Region(R)
Family of Funds
COMBINED ANNUAL REPORT
Dated November 30, 1998
- ----- Regions(R) ------------------------------------------------------------
Funds FIRST PRIORITY FUNDS BECAME REGIONS FUNDS
EFFECTIVE MAY 15, 1998
<PAGE>
PRESIDENT'S MESSAGE
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Dear Shareholder:
I am pleased to present the Annual Report for the Regions Funds. This report
covers activity in the funds over the 12-month fiscal year period from December
1, 1997 through November 30, 1998.
It begins with an investment review by each fund's portfolio manager, which
describes economic and market conditions and their impact on fund strategy.
Following the investment review are a complete list of fund holdings and the
financial statements.
The Regions Funds offer you a range of investment objectives to keep your money
working toward your financial goals -- from daily income on your ready cash to
income on a regular basis to growth for longer-term goals like a child's college
education or your retirement. Whatever your goal, there's a Regions fund that
may be right for you.
Fund-by-fund highlights over the period are as follows:
REGIONS TREASURY MONEY MARKET FUND
This fund continues to give shareholders a convenient, highly conservative way
to pursue daily income on their ready cash, with easy access to their money.*
The fund's portfolio of U.S. Treasury money market securities paid dividends of
$0.05 per share for Trust Shares and $0.04 per share for Investment Shares
during the 12-month reporting period. The 7-day net yields for Trust Shares and
Investment Shares for the period ended November 30, 1998, were 3.96% and 3.56%,
respectively.** This level of income resulted in a 12-month total return of
4.71% and 4.30%, for Trust Shares and Investment Shares, respectively.*** The
fund's net assets continued to soar, reaching $614 million at the reporting
period's end.
REGIONS LIMITED MATURITY GOVERNMENT FUND
This diversified portfolio of limited maturity U.S. Treasury notes, U.S.
government agency securities and investment-grade corporate bonds gives
shareholders the opportunity to pursue income with limited principal volatility.
Over the 12-month reporting period, the fund's Investment Shares produced a
total return of 6.05%, or 3.05% adjusted for the fund's contingent deferred
sales charge, through an income stream totaling $0.46 per share and a $0.13
increase in net asset value.*** Trust Shares, a new share class, began operation
on May 20, 1998. For the period from May 20, 1998 to November 30, 1998, this
share class produced a total return of 3.59% through an income stream totaling
$0.25 per share and an $0.11 increase in net asset value.*** The fund's net
assets reached $89 million at the end of the reporting period.
REGIONS FIXED INCOME FUND
For Investment Shares, the fund's portfolio of U.S. government bonds and
investment-grade corporate bonds produced a monthly income stream totaling $0.53
per share over the 12-month reporting period. The net asset value increased by
$0.24. As a result, the fund produced a total return of 7.60%, or 4.60% adjusted
for the contingent deferred sales charge.*** Trust Shares, a new share class
began operation on May 20, 1998. For the period from May 20, 1998 to November
30, 1998, this share class produced a total return of 4.87% through dividends
totaling $0.28 per share and a net asset value increase of $0.22.*** The fund's
net assets rose to $217 million at the end of the reporting period.
* An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although money market funds seek to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in a money market
fund.
** Performance quoted represents past performance and is not indicative of
future results. Yield will vary. Yields quoted for money market funds most
closely reflect the fund's current earnings.
*** Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. A contingent deferred sales charge is applicable to
Investment Shares redeemed within three years of their purchase.
<PAGE>
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REGIONS BALANCED FUND
The fund's combination of high-quality stocks, investment-grade corporate bonds
and U.S. government bonds produced a total return for the fund's Investment
Shares of 17.49% for the reporting period, or 14.49% adjusted for the contingent
deferred sales charge.* Contributing to the total return was a $1.53 rise in net
asset value, dividends totaling $0.37 per share and capital gains totaling $0.41
per share. Trust Shares, a new share class began operation on May 20, 1998. For
the period from May 20, 1998 to November 30, 1998, this share class produced a
total return of 6.89% through dividends totaling $0.19 per share and a net asset
value increase of $0.80.* Fund net assets reached $123 million at the end of the
reporting period.
REGIONS VALUE FUND
In a highly volatile yet favorable stock market environment, the fund's
Investment Shares delivered a total return of 11.00%, or 8.00% adjusted for the
contingent deferred sales charge.* Contributing to the total return was a $1.09
increase in net asset value, dividends totaling $0.21 per share and capital
gains totaling $0.42 per share. Trust Shares, a new share class began operation
on May 20, 1998. For the period from May 20, 1998 to November 30, 1998, this
share class produced a total return of 0.50%, the result of dividends totaling
$0.11 per share and a slight net asset value decline of $0.03.* Fund net assets
totaled $206 million at the end of the reporting period.
REGIONS GROWTH FUND
The fund's diversified portfolio of high-quality growth stocks delivered an
extremely strong total return for Investment Shares of 33.81%, or 30.81%
adjusted for the contingent deferred sales charge.* Contributing to this total
return was a $3.19 rise in net asset value, dividends totaling $0.03 per share,
and capital gains totaling $1.80 per share. Trust Shares, a new share class
began operation on May 20, 1998. For the period from May 20, 1998 to November
30, 1998, this share class produced a total return of 12.85% through dividends
totaling $0.02 per share and a net asset value increase of $2.27.* At the end of
the reporting period, fund net assets reached $388 million.
Remember, adding to your account on a regular basis and reinvesting your
dividends in additional shares are convenient, painless ways to "pay yourself
first" and enjoy the benefit of compounding.+
Thank you for joining with other shareholders who are pursuing a wide range of
financial goals through the Regions Funds. As we begin a new year, we renew our
commitment to bring you the highest level of disciplined decision-making and
personal service.
Sincerely,
/s/ Edward C. Gonzales
Edward C. Gonzales
President
January 15, 1999
* Performance quoted represents past performance and is not indicative of future
results. Investment return and principal value will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their
original cost. A contingent deferred sales charge is applicable to Investment
Shares redeemed within three years of their purchase.
+ Systematic investing does not ensure a profit or protect against loss in
declining markets.
<PAGE>
LIMITED MATURITY GOVERNMENT FUND
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MANAGEMENT DISCUSSION AND ANALYSIS
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During the fiscal year ended November 30, 1998, the Limited Maturity
Government Fund's Investment Shares produced a total return of 6.05%* based
on net asset value compared to 6.33%** for the Lipper Short Government
Funds Average and 7.32%** for the Merrill Lynch 1-3 Year
Government/Corporate Index (the "Merrill Lynch Index"). Remember, market
indices bear no transaction costs, no operating expenses and are not
required to have cash on hand to meet redemptions. We compare our
performance to this index because the fund will normally invest at least
65% of the value of its total assets in U.S. government securities, which
should closely track the U.S. government allocation in the Merrill Lynch
Index. The balance of the fund assets may be comprised of corporate bonds,
mortgage-backed securities, asset-backed securities, bank instruments,
repurchase agreements, and securities of other investment companies. The
fund's dollar-weighted average portfolio maturity will normally fluctuate
between 1.5-3.0 years.
During the year, the fund performed in a positive manner due to stable
economic growth coupled with an easing of monetary policy by the Federal
Reserve Board in September, October, and November of 1998. Stable inflation
as measured by the Consumer Price Index continued to enhance the fund's
return for fiscal year 1998. World economic difficulties coupled with a
desire of investors for the safety of U.S. Treasury securities also
provided a positive influence on the fund's return.
Our strategy for 1998 was to maintain the portfolio duration in line
with the Merrill Lynch Index, increase the overall portfolio convexity, and
maintain current yield in the face of a flat to declining yield curve. We
believe that going forward, the threat of inflation will be minimal
providing opportunities for the fund to perform well for its style.
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
their original cost. The total return for Investment Shares taking into
account the maximum contingent deferred sales charge of 3.00% as of
November 30, 1998 was 3.05%. The total return for Trust Shares for the
period from May 20, 1998 to November 30, 1998 was 3.59%.
** Lipper indices measure the performance of the 30 largest mutual funds in
each prospective fund category. The Merrill Lynch 1-3 Year
Government/Corporate Index is an unmanaged index comprised of publicly
placed, non-convertible coupon-bearing domestic debt with maturities
between 1 and 2.99 years. The index is produced by Merrill Lynch,
Pierce, Fenner & Smith, Inc. Investments cannot be made in an index.
<PAGE>
LIMITED MATURITY GOVERNMENT FUND--TRUST SHARES
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GROWTH OF $25,000 INVESTED IN LIMITED MATURITY GOVERNMENT FUND--TRUST SHARES
The graph below illustrates the hypothetical investment of $25,000* in
Limited Maturity Government Fund Trust Shares (the "Fund") from May 20, 1998
(start of performance) to November 30, 1998, compared to the Merrill Lynch 1-3
Year Government/Corporate Index.+
[Graphic representation "A1" omitted - see Appendix.]
TOTAL RETURN FOR THE PERIOD ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
Start of performance (5/20/98) (cumulative).......... 3.59%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Merrill Lynch 1-3 Year Government/Corporate Index has been
adjusted to reflect the reinvestment of dividends on securities in the index.
+ The Merrill Lynch 1-3 Year Government/Corporate Index is an unmanaged index
comprised of publicly placed, non-convertible coupon-bearing domestic debt
with maturities between 1 and 2.99 years. The index is produced by Merrill
Lynch, Pierce, Fenner & Smith, Inc. The Merrill Lynch 1-3 Year
Government/Corporate Index is not adjusted to reflect sales charges,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
<PAGE>
LIMITED MATURITY GOVERNMENT FUND--INVESTMENT SHARES
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GROWTH OF $10,000 INVESTED IN LIMITED MATURITY GOVERNMENT FUND--INVESTMENT
SHARES
The graph below illustrates the hypothetical investment of $10,000* in
Limited Maturity Government Fund Investment Shares (the "Fund") from December
12, 1993 (start of performance) to November 30, 1998, compared to the Merrill
Lynch 1-3 Year Government/Corporate Index.+
[Graphic representation "A2" omitted - see Appendix.]
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
1 Year............................................... 3.05%**
Start of Performance (12/12/93)...................... 5.10%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 2% at the Fund's inception ($10,000 investment
minus $200 sales charge = $9,800). The Fund's performance assumes the
reinvestment of all dividends and distributions. The Merrill Lynch 1-3 Year
Government/Corporate Index has been adjusted to reflect the reinvestment of
dividends on securities in the index. Effective June 1, 1997, the Fund
eliminated the sales charge and replaced it with a maximum contingent
deferred sales charge of 3.00%.
** Total return quoted reflects the maximum 3.00% contingent deferred sales
charge imposed on any redemption less than one year from the purchase date.
+ The Merrill Lynch 1-3 Year Government/Corporate Index is an unmanaged index
comprised of publicly placed, non-convertible coupon-bearing domestic debt
with maturities between 1 and 2.99 years. The index is produced by Merrill
Lynch, Pierce, Fenner & Smith, Inc. The Merrill Lynch 1-3 Year
Government/Corporate Index is not adjusted to reflect sales charges,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
<PAGE>
FIXED INCOME FUND
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MANAGEMENT DISCUSSION AND ANALYSIS
---------------------------------------------------------------------------
During the fiscal year ended November 30, 1998, the Fixed Income
Fund's Investment Shares returned 7.60% based on asset value.* This
compares to the performance of the Merrill Lynch 1-10 Year
Government/Corporate Index of 8.89%.** Remember, market indices bear no
transaction costs, no operating expenses and are not required to have cash
on hand to meet redemptions. We compare our performance to this index
because we typically use a high proportion of U.S. Treasury and agency
securities in our portfolios with approximately 30%-40% in high quality
corporate bonds. We define ourselves as intermediate fixed income managers,
since we typically do not buy bonds with maturity in excess of 15 years,
and maintain a weighted average life of less than 10 years for the
portfolio.
It is important to recognize that we utilize conservative accounting
policies which call for the amortization of premiums. Historically, in a
declining interest rate environment, many securities available to us for
purchase have been priced above par value or at a premium. We have chosen
to amortize this premium which reduces current yield for the fund.
Investors who purchase a fund primarily based on current yield should
examine the quality and maturity of the securities held and the accounting
treatment for amortization of premium. The effect of not amortizing premium
is to increase the current yield by, in effect, increasing current
distributions to investors by returning a portion of their investment or
principal.
During the year, the fund experienced a fairly consistent increase in
net asset value. The perceived and expected slowing in the economy served
as a strong impetus for the decline in interest rates. As international
crises made headline after headline, market participants expected the
Federal Reserve Board (the "Fed") to revise course and proceed with an
"easy" monetary policy. In fact, the Fed did lower the federal funds target
rate 50 basis points late in the year. By this time bond yields had
discounted these Fed actions. While rates fell across the board, credit
quality concerns raised spreads between corporates and Treasuries thereby
limiting performance of all but pure Treasury investments for the year. The
fund's Investment Shares net asset value rose from $10.37 on November 30,
1997 to $10.61 on November 30, 1998.
Our strategic plan for the fund was to extend maturities when positive
on the bond markets. Throughout the year we have maintained duration at
around 105% of the benchmark. While we expect the economy to slow in 1999,
the performance of the fund will be influenced by the trend in interest
rates.
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
their original cost. The total return for Investment Shares taking into
account the maximum contingent deferred sales charge of 3.00% as of
November 30, 1998 was 4.60%. The total return for Trust Shares for the
period from May 20, 1998 to November 30, 1998 was 4.87%.
** The Merrill Lynch 1-10 Year Government/Corporate Index is an unmanaged
index comprised of publicly placed, non-convertible coupon-bearing
domestic debt with maturities between 1 and 9.9 years. The index is
produced by Merrill Lynch, Pierce, Fenner & Smith, Inc. Investments
cannot be made in an index.
<PAGE>
FIXED INCOME FUND--TRUST SHARES
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GROWTH OF $25,000 INVESTED IN FIXED INCOME FUND--TRUST SHARES
The graph below illustrates the hypothetical investment of $25,000* in
Fixed Income Fund Trust Shares (the "Fund") from May 20, 1998 (start of
performance) to November 30, 1998, compared to the Merrill Lynch 1-10 Year
Government/Corporate Index.+
[Graphic representation "A3" omitted - see Appendix.]
TOTAL RETURN FOR THE PERIOD ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
Start of Performance (5/20/98) (cumulative).......... 4.87%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Merrill Lynch 1-10 Year Government/Corporate Index has
been adjusted to reflect the reinvestment of dividends on securities in the
index.
+ The Merrill Lynch 1-10 Year Government/Corporate Index is an unmanaged index
comprised of publicly placed, non-convertible coupon-bearing domestic debt
with maturities between 1 and 9.99 years. The index is produced by Merrill
Lynch, Pierce, Fenner & Smith, Inc. The Merrill Lynch 1-10 Year
Government/Corporate Index is not adjusted to reflect sales charges,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
<PAGE>
FIXED INCOME FUND--INVESTMENT SHARES
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GROWTH OF $10,000 INVESTED IN FIXED INCOME FUND--INVESTMENT SHARES
The graph below illustrates the hypothetical investment of $10,000* in
Fixed Income Fund Investment Shares (the "Fund") from April 20, 1992 (start of
performance) to November 30, 1998, compared to the Merrill Lynch 1-10 Year
Government/Corporate Index.+
[Graphic representation "A4" omitted - see Appendix.]
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
5 Year............................................... 5.76%
1 Year............................................... 4.60%**
Start of Performance (4/20/92)....................... 6.97%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 2% at the Fund's inception ($10,000 investment
minus $200 sales charge = $9,800). The Fund's performance assumes the
reinvestment of all dividends and distributions. The Merrill Lynch 1-10 Year
Government/Corporate Index has been adjusted to reflect reinvestment of
dividends on securities in the index. Effective June 1, 1997 the Fund
eliminated the sales charge and replaced it with a maximum contingent
deferred sales charge of 3.00%.
** Total return reflects the maximum 3.00% contingent deferred sales charge
imposed on any redemption less than one year from the purchase date.
+ The Merrill Lynch 1-10 Year Government/Corporate Index is an unmanaged index
comprised of publicly placed, non-convertible coupon-bearing domestic debt
with maturities between 1 and 9.99 years. The index is produced by Merrill
Lynch, Pierce, Fenner & Smith, Inc. The Merrill Lynch 1-10 Year
Government/Corporate Index is not adjusted to reflect sales charges,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
<PAGE>
BALANCED FUND
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MANAGEMENT DISCUSSION AND ANALYSIS
---------------------------------------------------------------------------
During the fiscal year ended November 30, 1998, the Balanced Fund's
Investment Shares produced a total return of 17.49% based on net asset
value.* This compares to 16.28% for the Standard & Poor's 500 Composite
Stock Index (the 'S&P 500")/Merrill Lynch 1-10 Year Government/Corporate
Index (the "Merrill Lynch Index") and 12.75% for the Lipper Balanced Fund
Index, which is comprised of the returns of mutual funds with a balanced
objective.**
During the previous 12 month stocks again significantly outperformed
bonds with the S&P 500 returning 23.66% while the Merrill Lynch Index
returned 8.89%.*** Within the equity market the best performing sectors
were Consumer Staples, Consumer Cyclicals, Technology and Utilities while
the worst performing areas were Energy, Basic Industries, Capital Goods,
and Transportation.
For 1999, based upon growing corporate profits, moderate economic
growth and low inflation, we expect stocks to outperform bonds. During the
past few years, we have primarily focused on large capitalization growth
stocks and high quality intermediate range bonds and will continue to do so
in the near future.
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate so
that an investor's shares, when redeemed, may be worth more or less
than their original cost. The total return for Investment Shares taking
into account the maximum contingent deferred sales charge of 3.00% as
of November 30, 1998 was 14.49%. The total return for Trust Shares for
the period from May 20, 1998 to November 30, 1998 was 6.89%.
** The S&P 500/Merrill Lynch 1-10 Year Government/Corporate Index combines
the components of a stock-oriented index and a bond-oriented index to
obtain results which can be compared to the performance of a
stock-oriented index. The indices' total returns will be assigned
various weights depending upon the fund's current asset allocation.
