ANNUAL
- ------------------------
FINANCIAL REPORT
- ------------------------
STI CLASSIC FUNDS
- ------------------------
A Family of Mutual Funds
- ------------------------
May 31, 1998
STI Classic Funds
[logo omitted]
<PAGE>
<PAGE>
Dear Valued STI Classic Trust Shareholder:
As of May 31, 1998, your STI Classic Funds' assets totaled $11.7 billion or
36% more than the $8.6 billion reported to you as of May 31, 1997.
The U.S. economic expansion has now passed seven years in duration and is
noteworthy for continued modest inflation and excellent investment returns.
Economic growth has been erratic, however, the U.S. experienced an acceleration
in early 1998 despite the real difficulties being experienced in Asia. Even with
the faster pace of economic activity, the Federal Reserve Board has not
tightened monetary conditions and longer term interest rates have fallen below
5.75% from over 7% in early 1997. Thus, the inherent strengths of the U.S.
economy are evident to investors world wide.
In spite of all the volatility in the markets and uncertainty of world events,
the STI Classic Funds continue to be managed with a disciplined, quality
oriented approach. We believe our shareholders are well positioned for the
current and anticipated investment environment.
Sincerely,
/S/ Signature
Anthony R. Gray
Chairman, Chief Investment Officer
STI Capital Management, N.A.
/S/ Signature
Douglas S. Phillips, CFA
President, Chief Investment Officer
Trusco Capital Management, Inc.
<PAGE>
STI CLASSIC VALUE INCOME STOCK FUND
-----------------------------------
The STI Classic Value Income Stock Fund (the "Fund") seeks to provide current
income with the secondary goal of achieving capital appreciation by investing
primarily in equity securities.
The Fund's investment philosophy is a very structured, methodical approach to
purchasing stocks. The bottom-up approach has three key factors to consider in
all investment decisions -- minimum dividend yield criteria, low historical
relative valuation, and a fundamental catalyst which could upwardly value the
individual security.
Our process seeks high-dividend paying stocks that are trading at the lower end
of their historical valuation ranges. These companies are in the midst of
fundamental change that we expect will reignite investor interest in the near
term. They tend to exhibit value characteristics such as low price-to-earnings
ratios and have lower volatility. As a result, the Fund benefits when the market
becomes less exuberant and more value oriented.
The Fund's return from June 1997 to May 1998 was 23.10% (Trust Shares). The Fund
underperformed the S&P/Barra Value Index, by 5.82%. We believe this
underperformance was a result of the Fund's underweighting in the financial
sector, a sector with strong performance in the fiscal year of 1998, as well as
its overweighting in the basic materials sector, a sector that did not perform
as well.
Growth continues to have an advantage over value in the marketplace, as
investors around the world buy stocks they know-typically large cap growth names
such as General Electric, Microsoft and Procter & Gamble.
