN BROTHERS GOVERNMENT (LT) INDEX, for example, is an index composed of
bonds issued by the U.S. government or its agencies which have at least $1
million outstanding in principal and which have maturities of ten years or
longer. Index figures are total return figures calculated monthly.

BALANCED FUND:

o STANDARD & POOR'S DAILY STOCK PRICE INDEX OF 500 COMMON STOCKS, a composite
index of common stocks in industry, transportation, and financial and
public utility companies, can be used to compare to the total returns of
funds whose portfolios are invested primarily in common stocks. In
addition, the Standard & Poor's Index assumes reinvestments of all
dividends paid by stocks listed on its index. Taxes due on any of these
distributions are not included, nor are brokerage or other fees calculated
in Standard & Poor's figures.

o LEHMAN BROTHERS GOVERNMENT/CORPORATE TOTAL INDEX is comprised of
approximately 5,000 issues which include non-convertible bonds publicly
issued by the U.S. government or its agencies; corporate bonds guaranteed
by the U.S. government and quasi-federal corporations; and publicly issued,
fixed-rate, nonconvertible domestic bonds of companies in industry, public
utilities, and finance. Tracked by Lehman Brothers, the index has an
average maturity of nine years. It calculates total return for one-month,
three-month, twelve-month, and ten-year periods, and year-to-date.

o S&P 500/LEHMAN BROTHERS GOVERNMENT/CORPORATE (WEIGHTED INDEX) AND THE S&P
500/LEHMAN GOVERNMENT (WEIGHTED INDEX) combine the components of a
stock-oriented index and a bond-oriented index to obtain results which can
be compared to the performance of a managed fund. The indices' total
returns will be assigned various weights depending upon the Fund's current
asset allocation.

VALUE FUND:

o S&P/BARRA VALUE INDEX is a sub-index of the S&P 500 composite index of
common stocks. The index represents approximately fifty percent of the S&P
500 market capitalization and is comprised of those companies with lower
price-to-book ratios. The index is maintained by Standard & Poor's in
conjunction with Barra, an investment technology firm.

GROWTH FUND:

o DOW JONES INDUSTRIAL AVERAGE ("DJIA") is an unmanaged index representing
share prices of major industrial corporations, public utilities, and
transportation companies. Produced by the Dow Jones & Company, it is cited
as a principal indicator of market conditions.

o STANDARD & POOR'S DAILY STOCK PRICE INDEX OF 500 COMMON STOCKS, a composite
index of common stocks in industry, transportation, and financial and
public utility companies, compares total returns of funds whose portfolios
are invested primarily in common stocks. In addition, the Standard & Poor's
index assumes reinvestment of all dividends paid by stocks listed on the
index. Taxes due on any of these distributions are not included, nor are
brokerage or other fees calculated in the Standard & Poor's figures.

O S&P/BARRA GROWTH INDEX is a sub-index of the S&P 500 composite index of
common stocks. The index represents approximately fifty percent of the S&P
500 market capitalization and is comprised of those companies with higher
price-to-book ratio (one distinction associated with "growth stocks"). The
index is maintained by Standard and Poor's in conjunction with BARRA, an
investment technology firm.

AGGRESSIVE GROWTH FUND:

Investors may also consult the fund evaluation consulting universes
listed below. Consulting universes may be composed of pension, profit
shares, commingled, endowment/foundation, and mutual funds.

o FIDUCIARY CONSULTING GRID UNIVERSE, for example, is composed of over 1,000
funds, representing 350 different investment managers, divided into
subcategories based on asset mix. The funds are ranked quarterly based on
performance and risk characteristics.

o SEI data base for equity funds includes approximately 900 funds,
representing 361 money managers, divided into fund types based on investor
groups and asset mix. The funds are ranked every three, six, and twelve
months.

o MERCER MEIDINGLER, INC. complies a universe of approximately 600 equity
funds, representing about 500 investment managers, and updates their
rankings each calendar quarter as well as on a one, three, and five year
basis.

o CALLAN ASSOCIATES, INC. maintains a detailed database of approximately 1900
equity mutual funds, representing about 500 investment managers, and
divides them into style groups based on asset mix and fund objectives. The
funds are ranked quarterly based in performance and risk characteristics.

Advertisements and other sales literature for a Fund may quote total
returns which are calculated on non-standardized base periods. These total
returns also represent the historic change in the value of an investment in
either class of shares based on quarterly reinvestment of dividends over a
specified period of time. Advertisements for Investment Shares and shares of
Aggressive Growth Fund may quote performance information which does not reflect
the effect of the contingent deferred sales charge. Advertising and other
promotional literature may include charts, graphs and other illustrations using
the Funds' returns, or returns in general, that demonstrate basic investment
concepts such as tax-deferred compounding, dollar-cost averaging and systematic
investment. In addition, the Funds can compare their performance, or performance
for the types of securities in which they invest, to a variety of other
investments, such as bank savings accounts, certificates of deposit, and
Treasury bills.

ECONOMIC AND MARKET INFORMATION

Advertising and sales literature for a Fund may include discussions of
economic, financial and political developments and their effect on the
securities market. Such discussions may take the form of commentary on these
developments by Fund portfolio managers and their views and analysis on how such
developments could affect a Fund. In addition, advertising and sales literature
may quote statistics and give general information about mutual fund industry,
including the growth of the industry, from sources such as the Investment
Company Institute (ICI). For example, according to the ICI, thirty-seven percent
of American households are pursuing their financial goals through mutual funds.
These investors, as well s business and institutions, have entrusted over $5
trillion to the more than 7,300 mutual funds available.

FINANCIAL STATEMENTS

The financial statements for the fiscal year ended November 30, 1998, are
incorporated herein by reference from the Funds' Annual Report dated November
30, 1998 (File Nos. 33-44737 and 811-6511). A copy of the Annual Report for a
Fund may be obtained without charge by contacting Regions Funds at the address
located on the back cover of the SAI or by calling the Regions Funds at
1-800-433-2829.

APPENDIX

STANDARD AND POOR'S BOND RATINGS

AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA--Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.

A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

NR--Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular type of obligation as a matter of policy. PLUS (+) OR
MINUS (-):--The ratings from AA to BBB may be modified by the addition of a plus
or minus sign to show relative standing within the major rating categories.

MOODY'S INVESTORS SERVICE, INC. CORPORATE BOND RATINGS

AAA--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
gilt edge. Interest

payments are protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are likely to change,
such changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues. AA--Bonds which are rated Aa are judged to be of
high quality by all standards. Together with the Aaa group, they comprise what
are generally known as high-grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may be
other elements present which make the long term risks appear somewhat larger
than in Aaa securities. A--Bonds which are rated A possess many favorable
investment attributes and are to be considered as upper medium-grade
obligations. Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment sometime in the future.

NR--Not rated by Moody's.

FITCH IBCA, INC. LONG-TERM DEBT RATINGS

AAA--Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.

AA--Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated AAA. Because bonds rated in
the AAA and AA categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated F-1+.

A--Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

NR--NR indicates that Fitch does not rate the specific issue.

STANDARD AND POOR'S COMMERCIAL PAPER RATINGS

A-1--This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. The issues determined to possess
overwhelming safety characteristics are denoted with a plus (+) sign
designation. A-2--Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.