Investments cannot be made in an index. Lipper indices measure the
performance of the 30 largest mutual funds in each prospective fund
category.
*** The S&P 500 is an unmanaged capitalization-weighted index of 500 stocks
designed to measure performance of the broad domestic economy through
changes in the aggregate market value of 500 stocks representing all
major industries. The Merrill Lynch Index is an unmanaged index
comprised of publicly placed, non-convertible, coupon-bearing domestic
debt with maturities between 1 and 9.99 years. The index is produced by
Merrill, Lynch, Pierce, Fenner & Smith, Inc. Investments cannot be made
in an index.
<PAGE>
BALANCED FUND--TRUST SHARES
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GROWTH OF $25,000 INVESTED IN BALANCED FUND--TRUST SHARES
The graph below illustrates the hypothetical investment of $25,000* in
Balanced Fund Trust Shares (the "Fund") from May 20, 1998 (start of performance)
to November 30, 1998, compared to the S&P 500/Lehman Brothers
Government/Corporate Index.+
[Graphic representation "A5" omitted - see Appendix.]
TOTAL RETURN FOR THE PERIOD ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
Start of Performance (5/20/98) (cumulative).......... 6.89%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500/ Lehman Brothers Government/Corporate Index has
been adjusted to reflect the reinvestment of dividends on securities in the
index.
+ The S&P 500/Lehman Brothers Government/Corporate Index is a weighted index
that combines components of the S&P 500 and the Lehman Brothers
Government/Corporate Index. Figures shown for the index assume a constant
weighting of 50% S&P 500 and 50% Lehman Brothers Government/ Corporate Index
throughout the period. Although the Fund's allocation between equity and debt
instruments will vary, the Fund's allocation on November 30, 1998, as
indicated in the Fund's financial statements, was 48.6% in equities, 45.4% in
debt instruments and the remainder in short-term liquid investments. The S&P
500/Lehman Brothers Government/Corporate Index is not adjusted to reflect
sales charges, expenses, or other fees that the SEC requires to be reflected
in the Fund's performance. Investments cannot be made in an index.
<PAGE>
BALANCED FUND--INVESTMENT SHARES
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GROWTH OF $10,000 INVESTED IN BALANCED FUND--INVESTMENT SHARES
The graph below illustrates the hypothetical investment of $10,000* in
Balanced Fund Investment Shares (the "Fund") from December 19, 1994 (start of
performance) to November 30, 1998, compared to the S&P 500/Lehman Brothers
Government/Corporate Index.+
[Graphic representation "A6" omitted - see Appendix.]
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
1 Year............................................... 14.49%**
Start of Performance (12/19/94)...................... 17.14%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 2% at the Fund's inception ($10,000 investment
minus $200 sales charge = $9,800). The Fund's performance assumes the
reinvestment of all dividends and distributions. The S&P 500/ Lehman Brothers
Government/Corporate Index has been adjusted to reflect the reinvestment of
dividends on securities in the index. Effective June 1, 1997 the Fund
eliminated the sales charge and replaced it with a maximum contingent
deferred sales charge of 3.00%.
** Total return quoted reflects the maximum 3.00% contingent deferred sales
charge imposed on any redemption less than one year from the purchase date.
+ The S&P 500/Lehman Brothers Government/Corporate Index is a weighted index
that combines components of the S&P 500 and the Lehman Brothers
Government/Corporate Index. Figures shown for the index assume a constant
weighting of 50% S&P 500 and 50% Lehman Brothers Government/ Corporate Index
throughout the period. Although the Fund's allocation between equity and debt
instruments will vary, the Fund's allocation on November 30, 1998, as
indicated in the Fund's financial statements, was 48.6% in equities, 45.4% in
debt instruments and the remainder in short-term liquid investments. The S&P
500/Lehman Brothers Government/Corporate Index is not adjusted to reflect
sales charges, expenses, or other fees that the SEC requires to be reflected
in the Fund's performance. Investments cannot be made in an index.
<PAGE>
VALUE FUND
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MANAGEMENT DISCUSSION AND ANALYSIS
---------------------------------------------------------------------------
The Regions Value Fund's Investment Shares had a total return of
11.00% for the twelve months ended November 30, 1998.* The S&P 500/Barra
Value Index (the "Value Index") had a return of 13.25% for the same
period.** This index represents the lower half of a price-to-book ranking
of the Standard & Poor's 500 Composite Index (the "S&P 500").** The members
of the S&P 500 are ranked from highest to lowest by price-to-book ratio.
The top one-half of this ranking (by market capitalization) becomes the S&P
500/Barra Growth Index and the lower one-half becomes the Value Index. The
Value Index currently contains approximately 380 stocks.
The fund's holdings benefited from a strong stock market during this
period. The S&P 500 returned 23.66%, including reinvested dividends, during
this period.** Corporate earnings growth has slowed this year. The stock
market has set several record highs, but the market has become increasingly
volatile. Financial stocks continue to do well, and the fund has benefited
from its holdings of bank and insurance stocks. The fund has several
holdings in the oil and natural gas industries, and these have not done as
well because of falling energy prices.
We plan to remain fully invested in the stock market. Although stocks
have had four excellent years in a row, we are more cautious about the year
ahead. We foresee steady interest rates and corporate earnings growth of 0%
to 5%. These factors, combined with a continued inflow of cash from mutual
funds, should hold the stock market steady, although we expect volatility
to be higher over the next year than over the past year. We hope to hold
the fund's dividend at a higher-than-average level by holding stocks which
pay dividends that are above the market's level.
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
their original cost. The total return for Investment Shares taking into
account the maximum contingent deferred sales charge of 3.00% as of
November 30, 1998 was 8.00%. The total return for Trust Shares for the
period from May 20, 1998 to November 30, 1998 was 0.50%.
** The Value Index is an unmanaged sub-index of the S&P 500 representing
50% of the S&P 500 market capitalization and is comprised of those
companies with lower price-to-book ratios. The S&P 500 is an unmanaged
capitalization-weighted index of 500 stocks designed to measure
performance of the broad domestic economy through changes in the
aggregate market value of 500 stocks representing all major industries.
Investments cannot be made in an index.
<PAGE>
VALUE FUND--TRUST SHARES
- --------------------------------------------------------------------------------
GROWTH OF $25,000 INVESTED IN VALUE FUND--TRUST SHARES
The graph below illustrates the hypothetical investment of $25,000* in
Value Fund Trust Shares (the "Fund") from May 20, 1998 (start of performance) to
November 30, 1998, compared to the S&P 500/Barra Value Index.+
[Graphic representation "A7" omitted - see Appendix.]
TOTAL RETURN FOR THE PERIOD ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
Start of Performance (5/20/98) (cumulative).......... 0.50%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500/ Barra Value Index has been adjusted to reflect the
reinvestment of dividends on securities in the index.
+ The S&P 500/Barra Value Index is an unmanaged sub-index of the S&P 500
representing 50% of the S&P 500 market capitalization and is comprised of
those companies with lower price-to-book ratios. The S&P 500/Barra Value Index
is not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be made
in an index.
<PAGE>
VALUE FUND--INVESTMENT SHARES
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN VALUE FUND--INVESTMENT SHARES
The graph below illustrates the hypothetical investment of $10,000* in
Value Fund Investment Shares (the "Fund") from December 19, 1994 (start of
performance) to November 30, 1998, compared to the S&P 500/Barra Value Index.+
[Graphic representation "A8" omitted - see Appendix.]
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
1 Year............................................... 8.00%*
Start of Performance (12/19/94)...................... 20.38%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 2% at the Fund's inception ($10,000 investment
minus $200 sales charge = $9,800). The Fund's performance assumes the
reinvestment of all dividends and distributions. The S&P 500/Barra Value
Index has been adjusted to reflect the reinvestment of dividends on
securities in the index. Effective June 1, 1997, the Fund eliminated the
sales charge and replaced it with a maximum contingent deferred sales charge
of 3.00%.
** Total return quoted reflects the maximum 3.00% contingent deferred sales
charge imposed on any redemption less than one year from the purchase date.
+ The S&P 500/Barra Value Index is an unmanaged sub-index of the S&P 500
representing 50% of the S&P 500 market capitalization and is comprised of
those companies with lower price-to-book ratios. The S&P 500/Barra Value
Index is not adjusted to reflect sales charges, expenses, or other fees that
the SEC requires to be reflected in the Fund's performance. Investments
cannot be made in an index.
<PAGE>
GROWTH FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS
---------------------------------------------------------------------------
During the fiscal year ended November 30, 1998 the fund's Investment
Shares returned 33.81%* based on net asset value, which slightly exceeded
the return of the S&P 500/Barra Growth Index** of 33.74% and exceeded the
Standard & Poor's 500 Composite Stock Index (the "S&P 500") return of
23.66%.** The Lipper Growth Fund Index, which is comprised of the returns
of mutual funds with growth as their objective, returned 17.95%.**
The stock market as a whole was heavily influenced by two forces which
had opposite effects and led to periods of high volatility: the negative
impact of the Asian Crisis on U.S. corporate profits, and the positive
impact of the Federal Reserve Board lowering key interest rate benchmarks.
Some sectors of the stock market responded to this volatility quite well
while others did not. Technology, Consumer Staples, Consumer Cyclicals and
Utilities were outperformers while Capital Goods, Energy, Transportation
and Basic Industries performed poorly as a whole. The fund was well
positioned during the year with overweights in Technology and Consumer
Staples and underweights in Energy, Basic Industries and Transportation.
Looking ahead to 1999 we expect inflation to remain low and the
economy to grow at a moderate rate. We believe this will lead to a
rewarding year for equity investors, but we do not expect the market to
produce returns comparable to the last few years.
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
their original cost. The total return for Investment Shares taking into
account the maximum contingent deferred sales charge of 3.00% as of
November 30, 1998 was 30.81%. The total return for Trust Shares for the
period from May 20, 1998 to November 30, 1998 was 12.85%.
** The S&P 500/Barra Growth Index is an unmanaged capitalization-weighted
index of all the stocks in the S&P 500 that have high price-to-book
ratios. The S&P 500 is an unmanaged capitalization-weighted index of 500
stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries. Investments cannot be made in an index. Lipper
indices measure the performance of the 30 largest mutual funds in each
prospective fund category.
<PAGE>
GROWTH FUND--TRUST SHARES
- --------------------------------------------------------------------------------
GROWTH OF $25,000 INVESTED IN GROWTH FUND--TRUST SHARES
The graph below illustrates the hypothetical investment of $25,000* in
Growth Fund Trust Shares (the "Fund") from May 20, 1998 (start of performance)
to November 30, 1998, compared to the Standard & Poor's 500 Composite Stock
Index (S&P 500)+.
[Graphic representation "A9" omitted - see Appendix.]
TOTAL RETURN FOR THE PERIOD ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
Start of Performance (5/20/98) (cumulative).......... 12.85%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 has been adjusted to reflect the reinvestment of
dividends on securities in the index.
+ The S&P 500 is an unmanaged capitalization-weighted index of 500 stocks
designed to measure performance of the broad domestic economy through changes
in the aggregate market value of 500 stocks representing all major industries.
The S&P 500 is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance. Investments
cannot be made in an index.
<PAGE>
GROWTH FUND--INVESTMENT SHARES
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN GROWTH FUND--INVESTMENT SHARES
The graph below illustrates the hypothetical investment of $10,000* in
Growth Fund Investment Shares (the "Fund") from April 20, 1992 (start of
performance) to November 30, 1998, compared to the Standard & Poor's 500
Composite Stock Index (S&P 500).+.
[Graphic representation "A10" omitted - see Appendix.]
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
5 Year............................................... 21.17%
1 Year............................................... 30.81%**
Start of Performance (4/20/92)....................... 17.35%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 2% at the Fund's inception ($10,000 investment
minus $200 sales charge = $9,800). The Fund's performance assumes the
reinvestment of all dividends and distributions. The S&P 500 has been
adjusted to reflect the reinvestment of dividends on securities in the index.
Effective June 1, 1997 the Fund eliminated the sales charge and replaced it
with a maximum contingent deferred sales charge of 3.00%.
** Total return quoted reflects the maximum 3.00% contingent deferred sales
charge imposed on any redemption less than one year from the purchase date.
+ The S&P 500 is an unmanaged capitalization-weighted index of 500 stocks
designed to measure performance of the broad domestic economy through changes
in the aggregate market value of 500 stocks representing all major
industries. The S&P 500 is not adjusted to reflect sales charges, expenses,
or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
<PAGE>
REGIONS TREASURY MONEY MARKET FUND
(FORMERLY, FIRST PRIORITY TREASURY MONEY MARKET FUND)
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
- ------------ ------------------------------------------------------------ ------------
<C> <C> <S> <C>
UNITED STATES TREASURY OBLIGATIONS--95.1%
- --------------------------------------------------------------------------------
U.S. TREASURY BILLS
------------------------------------------------------------
$588,000,000 12/3/1998-4/15/1999 (AT AMORTIZED COST) $584,378,231
------------------------------------------------------------ ------------
MUTUAL FUND SHARES--5.1%
- --------------------------------------------------------------------------------
29,532,642 Federated U.S. Treasury Cash Reserves Fund 29,532,642
------------------------------------------------------------
1,871,936 Goldman Sachs Fund Square Trust 1,871,936
------------------------------------------------------------ ------------
TOTAL MUTUAL FUNDS (AT NET ASSET VALUE) 31,404,578
------------------------------------------------------------ ------------
TOTAL INVESTMENTS (AT AMORTIZED COST AND VALUE)(A) $615,782,809
------------------------------------------------------------ ------------
</TABLE>
(a) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($614,264,976) at November 30, 1998.
(See Notes which are an integral part of the Financial Statements)
<PAGE>
REGIONS LIMITED MATURITY GOVERNMENT FUND
(FORMERLY, FIRST PRIORITY LIMITED MATURITY GOVERNMENT FUND)
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------ -----------
<C> <C> <S> <C>
CORPORATE BONDS--25.6%
- ------------------------------------------------------------------------------
COMMERCIAL SERVICES--5.7%
------------------------------------------------------------
$2,000,000 Donnelley (R.R.) & Sons Co., 6.340%, 6/21/2000 $ 2,033,580
------------------------------------------------------------
3,000,000 Dow Jones & Co., 5.750%, 12/1/2000 3,036,480
------------------------------------------------------------ -----------
Total 5,070,060
------------------------------------------------------------ -----------
CONSUMER NON-DURABLES--2.9%
------------------------------------------------------------
2,000,000 PepsiCo, Inc., 5.875%, 6/1/2000 2,019,180
------------------------------------------------------------
500,000 PepsiCo, Inc., 6.800%, 5/15/2000 511,020
------------------------------------------------------------ -----------
Total 2,530,200
------------------------------------------------------------ -----------
CONSUMER SERVICES--6.7%
------------------------------------------------------------
2,000,000 Carnival Corp., 5.650%, 10/15/2000 1,998,080
------------------------------------------------------------
2,000,000 Disney (Walt) Co., 5.600%, 4/17/2000 2,013,000
------------------------------------------------------------
2,000,000 Tribune Co., 5.300%, 4/17/2000 1,994,860
------------------------------------------------------------ -----------
Total 6,005,940
------------------------------------------------------------ -----------
FINANCE--AUTOMOTIVE--2.3%
------------------------------------------------------------
2,000,000 Ford Motor Credit Corp., 6.375%, 10/6/2000 2,040,540
------------------------------------------------------------ -----------
FINANCE--COMMERCIAL--2.9%
------------------------------------------------------------
500,000 American Express Credit Corp., 6.750%, 6/1/2001 513,165
------------------------------------------------------------
2,000,000 General Electric Capital Corp., 5.625%, 4/10/2000 2,014,180
------------------------------------------------------------ -----------
Total 2,527,345
------------------------------------------------------------ -----------
PRODUCER MANUFACTURING--2.2%
------------------------------------------------------------
2,000,000 Cooper Industries, Inc., 5.620%, 2/15/2001 1,993,640
------------------------------------------------------------ -----------
RETAIL TRADE--0.6%
------------------------------------------------------------
500,000 Penney (J.C.) Co., Inc., 6.375%, 9/15/2000 508,970
------------------------------------------------------------ -----------
UTILITIES--2.3%
------------------------------------------------------------
2,000,000 Southern California Edison Co., 5.875%, 1/15/2001 2,018,080
------------------------------------------------------------ -----------
TOTAL CORPORATE BONDS (IDENTIFIED COST $22,446,511) 22,694,775
------------------------------------------------------------ -----------
U. S. GOVERNMENT AGENCIES--47.7%
- ------------------------------------------------------------------------------
FEDERAL HOME LOAN BANK--33.6%
------------------------------------------------------------
2,000,000 4.630%, 10/9/2001 1,984,840
------------------------------------------------------------
2,000,000 4.775%, 10/15/2003 1,970,940
------------------------------------------------------------
4,000,000 4.910%, 11/19/2001 4,003,600
------------------------------------------------------------
3,300,000 5.005%, 12/4/2001 3,298,449
------------------------------------------------------------
</TABLE>
<PAGE>
REGIONS LIMITED MATURITY GOVERNMENT FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------ -----------
<C> <C> <S> <C>
U. S. GOVERNMENT AGENCIES--CONTINUED
- ------------------------------------------------------------------------------
FEDERAL HOME LOAN BANK--CONTINUED
------------------------------------------------------------
$3,325,000 5.345%, 2/16/2001 $ 3,354,593
------------------------------------------------------------
2,000,000 5.575%, 8/28/2001 2,033,300
------------------------------------------------------------
2,000,000 5.580%, 4/9/2001 2,029,220
------------------------------------------------------------
3,000,000 5.590%, 3/27/2000 3,025,590
------------------------------------------------------------
2,000,000 5.610%, 3/1/2001 2,029,260
------------------------------------------------------------
2,000,000 5.620%, 1/12/2001 2,028,060
------------------------------------------------------------
2,000,000 5.625%, 6/2/2000 2,021,000
------------------------------------------------------------
1,000,000 5.950%, 10/6/2000 1,018,820
------------------------------------------------------------
1,000,000 6.100%, 10/9/2002 1,036,920
------------------------------------------------------------ -----------
Total 29,834,592
------------------------------------------------------------ -----------
FEDERAL HOME LOAN MORTGAGE CORPORATION--1.1%
------------------------------------------------------------
1,000,000 5.960%, 10/20/2000 1,019,390
------------------------------------------------------------ -----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--13.0%
------------------------------------------------------------
2,000,000 5.360%, 2/16/2001 2,019,260
------------------------------------------------------------
4,000,000 5.600%, 1/12/2000 4,029,440
------------------------------------------------------------
1,000,000 5.600%, 2/2/2001 1,014,360
------------------------------------------------------------
4,000,000 5.860%, 11/7/2000 4,072,160
------------------------------------------------------------
500,000 Discount Note, 4/8/2003 403,865
------------------------------------------------------------ -----------
Total 11,539,085
------------------------------------------------------------ -----------
TOTAL U. S. GOVERNMENT AGENCIES (IDENTIFIED COST
$41,989,800) 42,393,067
------------------------------------------------------------ -----------
U.S. TREASURY NOTES--23.3%
- ------------------------------------------------------------------------------
1,000,000 5.000%, 2/15/1999 1,000,800
------------------------------------------------------------
1,500,000 5.250%, 1/31/2001 1,520,235
------------------------------------------------------------
2,000,000 5.375%, 1/31/2000 2,016,520
------------------------------------------------------------
4,000,000 5.375%, 6/30/2000 4,045,640
------------------------------------------------------------
500,000 5.500%, 12/31/2000 508,825
------------------------------------------------------------
3,750,000 5.500%, 4/15/2000 3,793,350
------------------------------------------------------------
200,000 5.625%, 10/31/1999 201,722
------------------------------------------------------------
2,000,000 5.625%, 11/30/1999 2,019,220
------------------------------------------------------------
500,000 5.625%, 11/30/2000 509,685
------------------------------------------------------------
1,500,000 5.625%, 2/28/2001 1,533,000
------------------------------------------------------------
500,000 5.750%, 10/31/2000 510,400
------------------------------------------------------------
1,000,000 5.875%, 6/30/2000 1,019,040
------------------------------------------------------------
500,000 6.750%, 4/30/2000 514,295
------------------------------------------------------------
</TABLE>
<PAGE>
REGIONS LIMITED MATURITY GOVERNMENT FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------ -----------
<C> <C> <S> <C>
U.S. TREASURY NOTES--CONTINUED
- ------------------------------------------------------------------------------
$1,000,000 6.875%, 3/31/2000 $ 1,028,580
------------------------------------------------------------
500,000 IO STRIP, 5/15/2001 447,020
------------------------------------------------------------ -----------
TOTAL U.S. TREASURY NOTES (IDENTIFIED COST $20,346,872) 20,668,332
------------------------------------------------------------ -----------
(a)REPURCHASE AGREEMENT--6.5%
- ------------------------------------------------------------------------------
5,821,077 Wachovia Bank of NC, NA, Winston-Salem, 5.050%, dated
11/30/1998, due 12/1/1998 (AT AMORTIZED COST) 5,821,077
------------------------------------------------------------ -----------
TOTAL INVESTMENTS (IDENTIFIED COST $90,604,260)(B) $91,577,251
------------------------------------------------------------ -----------
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(b) The cost of investments for federal tax purposes amounts to $90,604,260. The
net unrealized appreciation of investments on a federal tax basis amounts to
$972,991 which is comprised of $1,019,412 appreciation and $46,421
depreciation at November 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($89,083,862) at November 30, 1998.