/S/ Signature
Mills A. Riddick, CFA
Managing Director
2
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------------------------------------
Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year Inception Inception
Return Return Return to Date to Date
- --------------------------------------------------------------------------------
23.10% 24.37% 20.30% 18.29% 322.71%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Value Income Lipper Equity Income
Stock Fund, Trust Shares S&P/BARRA Value Index Funds Average
- --------------------------------------------------------------------------------
10/31/89 $10,000 $10,000 $10,000
5/31/90 $10,359 $10,463 $10,237
5/31/91 $12,434 $11,432 $11,074
5/31/92 $15,195 $12,449 $12,429
5/31/93 $16,778 $14,438 $14,138
5/31/94 $18,453 $15,512 $14,880
5/31/95 $21,970 $18,160 $16,838
5/31/96 $28,102 $22,946 $20,792
5/31/97 $34,335 $28,788 $25,516
5/31/98 $42,266 $37,113 $31,806
INVESTOR SHARES
- -----------------------------------------------------------------
Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year Inception Inception
Return Return Return to Date to Date
- -----------------------------------------------------------------
22.71% 23.90% 19.80% 18.00% 313.91% Without Load
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18.13% 22.34% 18.89% 17.48% 298.29% With Load
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COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Value Income Lipper Equity Income
Stock Fund, Investor Shares S&P/BARRA Value Index Funds Average
- --------------------------------------------------------------------------------
10/31/89 $ 9,625 $10,000 $10,000
5/31/90 $ 9,971 $10,463 $10,237
5/31/91 $11,968 $11,432 $11,074
5/31/92 $14,626 $12,449 $12,429
5/31/93 $16,142 $14,438 $14,138
5/31/94 $17,642 $15,512 $14,880
5/31/95 $20,943 $18,160 $16,838
5/31/96 $26,679 $22,946 $20,792
5/31/97 $32,466 $28,788 $25,516
5/31/98 $39,839 $37,113 $31,806
FLEX SHARES
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Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year Inception Inception
Return Return Return to Date to Date
- ------------------------------------------------------------------
21.76% 23.04% 19.52% 17.85% 309.24% Without Load
- ------------------------------------------------------------------
19.76% With Load
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COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Value Income Lipper Equity Income
Stock Fund, Flex Shares S&P/BARRA Value Index Funds Average
- --------------------------------------------------------------------------------
10/31/89 $10,000 $10,000 $10,000
5/31/90 $10,359 $10,463 $10,237
5/31/91 $12,434 $11,432 $11,074
5/31/92 $15,195 $12,449 $12,429
5/31/93 $16,778 $14,438 $14,138
5/31/94 $18,453 $15,512 $14,880
5/31/95 $21,970 $18,160 $16,838
5/31/96 $27,796 $22,946 $20,792
5/31/97 $33,609 $28,788 $25,516
5/31/98 $40,922 $37,113 $31,806
Past performance is no indication of future performance.
The performance quoted includes past performance of the Common Trust Fund
managed by STI Capital Management, N.A. adjusted for fees and expenses. The
Common Trust Fund was not registered under the 1940 Act and therefore was not
subject to certain investment restrictions which may have adversely affected
performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
3
<PAGE>
STI CLASSIC MID-CAP EQUITY FUND
-------------------------------
The STI Classic Mid-Cap Equity Fund (the "Fund") seeks capital appreciation by
investing in the stocks of companies with a market capitalization between $500
million and $5 billion.
Mid-cap securities with a strong growth history are the primary consideration
for this investment philosophy. These companies are evaluated relative to their
industry sector and the market in general. Each industry sector is considered in
relation to the business cycle, and the Fund maintains large positions in the
sectors which appear to perform best in the given cycle. Stocks that fall within
favored sectors are analyzed based on fundamentals -- the quality of earnings,
dependability of growth rates, and relative attractiveness of price/earnings
ratios.
The Fund's return from June 1997 to May 1998 was 21.14% (Trust Shares). The Fund
underperformed its index, S&P Mid Cap 400 Index, by 8.73%.
We believe the Fund's underperformance was a result of sector weightings. The
Fund was underweighted in both the financial and electrical sectors; both of
those sectors performed well. The Fund was also overweighted in technology
stocks, a sector that did not perform as well. In addition, the Fund held
several individual stocks that proved disappointing.
The biggest wildcard for 1998 is corporate earnings, and investors continue to
be jittery when a company disappoints. Fortunately, these dips are often buying
opportunities because the stocks generally recover.
Recently, the most consistent winning group has been retailing. Part of the
reason for the good performance was simply a bounce-back from the weak fourth
quarter for many of these companies. In addition, consumer spending has been
robust. Unemployment is low, inflation is almost non-existent and the stock
market is raging ahead, making consumers feel wealthy. Another group that
performed well was the leisure group.
The health care area produced some poor results during the quarter. The
technology area was mixed. Software companies with little exposure to Asia
performed better than hardware manufacturers that were more dependent on those
markets.