MOODY'S INVESTORS SERVICES, INC. COMMERCIAL PAPER RATINGS

P-1--Issuers rated PRIME-1 (for related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. PRIME-1
repayment capacity will normally be evidenced by the following characteristics:
conservative capitalization structures with moderate reliance on debt and ample
asset protection; broad margins in earning coverage of fixed financial charges
and high internal cash generation; and well-established access to a range of
financial markets and assured sources of alternate liquidity.

P-2--Issuers rated PRIME-2 (for related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.

FITCH IBCA, INC. SHORT-TERM RATINGS

F-1+--(Exceptionally Strong Credit Quality). Issues assigned this rating
are regarded as having the strongest degree of assurance for timely payment.

F-1--(Very Strong Credit Quality). Issues assigned to this rating reflect
an assurance of timely payment only slightly less in degree than issues rated
F-1+.

F-2--(Good Credit Quality). Issues carrying this rating have a satisfactory
degree of assurance for timely payment but the margin of safety is not as great
as the F-1+ and F-1 categories.

ADDRESSES

REGIONS TREASURY MONEY MARKET FUND
REGIONS LIMITED MATURITY GOVERNMENT FUND
REGIONS FIXED INCOME FUND
REGIONS BALANCED FUND
REGIONS VALUE FUND
REGIONS GROWTH FUND

<TABLE>
<CAPTION>
<S> <C> <C>
REGIONS AGGRESSIVE GROWTH FUND 5800 Corporate Drive
Pittsburgh, PA 15237-7010

Distributor

Federated Securities Corp. Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Adviser to all Funds

Regions Bank P.O. Box 10247
Capital Management Group Birmingham, AL 35202

Custodian

Regions Bank 417 North 20th Street
Birmingham, AL 35203

Transfer Agent, Dividend Disbursing Agent and Portfolio Accounting Services
Federated Shareholder Services Company

Federated Investors Tower
Pittsburgh, PA 15222-3779

Independent Auditors

Deloitte & Touche LLP 2500 One PPG Place
Pittsburgh, PA 15222-5401

</TABLE>

APPENDIX A

1. The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Regions Treasury Money Market Fund
(Fund) as of the calendar year-end for each of six years.

The `y' axis reflects the "% Total Return" beginning with "0.00%" and
increasing in increments of 1.00% up to 6.00%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Fund's start of business through the calendar year ended December 31,
1998. The light gray shaded chart features six distinct vertical bars, each
shaded in charcoal, and each visually representing by height the total return
percentages for the calendar year stated directly at its base. The calculated
total return percentage for the Fund which appear directly above each respective
bar, for the calendar years 1993 through 1998, are 2.76%, 3.77%, 5.51%, 4.78%,
4.81% and 4.64%.

The total returns displayed for the Fund do not reflect the payment of any
sales charges or recurring shareholder account fees. If these charges or fees
had been included, the returns shown would have been lower.

Within the period shown in the Chart, the Fund's highest quarterly return
for the quarter ended June 30, 1995, was 1.40%. Its lowest quarterly return for
the quarter
ended June 30, 1993, was 0.66%.

CALENDAR PERIOD TRUST SHARES INVESTMENT SHARES
1Year 4.64% 4.22%
5 Year 4.70% 4.28%

Start of Performance* 4.25% 3.84%

The Fund's 7-day net yield for Investment Shares was 3.51%, as of December
31, 1998. The Fund's 7-day net yield for Trust Shares was 3.91%, as of December
31, 1998.

<PAGE>

2. The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Regions Limited Maturity Government
Fund (Fund) as of the calendar year-end for each of five years.

The `y' axis reflects the "% Total Return" beginning with "0.00%" and
increasing in increments of 2.00% up to 12.00%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Fund's start of business through the calendar year ended December 31,
1998. The light gray shaded chart features five distinct vertical bars, each
shaded in charcoal, and each visually representing by height the total return
percentages for the calendar year stated directly at its base. The calculated
total return percentage for the Fund which appear directly above each respective
bar, for the calendar years 1994 through 1998, are 0.30%, 10.83%, 3.29%, 5.55%
and 5.86%.

Within the period shown in the Chart, the Fund's highest quarterly return
for the quarter ended June 30, 1995, was 3.39%. Its lowest quarterly return for
the quarter ended March 31, 1994, was -0.80%.

Average Annual Total Return for the Fund compared to Merrill Lynch 1-3 Year
Government/Corporate Index (ML1-3) through December 31, 1998.

CALENDAR PERIOD TRUST SHARES INVESTMENT SHARES ML1-3
- --------------- ------------ ----------------- -----
1Year N/A 2.86% 7.01%
5 Year N/A 5.12% 6.04%
Start of Performance* N/A 5.08% 6.02%

* The start of performance dates for the Trust Shares and Investment Shares
were May 20, 1998, and December 12, 1993, respectively. The start of performance
rate of return for Investment Shares represents the cumulative rate of return.

The bar chart shows the variability of the Fund's actual total return on a
yearly basis. The table shows the Fund's total returns averaged over a period of
years relative to ML1-3, a broad-based market index. While past performance does
not necessarily predict future performance, this information provides you with
historical performance information so that you can analyze whether the Fund's
investment risks are balanced by its potential rewards.

<PAGE>

3. The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Regions Fixed Income Fund (Fund) as of
the calendar year-end for each of six years.

The `y' axis reflects the "% Total Return" beginning with "-5.00%" and
increasing in increments of 5.00% up to 20.00%.

Within the period shown in the Chart, the Fund's highest quarterly return
for the quarter ended June 30, 1995, was 6.26%. Its lowest quarterly return for
the quarter ended March 31, 1994, was -3.36%.

Average Annual Total Return for the Fund compared to Merrill Lynch 1-10
Year Government/Corporate Index (ML1-10) through December 31, 1998.

CALENDAR PERIOD TRUST SHARES INVESTMENT SHARES ML1-10
1 Year N/A 3.79% 8.46%
5 Year N/A 5.70% 6.65%
Start of Performance* N/A 6.89% 7.41%

* The start of performance dates for the Trust Shares and Investment Shares
were May 20, 1998, and April 20, 1992, respectively. The start of performance
rate of return for Investment Shares represents the cumulative rate of return.

The bar chart shows the variability of the Fund's actual total return on a
yearly basis. The table shows the Fund's total returns averaged over a period of
years relative to ML1-10, a broad-based market index. While past performance
does not necessarily predict future performance, this information provides you
with historical performance information so that you can analyze whether the
Fund's investment risks are balanced by its potential rewards.

<PAGE>

4. The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Regions Balanced Fund (Fund) as of the
calendar year-end for each of four years.

The `y' axis reflects the "% Total Return" beginning with "0.00%" and
increasing in increments of 2.00% up to 20.00%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Fund's start of business through the calendar year ended December 31,
1998. The light gray shaded chart features four distinct vertical bars, each
shaded in charcoal, and each visually representing by height the total return
percentages for the calendar year stated directly at its base. The calculated
total return percentage for the Fund which appear directly above each respective
bar, for the calendar years 1995 through 1998, are 19.64%, 11.93%, 19.69% and
19.75%.

Within the period shown in the Chart, the Fund's highest quarterly return
for the quarter ended June 30, 1997, was 10.40%. Its lowest quarterly return for
the quarter ended September 30, 1998, was -2.43%.

Average Annual Total Return for the Fund compared to S&P 500/Lehman
Brothers Government/ Corporate Index (S&P 500/LH) through December 31, 1998.

