REGIONS FUNDS, 485BPOS, 2000-01-26

REGIONS FUNDS
485BPOS, 2000-01-26

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

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

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

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

Post-Effective Amendment No. 18 .......................... X
-------- ------

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
------

Amendment No. 19 .......................................... X
------- ------

REGIONS FUNDS
(formerly, First Priority Funds)

(Exact Name of Registrant as Specified in Charter)

5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7010
(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

John W. McGonigle, Esquire,
Federated Investors Tower,
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
_x on January 31, 2000 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i) on _______________
pursuant to paragraph (a) (i). 75 days after filing pursuant to paragraph
(a)(ii) on _________________ pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

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

Copies To:

Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037

[LOGO]

Family of Funds

Combined Prospectus

Dated January 31, 2000

[LOGO]

Trust Shares
Investment Shares

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

Table of Contents

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

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

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

Prospectus

January 31, 2000

Risk/Return Profile

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

Main Risks of the Funds

Fixed
Income
Mortgage-
Market Securities Backed
Securities Sector Money Market
Risks Risks
Risks Risks Risks
<S> <C> <C>
<C> <C> <C>
Regions Treasury Money Market Fund
X X
Regions Limited Maturity Government Fund X X X
Regions Fixed Income Fund X X X
Regions Balanced Fund X X X
Regions Value Fund X
X X
Regions Growth Fund
X X
Regions Aggressive Growth Fund X
X X

</TABLE>

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

Market Risks. The value of equity securities in the Funds' portfolios will
fluctuate and, as a result, the Funds' share prices may decline suddenly or over
a sustained period of time. Further, because the smaller companies in which some
of the Funds may invest may have unproven track records, a limited product or
service base and limited access to capital, they may be more likely to fail than
larger companies.

Fixed Income Securities Risks. Prices of fixed income securities generally fall
when interest rates rise.

Mortgage-Backed Securities Risks. Mortgage-backed securities are subject to the
risks of prepayment. When homeowners prepay their mortgages in response to lower
interest rates, the Funds will be required to reinvest the proceeds at the lower
interest rates available. Also, when interest rates fall, the price of mortgage
backed securities may not rise to as great an extent as that of other fixed
income securities

Sector Risks. Because the Funds may allocate relatively more assets to certain
industry sectors than others, the Funds' performance may be more susceptible to
any developments which affect those sectors emphasized by the Funds.

Money Market Risks. All mutual funds take investment risks. Therefore, even
though the Fund is a money market fund that seeks to maintain a stable net asset
value, it is possible to lose money by investing in the Fund.

Regions Funds

Treasury Money Market Fund

Goal. To provide current income consistent with stability of principal and
liquidity.

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

Annual Total Return (calendar years 1993-1999)

[graph appears here] - See Appendix 1.

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

The Fund's shares are sold without a sales charge (load). The total returns
displayed above are based upon net asset value.

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

Average Annual Total Return through 12/31/99

<TABLE>
<CAPTION>
Trust Investment
Calendar Period Shares Shares
<S> <C> <C>
1 Year 4.28% 4.02%
5 Years 4.80% 4.42%
Start of Performance* 4.25% 3.86%
</TABLE>

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

The Fund's Trust Shares and Investment Shares Seven-Day Net Yields as of
12/31/99 were 4.75% and 4.50%, respectively. Investors may call the Fund at 1-
800-433-2829 to acquire the current Seven-Day Net Yield.

Past performance does not necessarily predict the future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
returns.

Limited Maturity Government Fund

Goal. To achieve current income.

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

Annual Total Return (calendar years 1994-1999)

[graph appears here] - See Appendix 2

The bar chart shows the variability of the Fund's Investment Shares total
returns on a calendar year-end basis.

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

Within the period shown in the chart, the Fund's Investment Shares highest
quarterly return was 3.39% (quarter ended June 30, 1995). Its lowest quarter
return was (0.80%) (quarter ended March 31, 1994).

Average Annual Total Return through 12/31/99

<TABLE>
<CAPTION>
Trust Investment
Calendar Period Shares Shares ML1-3
<S> <C> <C> <C>
1 Year 2.28% (0.90%) 3.25%
5 Years NA 5.48% 6.59%
Start of Performance* 3.87% 4.57% 5.60%

</TABLE>

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

Regions Funds (cont.)

Fixed Income Fund

Goal. To achieve current income with a secondary goal of capital appreciation.

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

Annual Total Return (calendar years 1993-1999)

[graph appears here] - See Appendix 3

The bar chart shows the variability of the Fund's Investment Shares total
returns on a calendar year-end basis.

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

Average Annual Total Return through 12/31/99

<TABLE>
<CAPTION>
Trust Investment
Calendar Period Shares Shares ML1-10
<S> <C> <C> <C>
1 Year (0.31%) (3.39%) 0.47%
5 Years NA 6.61% 7.13%
Start of Performance* 2.86% 5.89% 6.48%
</TABLE>

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

Regions Funds (cont.)

Balanced Fund

Goal. To provide total return through capital appreciation, dividends and
interest.

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

Annual Total Return (calendar years 1995-1999)

[graph appears here] - See Appendix 4

The bar chart shows the variability of the Fund's Investment Shares total
returns on a calendar year-end basis.

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

The following table represents the Fund's Trust Shares and Investment Shares
Average Annual Total Returns, reduced to reflect applicable sales charges, for
the calendar periods ended December 31, 1999. The table shows the Fund's total
returns averaged over a period of years relative to the Standard & Poor's 500
(S&P 500 ) and the Lehman Brothers Government/Corporate Index (LBGCI), two
separate broad-based market indexes, and to the Standard & Poor's 500/Lehman
Brothers Government/Corporate Index (S&P 500/LBGCI), a blended index comprised
of 50% S&P 500 and 50% LBGCI. The S&P 500 is a 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 LBGCI is comprised of approximately 5,000 issues which include:
non-convertible bonds publicly issued by the U.S. government or its agencies;
corporate bonds guaranteed by the U.S. government and quasi-federal
corporations; and publicly issued, fixed rate, non-convertible domestic bonds of
companies in industry, public utilities, and finance. The S&P 500/LBGCI 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 managed fund. Total
returns for the indexes shown do not reflect sales charges, expenses or other
fees that the SEC requires to be reflected in the Fund's performance. Indexes
are unmanaged, and it is not possible to invest directly in an index.

Average Annual Total Return through 12/31/99

Trust Investment S&P S&P 500/
Calendar Period Shares Shares 500 LBGCI LBGCI
<S> <C> <C> <C> <C> <C>
1 Year 8.82% 5.56% 21.05% (2.15%) 9.45%
5 Years NA 15.82% 28.56% 7.61% 18.09%
Start of
Performance* 11.90% 15.77% 28.45% 7.69% 18.07%
</TABLE>

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

Value Fund

Goal. To provide income and growth
of capital.

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

Annual Total Return (calendar years 1995-1999)

[graph appears here] - See Appendix 5

The bar chart shows the variability of the Fund's Investment Shares total
returns on a calendar year-end basis.

Within the period shown in the chart, the Fund's Investment Shares class highest
quarterly return was 15.60% (quarter ended June 30, 1997). Its lowest quarter
return was (9.78%) (quarter ended September 30, 1999).

Average Annual Total Return through 12/31/99

Trust Investment S&P/
Calendar Period Shares Shares Barra Value
<S> <C> <C> <C>
1 Year 5.75% 2.69% 12.38%
5 Years NA 17.59% 21.75%
Start of Performance* 5.57% 17.53% 21.65%
</TABLE>

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

Regions Funds (cont.)

Growth Fund

Goal. To provide growth of capital
and income.

Strategy. The Fund invests in common stock of companies with market
capitalizations of $5 billion or more. The Fund's investment approach is based
on the conviction that over the long term the economy will continue to expand
and develop and that this economic growth will be reflected in the growth of the
revenues and earnings of major corporations.

Annual Total Return (calendar years 1993-1999)

[graph appears here] - See Appendix 6

The bar chart shows the variability of the Fund's Investment Shares total
returns on a calendar year-end basis.

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

Average Annual Total Return through 12/31/99

Trust Investment S&P
Calendar Period Shares Shares 500
<S> <C> <C> <C>
1 Year 28.57% 25.33% 21.05%
5 Years NA 28.58% 28.56%
Start of Performance* 31.10% 19.52% 20.68%
</TABLE>

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

Aggressive Growth Fund

Goal. To provide long-term
capital appreciation.

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

Performance Information for
Predecessor Collective Trust Fund

The Fund is the successor to the portfolio of a collective trust fund managed by
the Adviser since June 30, 1993. The performance data includes the performance
of the collective trust fund for periods before the Fund's registration
statement became effective. The past performance data is not necessarily
indicative of the Fund's future performance. The collective trust fund was not
registered under the Investment Company Act of 1940 ("1940 Act") and therefore
was not subject to certain investment restrictions that are imposed by the 1940
Act. If the collective trust fund had been registered under the 1940 Act, the
performance may have been adversely effected.

Annual Total Return (calendar years 1994-1999)

[graph appears here] - See Appendix 7

The bar chart shows the variability of the Predecessor Collective Trust Fund's
total returns on a yearly basis. The total returns reflect projected Fund
expenses before waivers.

Within the period shown in the chart, the Predecessor Collective Trust Fund's
highest quarterly return was 31.24% (quarter ended December 31, 1999). Its
lowest quarterly return was (8.26%)(quarter ended June 30, 1994)..

The following table represents the Predecessor Collective Trust Fund's Average
Annual Total Returns for the calendar periods ended December 31, 1999. The table
shows the Predecessor Collective Trust Fund's total returns averaged over a
period of years relative to the Standard & Poor's 500 Index (S&P 500) the
Standard & Poor's Midcap 400/Barra Growth Index (S&P MC400/BG), both broad-based
market indexes and the Lipper Midcap Growth Funds Index (LMGF). The S&P 500 is a
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 MC400/BG is a capitalization-
weighted index of common stocks representing all major industries in the
mid-range of the U.S. stock market having the highest price-to-book ratios.
Lipper indexes measure the performance of the 30 largest mutual funds in each
prospective fund category. Total returns for the indexes shown do not reflect
sales charges, expenses or other fees that the SEC requires to be reflected in
the Fund's performance. Indexes are unmanaged, and it is not possible to invest
directly in an index.

Average Annual Total Return through 12/31/99

S&P MC
Calendar Period Fund S&P500 400/BG LMGF
<S> <C> <C> <C> <C>
1 Year 38.64% 21.05% 28.65% 73.20%
5 Years 27.51% 28.56% NA 27.20%
Start of performance* 19.51% 22.45% NA 21.57%
</TABLE>

* The start of performance date for the Predecessor Collective Trust Fund was
June 30, 1993.

What Are the Fund's Fees and Expenses?

FEES AND EXPENSES

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

Treasury Money Limited Maturity Fixed
Income Balanced
Market Fund Government Fund
Fund Fund
Trust Investment Trust Investment Trust
Investment Trust Investment
Shares Shares Shares Shares Shares
Shares Shares Shares
<S> <C> <C> <C> <C> <C>
<C> <C> <C>
Shareholder Fees
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering
price) None None None None None
None None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, as applicable) None None None 3.00% None
3.00% None 3.00%
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends (and other
Distributions)
(as a percentage of offering price) None None None None None
None None None
Redemption Fee (as a percentage of
amount redeemed, if applicable) None None None None None
None None None
Exchange Fee None None None None None
None None None
Annual Fund Operating Expenses (Before
Waivers) (1)
Expenses That Are Deducted From Fund Assets
(as a percentage of average net assets)
Management Fee (2) 0.50% 0.50% 0.70% 0.70% 0.75%
0.75% 0.80% 0.80%
Distribution (12b-1) Services Fee (3) None 0.40% None 0.25% None
0.30% None 0.30%
Shareholder Services Fee None None None 0.25% None
0.25% None 0.25%
Other Expenses 0.19% 0.19% 0.31% 0.31% 0.21%
0.21% 0.29% 0.29%
Total Annual Fund Operating Expenses 0.69% 1.09% 1.01% 1.51% 0.96%
1.51% 1.09% 1.64%
</TABLE>

(1) Although not contractually obligated to do so, the adviser and distributor
waived certain amounts during the fiscal year ended November 30, 1999. These
are shown below along with the net expenses the Fund actually paid for the
fiscal year ended November 30, 1999.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> Total Waivers of Fund Expenses 0.25% 0.39%
0.19% 0.44% 0.23% 0.53% 0.05% 0.35% Total Actual Annual Fund Operating Expenses
(after waivers) 0.44% 0.70% 0.82% 1.07% 0.73% 0.98% 1.04% 1.29%
</TABLE>

(2) The adviser voluntarily waived a portion of the management fee. The adviser
can terminate this voluntary waiver at any time. The management fees paid by
the Treasury Money Market Fund, Limited Maturity Government Fund, Fixed
Income Fund and Balanced Fund (after the voluntary waivers) were 0.25%,
0.51%, 0.52% and 0.75%, respectively, for the fiscal year ended November 30,
1999.
(3) The distributor voluntarily waived a portion of the distribution (12b-1)
services fee. The distributor can terminate this voluntary waiver at any
time. The distribution (12b-1) services fee paid by the Treasury Money
Market Fund's Investment Shares (after the voluntary waiver) was 0.26% for
the fiscal year ended November 30, 1999. The Limited Maturity Government
Fund, the Fixed Income Fund and the Balanced Fund did not pay or accrue the
distribution (12b-1) services fee during the year ended November 30, 1999.
The Limited Maturity Government Fund, Fixed Income Fund and the Balanced
Fund do not expect to pay or accrue the distribution (12b-1) services fee
during the fiscal year ending November 30, 2000.
Example
This Example is intended to help you compare the cost of investing in the
Regions Funds with the cost of investing in other mutual funds.