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
IO -- Interest Only
-- Separate Trading of Registered Interest & Principal of
STRIP Securities
</TABLE>
(See Notes which are an integral part of the Financial Statements)
<PAGE>
REGIONS FIXED INCOME FUND
(FORMERLY, FIRST PRIORITY FIXED INCOME FUND)
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
CORPORATE BONDS--23.7%
- -------------------------------------------------------------------------------
CONSUMER DURABLES--0.5%
------------------------------------------------------------
MOTOR VEHICLES
------------------------------------------------------------
$ 880,000 Ford Motor Co., Note, 8.875%, 4/1/2006 $ 1,054,874
------------------------------------------------------------ ------------
CONSUMER SERVICES--0.8%
------------------------------------------------------------
NEWSPAPERS
------------------------------------------------------------
1,650,000 Dow Jones & Co., Note, 5.75%, 12/1/2000 1,670,064
------------------------------------------------------------ ------------
CONSUMER NON-DURABLES--4.0%
------------------------------------------------------------
PACKAGED FOODS
------------------------------------------------------------
2,500,000 Campbell Soup Co., Bond, 6.15%, 12/1/2002 2,606,300
------------------------------------------------------------
5,000,000 Sara Lee Corp., Note, 5.95%, 1/20/2005 5,186,050
------------------------------------------------------------ ------------
Total 7,792,350
------------------------------------------------------------ ------------
SOFT DRINKS
------------------------------------------------------------
1,000,000 PepsiCo, Inc., Note, 5.875%, 6/1/2000 1,009,590
------------------------------------------------------------ ------------
Total Consumer Non-Durables 8,801,940
------------------------------------------------------------ ------------
FINANCE--11.3%
------------------------------------------------------------
FINANCE--AUTOMOTIVE
------------------------------------------------------------
5,000,000 General Motors Acceptance Corp., Sr. Unsub., 5.875%,
1/22/2003 5,092,850
------------------------------------------------------------ ------------
FINANCE COMPANIES
------------------------------------------------------------
1,000,000 Associates Corp. of North America, Sr. Note, 5.75%,
10/15/2003 1,005,450
------------------------------------------------------------
2,000,000 Commercial Credit Co., Note, 5.90%, 9/1/2003 2,034,100
------------------------------------------------------------
5,000,000 National Rural Utilities Cooperative Finance Corp., Note,
6.046%, 4/15/2003 5,139,150
------------------------------------------------------------
5,000,000 Sears Roebuck Acceptance Corp., Bond, 6.00%, 3/20/2003 5,073,990
------------------------------------------------------------ ------------
Total 13,252,690
------------------------------------------------------------ ------------
INVESTMENT BANKERS/BROKERS/SERVICES
------------------------------------------------------------
5,000,000 Merrill Lynch & Co., Inc., Note, 6.00%, 2/12/2003 5,076,100
------------------------------------------------------------ ------------
MAJOR BANKS
------------------------------------------------------------
1,000,000 SouthTrust Bank of Alabama, Birmingham, Sub. Note, 7.00%,
11/15/2008 1,092,850
------------------------------------------------------------ ------------
Total Finance 24,514,490
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS FIXED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- -------------------------------------------------------------------------------
NON-ENERGY MINERALS--1.8%
------------------------------------------------------------
ALUMINUM
------------------------------------------------------------
$ 4,000,000 Aluminum Co. of America, Note, 5.75%, 2/1/2001 $ 4,034,480
------------------------------------------------------------ ------------
PROCESS INDUSTRIES--1.8%
------------------------------------------------------------
2,750,000 Air Products & Chemicals, Inc., Note, 6.25%, 6/15/2003 2,817,485
------------------------------------------------------------
1,000,000 Cargill, Inc., Note, 6.15%, 2/25/2008 1,030,630
------------------------------------------------------------ ------------
Total Process Industries 3,848,115
------------------------------------------------------------ ------------
UTILITIES--3.5%
------------------------------------------------------------
MAJOR U.S. TELECOMMUNICATIONS
------------------------------------------------------------
2,000,000 Bell Atlantic Corp., Unsecd. Note, 5.875%, 9/1/2003 2,061,440
------------------------------------------------------------
2,400,000 BellSouth Telecommunications, Inc., Note, 6.00%, 6/15/2002 2,470,872
------------------------------------------------------------
3,000,000 Southern California Edison Co., Sr. Note, 5.875%, 1/15/2001 3,027,120
------------------------------------------------------------ ------------
Total Utilities 7,559,432
------------------------------------------------------------ ------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $51,140,185) 51,483,395
------------------------------------------------------------ ------------
CORPORATE NOTES--8.9%
- -------------------------------------------------------------------------------
CONSUMER SERVICES--1.8%
------------------------------------------------------------
HOTELS/RESORTS
------------------------------------------------------------
4,000,000 Carnival Corp., Note, 5.65%, 10/15/2000 3,996,160
------------------------------------------------------------ ------------
FINANCE--6.6%
------------------------------------------------------------
FINANCE COMPANIES
------------------------------------------------------------
2,000,000 American General Finance Corp., Note, 6.05%, 4/9/2003 2,021,040
------------------------------------------------------------
2,000,000 Associates Corp. of North America, Sr. Note, 6.50%,
7/15/2002 2,070,340
------------------------------------------------------------
1,000,000 Associates Corp. of North America, Sr. Note, 6.875%,
8/1/2003 1,054,400
------------------------------------------------------------
5,000,000 Ford Motor Credit Corp., Sr. Note, 6.00%, 1/14/2003 5,133,900
------------------------------------------------------------
2,000,000 Morgan Stanley, Dean Witter & Co., Note, 6.25%, 3/15/2000 2,018,140
------------------------------------------------------------
2,000,000 Paccar Financial Corp., Note, 6.02%, 3/15/2000 2,018,760
------------------------------------------------------------ ------------
Total Finance 14,316,580
------------------------------------------------------------ ------------
HEALTH TECHNOLOGY--0.5%
------------------------------------------------------------
MAJOR PHARMACEUTICALS--0.5%
------------------------------------------------------------
1,000,000 Warner-Lambert Co., Note, 5.75%, 1/15/2003 1,023,210
------------------------------------------------------------ ------------
TOTAL CORPORATE NOTES (IDENTIFIED COST $18,970,062) 19,335,950
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS FIXED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
U.S. GOVERNMENT AGENCIES--50.4%
- -------------------------------------------------------------------------------
AGENCY SECURITIES
------------------------------------------------------------
$ 2,313,000 Tennessee Valley Authority, 10/15/2003 $ 1,821,256
------------------------------------------------------------ ------------
FEDERAL FARM CREDIT BANK
------------------------------------------------------------
1,000,000 5.92%, 12/18/2002 1,032,460
------------------------------------------------------------
1,000,000 5.75%, 9/1/2005 1,031,690
------------------------------------------------------------
1,000,000 5.90%, 1/10/2005 1,036,950
------------------------------------------------------------
3,200,000 5.10%, 11/9/2005 3,184,032
------------------------------------------------------------ ------------
Total 6,285,132
------------------------------------------------------------ ------------
FEDERAL HOME LOAN BANK
------------------------------------------------------------
5,850,000 4.39%, 11/5/2003 5,730,894
------------------------------------------------------------
3,000,000 5.125%, 9/15/2003 3,008,670
------------------------------------------------------------
2,000,000 5.345%, 2/16/2001 2,017,800
------------------------------------------------------------
1,000,000 5.625%, 6/2/2000 1,010,500
------------------------------------------------------------
4,000,000 5.69%, 6/19/2003 4,097,240
------------------------------------------------------------
4,000,000 5.70%, 3/25/2003 4,094,200
------------------------------------------------------------
4,000,000 4.775%, 10/15/2003 3,941,880
------------------------------------------------------------
1,500,000 4.91%, 11/19/2001 1,501,350
------------------------------------------------------------
1,000,000 5.005%, 10/1/2003 996,560
------------------------------------------------------------
7,300,000 5.005%, 12/4/2001 7,296,569
------------------------------------------------------------
2,000,000 5.135%, 9/23/2003 2,004,120
------------------------------------------------------------
1,000,000 5.19%, 9/23/2003 1,004,380
------------------------------------------------------------
5,200,000 5.375%, 2/13/2001 5,249,348
------------------------------------------------------------
3,000,000 5.62%, 1/12/2001 3,042,090
------------------------------------------------------------
2,000,000 5.717%, 8/25/2003 2,052,460
------------------------------------------------------------
1,000,000 5.72%, 3/6/2003 1,024,040
------------------------------------------------------------
4,925,000 5.76%, 4/9/2003 5,053,346
------------------------------------------------------------
1,000,000 5.86%, 12/30/2002 1,030,120
------------------------------------------------------------
3,000,000 6.14%, 12/10/2004 3,149,364
------------------------------------------------------------
3,000,000 Series F5-2001, 5.52%, 1/22/2001 3,036,540
------------------------------------------------------------
2,000,000 Series KY-2003, 5.37%, 1/16/2003 2,021,000
------------------------------------------------------------ ------------
Total 62,362,471
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS FIXED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
U.S. GOVERNMENT AGENCIES--CONTINUED
- -------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION
------------------------------------------------------------
$ 2,000,000 6.625%, 11/28/2005 $ 2,046,600
------------------------------------------------------------
2,000,000 7.53%, 8/7/2006 2,095,380
------------------------------------------------------------
314,132 Series 1414, Class F, 6.85%, 11/15/2007 324,712
------------------------------------------------------------
1,045,729 Series 1475, Class O, 7.00%, 2/15/2008 1,078,137
------------------------------------------------------------ ------------
Total 5,544,829
------------------------------------------------------------ ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
------------------------------------------------------------
2,500,000 Discount Note, 10/8/2004 1,882,775
------------------------------------------------------------
3,500,000 Discount Note, 4/8/2003 2,827,055
------------------------------------------------------------
10,000,000 7.55%, 3/27/2007 10,283,800
------------------------------------------------------------
1,000,000 5.36%, 2/16/2001 1,009,630
------------------------------------------------------------
1,100,000 6.31%, 11/1/2004 1,159,928
------------------------------------------------------------
5,000,000 7.09%, 3/13/2007 5,224,150
------------------------------------------------------------
2,000,000 7.27%, 2/14/2007 2,044,600
------------------------------------------------------------
3,716,165 Series G93-32, Class J, 6.75%, 5/25/2009 3,815,287
------------------------------------------------------------
3,000,000 Series MTN, 7.11%, 3/20/2006 3,099,300
------------------------------------------------------------
2,000,000 Unsecd. Note, Series MTN, 7.07%, 10/24/2006 2,077,200
------------------------------------------------------------ ------------
Total 33,423,725
------------------------------------------------------------ ------------
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $106,175,264) 109,437,413
------------------------------------------------------------ ------------
U.S. TREASURY OBLIGATIONS--13.4%
- -------------------------------------------------------------------------------
U.S. TREASURY BONDS
------------------------------------------------------------
7,000,000 7.50%, 5/15/2002 7,632,660
------------------------------------------------------------
12,250,000 IO, 02/15/2006 8,670,060
------------------------------------------------------------ ------------
Total 16,302,720
------------------------------------------------------------ ------------
U.S. TREASURY NOTES
------------------------------------------------------------
2,000,000 4.25%, 11/15/2003 1,978,120
------------------------------------------------------------
3,300,000 5.50%, 1/31/2003 3,404,742
------------------------------------------------------------
1,000,000 5.625%, 10/31/1999 1,008,610
------------------------------------------------------------
6,000,000 7.50%, 11/15/2001 6,473,280
------------------------------------------------------------ ------------
Total 12,864,752
------------------------------------------------------------ ------------
TOTAL U.S. TREASURY OBLIGATIONS (IDENTIFIED COST
$27,057,366) 29,167,472
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS FIXED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
(a)REPURCHASE AGREEMENT--6.1%
- -------------------------------------------------------------------------------
$13,253,775 Wachovia Bank of NC, NA, Winston-Salem, 5.05%, dated
11/30/1998, due 12/1/1998 (AT AMORTIZED COST) $ 13,253,775
------------------------------------------------------------ ------------
TOTAL INVESTMENTS (IDENTIFIED COST $216,596,652)(B) $222,678,005
------------------------------------------------------------ ------------
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(b) The cost of investments for federal tax purposes amounts to $216,596,652.
The net unrealized appreciation of investments on a federal tax basis
amounts to $6,081,353 which is comprised of $6,266,063 appreciation and
$184,710 depreciation at November 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($217,343,167) at November 30, 1998.