CALENDAR PERIOD TRUST SHARES INVESTMENT SHARES S&P 500/LH
1 Year N/A 16.75% 18.44%
Start of Performance* N/A 17.63% 20.00%

* The start of performance dates for the Trust Shares and Investment Shares
were May 20, 1998, and December 19, 1994, respectively. The start of performance
rate of return for Investment Shares represents the cumulative rate of return.

The bar chart shows the variability of the Fund's actual total return on a
yearly basis. The table shows the Fund's total returns averaged over a period of
years relative to S&P 500/LH, a broad-based market index. While past performance
does not necessarily predict future performance, this information provides you
with historical performance information so that you can analyze whether the
Fund's investment risks are balanced by its potential rewards.

<PAGE>

5. The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Regions Value Fund (Fund) as of the
calendar year-end for each of four years.

The `y' axis reflects the "% Total Return" beginning with "0.00%" and
increasing in increments of 5.00% up to 30.00%.

The `x' axis represents calculation periods from the earliest calendar year
end of the Fund's start of business through the calendar year ended December 31,
1998. The light gray shaded chart features four distinct vertical bars, each
shaded in charcoal, and each visually representing by height the total return
percentages for the calendar year stated directly at its base. The calculated
total return percentage for the Fund which appear directly above each respective
bar, for the calendar years 1995 through 1998, are 25.04%, 18.69%, 27.24% and
12.79%.

The total returns displayed for the Fund do not reflect the payment of any
sales charges or recurring shareholder account fees. If these charges or fees
had been
included, the returns shown would have been lower.

Within the period shown in the Chart, the Fund's highest quarterly return
for the quarter ended June 30, 1997, was 15.60%. Its lowest quarterly return for
the quarter ended September 30, 1998, was -9.36%.

Average Annual Total Return for the Fund compared to S&P 500/Barra Value
Index (S&P/Barra Value) through December 31, 1998.

CALENDAR PERIOD TRUST SHARES INVESTMENT SHARES S&P/BARRA VALUE
1 Year N/A 9.79% 12.47%
Start of Performance* N/A 20.70% 22.28%

The bar chart shows the variability of the Fund's actual total return on a
yearly basis. The table shows the Fund's total returns averaged over a period of
years relative to S&P/Barra Value, a broad-based market index. While past
performance does not necessarily predict future performance, this information
provides you with historical performance information so that you can analyze
whether the Fund's investment risks are balanced by its potential rewards.

<PAGE>

6. The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Regions Growth Fund (Fund) as of the
calendar year-end for each of six years.

The `y' axis reflects the "% Total Return" beginning with "-5.00%" and
increasing in increments of 5.00% up to 20.00%.

The total returns displayed for the Fund do not reflect the payment of any
sales charges or recurring shareholder account fees. If these charges or fees
had been
included, the returns shown would have been lower.

Within the period shown in the Chart, the Fund's highest quarterly return
for the quarter ended December 31, 1998, was 23.93%. Its lowest quarterly return
for the quarter ended September 30, 1998, was -7.68%.

Average Annual Total Return for the Fund compared to S&P 500 Index (S&P
500) through December 31, 1998.

CALENDAR PERIOD TRUST SHARES INVESTMENT SHARES S&P 500
1 Year N/A 38.50% 28.15%
5 Year N/A 22.45% 23.98%
Start of Performance* N/A 18.26% 20.41%

The bar chart shows the variability of the Fund's actual total return on a
yearly basis. The table shows the Fund's total returns averaged over a period of
years relative to S&P 500, a broad-based market index. While past performance
does not necessarily predict future performance, this information provides you
with historical performance information so that you can analyze whether the
Fund's investment risks are balanced by its potential rewards.

PART C. OTHER INFORMATION.

Item 23. Exhibits

(a) (i) Conformed copy of Declaration of Trust of the Registrant,
including conformed copy of Amendment No. 1;(7)
(ii) Conformed copy of Amendment No. 2 to Declaration of Trust (4);

(iii) Conformed Copy of Amendment No. 3 through 5 to the Declaration
of Trust; (12)
(iv) Form of Amendment No. 6 to the Declaration of Trust; (12)

(b) Copy of By-Laws of the Registrant (1);

(i) Copy of Amendment Nos. 1 through 4 to the By-Laws of the
Registrant; (13)
(c) Copy of Specimen Certificate for Shares of Beneficial Interest of the
Registrant (4);

(d) (i) Conformed copy of Investment Advisory Contract of the Registrant,
through and including conformed copies of Exhibits A, B, C,
and D;(7)
(ii) Conformed Copy of Exhibits E and F to the Investment Advisory
Contract of the Registrant to add First Priority Equity Income
Fund and First Priority Balanced Fund, respectively, to the
Investment Advisory Contract; (11)

(e) (i) Conformed copy of Distributor's Contract of the Registrant,
including conformed copies of Exhibits A, B, and C;(7)
(ii) Conformed Copy of Exhibit D to the Distributor's Contract to add
First Priority Equity Income Fund and First Priority Balanced
Fund, respectively, to the Distributor's Contract; (11)

(iii) Conformed copy of Exhibits E and F to the Distributor's Contract; (13)
(iv) Conformed copy of Exhibits G to the Distributor's Contract; +
(f) Not applicable;

(g) Conformed copy of Custodian Contract of the Registrant between First
Priority Funds and Regions Bank; (4)
(h) (i) Conformed copy of Fund Accounting and Shareholder Recordkeeping
Agreement (5);

+ All exhibits have been filed electronically.

(1) Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed December 23, 1991. (File Nos. 33-44737 and
811-6511)

(4) Response is incorporated by reference to Post-Effective Amendment No. 5 on
Form N-1A filed January 24, 1994. (File Nos. 33-44737 and 811-6511).

(7) Response is incorporated by reference to Post-Effective Amendment No.7 on
Form N-1A filed October 7, 1994 (File Nos. 33-44737 and 811-6511).

(11) Response is incorporated by reference to Post-Effective Amendment No. 11 on
Form N-1A filed January 22, 1997 (File Nos. 33-44737 and 811-6511).

(12) Response is incorporated by reference to Post-Effective Amendment No. 12 on
Form N-1A filed January 20, 1998 (File Nos. 33-44737 and 811-6511).

(13) Response is incorporated by reference to Post-Effective Amendment No. 13 on
Form N-1A filed September 18, 1998 (File Nos. 33-44737 and 811-6511).

(ii) Form of Shareholder Services Plan of the
Registrant; (7)

(iii) Conformed copy of Shareholder Services Agreement with conformed
copy of Exhibit A attached thereto; (13)
(iv) Conformed copy of Administrative Services Agreement;(10)

(a) Amendment No. 1 to Administrative Services Agreement; (13)

(i) Conformed copy of Opinion and Consent of Counsel as to legality of
shares being registered; (11)
(j) Conformed Copy of Independent Auditors Consent;+
(k) Not applicable;
(l) Conformed Copy of Initial Capital Understanding; (5)
(m) (i) Conformed copy of Distribution Plan of the Registrant, through
and including conformed copies of Exhibits A and B;(7)

(ii) Conformed Copy of Exhibit C to the Distribution Plan of the
Registrant; (11)
(iii) Copy of Rule 12b-1 Agreement through and including Exhibit A (1);

(iv) Copy of Amendment No. 1 to Exhibit A of the Rule 12b-1 Agreement; (12)
(v) Copy of Amendment No. 1 to Exhibit A of the Rule 12b-1 Agreement; +
(vi) Conformed copy of Exhibit D to the Distribution Plan of the
Registrant; +

(n) Copy of Financial Data Schedules; +
(o) (i) Conformed Copy of Multiple Class Plan; (9)

(ii) Conformed copy of Exhibits A & B to Multiple Class Plan; (13)
(p) Conformed copy of Power of Attorney; +

+ All exhibits have been filed electronically.