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

<TABLE>
<CAPTION>
Share Class 1 Year 3 Years 5 Years 10 Years
Trust Shares
<S> <C> <C> <C> <C>
Treasury Money Market Fund $ 70 $221 $384 $ 859
Limited Maturity Government Fund 103 322 558 1,236
Fixed Income Fund 98 306 531 1,178
Balanced Fund 111 347 601 1,329
Share Class 1 Year 3 Years 5 Years 10 Years
Investment Shares
Treasury Money Market Fund $111 $347 $601 $1,329
Limited Maturity Government Fund:
Expenses assuming redemption 454 577 824 1,802
Expenses assuming no redemption 154 477 824 1,802
Fixed Income Fund:
Expenses assuming redemption 454 577 824 1,802
Expenses assuming no redemption 154 477 824 1,802
Balanced Fund:
Expenses assuming redemption 467 617 892 1,944
Expenses assuming no redemption 167 517 892 1,944

</TABLE>

Aggressive
Value Fund Growth Fund Growth Fund
Trust Investment Trust Investment
Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C>
Shareholder Fees
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering price) None None None None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, as applicable) None 3.00% None 3.00% 3.00%
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends (and other Distributions)
(as a percentage of offering price) None None None None None
Redemption Fees (as a percentage of
amount redeemed, if applicable) None None None None None
Exchange Fee None None None None None
Annual Fund Operating Expenses
(Before Waivers) (5)
Expenses That Are Deducted From Fund Assets
(as a percentage of average net assets)
Management Fee (6) 0.80% 0.80% 0.80% 0.80% 0.75%
Distribution (12b-1) Services Fee (7) None 0.30% None 0.30% 0.30%
Shareholder Services Fee None 0.25% None 0.25% None
Other Expenses (8) 0.22% 0.22% 0.19% 0.19% 0.25%
Total Annual Fund Operating Expenses 1.02% 1.57% 0.99% 1.54% 1.30%
</TABLE>

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

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> Waiver of Fund Expenses 0.05% 0.35% 0.05% 0.35%
0.30% Total Actual Annual Fund Operating Expenses (after waivers) 0.97%
1.22% 0.94% 1.19% 1.00%
</TABLE>

(6) The adviser voluntarily waived a portion of the management fee. The adviser
can terminate this voluntary waiver at any time. The management fees paid by
the Value Fund, Growth Fund and Aggressive Growth Fund (after the voluntary
waivers) were 0.75%, 0.75% and 0.75%, respectively for the fiscal year ended
November 30, 1999.
(7) The Value Fund, Growth Fund and Aggressive Growth Fund did not pay or accrue
the distribution (12b-1) services fee during the fiscal year ended November
30, 1999. The Value Fund, Growth Fund and Aggressive Growth Fund do not
expect to pay or accrue the distribution (12b-1) services fee during the
fiscal year ending November 30, 2000.
(8) Other expenses reflect fees which the Aggressive Growth Fund expects to pay
and accrue during the fiscal year ending November 30, 2000. Other expenses
for the Aggressive Growth Fund were 0.44% for the fiscal year ended November
30, 1999.
Example

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

<TABLE>
<CAPTION>
Share Class 1 Year 3 Years 5 Years 10 Years
Trust Shares
<S> <C> <C> <C> <C>
Value Fund $104 $325 $563 $1,248
Growth Fund 101 315 547 1,213
Share Class 1 Year 3 Years 5 Years 10 Years
Investment Shares
Value Fund:
Expenses assuming redemption $460 $596 $855 $1,867
Expenses assuming no redemption 160 496 855 1,867
Growth Fund:
Expenses assuming redemption 457 586 839 1,834
Expenses assuming no redemption 157 486 839 1,834
Aggressive Growth Fund:
Expenses assuming redemption 432 512 713 1,568
Expenses assuming no redemption 132 412 713 1,568
</TABLE>

Main Risks of Investing in the Regions Funds

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

Market Risks. The Funds are subject to fluctuations in the stock markets, which
have periods of increasing and decreasing values. Stocks have greater
volatility than debt securities. While greater volatility increases risk,
it offers the potential for greater reward.

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

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

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

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

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

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

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

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

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

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

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

Principal Strategies

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Securities Descriptions

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

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

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

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

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

Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the
lowest credit risks.

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

The Funds treat mortgage-backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risks it does
not reduce the interest rate and prepayment risks of these mortgage-backed
securities.

Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most common types of
corporate debt securities. The Funds may also purchase interests in bank
loans to companies. The credit risks of corporate debt securities vary
widely among issuers.

In addition, the credit risk of an issuer's debt security may vary based on
its priority for repayment. For example, higher-ranking (senior) debt
securities have a higher priority than lower-ranking (subordinated)
securities. This means that the issuer might not make payments on
subordinated securities while continuing to make payments on senior
securities. In addition, in the event of bankruptcy, holders of senior
securities may receive amounts otherwise payable to the holders of
subordinated securities. Some subordinated securities, such as trust
preferred and capital securities notes, also permit the issuer to defer
payments under certain circumstances. For example, insurance companies
issue securities known as surplus notes that permit the insurance company
to defer any payment that would reduce its capital below regulatory
payments.

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

Mortgage-backed securities come in a variety of forms. Many have extremely
complicated terms. The simplest form of mortgage-backed securities are
"pass-through certificates." An issuer of pass-through certificates gathers
monthly payments from an underlying pool of mortgages. Then, the issuer
deducts its fees and expenses and passes the balance of the payments onto
the certificate holders once a month. Holders of pass-through certificates
receive a pro rata share of all payments and prepayments from the
underlying mortgages. As a result, the holders assume all the prepayment
risks of the underlying mortgages.

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

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

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

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

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

How to Buy Shares

What Do Shares Cost? You can buy shares of a Fund at net asset value (NAV),
without a sales charge, on the New York Stock Exchange (NYSE), Monday
through Friday, except on New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Memorial Day, Independence Day, Labor Day, Columbus Day,
Veterans' Day, Thanksgiving Day and Christmas Day. When the Fund receives
your transaction request in proper form, it is processed at the next
determined public offering price. NAV is determined for the Funds (other
than TREASURY MONEY MARKET FUND) at the end of regular trading (normally
3:00 p.m. Central Time) each day the NYSE is open. The NAV for the TREASURY
MONEY MARKET FUND is determined twice daily at 11:00 a.m. (Central Time)
and 3:00 p.m. (Central Time).

To open an account with the Regions Funds, your first investment must be at
least $25,000 for Trust Shares and $1,000 for Investment Shares. If you are
an officer, director, employee or retired employee of Regions Bank, or if
you establish a $50 monthly minimum addition to your account through the
Funds' Systematic Investment Program, or if you open an IRA account, the
minimum initial investment is $500 for Investment Shares. However, you can
add to your existing Regions Funds account directly for as little as $100
or through the Funds' Systematic Investment Program for as little as $50.
In special circumstances, these minimums may be waived or lowered at the
Funds' discretion. Keep in mind that investment professionals may charge
you fees for their services in connection with your share transaction.

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

Shares Held Up To: CDSC
1 year 3.00%
2 years 2.00%
3 years 1.00%
4 years 0.00%

You will not be charged a CDSC when redeeming Shares:

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

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

In addition, you will not be charged a CDSC:

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

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

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

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

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

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

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

If your redemption qualifies the Distributor must be notified at the time
of redemption to eliminate the CDSC.

To keep the sales charge as low as possible, the Funds will sell your
shares in the following order:

. Shares that are not subject to a CDSC;

. Shares held the longest; and

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

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

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

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

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

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

Distribution of Fund Shares

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

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

Fund 12b-1 Fee Paid as a Percentage
Investment Shares Assets
Limited Maturity
Government Fund 0.25%
Fixed Income Fund 0.30%
Balanced Fund 0.30%
Value Fund 0.30%
Growth Fund 0.30%
Aggressive Growth Fund 0.30%
Treasury Money
Market Fund 0.40%

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

How to Exchange Shares

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

. meet any minimum initial investment requirements; and

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

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

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

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

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

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

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

How to Redeem Shares

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

Systematic Withdrawal Plan. Under a Systematic Withdrawal Plan, with respect to
the Investment Shares of the Funds and the AGGRESSIVE GROWTH FUND, accounts
having a value of at least $10,000 may arrange for regular monthly or
quarterly fixed withdrawal payments. Each payment must be at least $100.
Excessive withdrawals may deplete or decrease the value of an account. For
this reason, payments under this Systematic Withdrawal Plan should not be
considered as yield or income on the shareholder's investment in the Funds.
A contingent deferred sales charge may be imposed on Investment Shares of
the Funds, with the exception of TREASURY MONEY MARKET FUND.

Additional Conditions for Redemptions

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

-when you want a redemption to be sent to an address other than
the one you have on record with the Fund;
-when you want the redemption payable to someone other than the
shareholder of record; or
-when your redemption is to be sent to an address of record that
was changed within the last 90 days.

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

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

. to allow your purchase payment to clear;
. during periods of market volatility; or
. when a shareholder's trade activity or amount adversely impacts the
Fund's ability to manage its assets.

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

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

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

Account and Share Information

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

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

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

Dividends and Capital Gains

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

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

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

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

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

Share Certificates. The Funds will not issue share certificates.

Account and Share Information (cont.)

Tax Information

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

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

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

Regions Fund Information

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

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

FUND ADVISER FEE
TREASURY MONEY MARKET FUND 0.50%
LIMITED MATURITY GOVERNMENT FUND 0.70%
FIXED INCOME FUND 0.75%
AGGRESSIVE GROWTH FUND 0.75%
GROWTH FUND 0.80%
BALANCED FUND 0.80%
VALUE FUND 0.80%

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

Adviser's Background. The Capital Management Group is a unit of the Trust
Division of Regions Bank, which is a wholly owned subsidiary of Regions
Financial Corp., a bank holding company organized under the laws of the
State of Delaware. Regions Financial Corporation has achieved Thomson Bank
Watch's highest rating of "A," a distinction earned by less than 1% of U.S.
financial institutions. Regions Bank was selected for inclusion in the S&P
500-Standard & Poor's widely followed index of the 500 most prominent
companies in the nation. As of December 31, 1999, Regions Financial Corp.
was one of the 25 largest bank holding companies in the United States with
total assets of approximately $42.7 billion. Regions Bank and Retirement
Plan Services of America, a subsidiary of Federated Investors, each receive
a sub-transfer agent fee for sub-accounting services they provide to
certain retirement plan accounts. This fee ($10.00 per account, per year)
is, depending on which Regions Fund is charged, either equal to or less
than the fees the Funds would pay their transfer agent for these accounts
if sub-accounting hadn't been performed.

Performance Information for Predecessor Collective Trust Fund

The AGGRESSIVE GROWTH FUND is the successor to the portfolio of a collective
trust fund managed by the Adviser since June 30, 1993. The Adviser has
represented that the Fund's investment objective, policies and limitations are
all in material respects equivalent to those of the collective trust fund.

The Fund's average annual compounded total returns for the one-, three-, five-
and since inception periods ended December 31, 1999, reflecting the contingent
deferred sales charge (See the section entitled "How to Buy Shares--What Do
Shares Cost" in this prospectus) were 38.64%, 31.97%, 27.52% and 19.51%,
respectively. The Fund's average annual compounded total returns for the one-,
three-, five-, and since inception periods ended December 31, 1999, without
reflecting the contingent deferred sales charge were 41.89%, 32.19%, 27.52% and
19.49%, respectively. The quoted performance data includes the performance of
the collective trust fund for periods before the Fund's registration statement
became effective and reflects projected Fund expenses absent waivers. The past
performance data shown above is not necessarily indicative of the Fund's future
performance. The collective trust fund was not registered under the Investment
Company Act of 1940 ("1940 Act") and therefore was not subject to certain
investment restrictions that are imposed by the 1940 Act. If the collective
trust fund had been registered under the 1940 Act, the performance may have been
adversely effected.

Regions Funds Personnel
<TABLE>
<CAPTION>

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

W. Jackson Parham, Jr., CFA Manager, Vice President. Director, Investment Services.
Responsible
Regions Funds for measuring the quarterly performance and style
specificity of Regions Funds,
and for supervising fund administration. Responsible for
providing investment
consulting services to institutional investors and
offering corporate finance and
business planning/strategy services to growing
businesses. Experience: 12 years
experience in investment banking, financial consulting,
teaching finance and
investments at the college level, and management of
client portfolios. Education:
B.A., History, Freed-Hardeman College, 1984; M.B.A.,
University of Virginia, 1987;
Chartered Financial Analyst, 1995. Affiliations: Member,
Institute of Chartered
Financial Analysts and Association for Investment
Management and Research.

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

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

John M. Haigler Portfolio Manager, Vice President and Portfolio Manager. Responsible for the
Limited Maturity day-to-day management of the Regions Limited Maturity
Government Fund Government Fund (July, 1997). Mr. Haigler previously
served as portfolio
manager of the Regions Treasury Money Market Fund
(April, 1992-December,
1993) and as portfolio manager of the Regions Limited
Maturity Government
Fund (December, 1993-January, 1997). He is responsible
for management of
the Trust Division's short-term income funds and for
commercial paper and
certificates of deposit investments. Mr. Haigler also
serves as an active
member of the Capital Management Group and as a
portfolio manager and
analyst. Experience: 24 years investment experience, 33
years with Regions
Bank. Education: B.A., Huntington College, 1963.
Affiliations: Member,
Alabama Society of Financial Analysts and Association
for Investment
Management and Research.

John E. Steiner, CFA Portfolio Manager, Vice President and Senior Equity Portfolio Manager.
Growth Fund Responsible for the day-to-day management of the Regions
Balanced Fund Growth Fund and co-manager of the Regions Balanced Fund.
Served as
(co-manager) portfolio manager of the Regions Treasury Money Market
Fund from December,
1993 until taking over the Balanced Fund on June 1,
1996. He actively
manages employee benefit and personal trust accounts as
well as
contributes to the formulation of equity and fixed
income strategies.
Experience: 15 years investment experience, specifically
Employee
Benefits, Personal Trust, and Endowments; 17 years with
Regions Bank.
Education: B.S., Business Administration/Industrial
Management, Auburn
University, 1981; Chartered Financial Analysts 1996.
Affiliations: Member,
Chartered Financial Analysts and the Association for
Investment Management
and Research.

Charles A. Murray, CFA Portfolio Manager, Vice President and Portfolio Manager. Responsible for the
Aggressive day-to-day management of the Regions Aggressive Growth
Fund (March, 1999).
Growth Fund Served as Portfolio Aggressive Growth Fund Manager and
Analyst in the
Capital Management Group managing equity portfolios and
balanced accounts
since 1974. Joined Regions Bank in June, 1972. Served as
a Portfolio
Manager for small/mid-cap common trust funds, a
convertible income fund
and a fixed income fund from 1978 through 1992.
Portfolio Manager of the
Regions Growth Fund (formerly, First Priority Equity
Fund) from 1992
through 1995. Employee Benefits account portfolio
manager from 1996
through present. Education: B.S., University of Alabama,
1970; Chartered
Financial Analyst, 1993. Affiliations: Member, Alabama
Society of
Financial Analysts and Association for Investment
Management and Research.

David B. Rees, Jr. Portfolio Manager, Portfolio Manager. Responsible for the day-to-day
Treasury Money management of the Regions Treasury Money Market Fund
(April, 1999). Also
Market Fund serves as an active member of the Capital Management
Group as a portfolio
manager. Experience: Five years investment analysis and
portfolio
management. Previously financial adviser with a
publicly-held national
brokerage firm (January, 1995 - March, 1998). Analyst
for Capital
Management Group from March
1998 through April 1999.
Education: B.S.,
Finance, Auburn University, 1992; M.B.A., Auburn
University, 1994.

Lee S. Cox Sales Manager, Vice President. Responsible for sales and marketing of
the Regions Funds. Works
Regions Funds closely with executives and brokers of Regions Investment
Company on issues such as
compliance, product awareness, and product development.
Provides feedback to Regions
Funds management regarding marketplace viability and
reception of the funds.
Experience: two years as vice president and trust
investment officer with Regions
Bank; eight years as regional vice president and
investment representative with
Citigroup's Primerica; four years as legislative aide to
U.S. Senator Howell Heflin.
Education: B.A., Christian Ministries, Asbury College,
1984; M.A., Public Policy,
Regent University, 1986.

</TABLE>

Financial Highlights

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

The following table has been audited by Deloitte &Touche LLP, the Funds'
independent auditors. Their report dated January 21, 2000 is included in the
Annual Report for the Funds, which is incorporated by reference. This table
should be read in conjunction with the Funds' financial statements and notes
thereto, which may be obtained free of charge from the Funds. Further
information about the performance of the Funds is contained in the Funds' Annual
Report dated November 30, 1999, which may be obtained free of charge.

For a share outstanding throughout each period.