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
IO -- Interest Only
MTN -- Medium Term Note
</TABLE>
(See Notes which are an integral part of the Financial Statements)
<PAGE>
REGIONS BALANCED FUND
(FORMERLY, FIRST PRIORITY BALANCED FUND)
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--48.6%
- ------------------------------------------------------------------------------
CONSUMER DURABLES--2.4%
------------------------------------------------------------
HOME FURNISHINGS
------------------------------------------------------------
2,500 Newell Co. $ 110,625
------------------------------------------------------------ ------------
PHOTOGRAPHIC PRODUCTS
------------------------------------------------------------
4,000 Eastman Kodak Co. 290,250
------------------------------------------------------------ ------------
SOFT DRINKS
------------------------------------------------------------
16,000 Coca-Cola Co. 1,121,000
------------------------------------------------------------
32,000 PepsiCo, Inc. 1,238,000
------------------------------------------------------------ ------------
Total 2,359,000
------------------------------------------------------------ ------------
SHOE MANUFACTURING
------------------------------------------------------------
6,000 Nike, Inc., Class B 240,000
------------------------------------------------------------ ------------
Total Consumer Durables 2,999,875
------------------------------------------------------------ ------------
CONSUMER NON-DURABLES--5.0%
------------------------------------------------------------
PACKAGE GOODS/COSMETICS
------------------------------------------------------------
10,000 Avon Products, Inc. 406,250
------------------------------------------------------------
11,000 Colgate-Palmolive Co. 941,875
------------------------------------------------------------
16,000 Dial Corp. 420,000
------------------------------------------------------------
9,000 Gillette Co. 413,438
------------------------------------------------------------
16,000 Kimberly-Clark Corp. 842,000
------------------------------------------------------------
10,000 Procter & Gamble Co. 876,250
------------------------------------------------------------ ------------
Total 3,899,813
------------------------------------------------------------ ------------
PACKAGED FOODS
------------------------------------------------------------
8,500 General Mills, Inc. 641,750
------------------------------------------------------------
12,000 Sara Lee Corp. 700,500
------------------------------------------------------------ ------------
Total 1,342,250
------------------------------------------------------------ ------------
TOBACCO
------------------------------------------------------------
16,000 Philip Morris Cos., Inc. 895,000
------------------------------------------------------------ ------------
Total Consumer Non-Durables 6,137,063
------------------------------------------------------------ ------------
CONSUMER SERVICES--1.9%
------------------------------------------------------------
FOOD DISTRIBUTORS
------------------------------------------------------------
24,000 Sysco Corp. 646,500
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------
CONSUMER SERVICES--CONTINUED
------------------------------------------------------------
MEDIA CONGLOMERATES
------------------------------------------------------------
24,000 Disney (Walt) Co. $ 772,500
------------------------------------------------------------ ------------
RESTAURANTS
------------------------------------------------------------
6,500 Cracker Barrel Old Country Store 151,125
------------------------------------------------------------
11,000 McDonald's Corp. 770,688
------------------------------------------------------------ ------------
Total 921,813
------------------------------------------------------------ ------------
Total Consumer Services 2,340,813
------------------------------------------------------------ ------------
ENERGY MINERALS--3.2%
------------------------------------------------------------
INTEGRATED OIL COMPANIES
------------------------------------------------------------
10,000 Amoco Corp. 589,375
------------------------------------------------------------
7,000 Chevron Corp. 585,375
------------------------------------------------------------
19,200 Exxon Corp. 1,441,200
------------------------------------------------------------
6,000 Mobil Corp. 517,125
------------------------------------------------------------
13,800 Texaco, Inc. 794,363
------------------------------------------------------------ ------------
Total Energy Minerals 3,927,438
------------------------------------------------------------ ------------
ELECTRONIC TECHNOLOGY--7.3%
------------------------------------------------------------
AEROSPACE
------------------------------------------------------------
10,400 Boeing Co. 422,500
------------------------------------------------------------
2,500 Lockheed Martin Corp. 259,375
------------------------------------------------------------ ------------
Total 681,875
------------------------------------------------------------ ------------
COMPUTER COMMUNICATIONS
------------------------------------------------------------
14,625 (a) Cisco Systems, Inc. 1,102,359
------------------------------------------------------------ ------------
ELECTRONIC DATA PROCESSING
------------------------------------------------------------
16,000 Compaq Computer Corp. 520,000
------------------------------------------------------------
6,000 (a) Gateway 2000, Inc. 336,750
------------------------------------------------------------
7,400 International Business Machines Corp. 1,221,000
------------------------------------------------------------
6,000 (a) Sun Microsystems, Inc. 444,375
------------------------------------------------------------ ------------
Total 2,522,125
------------------------------------------------------------ ------------
SEMICONDUCTORS
------------------------------------------------------------
14,500 Intel Corp. 1,560,563
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT
------------------------------------------------------------
23,000 Lucent Technologies, Inc. $ 1,979,438
------------------------------------------------------------
7,500 Motorola, Inc. 465,000
------------------------------------------------------------
10,000 (a) Tellabs, Inc. 540,625
------------------------------------------------------------ ------------
Total 2,985,063
------------------------------------------------------------ ------------
Total Electronic Technology 8,851,985
------------------------------------------------------------ ------------
FINANCE--7.9%
------------------------------------------------------------
ACCIDENT & HEALTH INSURANCE
------------------------------------------------------------
22,000 Torchmark Corp. 836,000
------------------------------------------------------------ ------------
DIVERSIFIED FINANCIAL SERVICES
------------------------------------------------------------
11,000 American Express Co. 1,100,688
------------------------------------------------------------
13,000 Citigroup, Inc. 652,438
------------------------------------------------------------ ------------
Total 1,753,126
------------------------------------------------------------ ------------
FINANCE COMPANIES
------------------------------------------------------------
17,000 Federal National Mortgage Association 1,236,750
------------------------------------------------------------
6,000 Household International, Inc. 234,750
------------------------------------------------------------
5,500 S&P Depositary Receipts Trust, ADR 639,719
------------------------------------------------------------ ------------
Total 2,111,219
------------------------------------------------------------ ------------
LIFE INSURANCE
------------------------------------------------------------
8,500 American General Corp. 598,719
------------------------------------------------------------
2,200 Jefferson-Pilot Corp. 150,150
------------------------------------------------------------ ------------
Total 748,869
------------------------------------------------------------ ------------
MAJOR BANKS
------------------------------------------------------------
11,000 BankAmerica Corp. 717,063
------------------------------------------------------------
8,500 First Union Corp. 516,375
------------------------------------------------------------
27,000 Wells Fargo Co. 972,000
------------------------------------------------------------ ------------
Total 2,205,438
------------------------------------------------------------ ------------
MULTI-LINE INSURANCE-
------------------------------------------------------------
13,800 American International Group, Inc. 1,297,200
------------------------------------------------------------ ------------
PROPERTY-CASUALTY INSURERS
------------------------------------------------------------
3,300 General RE Corp. 770,550
------------------------------------------------------------ ------------
Total Finance 9,722,402
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------
HEALTH TECHNOLOGY--6.9%
------------------------------------------------------------
MAJOR PHARMACEUTICALS
------------------------------------------------------------
28,000 American Home Products Corp. $ 1,491,000
------------------------------------------------------------
10,000 Bristol-Myers Squibb Co. 1,225,625
------------------------------------------------------------
11,900 Johnson & Johnson 966,875
------------------------------------------------------------
14,000 Merck & Co., Inc. 2,168,250
------------------------------------------------------------
15,000 Pfizer, Inc. 1,674,375
------------------------------------------------------------
9,000 Schering Plough Corp. 957,375
------------------------------------------------------------ ------------
Total Health Technology 8,483,500
------------------------------------------------------------ ------------
INDUSTRIAL SERVICES--0.4%
------------------------------------------------------------
OILFIELD SERVICES/EQUIPMENT
------------------------------------------------------------
7,000 Halliburton Co. 205,625
------------------------------------------------------------
7,000 Schlumberger Ltd. 312,813
------------------------------------------------------------ ------------
Total Industrial Services 518,438
------------------------------------------------------------ ------------
NON-ENERGY MINERALS--0.4%
------------------------------------------------------------
ALUMINUM
------------------------------------------------------------
5,500 Aluminum Co. of America 407,688
------------------------------------------------------------ ------------
OTHER METALS/MINERALS
------------------------------------------------------------
1,000 Phelps Dodge Corp. 56,688
------------------------------------------------------------ ------------
Total Non-Energy Minerals 464,376
------------------------------------------------------------ ------------
PROCESS INDUSTRIES--2.3%
------------------------------------------------------------
MULTI-SECTOR COMPANIES
------------------------------------------------------------
30,600 General Electric Co. 2,769,300
------------------------------------------------------------ ------------
PRODUCER MANUFACTURING--0.3%
------------------------------------------------------------
AUTO PARTS: O.E.M.
------------------------------------------------------------
6,000 TRW, Inc. 330,375
------------------------------------------------------------ ------------
RETAIL TRADE--3.5%
------------------------------------------------------------
BUILDING MATERIALS CHAINS
------------------------------------------------------------
17,000 Home Depot, Inc. 845,750
------------------------------------------------------------ ------------
DEPARTMENT STORES
------------------------------------------------------------
2,000 Penney (J.C.) Co., Inc. 110,000
------------------------------------------------------------
6,000 Sears, Roebuck & Co. 284,625
------------------------------------------------------------ ------------
Total 394,625
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------
RETAIL TRADE--CONTINUED
------------------------------------------------------------
DISCOUNT STORES
------------------------------------------------------------
7,500 Dayton-Hudson Corp. $ 337,500
------------------------------------------------------------
26,500 Wal-Mart Stores, Inc. 1,995,781
------------------------------------------------------------ ------------
Total 2,333,281
------------------------------------------------------------ ------------
DRUG STORE CHAINS
------------------------------------------------------------
3,000 Rite Aid Corp. 139,125
------------------------------------------------------------
4,000 Walgreen Co. 214,750
------------------------------------------------------------ ------------
Total 353,875
------------------------------------------------------------ ------------
FOOD CHAINS
------------------------------------------------------------
5,500 Albertsons, Inc. 313,844
------------------------------------------------------------
10,000 Food Lion, Inc., Class B 96,875
------------------------------------------------------------ ------------
Total 410,719
------------------------------------------------------------ ------------
Total Retail Trade 4,338,250
------------------------------------------------------------ ------------
TECHNOLOGY SERVICES--2.4%
------------------------------------------------------------
COMPUTER SOFTWARE
------------------------------------------------------------
11,000 (a) BMC Software, Inc. 561,688
------------------------------------------------------------
4,500 Computer Associates International, Inc. 199,125
------------------------------------------------------------
18,000 (a) Microsoft Corp. 2,196,000
------------------------------------------------------------ ------------
Total Technology Services 2,956,813
------------------------------------------------------------ ------------
UTILITIES--4.7%
------------------------------------------------------------
ELECTRIC UTILITIES: SOUTH
------------------------------------------------------------
5,000 Duke Energy Corp. 312,813
------------------------------------------------------------
15,000 Florida Progress Corp. 641,250
------------------------------------------------------------
10,800 SCANA Corp. 352,350
------------------------------------------------------------
20,000 Southern Co. 590,000
------------------------------------------------------------ ------------
Total 1,896,413
------------------------------------------------------------ ------------
MAJOR U.S. TELECOMMUNICATIONS
------------------------------------------------------------
18,600 Ameritech Corp. 1,006,725
------------------------------------------------------------
13,000 BellSouth Corp. 1,134,250
------------------------------------------------------------
12,400 (a) MCI Worldcom, Inc. 731,600
------------------------------------------------------------
21,000 SBC Communications, Inc. 1,006,688
------------------------------------------------------------ ------------
Total 3,879,263
------------------------------------------------------------ ------------
Total Utilities 5,775,676
------------------------------------------------------------ ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $35,235,820) 59,616,304
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
CORPORATE BONDS--7.9%
- ------------------------------------------------------------------------------
CONSUMER DURABLES--0.1%
------------------------------------------------------------
MOTOR VEHICLES
------------------------------------------------------------
$ 120,000 Ford Motor Co., Note, 8.875%, 4/1/2006 $ 143,846
------------------------------------------------------------ ------------
CONSUMER SERVICES--0.8%
------------------------------------------------------------
NEWSPAPERS
------------------------------------------------------------
1,000,000 Dow Jones & Co., Note, 5.75%, 12/1/2000 1,012,160
------------------------------------------------------------ ------------
CONSUMER STAPLES--0.9%
------------------------------------------------------------
FOOD & BEVERAGE
------------------------------------------------------------
1,000,000 Cargill, Inc., Note, 6.15%, 2/25/2008 1,030,630
------------------------------------------------------------ ------------
FINANCE--4.1%
------------------------------------------------------------
FINANCE COMPANIES
------------------------------------------------------------
2,000,000 Commercial Credit Co., Note, 5.90%, 9/1/2003 2,034,100
------------------------------------------------------------
425,000 National Rural Utilities Cooperative Finance Corp., Note,
6.046%, 4/15/2003 436,828
------------------------------------------------------------
1,000,000 Sears Roebuck Acceptance Corp., Bond, 6.00%, 3/20/2003 1,016,090
------------------------------------------------------------ ------------
Total 3,487,018
------------------------------------------------------------ ------------
INVESTMENT BANKERS/BROKERS/SERVICES--1.2%
------------------------------------------------------------
500,000 Merrill Lynch & Co., Inc., Note, 6.00%, 1/15/2001 505,205
------------------------------------------------------------
1,000,000 Merrill Lynch & Co., Inc., Note, 6.00%, 2/12/2003 1,015,220
------------------------------------------------------------ ------------
Total 1,520,425
------------------------------------------------------------ ------------
Total Finance 5,007,443
------------------------------------------------------------ ------------
PROCESS INDUSTRIES--0.8%
------------------------------------------------------------
SPECIALTY CHEMICALS
------------------------------------------------------------
1,000,000 Air Products & Chemicals, Inc., Note, 6.25%, 6/15/2003 1,024,540
------------------------------------------------------------ ------------
RETAIL TRADE--0.4%
------------------------------------------------------------
DEPARTMENT STORES
------------------------------------------------------------
500,000 Penney (J.C.) Co., Inc., Sr. Note, Series A, 6.375%,
9/15/2000 508,970
------------------------------------------------------------ ------------
UTILITIES--0.8%
------------------------------------------------------------
ELECTRIC UTILITIES: WEST
------------------------------------------------------------
1,000,000 Pacific Gas & Electric Co., 1st Ref. Mtg., 5.875%, 10/1/2005 1,023,330
------------------------------------------------------------ ------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $9,497,671) 9,750,919
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
CORPORATE NOTES--5.9%
- ------------------------------------------------------------------------------
FINANCE COMPANIES--4.8%
------------------------------------------------------------
$1,000,000 American General Finance Corp., Note, 6.05%, 4/9/2003 $ 1,010,520
------------------------------------------------------------
600,000 Associates Corp. of North America, Sr. Note, 6.50%,
7/15/2002 621,102
------------------------------------------------------------
500,000 Associates Corp. of North America, Sr. Note, 6.875%,
8/1/2003 527,200
------------------------------------------------------------
2,850,000 NationsBank Corp., Sr. Note, 5.80%, 1/31/2001 2,876,961
------------------------------------------------------------
1,000,000 Paccar Financial Corp., Note, 6.02%, 3/15/2000 1,009,380
------------------------------------------------------------ ------------
Total 6,045,163
------------------------------------------------------------ ------------
HOTELS/RESORTS--0.8%
------------------------------------------------------------
1,000,000 Carnival Corp., Note, 5.65%, 10/15/2000 999,040
------------------------------------------------------------ ------------
MAJOR PHARMACEUTICALS--0.3%
------------------------------------------------------------
400,000 Warner-Lambert Co., Note, 5.75%, 1/15/2003 409,284
------------------------------------------------------------ ------------
TOTAL CORPORATE NOTES (IDENTIFIED COST $7,307,121) 7,453,487
------------------------------------------------------------ ------------
U.S. GOVERNMENT AGENCIES--20.0%
- ------------------------------------------------------------------------------
FEDERAL FARM CREDIT BANK
------------------------------------------------------------
1,000,000 5.92%, 12/18/2002 1,032,460
------------------------------------------------------------
500,000 5.90%, 1/10/2005 518,475
------------------------------------------------------------
2,000,000 5.10%, 11/9/2005 1,990,020
------------------------------------------------------------ ------------
Total 3,540,955
------------------------------------------------------------ ------------
FEDERAL HOME LOAN BANK
------------------------------------------------------------
1,000,000 5.125%, 9/15/2003 1,002,890
------------------------------------------------------------
1,000,000 5.70%, 3/25/2003 1,023,550
------------------------------------------------------------
1,000,000 4.63%, 10/9/2001 992,420
------------------------------------------------------------
2,000,000 4.91%, 11/19/2001 2,001,800
------------------------------------------------------------
1,000,000 5.005%, 10/1/2003 996,560
------------------------------------------------------------
2,000,000 5.19%, 9/23/2003 2,008,760
------------------------------------------------------------
1,000,000 5.717%, 8/25/2003 1,026,230
------------------------------------------------------------
1,000,000 6.10%, 10/9/2002 1,036,920
------------------------------------------------------------
1,000,000 6.93%, 9/26/2002 1,007,250
------------------------------------------------------------
1,550,000 Series F5-2001, 5.52%, 1/22/2001 1,568,879
------------------------------------------------------------
2,000,000 Series KY-2003, 5.37%, 1/16/2003 2,021,000
------------------------------------------------------------ ------------
Total 14,686,259
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
U.S. GOVERNMENT AGENCIES--CONTINUED
- ------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION
------------------------------------------------------------
$1,000,000 Deb., 6.67%, 12/14/2005 $ 1,000,950
------------------------------------------------------------ ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
------------------------------------------------------------
500,000 Series G93-32, Class J, 6.75%, 5/25/2009 510,335
------------------------------------------------------------
1,500,000 Discount Note, 10/8/2004 1,129,665
------------------------------------------------------------
1,000,000 6.09%, 8/21/2000 1,019,730
------------------------------------------------------------
1,000,000 6.70%, 12/12/2006 1,028,080
------------------------------------------------------------
500,000 6.82%, 12/13/2006 507,505
------------------------------------------------------------ ------------
Total 4,195,315
------------------------------------------------------------ ------------
TENNESSEE VALLEY AUTHORITY
------------------------------------------------------------
1,500,000 6.00%, 10/15/2003 1,181,100
------------------------------------------------------------
1,000,000 6.00%, 11/1/2000 1,020,420
------------------------------------------------------------ ------------
Total 2,201,520
------------------------------------------------------------ ------------
TOTAL U.S. GOVERNMENT AGENCIES (IDENTIFIED COST $25,199,270) 25,624,999
------------------------------------------------------------ ------------
U.S. TREASURY OBLIGATIONS--11.6%
- ------------------------------------------------------------------------------
U.S. TREASURY BONDS
------------------------------------------------------------
1,000,000 United States Treasury Bond, 7.50%, 5/15/2002 1,090,380
------------------------------------------------------------ ------------
U.S. TREASURY NOTES
------------------------------------------------------------
2,000,000 STRIPS, IO, 2/15/2006 1,415,520
------------------------------------------------------------
2,500,000 STRIPS, IO, 5/15/2001 2,235,100
------------------------------------------------------------
700,000 4.25%, 11/15/2003 692,342
------------------------------------------------------------
1,000,000 4.50%, 9/30/2000 998,950
------------------------------------------------------------
2,000,000 5.00%, 1/31/1999 2,001,420
------------------------------------------------------------
2,000,000 5.50%, 1/31/2003 2,063,480
------------------------------------------------------------
1,000,000 5.625%, 2/28/2001 1,022,000
------------------------------------------------------------
1,000,000 6.25%, 2/15/2003 1,060,190
------------------------------------------------------------
500,000 6.25%, 8/31/2000 513,635
------------------------------------------------------------
1,000,000 7.50%, 11/15/2001 1,078,880
------------------------------------------------------------ ------------
Total 13,081,517
------------------------------------------------------------ ------------
TOTAL U.S. TREASURY OBLIGATIONS(IDENTIFIED COST $13,510,115) 14,171,897
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
(b)REPURCHASE AGREEMENT--3.4%
- ------------------------------------------------------------------------------
$4,139,257 Wachovia Bank of NC, NA, Winston-Salem, 5.05%, dated
11/30/1998, due 12/1/1998 (AT AMORTIZED COST) $ 4,139,257
------------------------------------------------------------ ------------
TOTAL INVESTMENTS (IDENTIFIED COST $94,889,254)(C) $120,756,863
------------------------------------------------------------ ------------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(c) The cost of investments for federal tax purposes amounts to $94,889,254. The
net unrealized appreciation of investments on a federal tax basis amounts to
$25,867,609 which is comprised of $26,540,923 appreciation and $673,314
depreciation at November 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($122,669,194) at November 30, 1998.