(1) Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed December 23, 1991. (File Nos. 33-44737 and
811-6511)

(4) Response is incorporated by reference to Post-Effective Amendment No. 5 on
Form N-1A filed January 24, 1994. (File Nos. 33-44737 and 811-6511).

(5) Response is incorporated by reference to Post-Effective Amendment No. 6 on
Form N-1A filed June 29, 1994 (File Nos. 33-44737 and 811-6511).

(7) Response is incorporated by reference to Post-Effective Amendment No.7 on
Form N-1A filed October 7, 1994 (File Nos. 33-44737 and 811-6511).

(9) Response is incorporated by reference to Post-Effective Amendment No. 9 on
Form N-1A filed June 29, 1995 (File Nos. 33-44737 and 811-6511).

(10) Response is incorporated by reference to Post-Effective Amendment No. 10 on
Form N-1A filed January 26, 1996 (File Nos. 33-44737 and 811-6511).

(11) Response is incorporated by reference to Post-Effective Amendment No. 10 on
Form N-1A filed January 22, 1997 (File Nos. 33-44737 and 811-6511).

(12) Response is incorporated by reference to Post-Effective Amendment No. 12 on
Form N-1A filed January 20, 1998 (File Nos. 33-44737 and 811-6511).

(13) Response is incorporated by reference to Post-Effective Amendment No. 13 on
Form N-1A filed September 18, 1998 (File Nos. 33-44737 and 811-6511).

(14) Response is incorporated by reference to Post-Effective Amendment No. 14 on
Form N-1A filed November 9, 1998 (File Nos. 33-44737 and 811-6511).

Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:

None

Item 25. INDEMNIFICATION: (1)

Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER:

(a) The Adviser is a wholly-owned subsidiary of Regions Financial Corp., a bank
holding company organized during 1971 under the laws of the State of
Delaware, and is a member of the Regions Bank organization. Operating out
of more than 700 offices, Regions provides wide range of banking and
fiduciary services to its customers. As of December 31, 1998, Regions
Financial Corp. was one of the 25 largest bank holding companies in the
United States with total assets of approximately $35 billion. Regions
Financial Corporation has achieved Thomson BankWatch's highest rating of
"A", a distinction earned by less than 1% of U.S. financial institutions.
In addition, Veribanc, Inc. has designated Regions' flagship bank, Regions
Bank, as a Blue Ribbon Bank. The Blue Ribbon rating symbol symbolizes
excellence in asset quality, capital strength, liquidity, and
profitability, as well as other key financial thresholds. No Blue Ribbon
Bank has ever failed. Regions Bank was selected for inclusion in the S&P
500 - Standard & Poor's widely followed index of the 500 most prominent
companies in the nation.

As fiduciary, Regions Bank managed over $8 billion in discretionary assets
as of December 31, 1998. It manages ten common trust funds and collective
investment funds having a market value in excess of $633 million as of December
31, 1998. Regions Bank has been adviser to the Regions Funds (formerly, First
Priority Funds) since inception with a market value of approximately $1.682
billion as of December 31, 1998.

Other Substantial
Position with Business, Profession,

NAME THE ADVISER VOCATION OR EMPLOYMENT

J. Stanley Mackin Chairman of the Board

Carl E. Jones, Jr. President and Chief
Executive Officer

Richard D. Horsley Vice Chairman of the
Board and Executive
Financial Officer

Sam P. Faucett President/Region Southwest

Joe M. Hinds President/Regions North

Wilbur B. Hufham President/Regions South

William E. Jordan President/Regions Central

Carl E. Jones, Jr. Chief Executive Officer

Peter D. Miller President/Regions Northeast

William E. Askew Executive Vice President/
Retail Banking

Samuel E. Upchurch, Jr. Executive Vice President/
General Counsel and Secretary

Robert P. Houston Executive Vice President
and Comptroller

E.C. Stone Executive Vice President/
Corporate Banking

Richard E. Wambsganss Executive Vice President/
Trust Group

Sheila S. Blair Director Civic Leader

James B. Boone, Jr. Director Chairman of the Board
Boone Newspapers, Inc.

Albert P. Brewer Director Professor of Law &
Government
Samford University

James S.M. French Director Chairman and President
Dunn Investment Company

Barnett Grace Director President/Regions West

Frank D. Hickingbotham Director Chairman of the Board TCBY Enterprises, Inc.

Richard D. Horsley Director Vice Chairman of the Board and Executive Financial Officer
Regions Financial Corp.

Carl E. Jones, Jr. Director President & Chief Executive Officer/
Regions Financial Corporation

Olin B. King Director Chairman of the Board and Chief Executive Officer
SCI Systems, Inc.

J. Stanley Mackin Director Chairman of the Board/
Regions Financial Corp.

Michael W. Murphy Director President/ Marmik Oil Company

Henry E. Simpson Director Attorney

Lange, Simpson, Robinson & Somerville

Robert E. Steiner, III Director Attorney
Steiner, Crum & Baker

Lee J. Styslinger, Jr. Director Chairman
ALTEC Industries, Inc.

Robert J. Williams Director Chairman and Chief Executive Officer Terminix Services, Inc.
</TABLE>

ITEM 27. PRINCIPAL UNDERWRITERS:

(a)....Federated Securities Corp. the Distributor for shares of the Registrant,
acts as principal underwriter for the following open-end investment
companies, including the Registrant:

Automated Government Money Trust; Cash Trust Series II; Cash Trust Series,
Inc.; CCB Funds; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash
Trust; Federated Adjustable Rate U.S. Government Fund, Inc.; Federated American
Leaders Fund, Inc.; Federated ARMs Fund; Federated Core Trust; Federated Equity
Funds; Federated Equity Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government Income Securities,
Inc.; Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated Insurance
Series; Federated Master Trust; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock and Bond Fund, Inc.; Federated Stock Trust; Federated Tax-Free
Trust; Federated Total Return Series, Inc.; Federated U.S. Government Bond Fund;
Federated U.S. Government Securities Fund: 1-3 Years; Federated U.S. Government
Securities Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10
Years; Federated Utility Fund, Inc.; Fixed Income Securities, Inc.; ; Hibernia
Funds; Independence One Mutual Funds; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Liberty U.S.
Government Money Market Trust; Liquid Cash Trust; Managed Series Trust; Marshall
Funds, Inc.; Money Market Management, Inc.; Money Market Obligations Trust;
Money Market Obligations Trust II; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; Regions Funds; RIGGS Funds; SouthTrust Funds;
Tax-Free Instruments Trust; The Planters Funds; The Wachovia Funds; The Wachovia
Municipal FundsTrust for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations; Vision Group of
Funds, Inc.; World Investment Series, Inc.; Blanchard Funds; Blanchard Precious
Metals Fund, Inc.; High Yield Cash Trust; Investment Series Trust; Peachtree
Funds; Star Funds; Targeted Duration Trust; The Virtus Funds; Trust for
Financial Institutions;

Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.