Mid-cap stocks continue to offer greater earnings growth, yet still sell at a
discount to the large cap stocks. We believe that U.S. corporate profit growth
will slow in 1998, but the profit slowdown will be less pronounced in the
mid-cap area.
/S/ Signature
Elliot Perny
Managing Director
4
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- ----------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ----------------------------------------------------------------
21.14% 20.21% 16.40% 92.82%
- ----------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Mid-Cap
Equity Fund, Trust Shares S&P Mid-Cap 400 Index
- --------------------------------------------------------------------------------
2/28/94 $10,000 $10,000
5/31/94 $ 9,735 $ 9,516
5/31/95 $10,958 $10,803
5/31/96 $13,756 $13,873
5/31/97 $15,714 $16,397
5/31/98 $19,035 $21,294
INVESTOR SHARES
- ---------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ---------------------------------------------------------------
20.56% 19.66% 15.81% 88.78% Without Load
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16.07% 18.14% 14.79% 81.69% With Load
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COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Mid-Cap
Equity Fund, Investor Shares S&P Mid-Cap 400 Index
- --------------------------------------------------------------------------------
1/31/94 $ 9,625 $10,000
5/31/94 $ 9,471 $ 9,381
5/31/95 $10,603 $10,650
5/31/96 $13,247 $13,676
5/31/97 $15,070 $16,164
5/31/98 $18,168 $20,992
FLEX SHARES
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Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- --------------------------------------------------
19.80% 18.54% 66.26% Without Load
- --------------------------------------------------
17.80% With Load
- -------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Mid-Cap
Equity Fund, Flex Shares S&P Mid-Cap 400 Index
- --------------------------------------------------------------------------------
6/30/95 $10,000 $10,000
5/31/96 $11,839 $12,339
5/31/97 $13,385 $14,584
5/31/98 $16,035 $18,940
Past performance is no indication of future performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
5
<PAGE>
STI SMALL CAP EQUITY FUND
-------------------------
The STI Classic Small Cap Equity Fund (the "Fund") seeks capital appreciation
with a secondary goal of achieving current income by investing in the stocks of
companies with a market capitalization of less than $1 billion.
The Fund's return from June 1997 to May 1998 was 23.59% (Trust Shares). The
Fund outperformed its index, the Frank Russell 2000 Index, by 2.35%.
Investors around the world continue to prefer large U.S. blue-chip growth
stocks, a phenomenon that has continued for several years now. Nevertheless, our
portfolio has had a number of strong performers, some from mergers and
acquisitions. Only a handful of stocks out of a portfolio of 75 performed poorly
during the year.
In terms of valuations, we are much more comfortable with small cap value stocks
than the S&P 500 because we are still able to buy companies selling at 15 to 18
times trailing earnings, whereas the S&P 500 is selling at a multiple of 26 to
27.
There is a misconception that small cap investors have to focus on growth
companies to do well. In fact, value investors have historically outperformed
growth investors. For every meteoric Microsoft or Xerox in a small cap growth
portfolio, there are hundreds that fall by the wayside. In contrast, most of the
companies on our buy list have been around for decades.
/S/ Signature
Brett L. Barner, CFA
Principal
6
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
two line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- ---------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ---------------------------------------------------------------
23.59% 29.60% 27.54% 148.89%
- ---------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Small Cap
Equity Fund, Trust Shares Frank Russell 2000 Index
- --------------------------------------------------------------------------------
8/31/94 $10,000 $10,000
5/31/95 $11,432 $10,638
5/31/96 $15,171 $14,457
5/31/97 $20,138 $15,465
5/31/98 $24,888 $18,749
FLEX SHARES*
- ---------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ---------------------------------------------------------------
22.29% 29.15% 27.19% 146.28% Without Load
- ---------------------------------------------------------------
20.29% With Load
- ------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Small Cap
Equity Fund, Flex Shares Frank Russell 2000 Index
- --------------------------------------------------------------------------------
8/31/94 $10,000 $10,000
5/31/95 $11,432 $10,638
5/31/96 $15,171 $14,457
5/31/97 $20,135 $15,465
5/31/98 $24,623 $18,749
*Commenced operations on June 5, 1997.