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C> <C>
ADR -- American Depository Receipt
IO -- Interest Only
STRIPS Separate Trading of Registered Interest & Principal of
-- Securities
</TABLE>
(See Notes which are an integral part of the Financial Statements)
<PAGE>
REGIONS VALUE FUND
(FORMERLY, FIRST PRIORITY VALUE FUND)
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--96.3%
- ------------------------------------------------------------------------------
COMMERCIAL SERVICES--1.3%
------------------------------------------------------------
FOOD DISTRIBUTORS
------------------------------------------------------------
100,000 Sysco Corp. $ 2,693,750
------------------------------------------------------------ ------------
CONSUMER DURABLES--6.0%
------------------------------------------------------------
AUTOMOTIVE AFTERMARKET
------------------------------------------------------------
90,000 Genuine Parts Co. 2,964,375
------------------------------------------------------------ ------------
MOTOR VEHICLES
------------------------------------------------------------
80,000 Ford Motor Co. 4,420,000
------------------------------------------------------------
45,000 General Motors Corp. 3,150,000
------------------------------------------------------------ ------------
Total 7,570,000
------------------------------------------------------------ ------------
PHOTOGRAPHIC PRODUCTS
------------------------------------------------------------
25,000 Eastman Kodak Co. 1,814,063
------------------------------------------------------------ ------------
Total Consumer Durables 12,348,438
------------------------------------------------------------ ------------
CONSUMER NON-DURABLES--1.0%
------------------------------------------------------------
TOBACCO
------------------------------------------------------------
70,000 RJR Nabisco Holdings Corp. 2,016,875
------------------------------------------------------------ ------------
CONSUMER SERVICES--4.7%
------------------------------------------------------------
BROADCASTING
------------------------------------------------------------
50,000 CBS Corp. 1,490,625
------------------------------------------------------------ ------------
MEDIA CONGLOMERATES
------------------------------------------------------------
100,000 Disney (Walt) Co. 3,218,750
------------------------------------------------------------
28,000 Time Warner, Inc. 2,961,000
------------------------------------------------------------ ------------
Total 6,179,750
------------------------------------------------------------ ------------
RESTAURANTS
------------------------------------------------------------
30,000 McDonald's Corp. 2,101,875
------------------------------------------------------------ ------------
Total Consumer Services 9,772,250
------------------------------------------------------------ ------------
ELECTRONIC TECHNOLOGY--9.8%
------------------------------------------------------------
AEROSPACE
------------------------------------------------------------
65,000 Boeing Co. 2,640,625
------------------------------------------------------------
27,000 Lockheed Martin Corp. 2,801,250
------------------------------------------------------------ ------------
Total 5,441,875
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
------------------------------------------------------------
ELECTRONIC COMPONENTS
------------------------------------------------------------
47,974 AMP, Inc. $ 2,320,742
------------------------------------------------------------ ------------
ELECTRONIC DATA PROCESSING
------------------------------------------------------------
85,000 Compaq Computer Corp. 2,762,500
------------------------------------------------------------
47,000 Hewlett-Packard Co. 2,949,250
------------------------------------------------------------
20,000 (a) Sun Microsystems, Inc. 1,481,250
------------------------------------------------------------ ------------
Total 7,193,000
------------------------------------------------------------ ------------
SEMICONDUCTORS
------------------------------------------------------------
35,000 Texas Instruments, Inc. 2,673,125
------------------------------------------------------------ ------------
TELECOMMUNICATIONS EQUIPMENT
------------------------------------------------------------
40,000 Motorola, Inc. 2,480,000
------------------------------------------------------------ ------------
Total Electronic Technology 20,108,742
------------------------------------------------------------ ------------
ENERGY MINERALS--14.4%
------------------------------------------------------------
INTEGRATED OIL COMPANIES
------------------------------------------------------------
55,000 Amoco Corp. 3,241,563
------------------------------------------------------------
55,000 Atlantic Richfield Co. 3,657,500
------------------------------------------------------------
35,000 Chevron Corp. 2,926,875
------------------------------------------------------------
115,000 Exxon Corp. 8,632,188
------------------------------------------------------------
40,000 Mobil Corp. 3,447,500
------------------------------------------------------------
105,000 Royal Dutch Petroleum Co., ADR 4,935,000
------------------------------------------------------------
50,000 Texaco, Inc. 2,878,125
------------------------------------------------------------ ------------
Total Energy Minerals 29,718,751
------------------------------------------------------------ ------------
FINANCE--20.4%
------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES
------------------------------------------------------------
115,000 Citigroup, Inc. 5,771,563
------------------------------------------------------------ ------------
FINANCE COMPANIES
------------------------------------------------------------
20,000 Associates First Capital Corp., Class A 1,557,500
------------------------------------------------------------
60,000 Federal National Mortgage Association 4,365,000
------------------------------------------------------------ ------------
Total 5,922,500
------------------------------------------------------------ ------------
MAJOR BANKS
------------------------------------------------------------
80,000 Bank One Corp. 4,105,000
------------------------------------------------------------
100,000 Bank of New York Co., Inc. 3,425,000
------------------------------------------------------------
84,606 BankAmerica Corp. 5,515,254
------------------------------------------------------------
15,000 Bankers Trust Corp. 1,305,000
------------------------------------------------------------
</TABLE>
<PAGE>
REGIONS VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------
FINANCE--CONTINUED
------------------------------------------------------------
MAJOR BANKS--CONTINUED
------------------------------------------------------------
50,000 First Union Corp. $ 3,037,500
------------------------------------------------------------
80,000 Fleet Financial Group, Inc. 3,335,000
------------------------------------------------------------
120,000 Wells Fargo Co. 4,320,000
------------------------------------------------------------ ------------
Total 25,042,754
------------------------------------------------------------ ------------
MULTI-LINE INSURANCE
------------------------------------------------------------
60,000 Allstate Corp. 2,445,000
------------------------------------------------------------ ------------
PROPERTY-CASUALTY INSURERS
------------------------------------------------------------
40,000 Chubb Corp. 2,802,500
------------------------------------------------------------ ------------
Total Finance 41,984,317
------------------------------------------------------------ ------------
HEALTH TECHNOLOGY--3.1%
------------------------------------------------------------
MAJOR PHARMACEUTICALS
------------------------------------------------------------
40,000 Bristol-Myers Squibb Co. 4,902,500
------------------------------------------------------------
30,000 Pharmacia & Upjohn, Inc. 1,561,875
------------------------------------------------------------ ------------
Total Health Technology 6,464,375
------------------------------------------------------------ ------------
LIFE INSURANCE--5.2%
------------------------------------------------------------
LIFE INSURANCE
------------------------------------------------------------
75,000 American General Corp. 5,282,813
------------------------------------------------------------
80,000 Jefferson-Pilot Corp. 5,460,000
------------------------------------------------------------ ------------
Total Life Insurance 10,742,813
------------------------------------------------------------ ------------
NON-ENERGY MINERALS--4.2%
------------------------------------------------------------
ALUMINUM
------------------------------------------------------------
40,000 Aluminum Co. of America 2,965,000
------------------------------------------------------------ ------------
FOREST PRODUCTS
------------------------------------------------------------
55,000 Weyerhaeuser Co. 2,756,875
------------------------------------------------------------ ------------
OTHER METALS/MINERALS
------------------------------------------------------------
50,000 Phelps Dodge Corp. 2,834,375
------------------------------------------------------------ ------------
Total Non-Energy Minerals 8,556,250
------------------------------------------------------------ ------------
PROCESS INDUSTRIES--1.2%
------------------------------------------------------------
PAPER
------------------------------------------------------------
80,000 Mead Corp. 2,425,000
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------
PRODUCER MANUFACTURING--3.4%
------------------------------------------------------------
AUTO PARTS: O.E.M.
------------------------------------------------------------
40,000 TRW, Inc. $ 2,202,500
------------------------------------------------------------ ------------
DIVERSIFIED MANUFACTURE
------------------------------------------------------------
30,000 Allied-Signal, Inc. 1,320,000
------------------------------------------------------------ ------------
INDUSTRIAL MACHINERY/COMPONENTS
------------------------------------------------------------
75,000 Ingersoll-Rand Co. 3,510,938
------------------------------------------------------------ ------------
Total Producer Manufacturing 7,033,438
------------------------------------------------------------ ------------
RETAIL TRADE--4.0%
------------------------------------------------------------
DEPARTMENT STORES
------------------------------------------------------------
65,000 Penney (J.C.) Co., Inc. 3,575,000
------------------------------------------------------------
40,000 Sears, Roebuck & Co. 1,897,500
------------------------------------------------------------ ------------
Total 5,472,500
------------------------------------------------------------ ------------
FOOD CHAINS
------------------------------------------------------------
80,000 American Stores Co. 2,685,000
------------------------------------------------------------ ------------
Total Retail Trade 8,157,500
------------------------------------------------------------ ------------
TRANSPORTATION--1.7%
------------------------------------------------------------
RAILROADS
------------------------------------------------------------
70,000 Union Pacific Corp. 3,403,750
------------------------------------------------------------ ------------
UTILITIES--15.9%
------------------------------------------------------------
ELECTRIC UTILITIES: SOUTH
------------------------------------------------------------
80,000 Duke Energy Corp. 5,005,000
------------------------------------------------------------
130,000 SCANA Corp. 4,241,250
------------------------------------------------------------
170,000 Southern Co. 5,015,000
------------------------------------------------------------ ------------
Total 14,261,250
------------------------------------------------------------ ------------
MAJOR U.S. TELECOMMUNICATIONS
------------------------------------------------------------
75,000 AT&T Corp. 4,673,435
------------------------------------------------------------
60,000 BellSouth Corp. 5,235,000
------------------------------------------------------------
100,000 (a) MCI Worldcom, Inc. 5,900,000
------------------------------------------------------------
19,000 Sprint Corp. 1,382,250
------------------------------------------------------------
</TABLE>
<PAGE>
REGIONS VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
- ---------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------
UTILITIES--CONTINUED
------------------------------------------------------------
MAJOR U.S. TELECOMMUNICATIONS--CONTINUED
------------------------------------------------------------
21,000 U.S. West, Inc. $ 1,307,250
------------------------------------------------------------ ------------
Total 18,497,935
------------------------------------------------------------ ------------
Total Utilities 32,759,185
------------------------------------------------------------ ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $166,764,707) 198,185,434
------------------------------------------------------------ ------------
(b)REPURCHASE AGREEMENT--3.5%
- ------------------------------------------------------------------------------
$6,218,841 Wachovia Bank of NC, NA, Winston-Salem, 5.05%, dated
11/30/1998, due 12/1/1998 (AT AMORTIZED COST) 6,218,841
------------------------------------------------------------ ------------
TOTAL INVESTMENTS (IDENTIFIED COST $172,983,548)(C) $204,404,275
------------------------------------------------------------ ------------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(c) The cost of investments for federal tax purposes amounts to $172,983,548.
The net unrealized appreciation of investments on a federal tax basis
amounts to $31,420,727 which is comprised of $34,626,320 appreciation and
$3,205,593 depreciation at November 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($205,804,451) at November 30, 1998.
The following acronym is used throughout this portfolio:
ADR -- American Depository Receipt
(See Notes which are an integral part of the Financial Statements)
<PAGE>
REGIONS GROWTH FUND
(FORMERLY, FIRST PRIORITY GROWTH FUND)
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--97.2%
- -------------------------------------------------------------------------------
BASIC INDUSTRIES--2.1%
------------------------------------------------------------
CHEMICALS/METALS
------------------------------------------------------------
97,000 Du Pont (E.I.) de Nemours & Co. $ 5,698,750
------------------------------------------------------------
51,000 Monsanto Co. 2,310,938
------------------------------------------------------------ ------------
Total Basic Industries 8,009,688
------------------------------------------------------------ ------------
CAPITAL GOODS--6.9%
------------------------------------------------------------
EQUIPMENT-MACHINERY
------------------------------------------------------------
254,000 General Electric Co. 22,987,000
------------------------------------------------------------
24,000 Illinois Tool Works, Inc. 1,525,500
------------------------------------------------------------
41,000 Pitney Bowes, Inc. 2,296,000
------------------------------------------------------------ ------------
Total Capital Goods 26,808,500
------------------------------------------------------------ ------------
COMMERCIAL SERVICES--0.1%
------------------------------------------------------------
5,308 Grainger (W.W.), Inc. 224,263
------------------------------------------------------------ ------------
CONSUMER CYCLICAL--7.6%
------------------------------------------------------------
ENTERTAINMENT
------------------------------------------------------------
44,000 Mattel, Inc. 1,520,750
------------------------------------------------------------ ------------
MERCHANDISE/MASS MERCHANDISING
------------------------------------------------------------
15,000 (a) Costco Cos., Inc. 941,250
------------------------------------------------------------
37,000 Dayton-Hudson Corp. 1,665,000
------------------------------------------------------------
196,981 Wal-Mart Stores, Inc. 14,835,132
------------------------------------------------------------ ------------
Total 17,441,382
------------------------------------------------------------ ------------
MERCHANDISE/SPECIALTY
------------------------------------------------------------
34,000 Gap (The), Inc. 2,501,125
------------------------------------------------------------
130,000 Home Depot, Inc. 6,467,500
------------------------------------------------------------
36,000 Walgreen Co. 1,932,750
------------------------------------------------------------ ------------
Total 10,901,375
------------------------------------------------------------ ------------
Total Consumer Cyclical 29,863,507
------------------------------------------------------------ ------------
CONSUMER NON-CYCLICAL--8.8%
------------------------------------------------------------
TOBACCO/COSMETICS/HOUSEHOLD
------------------------------------------------------------
29,000 Colgate-Palmolive Co. 2,483,125
------------------------------------------------------------
98,948 Gillette Co. 4,545,424
------------------------------------------------------------
40,000 Kimberly-Clark Corp. 2,105,000
------------------------------------------------------------
197,100 Philip Morris Cos., Inc. 11,025,281
------------------------------------------------------------
</TABLE>
<PAGE>
REGIONS GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------
CONSUMER NON-CYCLICAL--CONTINUED
------------------------------------------------------------
115,000 Procter & Gamble Co. $ 10,076,875
------------------------------------------------------------
55,000 Unilever N.V., ADR 4,252,188
------------------------------------------------------------ ------------
Total Consumer Non-Cyclical 34,487,893
------------------------------------------------------------ ------------
CONSUMER SERVICES--0.4%
------------------------------------------------------------
24,000 Gannett Co., Inc. 1,549,500
------------------------------------------------------------ ------------
ELECTRICAL PRODUCTS--0.6%
------------------------------------------------------------
37,000 Emerson Electric Co. 2,405,000
------------------------------------------------------------ ------------
ENERGY--0.8%
------------------------------------------------------------
OIL SERVICES
------------------------------------------------------------
34,000 Halliburton Co. 998,750
------------------------------------------------------------
44,000 Schlumberger Ltd. 1,966,250
------------------------------------------------------------ ------------
Total Energy 2,965,000
------------------------------------------------------------ ------------
FOOD & BEVERAGE--8.4%
------------------------------------------------------------
8,109 American Stores Co. 272,158
------------------------------------------------------------
42,000 Anheuser-Busch Cos., Inc. 2,546,250
------------------------------------------------------------
29,000 BestFoods 1,685,625
------------------------------------------------------------
39,000 Campbell Soup Co. 2,227,875
------------------------------------------------------------
191,000 Coca-Cola Co. 13,381,938
------------------------------------------------------------
36,000 ConAgra, Inc. 1,131,750
------------------------------------------------------------
33,000 Heinz (H.J.) Co. 1,924,313
------------------------------------------------------------
31,000 Kellogg Co. 1,135,375
------------------------------------------------------------
137,000 PepsiCo, Inc. 5,300,188
------------------------------------------------------------
45,000 Sara Lee Corp. 2,626,875
------------------------------------------------------------ ------------
Total Food & Beverage 32,232,347
------------------------------------------------------------ ------------
HEALTHCARE/DRUG--16.6%
------------------------------------------------------------
115,000 American Home Products Corp. 6,123,750
------------------------------------------------------------
88,800 Bristol-Myers Squibb Co. 10,883,550
------------------------------------------------------------
84,000 Lilly (Eli) & Co. 7,533,750
------------------------------------------------------------
108,000 Merck & Co., Inc. 16,726,500
------------------------------------------------------------
111,000 Pfizer, Inc. 12,390,375
------------------------------------------------------------
63,000 Schering Plough Corp. 6,701,625
------------------------------------------------------------
58,000 Warner-Lambert Co. 4,379,000
------------------------------------------------------------ ------------
Total Healthcare/Drug 64,738,550
------------------------------------------------------------ ------------
</TABLE>
<PAGE>
REGIONS GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------
HOSPITAL SUPPLIES--4.4%
------------------------------------------------------------
117,000 Abbott Laboratories $ 5,616,000
------------------------------------------------------------
112,100 Johnson & Johnson 9,108,125
------------------------------------------------------------
35,000 Medtronic, Inc. 2,369,063
------------------------------------------------------------ ------------
Total Hospital Supplies 17,093,188
------------------------------------------------------------ ------------
INSURANCE/MISCELLANEOUS--6.1%
------------------------------------------------------------
47,000 American Express Co. 4,702,938
------------------------------------------------------------
95,227 American International Group, Inc. 8,951,338
------------------------------------------------------------
98,000 Federal National Mortgage Association 7,129,500
------------------------------------------------------------
32,000 Franklin Resources, Inc. 1,368,000
------------------------------------------------------------
28,500 Marsh & McLennan Cos., Inc. 1,658,344
------------------------------------------------------------
2,949 Torchmark Corp. 112,062
------------------------------------------------------------ ------------
Total Insurance/Miscellaneous 23,922,182
------------------------------------------------------------ ------------
BANKING--1.9%
------------------------------------------------------------
4,637 BankAmerica Corp. 302,274
------------------------------------------------------------
72,000 Chase Manhattan Corp. 4,567,500
------------------------------------------------------------
63,000 U.S. Bancorp, Inc. 2,319,188
------------------------------------------------------------ ------------
Total Banking 7,188,962
------------------------------------------------------------ ------------
TECHNOLOGY--25.9%
------------------------------------------------------------
2,949 Boeing Co. 119,803
------------------------------------------------------------
130,500 (a) Cisco Systems, Inc. 9,836,438
------------------------------------------------------------
39,200 Computer Associates International, Inc. 1,734,600
------------------------------------------------------------
112,000 (a) Dell Computer Corp. 6,811,000
------------------------------------------------------------
2,949 Hewlett-Packard Co. 185,050
------------------------------------------------------------
141,000 Intel Corp. 15,175,125
------------------------------------------------------------
74,000 International Business Machines Corp. 12,210,000
------------------------------------------------------------
114,000 Lucent Technologies, Inc. 9,811,125
------------------------------------------------------------
211,000 (a) Microsoft Corp. 25,742,000
------------------------------------------------------------
29,000 Minnesota Mining & Manufacturing Co. 2,329,063
------------------------------------------------------------
49,000 Northern Telecom Ltd. 2,287,688
------------------------------------------------------------
84,000 (a) Oracle Corp. 2,877,000
------------------------------------------------------------
15,000 (a) Tellabs, Inc. 810,938
------------------------------------------------------------
28,000 Texas Instruments, Inc. 2,138,500
------------------------------------------------------------
54,500 Tyco International Ltd. 3,586,781
------------------------------------------------------------
</TABLE>
<PAGE>
REGIONS GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------
TECHNOLOGY--CONTINUED
------------------------------------------------------------
16,500 United Technologies Corp. $ 1,768,594
------------------------------------------------------------
32,000 Xerox Corp. 3,440,000
------------------------------------------------------------ ------------
Total Technology 100,863,705
------------------------------------------------------------ ------------
UTILITIES--6.3%
------------------------------------------------------------
COMMUNICATIONS
------------------------------------------------------------
50,000 (a) Airtouch Communications, Inc. 2,859,375
------------------------------------------------------------
77,000 Ameritech Corp. 4,167,625
------------------------------------------------------------
110,000 Bell Atlantic Corp. 6,118,750
------------------------------------------------------------
148,000 SBC Communications, Inc. 7,094,750
------------------------------------------------------------ ------------
Total 20,240,500
------------------------------------------------------------ ------------
ELECTRICAL
------------------------------------------------------------
68,000 GTE Corp. 4,216,000
------------------------------------------------------------ ------------
Total Utilities 24,456,500
------------------------------------------------------------ ------------
TRANSPORTATION--0.2%
------------------------------------------------------------
31,000 Southwest Airlines Co. 666,500
------------------------------------------------------------ ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $241,417,117) 377,475,285
------------------------------------------------------------ ------------
(b)REPURCHASE AGREEMENT--3.1%
- -------------------------------------------------------------------------------
$12,188,603 Wachovia Bank of NC, NA, Winston-Salem, 5.05%, dated
11/30/1998, due 12/1/1998 (AT AMORTIZED COST) 12,188,603
------------------------------------------------------------ ------------
TOTAL INVESTMENTS (IDENTIFIED COST $253,605,720)(C) $389,663,888
------------------------------------------------------------ ------------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(c) The cost of investments for federal tax purposes amounts to $253,778,258.