<PAGE>

(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief

1001 Liberty Avenue Operating Officer, Asst.
Pittsburgh, PA 15222-3779 Secretary and Asst.

Treasurer, Federated
Securities Corp.

Edward C. Gonzales Director, Executive Vice Treasurer and
Federated Investors Tower President, Trustee
1001 Liberty Avenue Federated Securities Corp.

Pittsburgh, PA 15222-3779

Thomas R. Donahue Director, Assistant Secretary
Federated Investors Tower and Assistant Treasurer
1001 Liberty Avenue Federated Securities Corp.

Pittsburgh, PA 15222-3779

James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<PAGE>

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ronald Petnuch Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Raymond Hanley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert M. Rossi Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Matthew S. Hardin Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Leslie K. Ross Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

</TABLE>

Item 28. LOCATION OF ACCOUNTS AND RECORDS:

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:

Regions Funds 5800 Corporate Drive
("Registrant") Pittsburgh, PA 15237-7010

Federated Shareholder Services Company Federated Investors Tower
("Transfer Agent and Dividend 1001 Liberty Avenue
Disbursing Agent) Pittsburgh, PA 15222-3779

Federated Administrative Services Federated Investors Tower
("Administrator") 1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Regions Bank

Mutual Funds Group P.O. Box 10247
("Advisor and Custodian") Birmingham, Alabama 35202

Item 29. MANAGEMENT SERVICES: Not applicable.

Item 30. UNDERTAKINGS:

Registrant hereby undertakes to comply with the provisions of Section 16(c)
of the 1940 Act with respect to the removal of Trustees and the calling of
special shareholder meetings by shareholders.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, REGIONS FUNDS, certifies that it
meets all of the requirements for effectiveness of this Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Amendment to its Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized, all in the City of
Pittsburgh and Commonwealth of Pennsylvania, on the 29th day of January 1999.

REGIONS FUNDS (formerly, First Priority Funds)
BY: /s/ Gail Cagney
Gail Cagney, Assistant Secretary
Attorney in Fact for John F. Donahue
January 29th, 1999

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:

NAME TITLE DATE

By: /s/Gail Cagney

GAIL CAGNEY____ Attorney In Fact January 29, 1999
---------------
ASSISTANT SECRETARY For the Persons
Listed Below

NAME TITLE

John F. Donahue* Chairman and Trustee
(Chief Executive Officer)

Edward C. Gonzales* President, Treasurer and Trustee
(Principal Financial and
Accounting Officer)

Thomas G. Bigley* Trustee

John T. Conroy, Jr.* Trustee

William J. Copeland* Trustee

James E. Dowd* Trustee

Lawrence D. Ellis, M.D.* Trustee

Edward L. Flaherty, Jr.* Trustee

Peter E. Madden* Trustee

John E. Murray, Jr.* Trustee

Wesley W. Posvar* Trustee

Marjorie P. Smuts* Trustee

John S. Walsh Trustee

* By Power of Attorney

Exhibit (j) under N-1A

Exhibit 23 under 601/Reg SK

INDEPENDENT AUDITORS' CONSENT

To the Board of Trustees and Shareholders of
REGIONS FUND:

We consent to the incorporation by reference in Post-Effective Amendment
No. 16 to Registration Statement (No. 33-44737) of Regions funds (formerly,
First Priority Funds) (comprised of the following portfolios: Regions Treasury
Money Market Fund, Regions Limited Maturity Government Fund, Regions Fixed
Income Fund, Regions Balanced Fund, Regions Value Fund, and Regions Growth Fund)
of our report dated January 14, 1999 appearing in the Prospectus, which are part
of such Registration Statement, and to the reference to us under the heading
"Financial Highlights" in such Prospectus.

By: /s/DELOITTE & TOUCHE LLP
Deloitte & Touche LLP

Pittsburgh, Pennsylvania
January 27, 1999

Exhibit (e)(iv) under Form N-1-A
Exhibit 1 under Item 601/Reg. S-K

Exhibit G
to the

Distributor's Contract

Regions Funds

Regions Aggressive Growth Fund

The following provisions are hereby incorporated and made part of the
Distributor's Contract dated the 26th day of February, 1992, between Regions
Funds and Federated Securities Corp. with respect to the Class of shares set
forth above.

1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed Class ("Shares").
Pursuant to this appointment, FSC is authorized to select a group of financial
institutions ("Financial Institutions") to sell Shares at the current offering
price thereof as described and set forth in the respective prospectuses of the
Trust.

2. During the term of this Agreement, the Trust will pay FSC for services
pursuant to this Agreement, a monthly fee computed at the annual rate of .30% of
the average aggregate net asset value of the Shares held during the month. For
the month in which this Agreement becomes effective or terminates, there shall
be an appropriate proration of any fee payable on the basis of the number of
days that the Agreement is in effect during the month.

3. FSC may from time-to-time and for such periods as it deems appropriate
reduce its compensation to the extent any Class' expenses exceed such lower
expense limitation as FSC may, by notice to the Trust, voluntarily declare to be
effective.

4. FSC will enter into separate written agreements with various firms to
provide certain of the services set forth in Paragraph 1 herein. FSC, in its
sole discretion, may pay Financial Institutions a periodic fee in respect of
Shares owned from time to time by their clients or customers. The schedules of
such fees and the basis upon which such fees will be paid shall be determined
from time to time by FSC in its sole discretion.

5. FSC will prepare reports to the Board of Trustees of the Trust on a
quarterly basis showing amounts expended hereunder including amounts paid to
Financial Institutions and the purpose for such expenditures.

In consideration of the mutual covenants set forth in the Distributor's
Contract dated the 26th day of February, 1992, between Regions Funds and
Federated Securities Corp., Regions Funds executes and delivers this Exhibit on
behalf of the Regions Aggressive Growth Fund.

Witness the due execution hereof this 1st day of December, 1998.

REGIONS FUNDS

By: /S/ CHARLES L. DAVIS, JR.
Name: Charles L. Davis, Jr.
Title: Vice President

FEDERATED SECURITIES CORP.

By: /S/ DAVID M. TAYLOR
Name: David M. Taylor
Title: Executive Vice President

Exhibit (m)(v) under Form N-1-A
Exhibit 1 under Item 601/Reg. S-K

REGIONS FUNDS

Amendment No. 2 to Exhibit A

to the 12b-1 Agreement with
Federated Securities Corp. ("FSC")

1. During the term of this Agreement, FSC will pay Administrator a
quarterly fee in respect of each Fund, effective as of the dates set forth
below. This fee will be computed at the annual rate of the average net asset
value of Shares held during the quarter in accounts for which the Administrator
provides services under this Agreement as follows:

PORTFOLIO NAME FEE EFFECTIVE DATE

Regions Limited Maturity Government Fund

Investment Shares .25% January 1, 1998
Regions Growth Fund
Investment Shares .30% February 26, 1992
Regions Fixed Income Fund
Investment Shares .30% February 26, 1992
Regions Balanced Fund,
Investment Shares .30% January 1, 1998
Regions Value Fund
Investment Shares .30% January 1, 1998
Regions Aggressive Growth Fund .30% December 1, 1998
Regions Treasury Money Market Fund
Investment Shares 40% February 26, 1992

This fee will be paid so long as the average net asset value of Shares in
each Fund during the quarter equals or exceeds such minimum amount as FSC shall
from time to time determine and communicate in writing to the Administrator.