Past performance is no indication of future performance.
The performance quoted includes past performance of the Common Trust Fund
managed by STI Capital Management, N.A. adjusted for fees and expenses. The
Common Trust Fund was not registered under the 1940 Act and therefore was not
subject to certain investment restrictions which may have adversely affected
performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
7
<PAGE>
STI CLASSIC CAPITAL GROWTH FUND
-------------------------------
The STI Classic Capital Growth Fund (the "Fund") seeks capital appreciation by
investing primarily in stocks which, in the advisor's opinion, are undervalued
in the marketplace at the time of purchase.
Large capitalization stocks with a strong growth history are the primary
consideration for this investment philosophy. Out of this universe of companies,
a security is selected for the Fund when it appears undervalued based on the
relative earnings ratios. In order to make this relative value comparison, each
stock is compared to its own historical price earnings ratio range, to other
stocks in the sector, and to the stock market as measured by indices such as the
S&P 500 Index.
The Fund's return from June 1997 to May 1998 was 29.51% (Trust Shares). The Fund
underperformed its index, the S&P 500 Composite Index, by 1.17%.
The past year has been another booming period for the U.S. stock market, fueled
by low interest rates as well as huge amounts of money coming into the market
from all over the world. These companies have one thing in common: their
earnings exceeded expectations set at the beginning of 1998. In addition, their
fortunes are not directly tied to the economy. We continue to own very few
cyclical stocks, such as paper, chemicals and commodities.
The Asian economic crisis has had a rather large impact that was expected last
fall, even though some companies are using it as a scapegoat to explain lower
than expected earnings. Although first quarter earnings will be uneven,
investors have shown no fear.
Our outlook for 1998 is cautious because of the uncertainty surrounding
corporate profits. However, it must be remembered that the stock market has had
its best three-year run in history. Even if 1998 turned out to be a flat to
mildly down year, the nineties would still be considered an excellent decade for
investors.
Sincerely,
/S/ Signature
Anthony R. Gray
Chairman, Chief Investment Officer
8
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------------------------------------
Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year Inception Inception
Return Return Return to Date to Date
- --------------------------------------------------------------------------------
29.51% 27.69% 18.19% 18.16% 168.33%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Capital
Growth Fund, Trust Shares S&P 500 Composite Index Lipper Growth Funds Average
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
7/31/92 $10,000 $10,000 $10,000
5/31/93 $11,203 $10,885 $11,184
5/31/94 $11,638 $11,345 $11,741
5/31/95 $12,409 $13,631 $13,360
5/31/96 $16,004 $17,505 $17,279
5/31/97 $19,951 $22,652 $20,584
5/31/98 $25,838 $29,601 $25,749
</TABLE>
INVESTOR SHARES
- ------------------------------------------------------------------
Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year Inception Inception
Return Return Return to Date to Date
- ------------------------------------------------------------------
28.71% 26.86% 17.43% 17.92% 167.77% Without Load
- ------------------------------------------------------------------
23.85% 25.26% 16.54% 17.17% 157.72% With Load
- ------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Capital
Growth Fund, Investor Shares S&P 500 Composite Index Lipper Growth Funds Average
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/92 $ 9,625 $10,000 $10,000
5/31/93 $11,206 $11,329 $11,582
5/31/94 $11,572 $11,808 $12,159
5/31/95 $12,258 $14,187 $13,836
5/31/96 $15,712 $18,219 $17,894
5/31/97 $19,442 $23,576 $21,187
5/31/98 $25,024 $30,809 $26,665
</TABLE>
FLEX SHARES
- -------------------------------------------------
Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- -------------------------------------------------
28.12% 26.26% 101.28% Without Load
- -------------------------------------------------
26.12% With Load
- ------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Capital
Growth Fund, Flex Shares S&P 500 Composite Index Lipper Growth Funds Average
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/95 $10,000 $10,000 $10,000
5/31/96 $12,387 $12,549 $12,424
5/31/97 $15,266 $16,239 $14,709
5/31/98 $19,559 $21,221 $18,513
</TABLE>
Past performance is no indication of future performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
9
<PAGE>
STI CLASSIC BALANCED FUND
-------------------------
The STI Classic Balanced Fund (the "Fund") seeks capital appreciation and
current income through investments in a diversified portfolio of common stocks,
bonds and money market securities.