The net unrealized appreciation of investments on a federal tax basis
amounts to $135,885,630 which is comprised of $139,050,136 appreciation and
$3,164,506 depreciation at November 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($387,534,646) at November 30, 1998.
The following acronym is used throughout this portfolio:
ADR -- American Depository Receipt
(See Notes which are an integral part of the Financial Statements)
<PAGE>
REGIONS FUNDS
(FORMERLY, FIRST PRIORITY FUNDS)
STATEMENTS OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY LIMITED
MONEY MATURITY FIXED
MARKET GOVERNMENT INCOME
FUND FUND FUND
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at value $615,782,809 $91,577,251 $222,678,005
Cash -- -- --
Income receivable 152,352 1,129,886 2,734,538
Receivable for investments sold -- -- --
Receivable for shares sold -- 20,926 134,778
Deferred expenses -- 2,677 --
- ------------------------------------------------------------------------------------------------
Total assets 615,935,161 92,730,740 225,547,321
- ------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for investments purchased -- 3,300,000 7,300,000
Payable for shares redeemed 7,158 44,897 24,376
Income distribution payable 1,468,692 187,615 783,262
Payable to Bank 124,810 84,366 56,609
Accrued expenses 69,525 30,000 39,907
- ------------------------------------------------------------------------------------------------
Total liabilities 1,670,185 3,646,878 8,204,154
- ------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Paid in capital $614,264,976 $87,984,907 $213,573,615
Net unrealized appreciation of investments -- 972,991 6,081,353
Accumulated net realized gain (loss) on investments -- 85,034 (2,314,558)
Undistributed net investment income -- 40,930 2,757
- ------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $614,264,976 $89,083,862 $217,343,167
- ------------------------------------------------------------------------------------------------
NET ASSET VALUE AND OFFERING PRICE PER SHARE:*
(net assets / shares outstanding)
Trust Shares $1.00 $10.07 $10.61
Investment Shares $1.00 $10.07 $10.61
- ------------------------------------------------------------------------------------------------
REDEMPTION PROCEEDS PER SHARE:*
Trust Shares $1.00 $10.07 $10.61
Investment Shares $1.00 $9.77** $10.29**
- ------------------------------------------------------------------------------------------------
NET ASSETS:
Trust Shares $524,591,852 $55,627,456 $193,351,427
Investment Shares $ 89,673,124 $33,456,406 $ 23,991,740
- ------------------------------------------------------------------------------------------------
SHARES OUTSTANDING:
Trust Shares 524,591,852 5,524,442 18,223,168
Investment Shares 89,673,124 3,322,637 2,261,184
- ------------------------------------------------------------------------------------------------
Investments, at identified cost $615,782,809 $90,604,260 $216,596,652
- ------------------------------------------------------------------------------------------------
Investments, at tax cost $615,782,809 $90,604,260 $216,596,652
- ------------------------------------------------------------------------------------------------
</TABLE>
* See "What Shares Cost" in the Prospectus.
** Computation of Redemption Proceeds: 97/100 of Net Asset Value.
(See Notes which are an integral part of the Financial Statements)
<PAGE>
REGIONS FUNDS
(FORMERLY, FIRST PRIORITY FUNDS)
STATEMENTS OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED VALUE GROWTH
FUND FUND FUND
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at value $120,756,863 $204,404,275 $389,663,888
Cash -- 731,134 --
Income receivable 843,090 577,878 380,596
Receivable for investments sold 2,378,902 149,370 7,512,250
Receivable for shares sold 49,789 54,298 196,293
Deferred expenses 5,018 4,232 --
- -------------------------------------------------------------------------------------------------
Total assets 124,033,662 205,921,187 397,753,027
- -------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for investments purchased 1,203,386 -- 9,874,431
Payable for shares redeemed 94,803 68,442 47,080
Income distribution payable -- -- --
Capital gain distribution payable -- -- --
Payable to Bank 21,273 -- 210,673
Accrued expenses 45,006 48,294 86,197
- -------------------------------------------------------------------------------------------------
Total liabilities 1,364,468 116,736 10,218,381
- -------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Paid in capital $ 92,612,747 $159,548,067 $224,818,146
Net unrealized appreciation of investments 25,867,602 31,420,727 136,058,162
Accumulated net realized gain (loss) on investments 3,927,071 14,578,228 26,646,048
Undistributed net investment income 261,774 257,429 12,290
- -------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $122,669,194 $205,804,451 $387,534,646
- -------------------------------------------------------------------------------------------------
NET ASSET VALUE AND OFFERING PRICE PER SHARE:*
(net assets / shares outstanding)
Trust Shares $15.32 $17.28 $20.08
Investment Shares $15.32 $17.27 $20.08
- -------------------------------------------------------------------------------------------------
REDEMPTION PROCEEDS PER SHARE:*
Trust Shares $15.32 $17.28 $20.08
Investment Shares $14.86** $16.75** $19.48**
- -------------------------------------------------------------------------------------------------
NET ASSETS:
Trust Shares $ 10,409,338 $157,989,881 $246,612,797
Investment Shares $112,259,856 $47,814,570 $140,921,849
- -------------------------------------------------------------------------------------------------
SHARES OUTSTANDING:
Trust Shares 679,471 9,145,338 12,280,727
Investment Shares 7,329,863 2,768,194 7,018,666
- -------------------------------------------------------------------------------------------------
Investments, at identified cost $ 94,889,254 $172,983,548 $253,605,720
- -------------------------------------------------------------------------------------------------
Investments, at tax cost $ 94,889,254 $172,983,548 $253,778,258
- -------------------------------------------------------------------------------------------------
</TABLE>
* See "What Shares Cost" in the Prospectus.
** Computation of Redemption Proceeds: 97/100 of Net Asset Value.
(See Notes which are an integral part of the Financial Statements)
<PAGE>
REGIONS FUNDS
(FORMERLY, FIRST PRIORITY FUNDS)
STATEMENTS OF OPERATIONS
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY LIMITED
MONEY MATURITY FIXED
MARKET GOVERNMENT INCOME
FUND FUND FUND
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $15,398,251 $5,050,059 $13,385,880
Dividends -- -- --
- --------------------------------------------------------------------------------------------
Total income 15,398,251 5,050,059 13,385,880
- --------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fee 1,530,439 613,188 1,631,732
Administrative personnel and services fee 322,494 93,041 230,969
Custodian fees 56,082 20,020 45,054
Transfer and dividend disbursing agent fees and
expenses 114,146 47,815 50,330
Directors'/Trustees' fees 4,281 2,564 2,331
Auditing fees 19,045 17,056 18,956
Legal fees 2,347 2,249 2,607
Portfolio accounting fees 77,296 53,182 72,096
Distribution services fee--Investment Shares 231,884 -- --
Shareholder services fee--Investment Shares -- 42,235 28,164
Share registration costs 49,458 33,795 35,639
Printing and postage 10,009 9,642 10,932
Insurance premiums 3,782 2,738 1,499
Miscellaneous 1,850 17,930 --
- --------------------------------------------------------------------------------------------
Total expenses 2,423,113 955,455 2,130,309
Waiver of investment advisory fee (765,219) -- --
- --------------------------------------------------------------------------------------------
Net expenses 1,657,894 955,455 2,130,309
- --------------------------------------------------------------------------------------------
Net investment income 13,740,357 4,094,604 11,255,571
- --------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on investments -- 422,729 1,376,624
Change in unrealized appreciation (depreciation)
of investments -- 666,940 3,374,177
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments -- 1,089,669 4,750,801
- --------------------------------------------------------------------------------------------
Change in net assets resulting from
operations $13,740,357 $5,184,273 $16,006,372
- --------------------------------------------------------------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
<PAGE>
REGIONS FUNDS
(FORMERLY, FIRST PRIORITY FUNDS)
STATEMENTS OF OPERATIONS
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED VALUE GROWTH
FUND FUND FUND
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 2,990,041 $ 380,535 $ 276,736
Dividends 750,800 3,918,735 3,613,804
- ----------------------------------------------------------------------------------------------
Total income 3,740,841 4,299,270 3,890,540
- ----------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fee 813,891 1,464,460 2,552,575
Administrative personnel and services fee 107,768 194,105 338,064
Custodian fees 22,847 39,102 59,071
Transfer and dividend disbursing agent fees and
expenses 49,677 57,862 70,871
Directors'/Trustees' fees 2,544 2,391 2,663
Auditing fees 16,001 15,744 17,139
Legal fees 1,651 2,296 4,769
Portfolio accounting fees 51,893 62,676 86,700
Distribution services fee--Investment Shares -- -- --
Shareholder services fee--Investment Shares 133,862 52,705 151,720
Share registration costs 36,668 62,017 50,011
Printing and postage 17,716 12,579 9,295
Insurance premiums 3,036 3,800 4,140
Miscellaneous 9,900 8,085 --
- ----------------------------------------------------------------------------------------------
Total expenses 1,267,454 1,977,822 3,347,018
Waiver of investment advisory fee -- -- --
- ----------------------------------------------------------------------------------------------
Net expenses 1,267,454 1,977,822 3,347,018
- ----------------------------------------------------------------------------------------------
Net investment income 2,473,387 2,321,448 543,522
- ----------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments 3,927,012 14,577,823 26,736,007
Change in unrealized appreciation (depreciation) of
investments 9,769,350 1,792,241 68,542,924
- ----------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments 13,696,362 16,370,064 95,278,931
- ----------------------------------------------------------------------------------------------
Change in net assets resulting from
operations $16,169,749 $18,691,512 $95,822,453
- ----------------------------------------------------------------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
<PAGE>
REGIONS FUNDS
(FORMERLY, FIRST PRIORITY FUNDS)
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIMITED MATURITY
TREASURY MONEY MARKET FUND GOVERNMENT FUND FIXED INCOME FUND
------------------------------ --------------------------- ----------------------------
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1998 1997 1998 1997 1998 1997
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 13,740,357 $ 8,513,843 $ 4,094,604 $ 3,890,075 $ 11,255,571 $ 9,718,987
Net realized gain (loss) on
investments -- -- 422,729 (39,130) 1,376,624 (81,761)
Net change in unrealized
appreciation (depreciation)
of investments -- -- 666,940 (46,941) 3,374,177 1,337,161
- ---------------------------------------------------------------------------------------------------------------------------
Change in net assets
resulting from
operations 13,740,357 8,513,843 5,184,273 3,804,004 16,006,372 10,974,387
- ---------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS--
Distributions from net
investment income:
Trust Shares (11,324,148) (6,495,920) (1,381,758) -- (5,320,193) --
Investment Shares (2,416,209) (2,017,923) (2,690,862) (3,890,075) (5,936,405) (9,764,674)
- ---------------------------------------------------------------------------------------------------------------------------
Change in net assets
resulting from
distributions to
shareholders (13,740,357) (8,513,843) (4,072,620) (3,890,075) (11,256,598) (9,764,674)
- ---------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS--
Proceeds from sale of shares 1,114,417,737 713,612,216 93,303,815 36,443,415 310,752,824 66,831,851
Net asset value of shares
issued to shareholders in
payment of dividends
declared 3,841,391 3,161,478 1,329,677 1,467,180 631,337 548,710
Cost of shares redeemed (715,989,367) (647,183,526) (86,282,554) (21,934,772) (282,854,601) (37,466,806)
- ---------------------------------------------------------------------------------------------------------------------------
Change in net assets
resulting from share
transactions 402,269,761 69,590,168 8,350,938 15,975,823 28,529,560 29,913,755
- ---------------------------------------------------------------------------------------------------------------------------
Change in net assets 402,269,761 69,590,168 9,462,591 15,889,752 33,279,334 31,123,468
NET ASSETS:
Beginning of period 211,995,215 142,405,047 79,621,271 63,731,519 184,063,833 152,940,365
- ---------------------------------------------------------------------------------------------------------------------------
End of period $ 614,264,976 $ 211,995,215 $ 89,083,862 $ 79,621,271 $ 217,343,167 $184,063,833
- ---------------------------------------------------------------------------------------------------------------------------
Undistributed net investment
income included in net
assets at end of period -- -- $ 40,930 $ 18,946 $ 2,757 $ 3,784
- ---------------------------------------------------------------------------------------------------------------------------
Net gain (loss) as computed
for federal tax purposes -- -- $ 432,001 $ (39,130) $ 1,376,624 $ (81,761)
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
<PAGE>
REGIONS FUNDS
(FORMERLY, FIRST PRIORITY FUNDS)
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED FUND VALUE FUND GROWTH FUND
--------------------------- ---------------------------- ----------------------------
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1998 1997 1998 1997 1998 1997
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS--
Net investment income $ 2,473,387 $ 1,966,484 $ 2,321,448 $ 1,635,685 $ 543,522 $ 1,088,123
Net realized gain (loss) on
investments 3,927,012 2,450,885 14,577,823 3,981,222 26,736,007 29,067,961
Net change in unrealized
appreciation(depreciation) of
investments 9,769,350 6,641,686 1,792,241 16,758,345 68,542,924 19,488,108
- --------------------------------------------------------------------------------------------------------------------------
Change in net assets
resulting from operations 16,169,749 11,059,055 18,691,512 22,375,252 95,822,453 49,644,192
- --------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net
investment income:
Trust Shares (121,848) -- (1,022,894) -- (217,639) --
Investment Shares (2,404,098) (1,975,632) (1,340,616) (1,593,979) (421,625) (1,080,251)
Distributions from net realized
gain on investment
transactions:
Trust shares -- -- -- -- -- --
Investment Shares (2,449,878) (1,475,295) (3,980,849) (3,888,698) (29,158,060) (9,157,167)
- --------------------------------------------------------------------------------------------------------------------------
Change in net assets
resulting from
distributions to
shareholders (4,975,824) (3,450,927) (6,344,359) (5,482,677) (29,797,324) (10,237,418)
- --------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS--
Proceeds from sale of shares 47,945,804 23,156,324 236,035,007 64,485,140 328,001,520 102,214,322
Net asset value of shares
issued to shareholders in
payment of dividends declared 4,425,146 3,266,797 875,469 415,500 7,454,900 2,218,235
Cost of shares redeemed (23,968,895) (10,278,832) (195,984,467) (12,833,896) (288,953,371) (44,353,846)
- --------------------------------------------------------------------------------------------------------------------------
Change in net assets
resulting from share
transactions 28,402,055 16,144,289 40,926,009 52,066,744 46,503,049 60,078,711
- --------------------------------------------------------------------------------------------------------------------------
Change in net assets 39,595,980 23,752,417 53,273,162 68,959,319 112,528,178 99,485,485
NET ASSETS:
Beginning of period 83,073,214 59,320,797 152,531,289 83,571,970 275,006,468 175,520,983
- --------------------------------------------------------------------------------------------------------------------------
End of period $122,669,194 $ 83,073,214 $ 205,804,451 $152,531,289 $ 387,534,646 $275,006,468
- --------------------------------------------------------------------------------------------------------------------------
Undistributed net investment
income included in net assets
at end of period $ 261,774 $ 314,333 $ 257,429 $ 299,491 $ 12,290 $ 108,032
- --------------------------------------------------------------------------------------------------------------------------
Net gain (loss) as computed for
federal tax purposes $ 3,927,012 $ 2,450,652 $ 14,577,823 $ 3,980,619 $ 26,815,920 $ 29,067,961
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
<PAGE>
REGIONS FUNDS--FINANCIAL HIGHLIGHTS
(FORMERLY, FIRST PRIORITY FUNDS)
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
DISTRIBUTIONS FROM
NET ASSET NET REALIZED DISTRIBUTIONS NET REALIZED
VALUE, NET AND UNREALIZED TOTAL FROM FROM NET GAIN ON
YEAR ENDED BEGINNING INVESTMENT GAIN/(LOSS) INVESTMENT INVESTMENT INVESTMENT
NOVEMBER 30, OF PERIOD INCOME ON INVESTMENTS OPERATIONS INCOME TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------------
<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) --
<CAPTION>
DISTRIBUTIONS
IN EXCESS
OF NET
YEAR ENDED INVESTMENT
NOVEMBER 30, INCOME
<S> <C>
TREASURY MONEY MARKET
1994 --
1995 --
1996 --
1997 --
1998 --
TREASURY MONEY MARKET
1994 --
1995 --
1996 --
1997 --
1998 --
LIMITED MATURITY GOVE
1998(a) --
LIMITED MATURITY GOVE
1994(b) --
1995 --
1996 --
1997 --
1998 --
FIXED INCOME FUND--TR
1992(c) --
1993 --
1994 (0.01)(e)
1995(d) --
1998(a) --
FIXED INCOME FUND--IN
1994 (0.01)(e)
1995 --
1996 --
1997 --
1998 --
</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.