Net
realized
Distributions
and
from net
Net Asset unrealized Distributions
realized Distributions in
Value, Net gain(loss) Total from from net
gain on excess of net
beginning investment on investment investment
investment investment
Year Ended November 30, of period income investments operations income
transactions income
<S> <C> <C> <C> <C> <C>
<C> <C>
Treasury Money Market
Fund
- Trust
Shares
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) - -
1999 $ 1.00 0.04 - 0.04
(0.04) - -
Treasury Money Market
Fund
- Investment
Shares
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) - -
1999 $ 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) - -
1999 $10.07 0.46 (0.20) 0.26 (0.46)
(0.01) -
Limited
Maturity
Government Fund
- -
Investment
Shares
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) - -
1999 $10.07 0.45 (0.21) 0.24 (0.44)
(0.01) -
Fixed Income Fund -
Trust

Shares
1992(b) $ 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) (0.01)(f)
1995(c) $ 9.46 0.09 0.11 0.20
(0.09) - -
1998(a) $10.39 0.28 0.22 0.50
(0.28) - -
1999 $10.61 0.53 (0.51) 0.02
(0.53) - -
Fixed Income Fund
- -
Investment
Shares
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) - -
1999 $10.61 0.51 (0.51) 0.00
(0.51) - -

Net
Ratios
to assets
Average Net
Assets end of
Net Asset Net
Expense period
Total Value, end Total Investment
waiver/ 000) Portfolio
Year Ended November 30, Distributions of period returning Expenses Income
reimbursement(h) omitted) turnover
<S> <C> <C> <C> <C> <C>
<C> <C> <C>
Treasury Money Market
Fund
- Trust
Shares
1995 (0.05) $ 1.00 5.48% 0.33% 5.35%
0.50% $109,368 -
1996 (0.05) $ 1.00 4.83% 0.52% 4.71%
0.29% $101,786 -
1997 (0.05) $ 1.00 4.81% 0.52% 4.71%
0.25% $166,035 -
1998 (0.05) $ 1.00 4.71% 0.47% 4.57%
0.25% $524,592 -
1999 (0.04) $ 1.00 4.21% 0.44% 4.12%
0.25% $493,350 -
Treasury Money Market
Fund
- Investment
Shares
1995 (0.04) $ 1.00 5.06% 0.73% 4.98%
0.50% $ 28,930 -
1996 (0.04) $ 1.00 4.41% 0.92% 4.31%
0.29% $ 40,619 -
1997 (0.04) $ 1.00 4.39% 0.92% 4.31%
0.25% $ 45,960 -
1998 (0.04) $ 1.00 4.30% 0.87% 4.17%
0.25% $ 89,673 -
1999 (0.04) $ 1.00 3.94% 0.70% 3.89%
0.39% $119,898 -
Limited
Maturity
Government Fund -
Trust

Shares
1998(a) (0.25) $10.07 3.59% 1.04%(i 4.73%(i)
- - $ 55,627 69%
1999 (0.47) $ 9.86 2.64% 0.82% 4.66%
0.19% $ 66,678 22%
Limited
Maturity
Government Fund
- -
Investment
Shares
1995 (0.51) $10.04 10.12% 0.61% 5.26%
0.49% $ 63,078 26%
1996 (0.50) $ 9.96 4.37% 1.01% 5.09%
0.08% $ 63,732 48%
1997 (0.49) $ 9.94 4.81% 0.99% 4.91%
- - $ 79,621 40%
1998 (0.46) $10.07 6.05% 1.12% 4.65%
- - $ 33,456 69%
1999 (0.45) $ 9.86 2.39% 1.07% 4.41%
0.19% $ 46,679 22%
Fixed Income Fund -
Trust

Shares
1992(b) (0.38) $10.27 7.66% 0.77%(i 6.02%(i)
0.29%(i) $ 96,354 44%
1993 (0.61) $10.67 10.14% 0.84% 4.80%
0.25% $169,881 83%
1994 (0.74) $ 9.46 (4.55%) 0.79% 5.44%
0.25% $153,289 24%
1995(c) (0.09) $ 9.57 2.11% 0.82%(i 5.79%(i)
0.25%(i) - -
1998(a) (0.28) $10.61 4.87% 0.97%(i 5.19%(i)
- - $193,351 64%
1999 (0.53) $10.10 0.24% 0.73% 5.18%
0.23% $215,281 18%
Fixed Income Fund
- -
Investment
Shares
1995 (0.54) $10.34 15.37% 1.02% 5.25%
- - $160,286 45%
1996 (0.54) $10.36 5.66% 1.02% 5.38%
- - $152,940 52%
1997 (0.59) $10.37 5.99% 0.97% 5.73%
- - $184,064 37%
1998 (0.53) $10.61 7.60% 0.99% 5.17%
- - $ 23,992 64%
1999 (0.51) $10.10 (0.01%) 0.98% 4.95%
0.23% $ 48,641 18%

</TABLE>

Financial Highlights
(cont.)

Net Net
Distributions
investment realized
from net
Net Asset income and Distributions
realized Distributions in
Value (net unrealized Total from from net
gain on excess of net
beginning operating gain(loss) on investment investment
investment investment
Year Ended November 30, of period loss) investments operations income
transactions income
<S> <C> <C> <C> <C> <C>
<C> <C>
Balanced Fund -
Trust

Shares
1998(a) $14.52 0.19 0.80 0.99
(0.19) - -
1999 $15.32 0.38 1.12 1.50 (0.36)
(0.49) -
Balanced Fund -
Investment

Shares
1995(d) $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) -
1999 $15.32 0.33 1.12 1.45 (0.32)
(0.49) -
Value Fund - Trust
Shares
1998(a) $17.31 0.10 (0.02) 0.08
(0.11) - -
1999 $17.28 0.18 0.73 0.91 (0.17)
(2.09) -
Value Fund -
Investment

Shares
1995(d) $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) -
1999 $17.27 0.09 0.78 0.87 (0.13)
(2.09) -
Growth Fund - Trust
Shares
1992(b) $ 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(c) $10.36 0.08 0.02 0.10 (0.08)
(0.33) -
1998(a) $17.81 0.02 2.27 2.29
(0.02) - -
1999 $20.08 0.03 5.18 5.21 (0.01)
(1.73) -
Growth Fund -
Investment

Shares
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) -
1999 $20.08 (0.03) 5.17 5.14 -
(1.73) -
Aggressive Growth
Fund
1999(e) $10.00 - 3.20 3.20 -
(0.62) -

<CAPTION>
Ratios
to Net
Average Net
Assets assets,

Net end of
Net Asset investment
Expense period
Total Value, end Total income (net
waiver/ (000
distributions of period return(g) Expenses operating loss)
reimbursement(h) omitted)
<S> <C> <C> <C> <C> <C>
<C> <C>
Balanced Fund -
Trust

Shares
1998(a) (0.19) $15.32 6.89% 1.11%(i)
2.56%(i) - $ 10,409
1999 (0.85) $15.97 10.14% 1.04% 2.42%
0.05% $ 15,868
Balanced Fund -
Investment

Shares
1995(d) (0.36) $11.46 18.50% 0.61%(i) 4.34%(i)
0.56%(i) $ 51,197
1996 (0.63) $12.51 15.35% 1.13% 3.60%
0.09% $ 59,321
1997 (0.68) $13.79 16.34% 1.11%
2.73% - $ 83,073
1998 (0.78) $15.32 17.49% 1.25%
2.42% - $112,260
1999 (0.81) $15.96 9.82% 1.29% 2.17%
0.05% $167,037
Value Fund - Trust
Shares
1998(a) (0.11) $17.28 0.50% 1.06%(i)
1.29%(i) - $157,990
1999 (2.26) $15.93 5.76% 0.97% 1.02%
0.05% $205,198
Value Fund -
Investment

Shares
1995(d) (0.34) $12.04 24.14% 0.69%(i) 3.93%(i)
0.55%(i) $ 45,424
1996 (0.64) $13.89 21.72% 1.11% 2.29%
0.06% $ 83,572
1997 (0.87) $16.18 24.08% 1.04%
1.50% - $152,531
1998 (0.63) $17.27 11.00% 1.11%
1.24% - $ 47,815
1999 (2.22) $15.92 5.51% 1.22% 0.77%
0.05% $ 77,325
Growth Fund - Trust
Shares
1992(b) (0.11) $10.66 9.28% 0.76%(i) 2.28%(i)
0.35%(i) $102,822
1993 (0.30) $10.51 1.43% 0.84% 1.85%
0.30% $154,185
1994 (0.30) $10.36 1.42% 0.79% 2.32%
0.30% $143,876
1995(c) (0.41) $10.05 1.00% 0.83%(i) 2.76%(i)
0.30%(i) -
1998(a) (0.02) $20.08 12.85% 1.00%(i)
0.22%(i) - $246,613
1999 (1.74) $23.55 27.42% 0.94% 0.05%
0.05% $376,940
Growth Fund -
Investment

Shares
1995 (0.54) $12.10 23.01% 1.03% 1.61%
0.05% $154,297
1996 (0.70) $14.64 28.22% 1.05% 0.98%
0.01% $175,521
1997 (0.83) $16.89 22.37% 1.01%
0.45% - $275,006
1998 (1.83) $20.08 33.81% 1.08%
0.12% - $140,922
1999 (1.73) $23.49 27.07% 1.19% (0.20%)
0.05% $320,921
Aggressive Growth
Fund
1999(e) (0.62) $12.58 33.17% 1.19%(i)
(0.11%)(i) - $ 95,992

<CAPTION>
Portfolio
turnover
<S> <C>
Balanced Fund - Trust
Shares
1998(a) 31%
1999 23%
Balanced Fund - Investment
Shares
1995(d) 49%
1996 41%
1997 34%
1998 31%
1999 23%
Value Fund - Trust Shares
1998(a) 63%
1999 69%
Value Fund - Investment
Shares
1995(d) 76%
1996 58%
1997 31%
1998 63%
1999 69%
Growth Fund - Trust Shares
1992(b) 30%
1993 74%
1994 66%
1995(c) -
1998(a) 41%
1999 20%
Growth Fund - Investment
Shares
1995 110%
1996 56%
1997 40%
1998 41%
1999 20%
Aggressive Growth Fund
1999(e)

</TABLE> 64%

(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 April 20, 1992 (date of initial
public investment) to November 30, 1992.
(c) 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.
(d) Reflects operations for the period from December 19, 1994 (date of initial
public investment) to November 30, 1995.
(e) Reflects operations for the period from March 15, 1999 (date of initial
public investment) to November 30, 1999.
(f) 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.
(g) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(h) This voluntary expense decrease is reflected in both the expense and net
investment income (loss) ratios shown above.
(i) Computed on an annualized basis.

Regions Funds

A Statement of Additional Information (SAI) dated January 31, 2000 is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is available in the Funds' annual report to shareholders. The
annual report discusses market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. To
obtain the SAI, the annual report and other information without charge write to
or call Regions Funds at 1-800-433-2829.

You can obtain information about the Regions Funds (including the SAI) by
visiting or writing the Public Reference Room of the SEC in Washington, D.C. You
may also access Regions Funds information from the EDGAR Database on the SEC's
Internet site at http://www.sec.gov. You can purchase copies of this information
by contacting the SEC by email at [email protected] or by writing to the SEC's
Public Reference Section, Washington, D.C. 20549-0102. Call 1-202-942-8090 for
information on the Public Reference Room's operations and copying fees.

Regions Funds
417 North 20th Street
12th Floor
P.O. Box 10247 (Zip code: 35202)
Birmingham, Alabama 35203
1-800-433-2829
Federated Securities Corp.
Distributor

007576 (1/00)

SEC File No. 811-6511

Regions Aggressive Growth Fund RAGRX 75913Q845

Regions Balanced Fund Trust Shares FPALX 75913Q209
Regions Balanced Fund Investment Shares FPBLX 75913Q100
Regions Fixed Income Fund Trust Shares RFIFX 75913Q803
Regions Fixed Income Fund Investment Shares FPFTX 75913Q704
Regions Growth Fund Trust Shares RGRAX 75913Q407
Regions Growth Fund Investment Shares FPETX 75913Q308
Regions Limited Maturity Gov't Fund
Trust Shares RLMGX 75913Q852
Regions Limited Maturity Gov't Fund
Investment Shares FPLGX 75913Q860
Regions Treasury Money Market Fund
Trust Shares FITXX 75913Q878
Regions Treasury Money Market Fund
Investment Shares FPIXX 75913Q886

Regions Value Fund Trust Shares RVLAX 75913Q605
Regions Value Fund Investment Shares FPEIX 75913Q506

Federated Securities Corp., Distributor

[logo]

007576 (1/00)

Regions Funds

Trust Shares

Investment Shares

Statement of Additional Information

January 31, 2000

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

This Statement of Additional Information (SAI) is not a prospectus. Read
this SAI in conjunction with the prospectus for the Regions Funds, dated
January 31, 2000. This SAI incorporates by reference the Funds' Annual
Report. Obtain the prospectus or Annual Report, without charge by calling
the Trust at 1-800-433-2829.

5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010

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

007580 (1/00)

FEDERATED SECURITIES CORP.
Distributor

A subsidiary of FEDERATED INVESTORS, INC.

<PAGE>

Table of Contents
- --------------------------------------------------------------------------------

How are the Funds Organized 1

Securities in Which the Funds Invest 1

Securities Descriptions, Techniques and Risks 2

Investment Limitations 10

Determining Market Value of Securities 12

What Do Shares Cost? 13

How is the Fund Sold? 14

How to Buy Shares 15

Massachusetts Partnership Law 16

Account and Share Information 15

What are the Tax Consequences 15

Who Manages the Funds 15

How Does the Fund Measure Performance 23

Performance Comparisons 24

Economic and Market Information 28

Financial Statements 28

Appendix 29

Addresses 31

<PAGE>

HOW ARE THE FUNDS ORGANIZED

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

SECURITIES IN WHICH THE FUNDS INVEST

Following is a table that indicates which types of securities are a: o P =
Principal investment of a Fund; (shaded in chart) o A = Acceptable (but not
principal) investment of a Fund; or o N = Not an acceptable investment of a
Fund.
<TABLE>
<CAPTION>

- ---------------------------------------------- -------------- ------------- ---------- ---------- --------- ------------ -----------
Securities Treasury Limited Fixed Balanced Value Growth Fund Aggressive
Money Market Maturity Income Fund Fund Growth
Fund Government Fund Fund
Fund
- ---------------------------------------------- -------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
American Depositary Receipts N N N A A A A
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Asset-Backed Securities N A A A N N N
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Bank Instruments N A A A A A A
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Borrowing A A A A A A A
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Commercial Paper N A A A A A A
- ----------------------------------------------- ------------- ------------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Common Stock1 N N N P P P P
- ----------------------------------------------- ------------- ------------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Convertible Securities2 N N N A A A A
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- --------- ------------ -----------
Derivative Contracts and Securities N A A A A A A
- ----------------------------------------------- ------------- ------------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Corporate Fixed Rate Debt Obligations3 N A P P N N N
- ----------------------------------------------- ------------- ------------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Corporate Floating Rate Debt Obligations3 N A A P N N N
- ----------------------------------------------- ------------- ------------- ---------- ---------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Foreign Securities N A A A A A A
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Futures and Options Transactions N A A A A A A
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Illiquid Securities4 A A A A A A A
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Lending of Portfolio Securities A A A A A A A
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Mortgage-Backed Securities N A A A N N N
- ----------------------------------------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Municipal Debt Obligations N A A A N N N
- ----------------------------------------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Other Money Market Instruments N A A A A A A
- ----------------------------------------------- ------------- ---------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Preferred Stocks N N N A A A A
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Repurchase Agreements N A A A A A A
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Securities of Other Investment Companies A A A A A A A
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Stripped Bonds N A A A N N N
- ----------------------------------------------- ------------- ---------- --------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
U.S. Government Securities P P P P A A A
- ----------------------------------------------- ------------- ---------- ------------ -----------
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------
Warrants N N A A A A A
- ----------------------------------------------- ------------- ------------- ---------- ---------- --------- ------------ -----------

<PAGE>

1. The Value Fund will invest in common stocks of companies with market
capitalizations of $1 billion or more, the Growth Fund will invest in
common stocks of companies with market capitalizations of $5 billion or
more and the Aggressive Growth Fund will invest will invest in common
stocks of companies with market capitalizations of $5 billion or less.
2. The Balanced Fund and Value Fund may invest up to 25% of their respective
total assets in below investment grade convertible securities (rated BB and
below by a nationally recognized statistical rating organization (NRSRO)).
An NRSRO is Moody's, S&P and Fitch
3. The Corporate Debt Obligations that the Funds invest will be rated in one
of the three highest rating categories by an NRSRO.
4. All Funds, except the Treasury Money Market Fund, may invest up to 15% of
their respective assets in illiquid securities. The Treasury Money Market
Fund may invest up to 10% of its assets in illiquid securities.