2. For the quarterly period in which the Administrative Agreement becomes
effective or terminates, there shall be an appropriate proration of any fee
payable on the basis of the number of days that the Agrement is in effect during
the quarter.

Revised: December 1, 1998

Exhibit (m)(vi) under Form N-1-A
Exhibit 1 under Item 601/Reg. S-K

EXHIBIT D
to the

Plan

REGIONS FUNDS

REGIONS AGGRESSIVE GROWTH FUND

This Plan is adopted by Regions Funds with respect to the portfolios of the
Trust set forth above.

In compensation for the services provided pursuant to this Plan, FSC will
be paid a monthly fee computed at the annual rate of .30 of 1% of the average
aggregate net asset value of the Regions Aggressive Growth Fund held during the
month.

Witness the due execution hereof this 1st day of December, 1998.

REGIONS FUNDS

By /S/ CHARLES L. DAVIS, JR.
Name: Charles L. Davis, Jr.
Title: Vice President

EXHIBIT (P) UNDER FORM N-1A
EXHIBIT 24 UNDER ITEM 601/REG. S-K

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of REGIONS FUNDS and each of them, their
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution for them and in their names, place and stead, in any and all
capacities, to sign any and all documents to be filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, by means of the
Securities and Exchange Commission's electronic disclosure system known as
EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.

SIGNATURES TITLE DATE

/S/ JOHN S. WALSH Trustee January 11, 1999
- ----------------------
John S. Walsh

Sworn to and subscribed before me this 11th day of January, 1999.

/S/ CHERI S. GOOD

Notary Public

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6

<NUMBER> 012

<NAME> REGIONS BALANCED FUND - INVESTMENT SHARES

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Nov-30-1998
<PERIOD-END> Nov-30-1998
<INVESTMENTS-AT-COST> 94,889,254
<INVESTMENTS-AT-VALUE> 120,756,863
<RECEIVABLES> 3,271,781
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 5,018
<TOTAL-ASSETS> 124,033,662
<PAYABLE-FOR-SECURITIES> 1,203,386
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 161,082
<TOTAL-LIABILITIES> 1,364,468
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 92,612,747
<SHARES-COMMON-STOCK> 7,329,863
<SHARES-COMMON-PRIOR> 6,023,878
<ACCUMULATED-NII-CURRENT> 261,774
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,927,071
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 25,867,602
<NET-ASSETS> 112,259,856
<DIVIDEND-INCOME> 750,800
<INTEREST-INCOME> 2,990,041
<OTHER-INCOME> 0
<EXPENSES-NET> 1,267,454
<NET-INVESTMENT-INCOME> 2,473,387
<REALIZED-GAINS-CURRENT> 3,927,012
<APPREC-INCREASE-CURRENT> 9,769,350
<NET-CHANGE-FROM-OPS> 16,169,749
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,404,098
<DISTRIBUTIONS-OF-GAINS> 2,449,878
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,457,275
<NUMBER-OF-SHARES-REDEEMED> 1,475,046
<SHARES-REINVESTED> 323,756
<NET-CHANGE-IN-ASSETS> 39,595,980
<ACCUMULATED-NII-PRIOR> 314,333
<ACCUMULATED-GAINS-PRIOR> 2,449,937
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 813,891
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,267,454
<AVERAGE-NET-ASSETS> 96,467,393
<PER-SHARE-NAV-BEGIN> 13.790
<PER-SHARE-NII> 0.350
<PER-SHARE-GAIN-APPREC> 1.960
<PER-SHARE-DIVIDEND> 0.370
<PER-SHARE-DISTRIBUTIONS> 0.410
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 15.320
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6

<NUMBER> 011

<NAME> REGIONS BALANCED FUND - TRUST SHARES

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Nov-30-1998
<PERIOD-END> Nov-30-1998
<INVESTMENTS-AT-COST> 94,889,254
<INVESTMENTS-AT-VALUE> 120,756,863
<RECEIVABLES> 3,271,781
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 5,018
<TOTAL-ASSETS> 124,033,662
<PAYABLE-FOR-SECURITIES> 1,203,386
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 161,082
<TOTAL-LIABILITIES> 1,364,468
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 92,612,747
<SHARES-COMMON-STOCK> 679,471
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 261,774
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,927,071
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 25,867,602
<NET-ASSETS> 10,409,338
<DIVIDEND-INCOME> 750,800
<INTEREST-INCOME> 2,990,041
<OTHER-INCOME> 0
<EXPENSES-NET> 1,267,454
<NET-INVESTMENT-INCOME> 2,473,387
<REALIZED-GAINS-CURRENT> 3,927,012
<APPREC-INCREASE-CURRENT> 9,769,350
<NET-CHANGE-FROM-OPS> 16,169,749
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 121,848
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 856,181
<NUMBER-OF-SHARES-REDEEMED> 176,710
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 39,595,980
<ACCUMULATED-NII-PRIOR> 314,333
<ACCUMULATED-GAINS-PRIOR> 2,449,937
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 813,891
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,267,454
<AVERAGE-NET-ASSETS> 9,214,483
<PER-SHARE-NAV-BEGIN> 14.520
<PER-SHARE-NII> 0.190
<PER-SHARE-GAIN-APPREC> 0.800
<PER-SHARE-DIVIDEND> 0.190
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 15.320
<EXPENSE-RATIO> 1.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6

<NUMBER> 012

<NAME> REGIONS FIXED INCOME FUND - INVESTMENT SHARES

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Nov-30-1998
<PERIOD-END> Nov-30-1998
<INVESTMENTS-AT-COST> 216,596,652
<INVESTMENTS-AT-VALUE> 222,678,005
<RECEIVABLES> 2,869,316
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 225,547,321
<PAYABLE-FOR-SECURITIES> 7,300,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 904,154
<TOTAL-LIABILITIES> 8,204,154
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 213,573,615
<SHARES-COMMON-STOCK> 2,261,184
<SHARES-COMMON-PRIOR> 17,750,075
<ACCUMULATED-NII-CURRENT> 2,757
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,314,558)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,081,353
<NET-ASSETS> 23,991,740
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 13,385,880
<OTHER-INCOME> 0
<EXPENSES-NET> 2,130,309
<NET-INVESTMENT-INCOME> 11,255,571
<REALIZED-GAINS-CURRENT> 1,376,624
<APPREC-INCREASE-CURRENT> 3,374,177
<NET-CHANGE-FROM-OPS> 16,006,372
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,936,405
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,793,437
<NUMBER-OF-SHARES-REDEEMED> 22,342,465
<SHARES-REINVESTED> 60,137
<NET-CHANGE-IN-ASSETS> 33,279,334
<ACCUMULATED-NII-PRIOR> 3,784
<ACCUMULATED-GAINS-PRIOR> (3,691,182)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,631,732
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,130,309
<AVERAGE-NET-ASSETS> 108,881,722
<PER-SHARE-NAV-BEGIN> 10.370
<PER-SHARE-NII> 0.530
<PER-SHARE-GAIN-APPREC> 0.240
<PER-SHARE-DIVIDEND> 0.530
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.610
<EXPENSE-RATIO> 0.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6