(c) Reflects operations for the period from April 20, 1992 (date of initial
public investment) to November 30, 1992.
(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 did not represent a return of capital for federal income tax
purposes.
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
-----------------------------------------
NET ASSET NET EXPENSE NET ASSETS,
TOTAL VALUE, END TOTAL INVESTMENT WAIVER/ END OF PERIOD PORTFOLIO
DISTRIBUTIONS OF PERIOD RETURN(F) EXPENSES INCOME REIMBURSEMENT(H) (000 OMITTED) TURNOVER
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
(0.04) $ 1.00 3.59% 0.32% 3.49% 0.50% $ 91,008 --
(0.05) $ 1.00 5.48% 0.33% 5.35% 0.50% $109,368 --
(0.05) $ 1.00 4.83% 0.52% 4.71% 0.29% $101,786 --
(0.05) $ 1.00 4.81% 0.52% 4.71% 0.25% $166,035 --
(0.05) $ 1.00 4.71% 0.47% 4.57% 0.25% $524,592
(0.03) $ 1.00 3.18% 0.72% 3.09% 0.50% $ 16,571 --
(0.04) $ 1.00 5.06% 0.73% 4.98% 0.50% $ 28,930 --
(0.04) $ 1.00 4.41% 0.92% 4.31% 0.29% $ 40,619 --
(0.04) $ 1.00 4.39% 0.92% 4.31% 0.25% $ 45,960 --
(0.04) $ 1.00 4.30% 0.87% 4.17% 0.25% $ 89,673
(0.25) $10.07 3.59% 1.04%(g) 4.73%(g) -- $ 55,627 69%
(0.42) $ 9.60 0.19% 0.38%(g) 4.45%(g) 0.70%(g) $ 48,526 3%
(0.51) $10.04 10.12% 0.61% 5.26% 0.49% $ 63,078 26%
(0.50) $ 9.96 4.37% 1.01% 5.09% 0.08% $ 63,732 48%
(0.49) $ 9.94 4.81% 0.99% 4.91% -- $ 79,621 40%
(0.46) $10.07 6.05% 1.12% 4.65% -- $ 33,456 69%
(0.38) $10.27 7.66% 0.77%(g) 6.02%(g) 0.29%(g) $ 96,354 44%
(0.61) $10.67 10.14% 0.84% 4.80% 0.25% $169,881 83%
(0.74) $ 9.46 (4.55%) 0.79% 5.44% 0.25% $153,289 24%
(0.09) $ 9.57 2.11% 0.82%(g) 5.79%(g) 0.25%(g) -- --
(0.28) $10.61 4.87% 0.97%(g) 5.19%(g) -- $193,351 64%
(0.71) $ 9.46 (4.83%) 1.09% 5.14% 0.25% $ 9,645 24%
(0.54) $10.34 15.37% 1.02% 5.25% -- $160,286 45%
(0.54) $10.36 5.66% 1.02% 5.38% -- $152,940 52%
(0.59) $10.37 5.99% 0.97% 5.73% -- $184,064 37%
(0.53) $10.61 7.60% 0.99% 5.17% -- $ 23,992 64%
</TABLE>
(f) Based on net asset value, which does not 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.
<PAGE>
REGIONS FUNDS--FINANCIAL HIGHLIGHTS
(FORMERLY, FIRST PRIORITY FUNDS)
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
DISTRIBUTIONS FROM
NET ASSET NET REALIZED DISTRIBUTIONS NET REALIZED
VALUE, NET AND UNREALIZED TOTAL FROM FROM NET GAIN ON
YEAR ENDED BEGINNING INVESTMENT GAIN/(LOSS) INVESTMENT INVESTMENT INVESTMENT
NOVEMBER 30, OF PERIOD INCOME ON 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(b) $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(b) $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)
<CAPTION>
DISTRIBUTIONS
IN EXCESS
OF NET
YEAR ENDED INVESTMENT
NOVEMBER 30, INCOME
- ----------------------------------------------------
<S> <C>
BALANCED FUND--TRUST
1998(a) --
BALANCED FUND--INVEST
1995(b) --
1996 --
1997 --
1998 --
VALUE FUND--TRUST SHA
1998(a) --
VALUE FUND--INVESTMEN
1995(b) --
1996 --
1997 --
1998 --
GROWTH FUND--TRUST SH
1992(c) --
1993 --
1994 --
1995(d) --
1998(a) --
GROWTH FUND--INVESTME
1994 --
1995 --
1996 --
1997 --
1998 --
</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 19, 1994 (date of initial
public investment) to November 30, 1995.
(c) Reflects operations for the period from April 20, 1992 (date of initial
public investment) to November 30, 1992.
(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.
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
-----------------------------------------
NET ASSET NET EXPENSE NET ASSETS,
TOTAL VALUE, END TOTAL INVESTMENT WAIVER/ END OF PERIOD PORTFOLIO
DISTRIBUTIONS OF PERIOD RETURN(F) EXPENSES INCOME REIMBURSEMENT(H) (000 OMITTED) TURNOVER
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
(0.19) $15.32 6.89% 1.11%(g) 2.56%(g) -- $ 10,409 31%
0.56%
(0.36) $11.46 18.50% 0.61%(g) 4.34%(g) (g) $ 51,197 49%
(0.63) $12.51 15.35% 1.13% 3.60% 0.09% $ 59,321 41%
(0.68) $13.79 16.34% 1.11% 2.73% -- $ 83,073 34%
(0.78) $15.32 17.49% 1.25% 2.42% -- $112,260 31%
(0.11) $17.28 0.50% 1.06%(g) 1.29%(g) -- $157,990 63%
0.55%
(0.34) $12.04 24.14% 0.69%(g) 3.93%(g) (g) $ 45,424 76%
(0.64) $13.89 21.72% 1.11% 2.29% 0.06% $ 83,572 58%
(0.87) $16.18 24.08% 1.04% 1.50% -- $152,531 31%
(0.63) $17.27 11.00% 1.11% 1.24% -- $ 47,815 63%
0.35%
(0.11) $10.66 9.28% 0.76%(g) 2.28%(g) (g) $102,822 30%
(0.30) $10.51 1.43% 0.84% 1.85% 0.30% $154,185 74%
(0.30) $10.36 1.42% 0.79% 2.32% 0.30% $143,876 66%
(0.41) $10.05 1.00% 0.83%(g) 2.76%(g) 0.30%(g) -- --
(0.02) $20.08 12.85% 1.00%(g) 0.22%(g) -- $246,613 41%
(0.27) $10.36 1.11% 1.09% 2.02% 0.30% $ 6,131 66%
(0.54) $12.10 23.01% 1.03% 1.61% 0.05% $154,297 110%
(0.70) $14.64 28.22% 1.05% 0.98% 0.01% $175,521 56%
(0.83) $16.89 22.37% 1.01% 0.45% -- $275,006 40%
(1.83) $20.08 33.81% 1.08% 0.12% -- $140,922 41%
</TABLE>
(f) Based on net asset value, which does not 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.
<PAGE>
REGIONS FUNDS
(FORMERLY, FIRST PRIORITY FUNDS)
COMBINED NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Regions Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act"), as an open-end management investment company. The
Trust consists of six portfolios (individually referred to as the "Fund", or
collectively as the "Funds") at November 30, 1998, which are presented herein:
<TABLE>
<S> <C>
PORTFOLIO NAME INVESTMENT OBJECTIVE
- ---------------------------------------------------------------------------------------------------
Regions Treasury Money Market Fund Current income consistent with stability of
("Treasury Money Market Fund") principal and liquidity. The Fund pursues its
objective by investing primarily in a
diversified portfolio limited to short-term
U.S. treasury obligations.
- ---------------------------------------------------------------------------------------------------
Regions Limited Maturity Government Fund Current income. The Fund pursues its objective
("Limited Maturity Government Fund") by investing in a diversified portfolio
consisting primarily of securities which are
guaranteed as to payment of principal and
interest by the U.S. government, its agencies,
or instrumentalities.
- ---------------------------------------------------------------------------------------------------
Regions Fixed Income Fund Current income with a secondary objective of
("Fixed Income Fund") capital appreciation. The Fund pursues its
objective by investing primarily in a broad
range of high grade debt securities.
- ---------------------------------------------------------------------------------------------------
Regions Balanced Fund Total return through capital appreciation,
("Balanced Fund") dividends, and interest. The Fund pursues its
objective by investing primarily in a
diversified portfolio of common stocks,
preferred stocks, fixed-income senior
securities, and convertible securities.
- ---------------------------------------------------------------------------------------------------
Regions Value Fund Income and growth of capital. The Fund pursues
("Value Fund") its objective by investing primarily in a
diversified portfolio of income-producing
equity securities, including convertible
securities.
- ---------------------------------------------------------------------------------------------------
Regions Growth Fund Growth of capital and income. The Fund pursues
("Growth Fund") its objective by investing principally in a
diversified portfolio of common stocks of
companies with market capitalizations of at
least $250 million.
- ---------------------------------------------------------------------------------------------------
</TABLE>
The Funds offer both Trust and Investment classes of shares. Investment Shares
are identical in all respects to Trust Shares, except the Investment Shares are
sold pursuant to a distribution plan adopted in accordance with the Act's Rule
12b-1 and have a Shareholders Services Agreement (except, Treasury Money Market
Fund). The assets of each Fund of the Trust are segregated and a shareholder's
interest is limited to the portfolio in which shares are held.
<PAGE>
REGIONS FUNDS
- --------------------------------------------------------------------------------
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--U.S. government securities, listed corporate bonds,
(other fixed income and asset-backed securities), and unlisted securities
and private placement securities are generally valued at the mean of the
latest bid and asked price as furnished by an independent pricing service.
Listed equity securities are valued at the last sale price reported on a
national securities exchange. The Treasury Money Market Fund uses the
amortized cost method to value its portfolio securities in accordance with
Rule 2a-7 under the Act. For fluctuating net asset value Funds within the
Trust, short-term securities are valued at the prices provided by an
independent pricing service. However, short-term securities purchased with
remaining maturities of sixty days or less may be valued at amortized cost,
which approximates fair market value. Investments in other open-end
regulated investment companies are valued at net asset value.
REPURCHASE AGREEMENTS--It is the policy of the Funds to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral in support of
repurchase agreement transactions. Additionally, procedures have been
established by the Funds to monitor, on a daily basis, the market value of
each repurchase agreement's collateral to ensure that the value of
collateral at least equals the repurchase price to be paid under the
repurchase agreement transaction, including accrued interest.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Funds' adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Funds
could receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES--It is the Funds' policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of their income. Accordingly, no
provisions for federal tax are necessary.
At November 30, 1998, the Fixed Income Fund, for federal tax purposes, had
capital loss carryforwards, of $2,313,647, which will reduce the Fund's
taxable income arising from future net realized gain on investments, if
any, to the extent permitted by the Code, and thus will reduce the amount
of the distributions to shareholders which would otherwise be necessary to
relieve the Funds of any liability for federal tax. Pursuant to the Code,
such capital loss carryforwards of the Fixed Income Fund will expire in,
2003 ($2,216,582), 2004 ($15,304), and 2005 ($81,761).
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in
when-issued or delayed delivery transactions. The Funds record when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
<PAGE>
REGIONS FUNDS
- --------------------------------------------------------------------------------
DEFERRED EXPENSES--The costs incurred by each Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period of up to five years from each Fund's commencement
date.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
TREASURY MONEY MARKET FUND
<S> <C> <C>
- -------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED YEAR ENDED
TRUST SHARES NOVEMBER 30, 1998 NOVEMBER 30, 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 735,928,297 398,538,313
Shares issued to shareholders in payment of
distributions declared 1,531,724 1,205,548
Shares redeemed (378,903,313) (335,497,366)
------------ -------------
Net change resulting from Trust Share
transactions 358,556,708 64,246,495
------------ -------------
</TABLE>
<TABLE>
<CAPTION>
TREASURY MONEY MARKET FUND
<S> <C> <C>
- -------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED YEAR ENDED
INVESTMENT SHARES NOVEMBER 30, 1998 NOVEMBER 30, 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 378,489,440 315,073,903
Shares issued to shareholders in payment of
distributions declared 2,309,667 1,955,930
Shares redeemed (337,086,054) (311,686,160)
------------ -------------
Net change resulting from Investment Share
transactions 43,713,053 5,343,673
------------ -------------
Net change resulting from Fund Share
transactions 402,269,761 69,590,168
------------ -------------
</TABLE>
<PAGE>
REGIONS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIMITED MATURITY
GOVERNMENT FUND
----------------------------------------
YEAR ENDED
NOVEMBER 30, 1998
- -------------------------------------------------------------------------------------------
TRUST SHARES SHARES DOLLARS
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 6,735,107 $ 67,149,621
Shares issued to shareholders in payment of
distributions declared -- --
Shares redeemed (1,210,665) (12,176,882)
------------ ------------
Net change resulting from Trust Share
transactions 5,524,442 $ 54,972,739
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
LIMITED MATURITY GOVERNMENT FUND
----------------------------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1998 NOVEMBER 30, 1997
- ------------------------------------------------------------------------------------------------
INVESTMENT SHARES SHARES DOLLARS SHARES DOLLARS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 2,615,874 $ 26,154,194 3,681,490 $ 36,443,415
Shares issued to shareholders in
payment of distributions declared 132,888 1,329,677 148,261 1,467,180
Shares redeemed (7,438,036) (74,105,672) (2,217,857) (21,934,772)
------------ ------------ ------------ ------------
Net change resulting from
Investment Share transactions (4,689,274) $(46,621,801) 1,611,894 $ 15,975,823
------------ ------------ ------------ ------------
Net change resulting from Fund
Share transactions 835,168 $ 8,350,938 1,611,894 $ 15,975,823
------------ ------------ ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
FIXED INCOME FUND
----------------------------------------
YEAR ENDED
NOVEMBER 30, 1998
- -------------------------------------------------------------------------------------------
TRUST SHARES SHARES DOLLARS
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 23,040,304 $ 239,713,263
Shares issued to shareholders in payment of
distributions declared -- --
Shares redeemed (4,817,136) (50,660,238)
------------ -------------
Net change resulting from Trust Share
transactions 18,223,168 $ 189,053,025
------------ -------------
</TABLE>
<PAGE>
REGIONS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME FUND
-----------------------------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1998 NOVEMBER 30, 1997
- ------------------------------------------------------------------------------------------------
INVESTMENT SHARES SHARES DOLLARS SHARES DOLLARS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 6,793,437 $ 71,039,561 6,594,521 $ 66,831,851
Shares issued to shareholders in
payment of distributions declared 60,137 631,337 53,609 548,710
Shares redeemed (22,342,465) (232,194,363) (3,661,175) (37,466,806)
------------ ------------- ------------ ------------
Net change resulting from
Investment Share transactions (15,488,891) $(160,523,465) 2,986,955 $ 29,913,755
------------ ------------- ------------ ------------
Net change resulting from Fund
Share transactions 2,734,277 $ 28,529,560 2,986,955 $ 29,913,755
------------ ------------- ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
BALANCED FUND
----------------------------------------
YEAR ENDED
NOVEMBER 30, 1998
- -------------------------------------------------------------------------------------------
TRUST SHARES SHARES DOLLARS
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 856,181 $12,458,022
Shares issued to shareholders in payment of
distributions declared -- --
Shares redeemed (176,710) (2,601,037)
-------- -----------
Net change resulting from Trust Share
transactions 679,471 $ 9,856,985
-------- -----------
</TABLE>
<TABLE>
<CAPTION>
BALANCED FUND
--------------------------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1998 NOVEMBER 30, 1997
- ------------------------------------------------------------------------------------------------
INVESTMENT SHARES SHARES DOLLARS SHARES DOLLARS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 2,457,275 $ 35,487,782 1,822,756 $ 23,156,324
Shares issued to shareholders in
payment of distributions declared 323,756 4,425,146 262,460 3,266,797
Shares redeemed (1,475,046) (21,367,858) (801,716) (10,278,832)
---------- ------------ --------- ------------
Net change resulting from Investment
Share transactions 1,305,985 $ 18,545,070 1,283,500 $ 16,144,289
---------- ------------ --------- ------------
Net change resulting from Fund Share
transactions 1,985,456 $ 28,402,055 1,283,500 $ 16,144,289
---------- ------------ --------- ------------
</TABLE>
<PAGE>
REGIONS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE FUND
----------------------------------------
YEAR ENDED
NOVEMBER 30, 1998
- -------------------------------------------------------------------------------------------
TRUST SHARES SHARES DOLLARS
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 10,264,378 $176,521,417
Shares issued to shareholders in payment of
distributions declared -- --
Shares redeemed (1,119,040) (18,102,094)
---------- ------------
Net change resulting from Trust Share
transactions 9,145,338 $158,419,323
---------- ------------
</TABLE>
<TABLE>
<CAPTION>
VALUE FUND
---------------------------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1998 NOVEMBER 30, 1997
- ------------------------------------------------------------------------------------------------
INVESTMENT SHARES SHARES DOLLARS SHARES DOLLARS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 3,622,183 $ 59,513,590 4,248,626 $ 64,485,140
Shares issued to shareholders in
payment of distributions declared 55,619 875,469 29,973 415,500
Shares redeemed (10,339,476) (177,882,373) (866,846) (12,833,896)
----------- ------------- --------- ------------
Net change resulting from
Investment Share transactions (6,661,674) $(117,493,314) 3,411,753 $ 52,066,744
----------- ------------- --------- ------------
Net change resulting from Fund
Share transactions 2,483,664 $ 40,926,009 3,411,753 $ 52,066,744
----------- ------------- --------- ------------
</TABLE>
<TABLE>
<CAPTION>
GROWTH FUND
----------------------------------------
YEAR ENDED
NOVEMBER 30, 1998
- -------------------------------------------------------------------------------------------
TRUST SHARES SHARES DOLLARS
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 13,907,936 $245,366,236
Shares issued to shareholders in payment of
distributions declared -- --
Shares redeemed (1,627,209) (29,392,290)
---------- ------------
Net change resulting from Trust Share
transactions 12,280,727 $215,973,946
---------- ------------
</TABLE>
<PAGE>
REGIONS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH FUND
---------------------------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1998 NOVEMBER 30, 1997
- ------------------------------------------------------------------------------------------------
INVESTMENT SHARES SHARES DOLLARS SHARES DOLLARS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 4,942,544 $ 82,635,284 6,984,817 $102,214,322
Shares issued to shareholders in
payment of distributions declared 512,106 7,454,900 160,544 2,218,235
Shares redeemed (14,721,586) (259,561,081) (2,852,310) (44,353,846)
----------- ------------- ---------- ------------
Net change resulting from
Investment Share transactions (9,266,936) $(169,470,897) 4,293,051 $ 60,078,711
----------- ------------- ---------- ------------
Net change resulting from Fund
Share transactions 3,013,791 $ 46,503,049 4,293,051 $ 60,078,711
----------- ------------- ---------- ------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--The Capital Management Group, a unit of the Trust
Division of Regions Bank, a wholly owned subsidiary of Regions Financial Corp.,
is the Trust's investment adviser (the "Adviser"), and receives for its services
an annual investment advisory fee based upon a percentage of each Fund's average
daily net assets (see below). The Adviser may voluntarily choose to waive any
portion of its fee. The Adviser can modify or terminate this voluntary waiver at
any time at its sole discretion.