SECURITIES DESCRIPTIONS, TECHNIQUES AND RISKS
Equity Securities
Equity securities represent a share of an issuer's earnings and assets, after
the issuer pays its liabilities. The Fund cannot predict the income it will
receive from equity securities because issuers generally have discretion as to
the payment of any dividends or distributions. However, equity securities offer
greater potential for appreciation than many other types of securities, because
their value increases directly with the value of the issuer's business. The
following describes the types of equity securities in which the Fund may invest.
Common Stocks
Common stocks are the most prevalent type of equity security. Common stocks
receive the issuer's earnings after the issuer pays its creditors and any
preferred stockholders. As a result, changes in an issuer's earnings
directly influence the value of its common stock. Preferred Stocks
Preferred stocks have the right to receive specified dividends or
distributions before the issuer makes payments on its common stock. Some
preferred stocks also participate in dividends and distributions paid on
common stock. Preferred stocks may also permit the issuer to redeem the
stock. The Fund [may also/will] treat such redeemable preferred stock as a
fixed income security. Interests in Other Limited Liability Companies
Entities such as limited partnerships, limited liability companies,
business trusts and companies organized outside the United States may issue
securities comparable to common or preferred stock.
Real Estate Investment Trusts (REITs)
REITs are real estate investment trusts that lease, operate and finance
commercial real estate. REITs are exempt from federal corporate income tax
if they limit their operations and distribute most of their income. Such
tax requirements limit a REIT's ability to respond to changes in the
commercial real estate market. Warrants Warrants give the Fund the option
to buy the issuer's equity securities at a specified price (the exercise
price) at a specified future date (the expiration date). The Fund may buy
the designated securities by paying the exercise price before the
expiration date. Warrants may become worthless if the price of the stock
does not rise above the exercise price by the expiration date. This
increases the market risks of warrants as compared to the underlying
security. Rights are the same as warrants, except companies typically issue
rights to existing stockholders.

<PAGE>

Fixed Income Securities
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities. A security's yield measures the
annual income earned on a security as a percentage of its price. A security's
yield will increase or decrease depending upon whether it costs less (a
discount) or more (a premium) than the principal amount. If the issuer may
redeem the security before its scheduled maturity, the price and yield on a
discount or premium security may change based upon the probability of an early
redemption. Securities with higher risks generally have higher yields. The
following describes the types of fixed income securities in which the Fund may
invest.
Treasury Securities
Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the
lowest credit risks. Agency Securities Agency securities are issued or
guaranteed by a federal agency or other government sponsored entity acting
under federal authority (a GSE). The United States supports some GSEs with
its full faith and credit. Other GSEs receive support through federal
subsidies, loans or other benefits. A few GSEs have no explicit financial
support, but are regarded as having implied support because the federal
government sponsors their activities. Agency securities are generally
regarded as having low credit risks, but not as low as treasury securities.
The Fund treats mortgage backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risks, it does
not reduce the interest rate and prepayment risks of these mortgage backed
securities. Corporate Debt Securities Corporate debt securities are fixed
income securities issued by businesses. Notes, bonds, debentures and
commercial paper are the most prevalent types of corporate debt securities.
The Fund may also purchase interests in bank loans to companies. The credit
risks of corporate debt securities vary widely among issuers. In addition,
the credit risk of an issuer's debt security may vary based on its priority
for repayment. For example, higher ranking (senior) debt securities have a
higher priority than lower ranking (subordinated) securities. This means
that the issuer might not make payments on subordinated securities while
continuing to make payments on senior securities. In addition, in the event
of bankruptcy, holders of senior securities may receive amounts otherwise
payable to the holders of subordinated securities. Some subordinated
securities, such as trust preferred and capital securities notes, also
permit the issuer to defer payments under certain circumstances. For
example, insurance companies issue securities known as surplus notes that
permit the insurance company to defer any payment that would reduce its
capital below regulatory requirements.
Commercial Paper
Commercial paper is an issuer's obligation with a maturity of less than
nine months. Companies typically issue commercial paper to pay for
current expenditures. Most issuers constantly reissue their commercial
paper and use the proceeds (or bank loans) to repay maturing paper. If
the issuer cannot continue to obtain liquidity in this fashion, its
commercial paper may default. The short maturity of commercial paper
reduces both the market and credit risks as compared to other debt
securities of the same issuer. Demand Instruments Demand instruments
are corporate debt securities that the issuer must repay upon demand.
Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The
Fund treats demand instruments as short-term securities, even though
their stated maturity may extend beyond one year.
Municipal Securities
Municipal securities are issued by states, counties, cities and other
political subdivisions and authorities. Although many municipal securities
are exempt from federal income tax, the Fund may invest in taxable
municipal securities. Mortgage Backed Securities Mortgage backed securities
represent interests in pools of mortgages. The mortgages that comprise a
pool normally have similar interest rates, maturities and other terms.
Mortgages may have fixed or adjustable interest rates. Interests in pools
of adjustable rate mortgages are known as ARMs. Mortgage backed securities
come in a variety of forms. Many have extremely complicated terms. The
simplest form of mortgage backed securities are pass-through certificates.
An issuer of pass-through certificates gathers monthly payments from an
underlying pool of mortgages. Then, the issuer deducts its fees and
expenses and passes the balance of the payments onto the certificate
holders once a month. Holders of pass-through certificates receive a pro
rata share of all payments and pre-payments from the underlying mortgages.
As a result, the holders assume all the prepayment risks of the underlying
mortgages. Collateralized Mortgage Obligations (CMOs) CMOs, including
interests in real estate mortgage investment conduits (REMICs), allocate
payments and prepayments from an underlying pass-through certificate among
holders of different classes of mortgage backed securities. This creates
different prepayment and interest rate risks for each CMO class.
Sequential CMOs
In a sequential pay CMO, one class of CMOs receives all principal
payments and prepayments. The next class of CMOs receives all principal
payments after the first class is paid off. This process repeats for
each sequential class of CMO. As a result, each class of sequential pay
CMOs reduces the prepayment risks of subsequent classes.

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

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

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

Z Classes and Residual Classes
CMOs must allocate all payments received from the underlying mortgages
to some class. To capture any unallocated payments, CMOs generally have
an accrual (Z) class. Z classes do not receive any payments from the
underlying mortgages until all other CMO classes have been paid off.
Once this happens, holders of Z class CMOs receive all payments and
prepayments. Similarly, REMICs have residual interests that receive any
mortgage payments not allocated to another REMIC class.
The degree of increased or decreased prepayment risks depends upon the
structure of the CMOs. However, the actual returns on any type of mortgage
backed security depend upon the performance of the underlying pool of
mortgages, which no one can predict and will vary among pools. Asset Backed
Securities Asset backed securities are payable from pools of obligations
other than mortgages. Most asset backed securities involve consumer or
commercial debts with maturities of less than ten years. However, almost
any type of fixed income assets (including other fixed income securities)
may be used to create an asset backed security. Asset backed securities may
take the form of commercial paper, notes, or pass through certificates.
Asset backed securities have prepayment risks. Like CMOs, asset backed
securities may be structured like Floaters, Inverse Floaters, IOs and POs.
Zero Coupon Securities Zero coupon securities do not pay interest or
principal until final maturity unlike debt securities that provide periodic
payments of interest (referred to as a coupon payment). Investors buy zero
coupon securities at a price below the amount payable at maturity. The
difference between the purchase price and the amount paid at maturity
represents interest on the zero coupon security. Investors must wait until
maturity to receive interest and principal, which increases the interest
rate and credit risks of a zero coupon security. A zero coupon step-up
security converts to a coupon security before final maturity. There are
many forms of zero coupon securities. Some are issued at a discount and are
referred to as zero coupon or capital appreciation bonds. Others are
created from interest bearing bonds by separating the right to receive the
bond's coupon payments from the right to receive the bond's principal due
at maturity, a process known as coupon stripping. Treasury STRIPs, IOs and
POs are the most common forms of stripped zero coupon securities. In
addition, some securities give the issuer the option to deliver additional
securities in place of cash interest payments, thereby increasing the
amount payable at maturity. These are referred to as pay-in-kind or PIK
securities. Bank Instruments Bank instruments are unsecured interest
bearing deposits with banks. Bank instruments include bank accounts, time
deposits, certificates of deposit and banker's acceptances. Yankee
instruments are denominated in U.S. dollars and issued by U.S. branches of
foreign banks. Eurodollar instruments are denominated in U.S. dollars and
issued by non-U.S. branches of U.S. or foreign banks. Credit Enhancement
Credit enhancement consists of an arrangement in which a company agrees to
pay amounts due on a fixed income security if the issuer defaults. In some
cases the company providing credit enhancement makes all payments directly
to the security holders and receives reimbursement from the issuer.
Normally, the credit enhancer has greater financial resources and liquidity
than the issuer. For this reason, the Adviser usually evaluates the credit
risk of a fixed income security based solely upon its credit enhancement.
Common types of credit enhancement include guarantees, letters of credit,
bond insurance and surety bonds. Credit enhancement also includes
arrangements where securities or other liquid assets secure payment of a
fixed income security. If a default occurs, these assets may be sold and
the proceeds paid to security's holders. Either form of credit enhancement
reduces credit risks by providing another source of payment for a fixed
income security.
Convertible Securities
Convertible securities are fixed income securities that the Fund has the option
to exchange for equity securities at a specified conversion price. The option
allows the Fund to realize additional returns if the market price of the equity
securities exceeds the conversion price. For example, the Fund may hold fixed
income securities that are convertible into shares of common stock at a
conversion price of $10 per share. If the market value of the shares of common
stock reached $12, the Fund could realize an additional $2 per share by
converting its fixed income securities. Convertible securities have lower yields
than comparable fixed income securities. In addition, at the time a convertible
security is issued the conversion price exceeds the market value of the
underlying equity securities. Thus, convertible securities may provide lower
returns than non-convertible fixed income securities or equity securities
depending upon changes in the price of the underlying equity securities.
However, convertible securities permit the Fund to realize some of the potential
appreciation of the underlying equity securities with less risk of losing its
initial investment. The Fund treats convertible securities as both fixed income
and equity securities for purposes of its investment policies and limitations,
because of their unique characteristics.

<PAGE>

Foreign Securities
Foreign securities are securities of issuers based outside the United States.
The Fund considers an issuer to be based outside the United States if: o it is
organized under the laws of, or has a principal office located in, another
country; o the principal trading market for its securities is in another
country; or o it (or its subsidiaries) derived in its most current fiscal year
at least 50% of its total
assets, capitalization, gross revenue or profit from goods produced,
services performed, or sales made in another country.
Foreign securities are primarily denominated in foreign currencies. Along with
the risks normally associated with domestic securities of the same type, foreign
securities are subject currency risks and risks of foreign investing. Trading in
certain foreign markets is also subject to liquidity risks.
Depositary Receipts
Depositary receipts represent interests in underlying securities issued by
a foreign company. Depositary receipts are not traded in the same market as
the underlying security. The foreign securities underlying American
Depositary Receipts (ADRs) are not traded in the United States. ADRs
provide a way to buy shares of foreign-based companies in the United States
rather than in overseas markets. ADRs are also traded in U.S. dollars,
eliminating the need for foreign exchange transactions. The foreign
securities underlying European Depositary Receipts (EDRs), Global
Depositary Receipts (GDRs), and International Depositary Receipts (IDRs),
are traded globally or outside the United States. Depositary receipts
involve many of the same risks of investing directly in foreign securities,
including currency risks and risks of foreign investing.
Derivative Contracts
Derivative contracts are financial instruments that require payments based upon
changes in the values of designated (or underlying) securities, currencies,
commodities, financial indices or other assets. Some derivative contracts (such
as futures, forwards and options) require payments relating to a future trade
involving the underlying asset. Other derivative contracts (such as swaps)
require payments relating to the income or returns from the underlying asset.
The other party to a derivative contract is referred to as a counterparty. Many
derivative contracts are traded on securities or commodities exchanges. In this
case, the exchange sets all the terms of the contract except for the price.
Investors make payments due under their contracts through the exchange. Most
exchanges require investors to maintain margin accounts through their brokers to
cover their potential obligations to the exchange. Parties to the contract make
(or collect) daily payments to the margin accounts to reflect losses (or gains)
in the value of their contracts. This protects investors against potential
defaults by the counterparty. Trading contracts on an exchange also allows
investors to close out their contracts by entering into offsetting contracts.
For example, the Fund could close out an open contract to buy an asset at a
future date by entering into an offsetting contract to sell the same asset on
the same date. If the offsetting sale price is more than the original purchase
price, the Fund realizes a gain; if it is less, the Fund realizes a loss.
Exchanges may limit the amount of open contracts permitted at any one time. Such
limits may prevent the Fund from closing out a position. If this happens, the
Fund will be required to keep the contract open (even if it is losing money on
the contract), and to make any payments required under the contract (even if it
has to sell portfolio securities at unfavorable prices to do so). Inability to
close out a contract could also harm the Fund by preventing it from disposing of
or trading any assets it has been using to secure its obligations under the
contract. The Fund may also trade derivative contracts over-the-counter (OTC) in
transactions negotiated directly between the Fund and the counterparty. OTC
contracts do not necessarily have standard terms, so they cannot be directly
offset with other OTC contracts. In addition, OTC contracts with more
specialized terms may be more difficult to price than exchange traded contracts.
Depending upon how the Fund uses derivative contracts and the relationships
between the market value of a derivative contract and the underlying asset,
derivative contracts may increase or decrease the Fund's exposure to interest
rate and currency risks, and may also expose the Fund to liquidity and leverage
risks. OTC contracts also expose the Fund to credit risks in the event that a
counterparty defaults on the contract. The Fund may trade in the following types
of derivative contracts.
Futures Contracts
Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of an underlying asset at a specified
price, date, and time. Entering into a contract to buy an underlying asset
is commonly referred to as buying a contract or holding a long position in
the asset. Entering into a contract to sell an underlying asset is commonly
referred to as selling a contract or holding a short position in the asset.
Futures contracts are considered to be commodity contracts. Futures
contracts traded OTC are frequently referred to as forward contracts.
Options Options are rights to buy or sell an underlying asset for a
specified price (the exercise price) during, or at the end of, a specified
period. A call option gives the holder (buyer) the right to buy the
underlying asset from the seller (writer) of the option. A put option gives
the holder the right to sell the underlying asset to the writer of the
option. The writer of the option receives a payment, or premium, from the
buyer, which the writer keeps regardless of whether the buyer uses (or
exercises) the option. The Fund may: Buy call options on securities,
securities indices and futures contracts in anticipation of an increase in
the value of the underlying asset. Buy put options on securities,
securities indices and futures contracts in anticipation of a decrease in
the value of the underlying asset. Write call options on securities,
securities indices and futures contracts to generate income from premiums,
and in anticipation of a decrease or only limited increase in the value of
the underlying asset. If a call written by the Fund is exercised, the Fund
foregoes any possible profit from an increase in the market price of the
underlying asset over the exercise price plus the premium received. Write
put options on securities, securities indices and futures contracts (to
generate income from premiums, and in anticipation of an increase or only
limited decrease in the value of the underlying asset). In writing puts,
there is a risk that the Fund may be required to take delivery of the
underlying asset when its current market price is lower than the exercise
price. When the Fund writes options on futures contracts, it will be
subject to margin requirements similar to those applied to futures
contracts. Buy or write options to close out existing options positions.
Temporary Defensive Investments

For temporary defensive purposes and to maintain liquidity, the Funds may invest
in cash and cash items, including short-term money market instruments;
securities issued and/or guaranteed as to payment of principal and interest by
the U.S. government, its agencies or instrumentalities; and repurchase
agreements.