<NUMBER> 011

<NAME> REGIONS FIXED INCOME FUND - TRUST SHARES

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Nov-30-1998
<PERIOD-END> Nov-30-1998
<INVESTMENTS-AT-COST> 216,596,652
<INVESTMENTS-AT-VALUE> 222,678,005
<RECEIVABLES> 2,869,316
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 225,547,321
<PAYABLE-FOR-SECURITIES> 7,300,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 904,154
<TOTAL-LIABILITIES> 8,204,154
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 213,573,615
<SHARES-COMMON-STOCK> 18,223,168
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 2,757
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,314,558)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,081,353
<NET-ASSETS> 193,351,427
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 13,385,880
<OTHER-INCOME> 0
<EXPENSES-NET> 2,130,309
<NET-INVESTMENT-INCOME> 11,255,571
<REALIZED-GAINS-CURRENT> 1,376,624
<APPREC-INCREASE-CURRENT> 3,374,177
<NET-CHANGE-FROM-OPS> 16,006,372
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,320,193)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 23,040,304
<NUMBER-OF-SHARES-REDEEMED> 4,817,136
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 33,279,334
<ACCUMULATED-NII-PRIOR> 3,784
<ACCUMULATED-GAINS-PRIOR> (3,691,182)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,631,732
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,130,309
<AVERAGE-NET-ASSETS> 200,517,121
<PER-SHARE-NAV-BEGIN> 10.390
<PER-SHARE-NII> 0.280
<PER-SHARE-GAIN-APPREC> 0.220
<PER-SHARE-DIVIDEND> 0.280
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.610
<EXPENSE-RATIO> 0.97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6

<NUMBER> 012

<NAME> REGIONS GROWTH FUND - INVESTMENT SHARES

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Nov-30-1998
<PERIOD-END> Nov-30-1998
<INVESTMENTS-AT-COST> 253,605,720
<INVESTMENTS-AT-VALUE> 389,663,888
<RECEIVABLES> 8,089,139
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 397,753,027
<PAYABLE-FOR-SECURITIES> 9,874,431
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 343,950
<TOTAL-LIABILITIES> 10,218,381
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 224,818,146
<SHARES-COMMON-STOCK> 7,018,666
<SHARES-COMMON-PRIOR> 16,285,602
<ACCUMULATED-NII-CURRENT> 12,290
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 26,646,048
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 136,058,162
<NET-ASSETS> 140,921,849
<DIVIDEND-INCOME> 3,613,804
<INTEREST-INCOME> 276,736
<OTHER-INCOME> 0
<EXPENSES-NET> 3,347,018
<NET-INVESTMENT-INCOME> 543,522
<REALIZED-GAINS-CURRENT> 26,736,007
<APPREC-INCREASE-CURRENT> 68,542,924
<NET-CHANGE-FROM-OPS> 95,822,453
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 421,625
<DISTRIBUTIONS-OF-GAINS> 29,158,060
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,942,544
<NUMBER-OF-SHARES-REDEEMED> 14,721,586
<SHARES-REINVESTED> 512,106
<NET-CHANGE-IN-ASSETS> 112,528,178
<ACCUMULATED-NII-PRIOR> 108,032
<ACCUMULATED-GAINS-PRIOR> 29,068,101
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,552,575
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,347,018
<AVERAGE-NET-ASSETS> 196,385,336
<PER-SHARE-NAV-BEGIN> 16.890
<PER-SHARE-NII> 0.020
<PER-SHARE-GAIN-APPREC> 5.000
<PER-SHARE-DIVIDEND> 0.030
<PER-SHARE-DISTRIBUTIONS> 1.800
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 20.080
<EXPENSE-RATIO> 1.08
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6

<NUMBER> 011

<NAME> REGIONS GROWTH FUND - TRUST SHARES

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Nov-30-1998
<PERIOD-END> Nov-30-1998
<INVESTMENTS-AT-COST> 253,605,720
<INVESTMENTS-AT-VALUE> 389,663,888
<RECEIVABLES> 8,089,139
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 397,753,027
<PAYABLE-FOR-SECURITIES> 9,874,431
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 343,950
<TOTAL-LIABILITIES> 10,218,381
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 224,818,146
<SHARES-COMMON-STOCK> 12,280,727
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 12,290
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 26,646,048
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 136,058,162
<NET-ASSETS> 246,612,797
<DIVIDEND-INCOME> 3,613,804
<INTEREST-INCOME> 276,736
<OTHER-INCOME> 0
<EXPENSES-NET> 3,347,018
<NET-INVESTMENT-INCOME> 543,522
<REALIZED-GAINS-CURRENT> 26,736,007
<APPREC-INCREASE-CURRENT> 68,542,924
<NET-CHANGE-FROM-OPS> 95,822,453
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 217,639
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13,907,936
<NUMBER-OF-SHARES-REDEEMED> 1,627,209
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 112,528,178
<ACCUMULATED-NII-PRIOR> 108,032
<ACCUMULATED-GAINS-PRIOR> 29,068,101
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,552,575
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,347,018
<AVERAGE-NET-ASSETS> 225,987,674
<PER-SHARE-NAV-BEGIN> 17.810
<PER-SHARE-NII> 0.020
<PER-SHARE-GAIN-APPREC> 2.270
<PER-SHARE-DIVIDEND> 0.020
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 20.080
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6

<NUMBER> 012

<NAME> REGIONS LIMITED MATURITY GOVERNMENT FUND - INVESTMENT SHARES

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Nov-30-1998
<PERIOD-END> Nov-30-1998
<INVESTMENTS-AT-COST> 90,604,260
<INVESTMENTS-AT-VALUE> 91,577,251
<RECEIVABLES> 1,150,812
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 2,677
<TOTAL-ASSETS> 92,730,740
<PAYABLE-FOR-SECURITIES> 3,300,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 346,878
<TOTAL-LIABILITIES> 3,646,878
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 87,984,907
<SHARES-COMMON-STOCK> 3,322,637
<SHARES-COMMON-PRIOR> 8,011,911
<ACCUMULATED-NII-CURRENT> 40,930
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 85,034
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 972,991
<NET-ASSETS> 33,456,406
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,050,059
<OTHER-INCOME> 0
<EXPENSES-NET> 955,455
<NET-INVESTMENT-INCOME> 4,094,604
<REALIZED-GAINS-CURRENT> 422,729
<APPREC-INCREASE-CURRENT> 666,940
<NET-CHANGE-FROM-OPS> 5,184,273
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,690,862
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,615,874
<NUMBER-OF-SHARES-REDEEMED> 7,438,036
<SHARES-REINVESTED> 132,888
<NET-CHANGE-IN-ASSETS> 9,462,591
<ACCUMULATED-NII-PRIOR> 18,946
<ACCUMULATED-GAINS-PRIOR> (337,695)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 613,188
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 955,455
<AVERAGE-NET-ASSETS> 56,348,868
<PER-SHARE-NAV-BEGIN> 9.940
<PER-SHARE-NII> 0.460
<PER-SHARE-GAIN-APPREC> 0.130
<PER-SHARE-DIVIDEND> 0.460
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.070
<EXPENSE-RATIO> 1.12
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6