<TABLE>
<CAPTION>
FUND ANNUAL RATE
- ------------------------------------------------------------ -----------
<S> <C>
Treasury Money Market Fund 0.50%
- ------------------------------------------------------------
Limited Maturity Government Fund 0.70%
- ------------------------------------------------------------
Fixed Income Fund 0.75%
- ------------------------------------------------------------
Balanced Fund 0.80%
- ------------------------------------------------------------
Value Fund 0.80%
- ------------------------------------------------------------
Growth Fund 0.80%
- ------------------------------------------------------------
</TABLE>
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Trust
with certain administrative personnel and services. The fee is based on the
level of average aggregate net assets of the Trust for the period.
DISTRIBUTION SERVICES FEE--The Trust has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the
Funds will compensate Federated Securities Corp. ("FSC"), the principal
distributor, from the net assets of the Funds' Investment Shares to finance
activities intended to result in the sale of the Funds' Investment Shares. The
Plan provides that the
<PAGE>
REGIONS FUNDS
- --------------------------------------------------------------------------------
Funds may incur distribution expenses according to the following schedule,
annually, to compensate FSC.
<TABLE>
<CAPTION>
% OF AVG.
DAILY NET ASSETS
OF EACH FUND'S
FUND NAME INVESTMENT SHARES
- ------------------------------------------------------------ -----------------
<S> <C>
Treasury Money Market Fund 0.40%
- ------------------------------------------------------------
Limited Maturity Government Fund 0.25%
- ------------------------------------------------------------
Fixed Income Fund 0.30%
- ------------------------------------------------------------
Balanced Fund 0.30%
- ------------------------------------------------------------
Value Fund 0.30%
- ------------------------------------------------------------
Growth Fund 0.30%
- ------------------------------------------------------------
</TABLE>
For the year ended November 30, 1998 Limited Maturity Government Fund, Fixed
Income Fund, Balanced Fund, Value Fund, and Growth Fund did not incur a
distribution services fee.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services Company ("FSSC"), the Funds, except Treasury
Money Market Fund, will pay FSSC based upon a percentage of each Fund's
Investment Shares average daily net assets for the period (see below). The fee
paid to FSSC is used to finance certain services for shareholders and to
maintain shareholder accounts.
<TABLE>
<CAPTION>
% OF AVG.
DAILY NET ASSETS
OF EACH FUND'S
FUND NAME INVESTMENT SHARES
- ------------------------------------------------------------ -----------------
<S> <C>
Limited Maturity Government Fund 0.25%
- ------------------------------------------------------------
Fixed Income Fund 0.25%
- ------------------------------------------------------------
Balanced Fund 0.25%
- ------------------------------------------------------------
Value Fund 0.25%
- ------------------------------------------------------------
Growth Fund 0.25%
- ------------------------------------------------------------
</TABLE>
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ"), through its subsidiary, FSSC, serves as transfer and dividend
disbursing agent for the Funds. The fee paid to FSSC is based on the size, type,
and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Funds' accounting records for
which it receives a fee. The fee is based on the level of each Fund's average
daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the year ended November 30, 1998, the Treasury
Money Market Fund engaged in purchase and sale transactions with mutual funds
and/or common trust funds that have a common investment adviser (or affiliated
investment advisers), common Director/Trustees, and/or common Officers. These
purchase and sale transactions were made at current market value pursuant to
Rule 17a-7 under the Act amounting to $142,841,701 and $113,309,060,
respectively.
CUSTODIAN FEES--Regions Bank is the Funds' custodian. The fee is based on the
level of each Fund's average daily net assets for the period, plus out-of-pocket
expenses.
<PAGE>
REGIONS FUNDS
- --------------------------------------------------------------------------------
ORGANIZATIONAL EXPENSES--Organizational expenses were borne initially by FAS.
The Funds have agreed to reimburse FAS for the organizational expenses during
the five year period following the Funds' effective dates. For the year ended
November 30, 1998, the Funds paid FAS, pursuant to this agreement, as follows:
<TABLE>
<CAPTION>
INITIAL ORGANIZATIONAL
ORGANIZATIONAL EXPENSES
FUND EXPENSES REIMBURSED
- -------------------------------------------------------- -------- ----------
<S> <C> <C>
Limited Maturity Government Fund $26,082 $2,674
- --------------------------------------------------------
Balanced Fund $24,457 $1,664
- --------------------------------------------------------
Value Fund $18,322 $1,411
- --------------------------------------------------------
</TABLE>
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
year ended November 30, 1998, were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ------------------------------------------------------------ --------- -----
<S> <C> <C>
Limited Maturity Government Fund $ 66,355,587 $ 58,447,250
- ------------------------------------------------------------
Fixed Income Fund $160,292,074 $134,271,196
- ------------------------------------------------------------
Balanced Fund $ 52,431,463 $ 29,971,428
- ------------------------------------------------------------
Value Fund $144,520,604 $109,616,015
- ------------------------------------------------------------
Growth Fund $143,441,194 $129,187,815
- ------------------------------------------------------------
</TABLE>
(6) YEAR 2000 (UNAUDITED)
Similar to other financial organizations, the Funds could be adversely affected
if the computer systems used by the Funds' service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Funds' Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Funds' other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Funds.
(7) SUBSEQUENT EVENT
Subsequent to the year ended November 30, 1998, the Trust added Regions
Aggressive Growth Fund to the series, which became effective December 2, 1998.
<PAGE>
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Board of Trustees and the Shareholders of
REGIONS FUNDS (formerly, First Priority Funds):
We have audited the accompanying statements of assets and liabilities of Regions
Funds (formerly, First Priority Funds) (comprising 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), including the schedules of investments, as of November 30, 1998,
and the related statements of operations for the year then ended, the statements
of changes in net assets for the years ended November 30, 1998 and 1997, and the
financial highlights for periods presented. These financial statements and
financial highlights are the responsibility of the Regions Funds' management.
Our responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
November 30, 1998, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Regions Funds as of
November 30, 1998, the results of their operations, the changes in their net
assets and their financial highlights for the respective periods in conformity
with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
January 14, 1999
<PAGE>
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- -----------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Edward C. Gonzales
Nicholas P. Constantakis President and Treasurer
William J. Copeland J. Christopher Donahue
James E. Dowd, Esq. Executive Vice President
Lawrence D. Ellis, M.D. John W. McGonigle
Edward L. Flaherty, Jr., Esq. Executive Vice President and Secretary
Edward C. Gonzales Richard B. Fisher
Peter E. Madden Vice President
John E. Murray, Jr., J.D., S.J.D. Charles L. Davis, Jr.
Wesley W. Posvar Vice President and Assistant Treasurer
Marjorie P. Smuts Gail Cagney
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Funds' prospectus which contains facts concerning
their objectives and policies, management fees, expenses and other information.
<PAGE>
Federated Securities Corp., Distributor
- -------------------------------------------------------- Regions(R)
Cusip 75913Q886 Cusip 75913Q878 Funds
Cusip 75913Q860 Cusip 75913Q852
Cusip 75913Q704 Cusip 75913Q803
Cusip 75913Q100 Cusip 75913Q209
Cusip 75913Q506 Cusip 75913Q605
Cusip 75913Q308 Cusip 75913Q407
Cusip 75913Q845
007575 (1/99)
APPENDIX
A1. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Trust
Shares of Limited Maturity Government Fund (the "Fund") are represented by a
solid line. The Merrill Lynch 1-3 Year Government/Corporate Index (the "Merrill
Lynch Index") is represented by a broken line. The line graph is a visual
representation of a comparison of change in value of a $25,000 hypothetical
investment in the Trust Shares of the Fund and the Merrill Lynch Index. The "x"
axis reflects computation periods from 5/20/98 to 11/30/98. The "y" axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the Fund's Trust Shares as compared to the
Merrill Lynch Index. The ending values were $25,898 and $25,988, respectively.
The legend in the bottom quadrant of the graphic presentation indicates the
Fund's Trust Shares Total Returns from the start of performance of the Fund's
Trust Shares (5/20/98) to 11/30/98. The total return was 3.59%.
A2. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Investment
Shares of Limited Maturity Government Fund (the "Fund") are represented by a
solid line. The Merrill Lynch 1-3 Year Government/Corporate Index (the "Merrill
Lynch Index") is represented by a broken line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Investment Shares of the Fund and the Merrill Lynch Index. The
"x" axis reflects computation periods from 12/12/93 to 11/30/98. The "y" axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the Fund's Investment Shares as compared to
the Merrill Lynch Index. The ending values were $12,543 and $13,407,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Investment Shares Average Annual Total Returns for the
one-year period ended 11/30/98 and from the start of performance of the Fund's
Investment Shares (12/12/93) to 11/30/98. The total returns were 3.05% and
5.10%, respectively.
A3. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Trust
Shares of Fixed Income Fund (the "Fund") are represented by a solid line. The
Merrill Lynch 1-10 Year Government/Corporate Index (the "Merrill Lynch Index")
is represented by a broken line. The line graph is a visual representation of a
comparison of change in value of a $25,000 hypothetical investment in the Trust
Shares of the Fund and the Merrill Lynch Index. The "x" axis reflects
computation periods from 5/20/98 to 11/30/98. The "y" axis reflects the cost of
the investment. The right margin reflects the ending value of the hypothetical
investment in the Fund's Trust Shares as compared to the Merrill Lynch Index.
The ending values were $26,218 and $26,258, respectively. The legend in the
bottom quadrant of the graphic presentation indicates the Fund's Trust Shares
Total Returns from the start of performance of the Fund's Trust Shares (5/20/98)
to 11/30/98. The total return was 4.87%.
A4. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Investment
Shares of Fixed Income Fund (the "Fund") are represented by a solid line. The
Merrill Lynch 1-10 Year Government/Corporate Index (the "Merrill Lynch Index")
is represented by a broken line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
Investment Shares of the Fund and the Merrill Lynch Index. The "x" axis reflects
computation periods from 4/20/92 to 11/30/98. The "y" axis reflects the cost of
the investment. The right margin reflects the ending value of the hypothetical
investment in the Fund's Investment Shares as compared to the Merrill Lynch
Index. The ending values were $15,303 and $16,073, respectively. The legend in
the bottom quadrant of the graphic presentation indicates the Fund's Investment
Shares Average Annual Total Returns for the one-year and five-year periods ended
11/30/98 and from the start of performance of the Fund's Investment Shares
(4/20/92) to 11/30/98. The total returns were 4.60%, 5.76% and 6.97%,
respectively.
<PAGE>
A5. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Trust
Shares of Balanced Fund (the "Fund") are represented by a solid line. The S&P
500/Lehman Brothers Government/Corporate Index (the "S&P/Lehman Index") is
represented by a broken line. The line graph is a visual representation of a
comparison of change in value of a $25,000 hypothetical investment in the Trust
Shares of the Fund and the S&P/Lehman Index. The "x" axis reflects computation
periods from 5/20/98 to 11/30/98. The "y" axis reflects the cost of the
investment. The right margin reflects the ending value of the hypothetical
investment in the Fund's Trust Shares as compared to the S&P/Lehman Index. The
ending values were $26,723 and $26,613, respectively. The legend in the bottom
quadrant of the graphic presentation indicates the Fund's Trust Shares Total
Returns from the start of performance of the Fund's Trust Shares (5/20/98) to
11/30/98. The total return was 6.89%.
A6. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Investment
Shares of Balanced Fund (the "Fund") are represented by a solid line. The S&P
500/Lehman Brothers Government/Corporate Index (the "S&P/Lehman Index") is
represented by a broken line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
Investment Shares of the Fund and the S&P/Lehman Index. The "x" axis reflects
computation periods from 12/19/94 to 11/30/98. The "y" axis reflects the cost of
the investment. The right margin reflects the ending value of the hypothetical
investment in the Fund's Investment Shares as compared to the S&P/Lehman Index.
The ending values were $18,310 and $20,616, respectively.
The legend in the bottom quadrant of the graphic presentation indicates the
Fund's Investment Shares Average Annual Total Returns for the one-year period
ended 11/30/98 and from the start of performance of the Fund's Investment Shares
(12/19/94) to 11/30/98. The total returns were 14.49% and 17.14%, respectively.
A7. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Trust
Shares of Value Fund (the "Fund") are represented by a solid line. The S&P
500/Barra Value Index (the "S&P/Barra Index") is represented by a broken line.
The line graph is a visual representation of a comparison of change in value of
a $25,000 hypothetical investment in the Trust Shares of the Fund and the
S&P/Barra Index. The "x" axis reflects computation periods from 5/20/98 to
11/30/98. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Fund's Trust
Shares as compared to the S&P/Barra Index. The ending values were $25,125 and
$24,648, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Fund's Trust Shares Total Returns from the start of
performance of the Fund's Trust Shares (5/20/98) to 11/30/98. The total return
was 0.50%.
A8. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Investment
Shares of Value Fund (the "Fund") are represented by a solid line. The S&P
500/Barra Value Index (the "S&P/Barra Index") is represented by a broken line.
The line graph is a visual representation of a comparison of change in value of
a $10,000 hypothetical investment in the Investment Shares of the Fund and the
S&P/Barra Index. The "x" axis reflects computation periods from 12/19/94 to
11/30/98. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Fund's
Investment Shares as compared to the S&P/Barra Index. The ending values were
$20,395 and $21,773, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the Fund's Investment Shares Average Annual Total
Returns for the one-year period ended 11/30/98 and from the start of performance
of the Fund's Investment Shares (12/19/94) to 11/30/98. The total returns were
8.00% and 20.38%, respectively.
<PAGE>
A9. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Trust
Shares of Growth Fund (the "Fund") are represented by a solid line. The Standard
& Poor's 500 Composite Stock Index (the "S&P 500") is represented by a broken
line. The line graph is a visual representation of a comparison of change in
value of a $25,000 hypothetical investment in the Trust Shares of the Fund and
the S&P 500. The "x" axis reflects computation periods from 5/20/98 to 11/30/98.
The "y" axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the Fund's Trust Shares as
compared to the S&P 500. The ending values were $28,213 and $26,813,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Trust Shares Total Returns from the start of performance of
the Fund's Trust Shares (5/20/98) to 11/30/98. The total return was 12.85%.
A10. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Investment
Shares of Growth Fund (the "Fund") are represented by a solid line. The Standard
& Poor's 500 Composite Stock Index (the "S&P 500") is represented by a broken
line. The line graph is a visual representation of a comparison of change in
value of a $10,000 hypothetical investment in the Investment Shares of the Fund
and the S&P 500. The "x" axis reflects computation periods from 4/20/92 to
11/30/98. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Fund's
Investment Shares as compared to the S&P 500. The ending values were $28,245 and
$32,697, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Fund's Investment Shares Average Annual Total Returns
for the one-year and five-year periods ended 11/30/98 and from the start of
performance of the Fund's Investment Shares (4/20/94) to 11/30/98. The total
returns were 30.81%, 21.17% and 17.35%, respectively.