Special Transactions
Repurchase Agreements
Repurchase agreements are transactions in which the Fund buys a security
from a dealer or bank and agrees to sell the security back at a mutually
agreed upon time and price. The repurchase price exceeds the sale price,
reflecting the Fund's return on the transaction. This return is unrelated
to the interest rate on the underlying security. The Fund will enter into
repurchase agreements only with banks and other recognized financial
institutions, such as securities dealers, deemed creditworthy by the
Adviser. The Fund's custodian or subcustodian will take possession of the
securities subject to repurchase agreements. The Adviser or subcustodian
will monitor the value of the underlying security each day to ensure that
the value of the security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks. Reverse Repurchase
Agreements Reverse repurchase agreements are repurchase agreements in which
the Fund is the seller (rather than the buyer) of the securities, and
agrees to repurchase them at an agreed upon time and price. A reverse
repurchase agreement may be viewed as a type of borrowing by the Fund.
Reverse repurchase agreements are subject to credit risks. In addition,
reverse repurchase agreements create leverage risks because the Fund must
repurchase the underlying security at a higher price, regardless of the
market value of the security at the time of repurchase. Delayed Delivery
Transactions When issued transactions are arrangements in which the Fund
buys securities for a set price, with payment and delivery of the
securities scheduled for a future time. During the period between purchase
and settlement, no payment is made by the Fund to the issuer and no
interest accrues to the Fund. The Fund records the transaction when it
agrees to buy the securities and reflects their value in determining the
price of its shares. Settlement dates may be a month or more after entering
into these transactions so that the market values of the securities bought
may vary from the purchase prices. Therefore, when issued transactions
create market risks for the Fund. When issued transactions also involve
credit risks in the event of a counterparty default. Some Funds may have
leverage risks.
To Be Announced Securities (TBAs)
As with other when issued transactions, a seller agrees to issue a TBA
security at a future date. However, the seller does not specify the
particular securities to be delivered. Instead, the Fund agrees to
accept any security that meets specified terms. For example, in a TBA
mortgage backed transaction, the Fund and the seller would agree upon
the issuer, interest rate and terms of the underlying mortgages.
However, the seller would not identify the specific underlying
mortgages until it issues the security. TBA mortgage backed securities
increase market risks because the underlying mortgages may be less
favorable than anticipated by the Fund.
Securities Lending
The Fund may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, the Fund receives cash or liquid securities from
the borrower as collateral. The borrower must furnish additional collateral
if the market value of the loaned securities increases. Also, the borrower
must pay the Fund the equivalent of any dividends or interest received on
the loaned securities. The Fund will reinvest cash collateral in securities
that qualify as an acceptable investment for the Fund. However, the Fund
must pay interest to the borrower for the use of cash collateral. Loans are
subject to termination at the option of the Fund or the borrower. The Fund
will not have the right to vote on securities while they are on loan, but
it will terminate a loan in anticipation of any important vote. The Fund
may pay administrative and custodial fees in connection with a loan and may
pay a negotiated portion of the interest earned on the cash collateral to a
securities lending agent or broker. Securities lending activities are
subject to market risks and credit risks. Some Funds may have leverage
risks.
Asset Coverage
In order to secure its obligations in connection with derivatives contracts or
special transactions, the Fund will either own the underlying assets, enter into
an offsetting transaction or set aside readily marketable securities with a
value that equals or exceeds the Fund's obligations. Unless the Fund has other
readily marketable assets to set aside, it cannot trade assets used to secure
such obligations entering into an offsetting derivative contract or terminating
a special transaction. This may cause the Fund to miss favorable trading
opportunities or to realize losses on derivative contracts or special
transactions.

Stock Market Risks
o The value of equity securities in the Fund's portfolio will rise and fall.
These fluctuations could be a sustained trend or a drastic movement. The
Fund's portfolio will reflect changes in prices of individual portfolio
stocks or general changes in stock valuations. Consequently, the Fund's
share price may decline.
o The Adviser attempts to manage market risk by limiting the amount the Fund
invests in each company's equity securities. However, diversification will
not protect the Fund against widespread or prolonged declines in the stock
market.

Liquidity Risks

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

o Liquidity risk also refers to the possibility that the Fund may not be able
to sell a security or close out a derivative contract when it wants to. If
this happens, the Fund will be required to continue to hold the security or
keep the position open, and the Fund could incur losses.
o OTC derivative contracts generally carry greater liquidity risk than
exchange-traded contracts. Risks Related to Investing for Growth o Due to their
relatively high valuations, growth stocks are typically more volatile than value
stocks. For instance, the price of a growth stock may experience a larger
decline on a forecast of lower earnings, a negative fundamental
development, or an adverse market development. Further, growth stocks may
not pay dividends or may pay lower dividends than value stocks. This means
they depend more on price changes for returns and may be more adversely
affected in a down market compared to value stocks that pay higher
dividends.
Risks Related to Investing for Value
o Due to their relatively low valuations, value stocks are typically less
volatile than growth stocks. For instance, the price of a value stock may
experience a smaller increase on a forecast of higher earnings, a positive
fundamental development, or positive market development. Further, value
stocks tend to have higher dividends than growth stocks. This means they
depend less on price changes for returns and may lag behind growth stocks
in an up market.

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

Bond Market Risks
o Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise,
prices of fixed income securities fall.
o Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity
of a fixed income security to changes in interest rates.

Credit Risks
o Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the
Fund will lose money.
o Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not
received a rating, the Fund must rely entirely upon the Adviser's credit
assessment.
o Fixed income securities generally compensate for greater credit risk by
paying interest at a higher rate. The difference between the yield of a
security and the yield of a U.S. Treasury security with a comparable
maturity (the spread) measures the additional interest paid for risk.
Spreads may increase generally in response to adverse economic or market
conditions. A security's spread may also increase if the security's rating
is lowered, or the security is perceived to have an increased credit risk.
An increase in the spread will cause the price of the security to decline.
o Credit risk includes the possibility that a party to a transaction
involving the Fund will fail to meet its obligations. This could cause the
Fund to lose the benefit of the transaction or prevent the Fund from
selling or buying other securities to implement its investment strategy.

Call Risks
o Call risk is the possibility that an issuer may redeem a fixed income
security before maturity (a call) at a price below its current market
price. An increase in the likelihood of a call may reduce the security's
price.
o If a fixed income security is called, the Fund may have to reinvest the
proceeds in other fixed income securities with lower interest rates, higher
credit risks, or other less favorable characteristics.

<PAGE>

Prepayment Risks

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

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

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

FUNDAMENTAL LIMITATIONS

The following investment limitations are fundamental and cannot be changed
without shareholder approval.
Issuing Senior Securities and Borrowing Money

The Funds may borrow money, directly or indirectly, and issue senior securities
to the maximum extent
permitted under the 1940 Act.
Lending Cash or Securities

The Funds may not make loans, provided that this restriction does not prevent
the Funds from purchasing debt obligations, entering into repurchase agreements,
lending their assets to broker/dealers or institutional investors and investing
in loans, including assignments and participation interests.

Investing in Commodities

The Funds may not purchase or sell physical commodities, provided that the Funds
may purchase securities of companies that deal in commodities. As a
non-fundamental policy, for purposes of this restriction, investments in
transactions involving futures contracts and options, forward currency
contracts, swap transactions and other financial contracts that settle by
payment of cash are not deemed to be investments in commodities.

Investing in Real Estate

The Funds may not purchase or sell real estate, provided that this restriction
does not prevent the Funds from investing in issuers which invest, deal, or
otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interests therein.
The Funds may exercise their rights under agreements relating to such
securities, including the right to enforce security interests and to hold real
estate acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner.

<PAGE>

Diversification of Investments

With respect to securities comprising 75% of the value of its total assets, the
Funds will not purchase securities of any one issuer (other than cash; cash
items; securities issued or guaranteed by the government of the United States or
its agencies or instrumentalities and repurchase agreements collateralized by
such U.S. government securities; and securities of other investment companies)
if, as a result, more than 5% of the value of their total assets would be
invested in securities of that issuer, or the Funds would own more than 10% of
the outstanding voting securities of that issuer.

Concentration of Investments

The Funds will not make investments that will result in the concentration of
their investments in the securities of issuers primarily engaged in the same
industry. Government securities, municipal securities and bank instruments will
not be deemed to constitute an industry. To conform to the current view of the
SEC staff that only domestic bank instruments may be excluded from industry
concentration limitations, as a matter of non-fundamental policy, the Funds will
not exclude foreign bank instruments from industry concentration tests so long
as the policy of the SEC remains in effect. As a non-fundamental operating
policy, the Funds will consider concentration to be the investment of more than
25% of the value of their total assets in any one industry. Underwriting

The Funds may not underwrite the securities of other issuers, except that the
Funds may engage in transactions involving the acquisition, disposition or
resale of their portfolio securities, under circumstances where they may be
considered to be underwriters under the Securities Act of 1933.

Non-Fundamental Limitations

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

The Treasury Money Market Fund and the Limited Maturity Government Fund will not
purchase securities on margin, provided that these Funds may obtain short-term
credits necessary for the clearance of purchases and sales of securities. The
Fixed Income Fund, Balanced Fund, Value Fund and Growth Fund will not purchase
securities on margin, provided that these Funds may obtain short-term credits
necessary for the clearance of purchases and sales of securities, and further
provided that these Funds may make margin deposits in connection with their use
of financial options and futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative instruments. Pledging
Assets

The Funds will not mortgage, pledge, or hypothecate any of their assets,
provided that this shall not apply to the transfer of securities in connection
with any permissible borrowing or to collateral arrangements in connection with
permissible activities.

Investing in Illiquid Securities

The Treasury Money Market Fund will not purchase securities for which there is
no readily available market, or enter in to repurchase agreements or purchase
time deposits maturing in more than seven days, if immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of the
Fund's net assets.
The Limited Maturity Government Fund, Fixed Income Fund, Balanced Fund, Value
Fund, Growth Fund and Aggressive Growth Fund will not purchase securities for
which there is no readily available market, or enter in to repurchase agreements
or purchase time deposits maturing in more than seven days, if immediately after
and as a result, the value of such securities would exceed, in the aggregate,
15% of the Funds' net assets. Investing in Securities of Other Investment
Companies

The Funds may invest their assets in securities of other investment companies.
Reverse Repurchase Agreements

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

In applying the Fund's concentration restriction: (a) utility companies will be
divided according to their services, for example, gas, gas transmission,
electric and telephone will each be considered a separate industry; (b)
financial service companies will be classified according to the end users of
their services, for example, automobile finance, bank finance and diversified
finance will each be considered a separate industry; and (c) asset-backed
securities will be classified according to the underlying assets securing such
securities.

Arbitrage Transactions
The Funds will not enter into transactions for the purpose of engaging in
arbitrage. Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in percentage
resulting from any change in value or net assets will not result in a violation
of such restriction. For purposes of their policies and limitations, the Funds
consider instruments (such as certificates of deposit and demand and time
deposits) issued by a U.S. branch of a domestic bank or savings and loan having
capital, surplus, and undivided profits in excess of $100,000,000 at the time of
investment to be cash items.

Regulatory Compliance. The Treasury Money Market Fund may follow non-fundamental
operational policies that are more restrictive than its fundamental investment
limitations, as set forth in the prospectus and this statement of additional
information, in order to comply with applicable laws and regulations. In
particular, the Treasury Money Market Fund will comply with the various
requirements of Rule 2a-7 under the Act, which regulates money market mutual
funds. For example, Rule 2a-7 generally prohibits the investment of more than 5%
of the Treasury Money Market Fund's total assets in the securities of any one
issuer, although the Treasury Money Market Fund's fundamental investment
limitation only requires such 5% diversification with respect to 75% of its
assets. The Treasury Money Market Fund will also determine the effective
maturity of its investments, as well as its ability to consider a security as
having received the requisite short-term ratings by NRSROs, according to Rule
2a-7. The Treasury Money Market Fund may change these operational policies to
reflect changes in the laws and regulations without shareholder approval.
Portfolio Turnover. For the fiscal years ended November 30, 1999 and 1998, the
portfolio turnover rates were 22% and 69%, respectively, for Limited Maturity
Government Fund; 18% and 64%, respectively, for the Fixed Income Fund; 20% and
41%, respectively, for the Growth Fund; 69% and 63%, respectively, for the Value
Fund; and 23% and 31%, respectively, for the Balanced Fund. For the period ended
November 30, 1999, the portfolio turnover rate was 64% for the Aggressive Growth
Fund. DETERMINING MARKET VALUE OF SECURITIES

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

The Trustees have decided that the best method for determining the value of
portfolio instruments for the Treasury Money Market Fund is amortized cost.
Under this method, portfolio instruments are valued at the acquisition cost as
adjusted for amortization of premium or accumulation of discount rather than at
current market value. The Treasury Money Market Fund's use of the amortized cost
method of valuing portfolio instruments depends on its compliance with the
provisions of Rule 2a-7 (the Rule) promulgated by the Securities and Exchange
Commission under the Act. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per share, as computed for
purposes of distribution and redemption, at $1.00 per share, taking into account
current market conditions and the Fund's investment objective. Under the Rule,
the Treasury Money Market Fund is permitted to purchase instruments which are
subject to demand features or standby commitments. As defined by the Rule, a
demand feature entitles the Fund to receive the principal amount of the
instrument from the issuer or a third party on (1) no more than 30 days' notice
or (2) at specified intervals not exceeding 397 days on no more than 30 days'
notice. A standby commitment entitles the Fund to achieve same-day settlement
and to receive an exercise price equal to the amortized cost of the underlying
instrument plus accrued interest at the time of exercise. The Treasury Money
Market Fund acquires instruments subject to demand features and standby
commitments to enhance the instrument's liquidity. The Fund treats demand
features and standby commitments as part of the underlying instruments, because
the Fund does not acquire them for speculative purposes and cannot transfer them
separately from the underlying instruments. Therefore, although the Fund defines
demand features and standby commitments as puts, the Fund does not consider them
to be corporate investments for purposes of its investment policies. Monitoring
Procedures. The Trustees' procedures include monitoring the relationship between
the amortized cost value per share and the net asset value per share based upon
available indications of market value. The Trustees will decide what, if any,
steps should be taken if there is a difference of more than 0.5 of 1% between
the two values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to minimize
any material dilution or other unfair results arising from differences between
the two methods of determining net asset value. Investment Restrictions. The
Rule requires that the Treasury Money Market Fund limit its investments to
instruments that, in the opinion of the Trustees, present minimal credit risks
and have received the requisite rating from one or more NRSROs. If the
instruments are not rated, the Trustees must determine that they are of
comparable quality. The Rule also requires the Fund to maintain a
dollar-weighted average portfolio maturity (not more than 90 days) appropriate
to the objective of maintaining a stable net asset value of $1.00 per share. In
addition, no instrument with a remaining maturity of more than 397 days can be
purchased by the Fund. Should the disposition of a portfolio security result in
a dollar-weighted average portfolio maturity of more than 90 days, the Treasury
Money Market Fund will invest its available cash to reduce the average maturity
to 90 days or less as soon as possible. Shares of investment companies purchased
by the Fund will meet these same criteria and will have investment policies
consistent with Rule 2a-7. Under the amortized cost method of valuation, neither
the amount of daily income nor the net asset value is affected by any unrealized
appreciation or depreciation of the portfolio. In periods of declining interest
rates, the indicated daily yield on shares of the Treasury Money Market Fund,
computed based upon amortized cost valuation, may tend to be higher than a
similar computation made by using a method of valuation based upon market prices
and estimates. In periods of rising interest rates, the indicated daily yield on
shares of the Fund computed the same way may tend to be lower than a similar
computation made by using a method of calculation based upon market prices and
estimates. MARKET VALUES (ALL OTHER FUNDS)

Market values of portfolio securities are determined as follows:

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

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

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

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

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

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

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

WHAT DO SHARES COST?