<NUMBER> 011

<NAME> REGIONS LIMITED MATURITY GOVERNMENT FUND - TRUST SHARES

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Nov-30-1998
<PERIOD-END> Nov-30-1998
<INVESTMENTS-AT-COST> 90,604,260
<INVESTMENTS-AT-VALUE> 91,577,251
<RECEIVABLES> 1,150,812
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 2,677
<TOTAL-ASSETS> 92,730,740
<PAYABLE-FOR-SECURITIES> 3,300,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 346,878
<TOTAL-LIABILITIES> 3,646,878
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 87,984,907
<SHARES-COMMON-STOCK> 5,524,442
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 40,930
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 85,034
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 972,991
<NET-ASSETS> 55,627,456
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,050,059
<OTHER-INCOME> 0
<EXPENSES-NET> 955,455
<NET-INVESTMENT-INCOME> 4,094,604
<REALIZED-GAINS-CURRENT> 422,729
<APPREC-INCREASE-CURRENT> 666,940
<NET-CHANGE-FROM-OPS> 5,184,273
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,381,758
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,735,107
<NUMBER-OF-SHARES-REDEEMED> 1,210,665
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 9,462,591
<ACCUMULATED-NII-PRIOR> 18,946
<ACCUMULATED-GAINS-PRIOR> (337,695)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 613,188
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 955,455
<AVERAGE-NET-ASSETS> 56,964,959
<PER-SHARE-NAV-BEGIN> 9.960
<PER-SHARE-NII> 0.250
<PER-SHARE-GAIN-APPREC> 0.110
<PER-SHARE-DIVIDEND> 0.250
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.070
<EXPENSE-RATIO> 1.04
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6

<NUMBER> 012

<NAME> REGIONS TREASURY MONEY MARKET FUND - INVESTMENT SHARES

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Nov-30-1998
<PERIOD-END> Nov-30-1998
<INVESTMENTS-AT-COST> 615,782,809
<INVESTMENTS-AT-VALUE> 615,782,809
<RECEIVABLES> 152,352
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 615,935,161
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,670,185
<TOTAL-LIABILITIES> 1,670,185
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 614,264,976
<SHARES-COMMON-STOCK> 89,673,124
<SHARES-COMMON-PRIOR> 45,960,071
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 89,673,124
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 15,398,251
<OTHER-INCOME> 0
<EXPENSES-NET> 1,657,894
<NET-INVESTMENT-INCOME> 13,740,357
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 13,740,357
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,416,209
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 378,489,440
<NUMBER-OF-SHARES-REDEEMED> 337,086,054
<SHARES-REINVESTED> 2,309,667
<NET-CHANGE-IN-ASSETS> 402,269,761
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,530,439
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,423,113
<AVERAGE-NET-ASSETS> 55,564,658
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.040
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.040
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6

<NUMBER> 011

<NAME> REGIONS TREASURY MONEY MARKET FUND - TRUST SHARES

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Nov-30-1998
<PERIOD-END> Nov-30-1998
<INVESTMENTS-AT-COST> 615,782,809
<INVESTMENTS-AT-VALUE> 615,782,809
<RECEIVABLES> 152,352
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 615,935,161
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,670,185
<TOTAL-LIABILITIES> 1,670,185
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 614,264,976
<SHARES-COMMON-STOCK> 524,591,852
<SHARES-COMMON-PRIOR> 166,035,144
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 524,591,852
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 15,398,251
<OTHER-INCOME> 0
<EXPENSES-NET> 1,657,894
<NET-INVESTMENT-INCOME> 13,740,357
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 13,740,357
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 11,324,148
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 735,928,297
<NUMBER-OF-SHARES-REDEEMED> 378,903,313
<SHARES-REINVESTED> 1,531,724
<NET-CHANGE-IN-ASSETS> 402,269,761
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,530,439
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,423,113
<AVERAGE-NET-ASSETS> 260,350,362
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.050
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.050
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.47
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<ARTICLE> 6

<NUMBER> 012

<NAME> REGIONS VALUE FUND - INVESTMENT SHARES

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Nov-30-1998
<PERIOD-END> Nov-30-1998
<INVESTMENTS-AT-COST> 172,983,548
<INVESTMENTS-AT-VALUE> 204,404,275
<RECEIVABLES> 781,546
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 735,366
<TOTAL-ASSETS> 205,921,187
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 116,736
<TOTAL-LIABILITIES> 116,736
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 159,548,067
<SHARES-COMMON-STOCK> 2,768,194
<SHARES-COMMON-PRIOR> 9,429,868
<ACCUMULATED-NII-CURRENT> 257,429
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,578,228
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 31,420,727
<NET-ASSETS> 47,814,570
<DIVIDEND-INCOME> 3,918,735
<INTEREST-INCOME> 380,535
<OTHER-INCOME> 0
<EXPENSES-NET> 1,977,822
<NET-INVESTMENT-INCOME> 2,321,448
<REALIZED-GAINS-CURRENT> 14,577,823
<APPREC-INCREASE-CURRENT> 1,792,241
<NET-CHANGE-FROM-OPS> 18,691,512
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,340,616
<DISTRIBUTIONS-OF-GAINS> 3,980,849
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,622,183
<NUMBER-OF-SHARES-REDEEMED> 10,339,476
<SHARES-REINVESTED> 55,619
<NET-CHANGE-IN-ASSETS> 53,273,162
<ACCUMULATED-NII-PRIOR> 299,491
<ACCUMULATED-GAINS-PRIOR> 3,981,254
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,464,460
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,977,822
<AVERAGE-NET-ASSETS> 100,605,638
<PER-SHARE-NAV-BEGIN> 16.180
<PER-SHARE-NII> 0.220
<PER-SHARE-GAIN-APPREC> 1.500
<PER-SHARE-DIVIDEND> 0.210
<PER-SHARE-DISTRIBUTIONS> 0.420
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 17.270
<EXPENSE-RATIO> 1.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>

<ARTICLE> 6

<NUMBER> 011

<NAME> REGIONS VALUE FUND - TRUST SHARES

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Nov-30-1998
<PERIOD-END> Nov-30-1998
<INVESTMENTS-AT-COST> 172,983,548
<INVESTMENTS-AT-VALUE> 204,404,275
<RECEIVABLES> 781,546
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 735,366
<TOTAL-ASSETS> 205,921,187
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 116,736
<TOTAL-LIABILITIES> 116,736
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 159,548,067
<SHARES-COMMON-STOCK> 9,145,338
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 257,429
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,578,228
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 31,420,727
<NET-ASSETS> 157,989,881
<DIVIDEND-INCOME> 3,918,735
<INTEREST-INCOME> 380,535
<OTHER-INCOME> 0
<EXPENSES-NET> 1,977,822
<NET-INVESTMENT-INCOME> 2,321,448
<REALIZED-GAINS-CURRENT> 14,577,823
<APPREC-INCREASE-CURRENT> 1,792,241
<NET-CHANGE-FROM-OPS> 18,691,512
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,022,894
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,264,378
<NUMBER-OF-SHARES-REDEEMED> 1,119,040
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 53,273,162
<ACCUMULATED-NII-PRIOR> 299,491
<ACCUMULATED-GAINS-PRIOR> 3,981,254
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,464,460
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,977,822
<AVERAGE-NET-ASSETS> 151,476,126
<PER-SHARE-NAV-BEGIN> 17.310
<PER-SHARE-NII> 0.100
<PER-SHARE-GAIN-APPREC> (0.020)
<PER-SHARE-DIVIDEND> 0.110
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 17.280
<EXPENSE-RATIO> 1.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000

</TABLE>