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

REDUCING OR ELIMINATING THE CONTINGENT DEFERRED SALES CHARGE
These reductions or eliminations are offered because: no sales commissions have
been advanced to the investment professional selling Share; the shareholder has
already paid a CDSC; or nominal sales efforts are associated with the original
purchase of Shares. Upon notification to the Distributor or the Funds' transfer
agent, no CDSC will be imposed on redemptions:

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

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

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

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

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

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

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

o on shares purchased prior to June 1, 1997; or
o when the Fund redeems your Shares and closes your account for failing to meet
the minimum balance requirement.

HOW IS THE FUND SOLD?

Under the Distributor's Contract with the Funds, the Distributor (Federated
Securities Corp.), located at Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, PA 15222-3779, offers Shares on a continuous, best-efforts basis.
RULE 12B-1 PLAN (AGGRESSIVE GROWTH FUND and INVESTMENT SHARES only)

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

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

The Funds (except the Aggressive Growth Fund and Treasury Money Market Fund) may
pay Federated Shareholder Services, a subsidiary of Federated Investors, Inc.,
for providing shareholder services and maintaining shareholder accounts.
Federated Shareholder Services may select others, including Regions Bank and
RICI, to perform these services for their customers and may pay them fees.

SUPPLEMENTAL PAYMENTS

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

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

HOW TO BUY SHARES

EXCHANGING SECURITIES FOR FUND SHARES
You may contact the Distributor to request a purchase of Shares in an exchange
for securities you own. The Fund reserves the right to determine whether to
accept your securities and the minimum market value to accept. The Fund will
value your securities in the same manner as it values its assets. This exchange
is treated as a sale of your securities for federal tax purposes.
EXCHANGE PRIVILEGE
Before the exchange, the shareholder must receive a copy of the Prospectus.
Please refer to the "How to Exchange Shares" section in the Prospectus.
REDEMPTION IN KIND

Although the Funds intend to pay share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities. Because the Trust has elected
to be governed by Rule 18f-1 under the Investment Company Act or 1940, the Funds
are obligated to pay share redemptions to any one shareholder in cash only up to
the lesser of $250,000 or 1% of a Fund's net assets represented by such share
class during any 90-day period. Any share redemption payment greater than this
amount will also be in cash unless the Funds' Trustees determine that payment
should be in kind. In such a case, a Fund will pay all or a portion of the
remainder of the redemption in portfolio securities, valued in the same way as
the Fund determines its net asset value. The portfolio securities will be
selected in a manner that the Funds' Trustees deems fair and equitable and, to
the extent available, such securities will be readily marketable. Redemption in
kind is not as liquid as a cash redemption. If redemption is made in kind,
shareholders receiving their portfolio securities and selling them before their
maturity could receive less than the redemption value of their securities and
could incur transaction costs. MASSACHUSETTS PARTNERSHIP LAW Under certain
circumstances, shareholders may be held personally liable under Massachusetts
law for acts or obligations of the Trust. To protect shareholders, the Trust has
filed legal documents with Massachusetts that expressly disclaim the liability
of shareholders for such acts or obligations of the Trust. These documents
require notice of this disclaimer to be given in each agreement, obligation, or
instrument the Trust or its Trustees enter into or sign. In the unlikely event a
shareholder is held personally liable for the Trust's obligations, the Trust is
required to use its property to protect or compensate the shareholder. On
request, the Trust will defend any claim made and pay any judgment against a
shareholder for any act or obligation of the Trust. Therefore, financial loss
resulting from liability as a shareholder will occur only if the Trust cannot
meet its obligations to indemnify shareholders and pay judgments against them.
ACCOUNT AND SHARE INFORMATION

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

As of January 4, 2000, the following list indicates the shareholders who owned
of record, beneficially or both 5% or more of the outstanding shares of the
following portfolios: HUBCO, c/o Regions Financial Corp., Birmingham, AL owned
approximately 7,426,191 Shares (91.91%) of the Aggressive Growth Fund;
approximately 509,704,470 Trust Shares (99.14%) and 30,594,551 Investment Shares
(26.62%) of the Treasury Money Market Fund; approximately 6,749,821 Trust Shares
(99.89%) and 4,054,692 Investment Shares (8.43%) of Limited Maturity Government
Fund; approximately 21,242,619 Trust Shares (100%) and 3,484,255 Investment
Shares (73.67%) of Fixed Income Fund; approximately 981,963 Trust Shares (100%)
and 6,542,231 Investment Shares (59.40%) of the Balanced Fund; approximately
13,031,5596 Trust Shares (100%) and 3,608,833 Investment Shares (72.03%) of
Value Fund; and approximately 16,066,715 Trust Shares (100%) and 7,834,832
Investment Shares (55.79%) of Growth Fund.

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

WHAT ARE THE TAX CONSEQUENCES?

FEDERAL INCOME TAX

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

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

OFFICERS AND TRUSTEES

The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birthdate, present position(s) held with the Trust,
principal occupations for the past five years, total compensation received as a
Trustee from the Trust for its most recent fiscal year. The Trust is comprised
of seven funds. As of January 4, 2000, the Funds' Board and Officers as a group
owned less than 1% of the Fund's outstanding Shares.

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

<PAGE>

Name Aggregate
Birthdate Compensation
Address Principal Occupations From
Position With Trust for Past 5 Years Trust
John F. Donahue*+# Chief Executive Officer and Director or Trustee of the $0
Birthdate: July 28, 1924 Federated Fund Complex; Chairman and Director,
Federated Investors Tower Federated Investors, Inc.; Chairman and Trustee,
1001 Liberty Avenue Federated Investment Management Company; Chairman and
Pittsburgh, PA Director, Federated Investment Counseling and
TRUSTEE AND CHAIRMAN Federated Global Investment Management Corp.;
Chairman, Passport Research, Ltd.
Thomas G. Bigley Director or Trustee of the Federated Fund Complex; $2082.52
Birthdate: February 3, 1934 Director, Member of Executive Committee, Children's
15 Old Timber Trail Hospital of Pittsburgh; Director, Robroy Industries,
Pittsburgh, PA Inc. (coated steel conduits/computer storage
TRUSTEE equipment); formerly: Senior Partner, Ernst & Young
LLP; Director, MED 3000 Group, Inc. (physician
practice management); Director, Member of Executive
Committee, University of Pittsburgh.

John T. Conroy, Jr. Director or Trustee of the Federated Fund Complex; $2291.08
Birthdate: June 23, 1937 President, Investment Properties Corporation; Senior
Wood/IPC Commercial Dept. Vice President, John R. Wood and Associates, Inc.,
John R. Wood Associates, Realtors; Partner or Trustee in private real estate
Inc. Realtors ventures in Southwest Florida; formerly: President,
3255 Tamiami Trial North Naples Property Management, Inc. and Northgate Village
Naples, FL Development Corporation.
TRUSTEE

Nicholas Constantakis Director or Trustee of the Federated Fund Complex; $2082.52
Birthdate: September 3, 1939 Director, Michael Baker Corporation (engineering,
175 Woodshire Drive construction, operations and technical services);
Pittsburgh, PA formerly: Partner, Andersen Worldwide SC.
TRUSTEE

Director or Trustee of some of the Federated Fund $1135.94
John F. Cunningham Complex; Chairman, President and Chief Executive
Birth Date: March 5, 1943 Officer, Cunningham & Co., Inc. (strategic business
353 El Brillo Way consulting); Trustee Associate, Boston College;
Palm Beach, FL Director, Iperia Corp. (communications/software);
TRUSTEE formerly: Director, Redgate Communications and EMC
Corporation (computer storage systems).

Previous Positions: Chairman of the Board and Chief
Executive Officer, Computer Consoles, Inc.; President
and Chief Operating Officer, Wang Laboratories;
Director, First National Bank of Boston; Director,
Apollo Computer, Inc.

Lawrence D. Ellis, M.D.* Director or Trustee of the Federated Fund Complex; $2082.52
Birthdate: October 11, 1932 Professor of Medicine, University of Pittsburgh;
3471 Fifth Avenue Medical Director, University of Pittsburgh Medical
Suite 1111 Center - Downtown; Hematologist, Oncologist, and
Pittsburgh, PA Internist, University of Pittsburgh Medical Center;
TRUSTEE Member, National Board of Trustees, Leukemia Society
of America.
Peter E. Madden Director or Trustee of the Federated Fund Complex; $1966.08
Birthdate: March 16, 1942 formerly: Representative, Commonwealth of
One Royal Palm Way Massachusetts General Court; President, State Street
100 Royal Palm Way Bank and Trust Company and State Street Corporation.
Palm Beach, FL
TRUSTEE Previous Positions: Director, VISA USA and VISA
International; Chairman and Director, Massachusetts
Bankers Association; Director, Depository Trust
Corporation; Director, The Boston Stock Exchange.

Charles F. Mansfield, Jr. Director or Trustee of some of the Federated Fund $1249.69
Birth Date: April 10, 1945 Complex; Executive Vice President, Legal and External
80 South Road Affairs, Dugan Valva Contess, Inc. (marketing,
Westhampton Beach, NY TRUSTEE communications, technology and consulting).; formerly
Management Consultant.

Previous Positions: Chief Executive Officer,
PBTC International Bank; Partner, Arthur Young
& Company (now Ernst & Young LLP); Chief
Financial Officer of Retail Banking Sector,
Chase Manhattan Bank; Senior Vice President,
Marine Midland Bank; Vice President, Citibank;
Assistant Professor of Banking and Finance,
Frank G. Zarb School of Business, Hofstra
University.

John E. Murray, Jr., J.D., Director or Trustee of the Federated Fund Complex; $2291.08
S.J.D.# President, Law Professor, Duquesne University;
Birthdate: December 20, 1932 Consulting Partner, Mollica & Murray; Director,
President, Duquesne Michael Baker Corp. (engineering, construction,
University operations and technical services).
Pittsburgh, PA
TRUSTEE Previous Positions: Dean and Professor of Law,
University of Pittsburgh School of Law; Dean
and Professor of Law, Villanova University
School of Law.

Marjorie P. Smuts Director or Trustee of the Federated Fund Complex; $2082.52
Birthdate: June 21, 1935 Public Relations/Marketing/Conference Planning.
4905 Bayard Street
Pittsburgh, PA Previous Positions: National Spokesperson, Aluminum
TRUSTEE Company of America; television producer; business
owner.
John S. Walsh Director or Trustee of some of the Federated Fund $2082.52
Birthdate: November 28, 1957 Complex; President and Director, Heat Wagon, Inc.
2007 Sherwood Drive (manufacturer of construction temporary heaters);
Valparaiso, IN President and Director, Manufacturers Products, Inc.
TRUSTEE (distributor of portable construction heaters);
President, Portable Heater Parts, a division of
Manufacturers Products, Inc.; Director, Walsh & Kelly,
Inc. (heavy highway contractor); formerly: Vice
President, Walsh & Kelly, Inc.

J. Christopher Donahue*+ President or Executive Vice President of the Federated $0
Birthdate: April 11, 1949 Fund Complex; Director or Trustee of some of the Funds
Federated Investors Tower in the Federated Fund Complex; President, Chief
1001 Liberty Avenue Executive Officer and Director, Federated Investors,
Pittsburgh, PA Inc.; President and Trustee, Federated Investment
EXECUTIVE VICE PRESIDENT and Management Company; President and Trustee, Federated
TRUSTEE Investment Counseling; President and Director,
Federated Global Investment Management Corp.;
President, Passport Research, Ltd.; Trustee, Federated
Shareholder Services Company; Director, Federated
Services Company.

John W. McGonigle Executive Vice President and Secretary of the $0
Birthdate: October 26, 1938 Federated Fund Complex; Executive Vice President,
Federated Investors Tower Secretary and Director, Federated Investors, Inc.;
1001 Liberty Avenue Trustee, Federated Investment Management Company and
Pittsburgh, PA Federated Investment Counseling; Director, Federated
EXECUTIVE VICE PRESIDENT Global Investment Management Corp., Federated Services
AND SECRETARY Company and Federated Securities Corp.

<PAGE>

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

Richard B. Fisher President or Vice President of some of the Funds in $0
Birthdate: May 17, 1923 the Federated Fund Complex; Director or Trustee of
Federated Investors Tower some of the Funds in the Federated Fund Complex;
1001 Liberty Avenue Executive Vice President, Federated Investors, Inc.;
Pittsburgh, PA Chairman and Director, Federated Securities Corp.
VICE PRESIDENT

Charles L. Davis, Jr. Vice President and Assistant Treasurer of some of the $0
Birthdate: March 23, 1960 Funds.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
VICE PRESIDENT AND ASSISTANT
TREASURER
</TABLE>

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

ADVISER TO THE FUNDS

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

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

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

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

For the fiscal year ended November 30, 1999, the Funds' Adviser directed
brokerage transactions to certain brokers due to research services they
provided. The total amount of these transactions was $934,811,377 for which the
Funds paid $1,412,522 in brokerage commissions.

ADMINISTRATOR

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

Maximum Average Aggregate Daily Net
Administrative Fee Assets of the Trust
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million

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

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

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

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

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

o supervision of the preparation of financial reports;

o preparation and filing of federal and state tax returns;

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

o providing advice to the Funds and Trustees.

TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND PORTFOLIO ACCOUNTING SERVICES

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

CUSTODIAN

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

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

<PAGE>

FEES PAID BY THE FUNDS FOR SERVICES

- ------------------------- -------------------------------------- --------------------------------- ---------------------------------
Fund Advisory Fee Paid/ Brokerage Commissions Paid Administrative Fee Paid
Advisory Fee Waived
--------------------------------- ---------------------------------
-------------------------------------- --------------------------------- ---------------------------------
For the fiscal year ended November For the fiscal year ended For the fiscal year ended
30, 1999 November 30, 1999 November 30, 1999
-------------------------------------- --------------------------------- ---------------------------------
----------------------------------------------------------------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- ------------------------- -----------
--------------------------------------- ---------------------------------------------------------
Treasury Money Market $3,017,941 $1,530,439 $923,323 N/A N/A N/A $568,721 $322,494 $218,861
Fund $1,508,970 $765,219 $461,662

- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Limited Maturity $729,204 $613,188 $554,567 N/A N/A N/A $97,987 $93,041 $94,304
Government Fund $193,164 $0 $0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Fixed Income Fund $1,911,791 $1,631,732 $1,272,862 N/A N/A N/A $239,796 $230,969 $201,589
$590,903 $0 $0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Balanced Fund $1,248,069 $813,891 $576,963 $53,790 $30,423 $45,727 $146,623 $107,768 $85,552
$72,753 $0 $0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Value Fund $2,028,188 $1,464,460 $875,092 $639,095 $394,549 $178,390 $238,281 $194,105 $129,340
$118,069 $0 $0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Fund $4,391,129 $2,552,575 $1,925,571 $425,140 $337,246 $382,723 $515,444 $338,064 $285,419
$257,614 $0 $0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Aggressive Growth Fund* $357,738 N/A N/A $109,228 N/A N/A $44,514 N/A N/A
$0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

*Reflects operations for the period from March 15, 1999 (date of the initial
public investment) to November 30, 1999.
N/A - Not Applicable.

----------------------------------------------------
For the fiscal year ended November 30, 1999
- ---------------------------------------- ----------------------------------------------------
- ---------------------------------------- ---------------- -----------------------------------
Fund 12b-1 Fee Shareholder Services Fee
- ---------------------------------------- ---------------- -----------------------------------
- ---------------------------------------- ---------------- ----------------- -----------------
Investment Trust Shares Investment
Shares Shares
- ---------------------------------------- ---------------- ----------------- -----------------
- ---------------------------------------- ---------------- ----------------- -----------------
Treasury Money Market Fund $289,359 N/A N/A
- ---------------------------------------- ---------------- ----------------- -----------------
- ---------------------------------------- ---------------- ----------------- -----------------
Limited Maturity Government Fund N/A N/A $102,346
- ---------------------------------------- ---------------- ----------------- -----------------
- ---------------------------------------- ---------------- ----------------- -----------------
Fixed Income Fund N/A N/A $104,903
- ---------------------------------------- ---------------- ----------------- -----------------
- ---------------------------------------- ---------------- ----------------- -----------------
Balanced Fund N/A N/A $358,276
- ---------------------------------------- ---------------- ----------------- -----------------
- ---------------------------------------- ---------------- ----------------- -----------------
Value Fund N/A N/A $163,865
- ---------------------------------------- ---------------- ----------------- -----------------
- ---------------------------------------- ---------------- ----------------- -----------------
Growth Fund N/A N/A $598,370
- ---------------------------------------- ---------------- ----------------- -----------------
- ---------------------------------------- ---------------- ----------------- -----------------
Aggressive Growth Fund* N/A N/A N/A
- ---------------------------------------- ---------------- ----------------- -----------------
</TABLE>

*Reflects operations for the period from March 15, 1999 (date of the initial
public investment) to November 30, 1999.
N/A - Not Applicable.

HOW DO THE FUNDS MEASURE PERFORMANCE?

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

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

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

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value of
shares over a specific period of time, and includes the investment of income and
capital gains distributions. The average annual total return for a Fund shares
is the average compounded rate of return for a given period that would equate a
$1,000 initial investment to the ending redeemable value of that investment. The
ending redeemable value is computed by multiplying the number of shares owned at
the end of the period by the net asset value per share at the end of the period.
The number of shares owned at the end of the period is based on the number of
shares purchased at the beginning of the period with $1,000, less any contingent
deferred sales charge, adjusted over the period by any additional shares,
assuming the quarterly reinvestment of any dividends and distributions. YIELD

The Treasury Money Market Fund calculates the yield for both classes of shares
daily, based upon the seven days ending on the day of the calculation, called
the base period. This yield is computed by:
o determining the net change in the value of a hypothetical account with
a balance of one Share at the beginning of the base period, with the
net change excluding capital changes but including the value of any
additional Shares purchased with dividends earned from the original one
Share and all dividends declared on the original and any purchased
shares;

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

o multiplying the base period return by 365/7.

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

The Treasury Money Market Fund's effective yield for both classes of shares is
computed by compounding the unannualized base period return by: adding 1 to the
base period return; raising the sum to the 365/7th power; and subtracting 1 from
the result. The Treasury Money Market Fund's effective yield for Trust Shares
for the seven-day period ended November 30, 1999, was 4.65%. The Treasury Money
Market Fund's effective yield for Investment Shares was 4.39% for the same
period.

<PAGE>

- --------------------------- --------------------------------------------- -------------------------------------------
Fund Average Annual Total Return Yield
for the following periods ended November for the 30-day period ended
30, 1999 November 30, 1999
--------------------------------------------- -------------------------------------------
---------------------- ---------------------- -------------------- ----------------------
Trust Shares Investment Shares Trust Shares Investment Shares
One Year One Year
Five Year Five Year
Start of Performance Start of Performance
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
Treasury Money Market Fund 4.21% 3.94% 4.50% 4.25%
4.81% 4.42%
4.25%(a) 3.85%(a)
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
Limited Maturity 2.64% (0.55%) 5.40% 4.57%
Government Fund N/A 5.52%
4.08%(b) 4.64%(c)
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
Fixed Income Fund 0.24% (2.87%) 6.09% 5.83%
N/A 6.81%
3.31%(b) 6.02%(d)
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
Balanced Fund 10.14% 6.82% 2.84% 2.59%
N/A NA
11.22%(b) 15.62%(e)
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
Value Fund 5.76% 2.74% 0.92% 0.67%
N/A NA
4.06%(b) 17.22%(e)
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
Growth Fund 27.42% 24.07% 0.00% 0.00%
N/A 26.83%
26.71%(b) 18.58%(d)
- --------------------------- ---------------------- ---------------------- -------------------- ----------------------
(a) April 14, 1992
(b) May 20, 1998
(c) December 12, 1993
(d) April 20, 1992
(e) December 19, 1994

<PAGE>

(f) The start of performance date for the Predecessor Collective Trust Fund was
June 30, 1993.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or
performance comparisons of the Funds' shares to certain indices;
o charts, graphs and illustrations using the Funds' returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;
o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Funds; and
o information about the mutual fund industry from sources such as the Investment
Company Institute.

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

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

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

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

Treasury Money Market Fund:

o Salomon 30-Day Treasury Bill Index is a weekly quote of the most
representative yields for selected securities, issued by the U.S.
Treasury, maturing in 30 days.

o Lehman Brothers Treasury Bond Index comprised entirely of U.S.
Treasury obligations. Flower bonds and foreign issues are
excluded.

o IBC/Donohue's Money Fund Report publishes annualized yields of
hundreds of money market funds on a weekly basis and through its
Money Market Insight publication reports monthly reinvestment of
dividends over a specified period of time.

Limited Maturity Government Fund:

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

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

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

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

o Merrill Lynch 2-Year Treasury Curve Index is comprised of the most
recently issued 2-year U.S. Treasury notes. Index returns are
calculated as total returns for periods of one, three, six, and
twelve months as well as year-to-date.

i 2-Year Treasury Note-Source: Wall Street Journal, Bloomberg Financial
Markets, and Telerate.

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

Fixed Income Fund:

o Lehman Brothers Government/Corporate Total Index is comprised of
approximately 5,000 issues which include non-convertible bonds
publicly issued by the U.S. government or its agencies; corporate
bonds guaranteed by the U.S. government and quasi-federal
corporations; and publicly issued, fixed-rate, non-convertible
domestic bonds of maturity of nine years. It calculates total return
for one month, three month, twelve month, and ten year periods, and
year-to-date.

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

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

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

Balanced Fund:

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

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

o S&P 500/Lehman Brothers Government/Corporate (Weighted Index) and
the S&P 500/Lehman Government (Weighted Index) combine the
components of a stock-oriented index and a bond-oriented index to
obtain results which can be compared to the performance of a managed
fund. The indices' total returns will be assigned various weights
depending upon the Fund's current asset allocation.

Value Fund:

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

Growth Fund:

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

o Standard & Poor's Daily Stock Price Index of 500 Common Stocks, a
composite index of common stocks in industry, transportation, and
financial and public utility companies, compares total returns of
funds whose portfolios are invested primarily in common stocks. In
addition, the Standard & Poor's index assumes reinvestment of all
dividends paid by stocks listed on the index. Taxes due on any of
these distributions are not included, nor are brokerage or other
fees calculated in the Standard & Poor's figures.

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

<PAGE>

Aggressive Growth Fund:

o Standard & Poor's 500 Index is a capitalization-weighted index of
500 stocks designed to measure the performance of the broad domestic
economy through changes in the aggregate market value of 500 stocks
representing all major industries.

o Standard & Poor's Midcap 400/Barra Growth Index is a
capitalization-weighted index of common stocks representing all
major industries in the mid-range of the U.S. stock market having
the highest price-to-book ratios.

o Lipper Midcap Growth Funds Index Lipper indexes measure the
performance of the 30 largest mutual funds in each prospective fund
category.

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

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

The financial statements for the fiscal year ended November 30, 1999, are
incorporated herein by reference from the Funds' Annual Report dated November
30, 1999 (File Nos. 33-44737 and 811-6511). A copy of the Annual Report for a
Fund may be obtained without charge by contacting Regions Funds at the address
located on the back cover of the SAI or by calling the Regions Funds at
1-800-433-2829.

<PAGE>

APPENDIX

STANDARD AND POOR'S BOND RATINGS
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong. AA--Debt rated
AA has a very strong capacity to pay interest and repay principal and differs
from the higher rated issues only in small degree. A--Debt rated A has a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories. NR--Indicates that no public
rating has been requested, that there is insufficient information on which to
base a rating, or that Standard & Poor's does not rate a particular type of
obligation as a matter of policy. PLUS (+) OR MINUS (-):--The ratings from AA to
BBB may be modified by the addition of a plus or minus sign to show relative
standing within the major rating categories. MOODY'S INVESTORS SERVICE, INC.
CORPORATE BOND RATINGS AAA--Bonds which are rated Aaa are judged to be of the
best quality. They carry the smallest degree of investment risk and are
generally referred to as gilt edge. Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future. NR--Not rated by
Moody's. FITCH IBCA, INC. LONG-TERM DEBT RATINGS AAA--Bonds considered to be
investment grade and of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events. AA--Bonds considered
to be investment grade and of very high credit quality. The obligor's ability to
pay interest and repay principal is very strong, although not quite as strong as
bonds rated AAA. Because bonds rated in the AAA and AA categories are not
significantly vulnerable to foreseeable future developments, short-term debt of
these issuers is generally rated F-1+. A--Bonds considered to be investment
grade and of high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more vulnerable to
adverse changes in economic conditions and circumstances than bonds with higher
ratings. NR--NR indicates that Fitch does not rate the specific issue. STANDARD
AND POOR'S COMMERCIAL PAPER RATINGS A-1--This designation indicates that the
degree of safety regarding timely payment is either overwhelming or very strong.
The issues determined to possess overwhelming safety characteristics are denoted
with a plus (+) sign designation. A-2--Capacity for timely payment on issues
with this designation is strong. However, the relative degree of safety is not
as high as for issues designated A-1.

<PAGE>

MOODY'S INVESTORS SERVICES, INC. COMMERCIAL PAPER RATINGS
P-1--Issuers rated PRIME-1 (for related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. PRIME-1 repayment
capacity will normally be evidenced by the following characteristics:
conservative capitalization structures with moderate reliance on debt and ample
asset protection; broad margins in earning coverage of fixed financial charges
and high internal cash generation; and well-established access to a range of
financial markets and assured sources of alternate liquidity. P-2--Issuers rated
PRIME-2 (for related supporting institutions) have a strong capacity for
repayment of short-term promissory obligations. This will normally be evidenced
by many of the characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound, will be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained. FITCH IBCA, INC.
SHORT-TERM RATINGS F-1+--(Exceptionally Strong Credit Quality). Issues assigned
this rating are regarded as having the strongest degree of assurance for timely
payment. F-1--(Very Strong Credit Quality). Issues assigned to this rating
reflect an assurance of timely payment only slightly less in degree than issues
rated F-1+. F-2--(Good Credit Quality). Issues carrying this rating have a
satisfactory degree of assurance for timely payment but the margin of safety is
not as great as the F-1+ and F-1 categories.

ADDRESSES
Regions Treasury Money Market Fund
Regions Limited Maturity Government Fund
Regions Fixed Income Fund
Regions Balanced Fund
Regions Value Fund
Regions Growth Fund
Regions Aggressive Growth Fund 5800 Corporate Drive
Pittsburgh, PA 15237-7010

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

Adviser to all Funds
Regions Bank P.O. Box 10247
Capital Management Group Birmingham, AL 35202

Custodian
Regions Bank 417 North 20th Street
Birmingham, AL 35203

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

Federated Investors Tower
Pittsburgh, PA 15222-3779

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

APPENDIX

1. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of Regions Treasury Money Market Fund (Fund) as of the
calendar year-end for each of seven years. The `y' axis reflects the "% Total
Return" beginning with "0.00%" and increasing in increments of 1.00% up to
6.00%. The `x' axis represents calculation periods from the earliest calendar
yearend of the Fund's start of business through the calendar year ended December
31,1999. The light gray shaded chart features seven distinct vertical bars, each
shaded in charcoal, and each visually representing by height the total return
percentages for the calendar year stated directly at its base. The calculated
total return percentage for the Fund which appear directly above each respective
bar, for the calendar years 1993 through 1999, are 2.76%, 3.77%, 5.51%,
4.78%,4.81%, 4.64%, and 4.28%.

2. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of Regions Limited Maturity Government Fund (Fund) as
of the calendar year-end for each of six years. The `y' axis reflects the "%
Total Return" beginning with "0.00%" and increasing in increments of 2.00% up to
12.00%. The `x' axis represents calculation periods from the earliest calendar
year end of the Fund's start of business through the calendar year ended
December 31, 1999. The light gray shaded chart features six distinct vertical
bars, each shaded in charcoal, and each visually representing by height the
total return percentages for the calendar year stated directly at its base. The
calculated total return percentage for the Fund which appear directly above each
respective bar, for the calendar years 1994 through 1999, are 0.30%, 10.83%,
3.29%, 5.55%, 5.86%, and 2.28%.

3. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of Regions Fixed Income Fund (Fund) as of the calendar
year-end for each of seven years. The `y' axis reflects the "% Total Return"
beginning with "-5.00%" and increasing in increments of 5.00% up to 20.00%. The
`x' axis represents calculation periods from the earliest calendar yearend of
the Fund's start of business through the calendar year ended December 31, 1999.
The light gray shaded chart features seven distinct vertical bars, each shaded
in charcoal, and each visually representing by height the total return
percentages for the calendar year stated directly at its base. The calculated
total return percentage for the Fund which appear directly above each respective
bar, for the calendar years 1993 through 1999, are 8.40%, -4.74%, 15.99%, 3.58%,
7.96%, 6.79%, and -0.55%.

4. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of Regions Balanced Fund (Fund) as of the calendar
year-end for each of five years. The `y' axis reflects the "% Total Return"
beginning with "0.00%" and increasing in increments of 5.00% up to 20.00%. The
`x' axis represents calculation periods from the earliest calendar yearend of
the Fund's start of business through the calendar year ended December 31, 1999.
The light gray shaded chart features five distinct vertical bars, each shaded in
charcoal, and each visually representing by height the total return percentages
for the calendar year stated directly at its base. The calculated total return
percentage for the Fund which appear directly above each respective bar, for the
calendar years 1995 through 1999, are 19.64%, 11.93%, 19.69%, 19.75%, and 8.56%.

5. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of Regions Value Fund (Fund) as of the calendar
year-end for each of five years. The `y' axis reflects the "% Total Return"
beginning with "0.00%" and increasing in increments of 5.00% up to 30.00%. The
`x' axis represents calculation periods from the earliest calendar yearend of
the Fund's start of business through the calendar year ended December 31,1999.
The light gray shaded chart features five distinct vertical bars, each shaded in
charcoal, and each visually representing by height the total return percentages
for the calendar year stated directly at its base. The calculated total return
percentage for the Fund which appear directly above each respective bar, for the
calendar years 1995 through 1999, are 25.04%, 18.69%, 27.24%, 12.79%, and 4.57%.

6. The graphic presentation displayed here consists of a bar char representing
the annual total returns of Regions Growth Fund (Fund) as of the calendar
year-end for each of seven years. The `y' axis reflects the "% Total Return"
beginning with "0.00%" and increasing in increments of 10.00% up to 50.00%. The
`x' axis represents calculation periods from the earliest calendar yearend of
the Fund's start of business through the calendar year ended December 31,1999.
The light gray shaded chart features seven distinct vertical bars, each shaded
in charcoal, and each visually representing by height the total return
percentages for the calendar year stated directly at its base. The calculated
total return percentage for the Fund which appear directly above each respective
bar, for the calendar years 1993 through 1999, are 2.14%, 0.50%, 23.65%,
23.03%,27.22%, 41.50%, and 28.33%.

7. The graphic presentation displayed here consists of a bar chart representing
the annual total returns of Regions Aggressive Growth Fund (Fund) as of the
calendar year-end for each of six years. The `y' axis reflects the "% Total
Return" beginning with "-10.00%" and increasing in increments of 10.00% up to
50.00%. The `x' axis represents calculation periods from the earliest calendar
year end of the Fund's start of business through the calendar year ended
December 31, 1999. The light gray shaded chart features six distinct vertical
bars, each shaded in charcoal, and each visually representing by height the
total return percentages for the calendar year stated directly at its base. The
calculated total return percentage for the Fund which appear directly above each
respective bar, for the calendar years 1994 through 1999, are -7.38%, 19.75%,
21.92%, 34.87%, 20.71%, and 41.59%.

PART C. OTHER INFORMATION.
Item 23. Exhibits
(a) (i) Conformed copy of Declaration of Trust of the Registrant,
including conformed copy of Amendment No. 1;(7)
(ii) Conformed copy of Amendment No. 2 to Declaration of Trust
(4);
(iii) Conformed Copy of Amendment No. 3 through 5 to the
Declaration of Trust; (12)
(iv) Form of Amendment No. 6 to the Declaration of Trust; (12)
(b) Copy of By-Laws of the Registrant (1);
(i) Copy of Amendment Nos. 1 through 4 to the By-Laws of the
Registrant; (13)
(c) Copy of Specimen Certificate for Shares of Beneficial Interest of the
Registrant (4);
(d) (i) Conformed copy of Investment
Advisory Contract of the
Registrant, through and including
conformed copies of Exhibits A, B,
C, and D;(7)
(ii) Conformed Copy of Exhibits E and F
to the Investment Advisory Contract
of the Registrant to add First
Priority Equity Income Fund and
First Priority Balanced Fund,
respectively, to the Investment
Advisory Contract; (11)
(e) (i) Conformed copy of Distributor's Contract of the Registrant,
including conformed copies of Exhibits A, B, and C;(7)
(ii) Conformed Copy of Exhibit D to the Distributor's Contract to
add First Priority Equity Income Fund and First Priority
Balanced Fund, respectively, to the Distributor's Contract;
(11)
(iii) Conformed copy of Exhibits E and F to the Distributor's Contract; (13)
(iv) Conformed copy of Exhibits G to the Distributor's Contract; (15)

+ All exhibits have been filed electronically. (1) Response is incorporated
by reference to Registrant's Initial Registration Statement on Form N-1A
filed December 23, 1991 (File Nos. 33-44737 and 811-6511). (4) Response is
incorporated by reference to Post-Effective Amendment No. 5 on Form N-1A
filed January 24, 1994 (File Nos. 33-44737 and 811-6511).

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

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

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

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

(15) Response is incorporated by reference to Post-Effective Amendment No. 16 on
Form N-1A filed January 29, 1999 (File Nos. 33-44737 and 811-6511).

(f)

<PAGE>

Not applicable;
(g) Conformed copy of Custodian Contract of the Registrant between First
Priority Funds and Regions Bank; (4)
(h) (i) Conformed copy of Fund Accounting and Shareholder
Recordkeeping Agreement (5);
(ii) Form of Shareholder Services Plan of the Registrant; (7)
(iii) Conformed copy of Shareholder Services Agreement with
conformed copy of Exhibit A attached thereto; (13)
(iv) Conformed copy of Administrative Services Agreement;(10)
(a) Amendment No. 1 to Administrative Services Agreement;
(13)
(i) Conformed copy of Opinion and Consent of Counsel as to legality of
shares being registered; (11)
(j) Conformed Copy of Independent Auditors Consent;(+)
(k) Not applicable;
(l) Conformed Copy of Initial Capital Understanding; (5)
(m) (i) Conformed copy of Distribution Plan of the Registrant,
through and including conformed copies of Exhibits A and
B;(7)
(ii) Conformed Copy of Exhibit C to the Distribution Plan of the
Registrant; (11)
(iii) Copy of Rule 12b-1 Agreement
through and including Exhibit A
(1);
(iv) Copy of Amendment No. 1 to Exhibit A of the Rule 12b-1 Agreement; (12)
(v) Copy of Amendment No. 1 to Exhibit A of the Rule 12b-1 Agreement; (15)

+ All exhibits have been filed electronically.

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

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

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

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

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

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

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

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

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

(15) Response is incorporated by reference to Post-Effective Amendment No. 16 on
Form N-1A filed January 29, 1999 (File Nos. 33-44737 and 811-6511).

(iv) Conformed copy of Exhibit D to the Distribution Plan of the
Registrant; (15)
(n) (i) Conformed Copy of Multiple Class Plan; (9)
(ii) Conformed copy of Exhibits A & B to
Multiple Class Plan; (13)
(o) Copies of Financial Data Schedules; (not
included per footnote 60 of Release No. 33-7684)
(p) (i) Conformed copy of Power of Attorney;
(+) (ii) Conformed copies of Powers of
Attorney for:
(a) John S. Walsh (+)
(b) John F. Cunningham (+)
(c) Charles F. Mansfield, Jr. (+)
(d) Nicholas P. Constantakis (+)
Item 24. Persons Controlled by or Under Common Control with Registrant:
None

Item 25. Indemnification: (1)

Item 26. Business and Other Connections of Investment Adviser:

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

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

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

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

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

(15) Response is incorporated by reference to Post-Effective Amendment No. 16 on
Form N-1A filed January 29, 1999 (File Nos. 33-44737 and 811-6511).

<PAGE>

Other Substantial
Position with Business, Profession,
Name the Adviser Vocation or Employment

J. Stanley Mackin Chairman of the Board

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

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

Sam P. Faucett President/Region Southwest

Joe M. Hinds President/Regions North

Wilbur B. Hufham President/Regions South

William E. Jordan President/Regions Central

Carl E. Jones, Jr. Chief Executive Officer

Peter D. Miller President/Regions Northeast

William E. Askew Executive Vice President/
Retail Banking

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

Robert P. Houston Executive Vice President
and Comptroller

E.C. Stone Executive Vice President/
Corporate Banking

Richard E. Wambsganss Executive Vice President/
Trust Group

Sheila S. Blair Director Civic Leader

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

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

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

Barnett Grace Director President/Regions West

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

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

<PAGE>

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

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

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

Michael W. Murphy Director President/ Marmik Oil Company

Henry E. Simpson Director Attorney
Lange, Simpson, Robinson &
Somerville

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

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

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

Item 27. Principal Underwriters:

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

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

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

(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Richard B. Fisher Chairman, Chief Executive Vice President
Federated Investors Tower Officer, Chief Operating
1001 Liberty Avenue Officer,
Pittsburgh, PA 15222-3779 Federated Securities Corp.

Arthur L. Cherry Director, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

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

Thomas R. Donahue Director, Assistant Secretary --
Federated Investors Tower and Treasurer,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

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

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

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

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

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

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

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

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

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

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

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

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

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

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

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

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

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

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

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

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

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

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

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

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

Kirk A. Montgomery Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy S. Johnson Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Victor R. Siclari Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Denis McAuley III Assistant Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
</TABLE>

Item 28. Location of Accounts and Records:

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

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

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

Federated Administrative Services Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779

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

Item 29. Management Services: Not applicable.

Item 30. Undertakings:

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

<PAGE>

SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, REGIONS FUNDS, certifies that it
meets all of the requirements for effectiveness of this Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Amendment to its Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized, all in the City of
Pittsburgh and Commonwealth of Pennsylvania, on the 26th day of January, 2000.

REGIONS FUNDS
(formerly, First Priority Funds)

BY: /s/ Gail Cagney
Gail Cagney, Assistant Secretary
Attorney in Fact for John F. Donahue
January 26, 2000

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

NAME TITLE DATE

By: /s/Gail Cagney
Gail Cagney____ Attorney In Fact January 26, 2000
---------------
ASSISTANT SECRETARY For the Persons
Listed Below

NAME TITLE

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

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

Thomas G. Bigley* Trustee

John T. Conroy, Jr.* Trustee

Nicholas P. Constantakis* Trustee

John F. Cunningham* Trustee

J. Christopher Donahue* Trustee

Lawrence D. Ellis, M.D.* Trustee

Peter E. Madden* Trustee

Charles F. Mansfield, Jr.* Trustee

John E. Murray, Jr.* Trustee

Marjorie P. Smuts* Trustee

John S. Walsh* Trustee

* By Power of Attorney
</TABLE>

Exhibit j under Form N-1A
Exhibit 23 under 601/Reg SK

DELOITTE & TOUCHE

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in post-Effective Amendment
No. 18 to Registration Statement (no. 33-44737) of Regions Funds (comprised of
the following portfolios: Regions Treasury Money Market Fund, Regions Limited
Maturity Government Fund, Regions Fixed Income Fund, Regions Balanced Fund,
Regions Value Fund, Regions Growth Fund, and Regions Aggressive Growth Fund) of
our report dated January 18, 2000 appearing in the combined Prospectus, which is
part of such Registration Statement, and to the reference to us under the
heading "Financial Highlights" in such Prospectus.

/s/ Deloitte & Touch LLP
Deloitte & Touch LLP

Pittsburgh, Pennsylvania
January 25, 2000

Exhibit p(ii)(d) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretaries of Regions Funds and each of them, their
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution for them and in their names, place and stead, in any and all
capacities, to sign any and all documents to be filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, by means of the
Securities and Exchange Commission's electronic disclosure system known as
EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.

SIGNATURES TITLE DATE

/s/Nicholas P. Constantakis Trustee January 3, 2000
Nicholas P. Constantakis

Sworn to and subscribed before me this 3rd day of January, 2000

/s/Madeline P. Kelly
Madeline P. Kelly
Notarial Seal
Madeline P. Kelly, Notary Public
Baldwin Boro, Allegheny County
My Commission Expires Feb. 22, 2000
Member, Pennsylvania Association of Notaries

Exhibit p(ii)(b) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE

/s/John F. Cunningham Trustee January 3, 2000
John F. Cunningham

Sworn to and subscribed before me this 3rd day of January, 2000

/s/Madeline P. Kelly
Madeline P. Kelly
Notarial Seal
Madeline P. Kelly, Notary Public
Baldwin Boro, Allegheny County
My Commission Expires Feb. 22, 2000
Member, Pennsylvania Association of Notaries

Exhibit p(ii)(c) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE

/s/Charles F. Mansfield, Jr. Trustee. January 3, 2000
Charles F. Mansfield, Jr.

Sworn to and subscribed before me this 3rd day of January, 2000

/s/Madeline P. Kelly
Madeline P. Kelly
Notarial Seal
Madeline P. Kelly, Notary Public
Baldwin Boro, Allegheny County
My Commission Expires Feb. 22, 2000
Member, Pennsylvania Association of Notaries

Exhibit p(ii)(a) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE

/s/John S. Walsh Trustee. January 3, 2000
John S. Walsh

Sworn to and subscribed before me this 3rd day of January, 2000

/s/Madeline P. Kelly
Madeline P. Kelly
Notarial Seal
Madeline P. Kelly, Notary Public
Baldwin Boro, Allegheny County
My Commission Expires Feb. 22, 2000
Member, Pennsylvania Association of Notaries

Exhibit p(i) under Form N-1A
Exhibit 24 under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE

/s/John F. Donahue Chairman and Trustee January 3, 2000
John F. Donahue (Chief Executive Officer)

/s/Edward C. Gonzales President and Treasurer January 3, 2000
Edward C. Gonzales (Principal Financial and
Accounting Officer)

/s/J. Christopher Donahue Executive Vice President January 3, 2000
J. Christopher Donahue and Trustee

/s/Thomas G. Bigley Trustee January 3, 2000
Thomas G. Bigley

/s/John T. Conroy, Jr. Trustee January 3, 2000
John T. Conroy, Jr.

/s/William J. Copeland Trustee* January 3, 2000
William J. Copeland

/s/James E. Dowd Trustee* January 3, 2000
James E. Dowd

/s/Lawrence D. Ellis, M.D. Trustee January 3, 2000
Lawrence D. Ellis, M.D.

/s/Edward L. Flaherty, Jr. Trustee** January 3, 2000
Edward L. Flaherty, Jr.

/s/Peter E. Madden Trustee January 3, 2000
Peter E. Madden

/s/John E. Murray, Jr. Trustee January 3, 2000
John E. Murray, Jr.

/s/Wesley W. Posvar Trustee** January 3, 2000
Wesley W. Posvar

/s/Marjorie P. Smuts Trustee January 3, 2000
Marjorie P. Smuts
* Resigned as of May 23, 1999
** Resigned as of June 30, 1999

Sworn to and subscribed before me this 3rd day of January, 2000

/s/Madeline P. Kelly
Madeline P. Kelly
Notarial Seal
Madeline P. Kelly, Notary Public
Baldwin Boro, Allegheny County
My Commission Expires Feb. 22, 2000
Member, Pennsylvania Association of Notaries