The Fund uses a bottom-up selection process to find stocks of high quality
companies with a history of earnings growth. Bonds are selected by attempting to
exploit undervalued bond sectors and areas along the yield curve. No more than
70% of the total assets of the Fund are invested in stocks, and no more than 60%
are invested in bonds. At least 20% of the Fund 's total assets will be in
senior fixed income securities.
The Fund's return from June 1997 to May 1998 was 22.15% (Trust Shares). The Fund
outperformed its index, the 50% S&P 500 Composite Index and 50% Lehman
Government/Corporate Bond Index Fund by 1.07%.
The past year has been another booming period for the U.S. stock market, fueled
by low interest rates as well as huge amounts of money coming into the market
from all over the world. These companies have one thing in common: their
earnings exceeded expectations set at the beginning of 1998. In addition, their
fortunes are not directly tied to the economy. We continue to own very few
cyclical stocks, such as paper, chemicals and commodities.
The Asian economic crisis has not had the impact that was expected last fall,
even though some companies are using it as a scapegoat to explain lower than
expected earnings. Although first quarter earnings will be uneven, investors
have shown no fear.
Our outlook for 1998 is cautious because of the uncertainty surrounding
corporate profits. However, it must be remembered that the stock market has had
its best three-year run in history. Even if 1998 turned out to be a flat to
mildly down year, the nineties would still be considered an excellent decade for
investors.
Over the last year, the interest-rate environment has been calm, with bond
yields trading within a narrow range of five or six points. Because the
direction of interest rates has been flat and the economy has remained
moderately strong, corporate bonds have outperformed U.S. Treasury bonds and
mortgage-backed securities during the period.
Our belief was that interest rates were likely to fall and the yield curve to
steepen, which would generate more relative capital appreciation for mid-range
securities. As a result, we shortened the Fund's duration and we raised our cash
position. That decision hampered our performance slightly, as did our decision
to underweight mortgages, which we thought would underperform significantly.
Instead, mortgages performed in line with Treasury bonds.
We expect economic growth to remain fairly good, and so we will continue to
overweight the corporate sector. At current interest rate levels, we are still
uncomfortable with mortgages. If the market rallies, they would underperform
quite dramatically; if the market backs up, then they outperform. However, since
they only outperform materially if the market goes down, we currently plan to
underweight the sector.
/S/ Signature
Anthony R. Gray
Chairman, Chief Investment Officer
/S/ Signature
L. Earl Denney, CFA
Managing Director
10
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- ---------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ---------------------------------------------------------------
22.15% 18.66% 14.05% 78.42%
- ---------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Balanced Fund, Lehman Government/ Lipper Balanced
Trust Shares S&P 500 Composite Index Corporate Bond Index Funds Average
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1/31/94 $10,000 $10,000 $10,000 $10,000
5/31/94 $ 9,554 $ 9,579 $ 9,446 $ 9,505
5/31/95 $10,387 $11,510 $10,543 $10,654
5/31/96 $12,180 $14,781 $10,975 $12,556
5/31/97 $14,210 $19,126 $11,842 $14,599
5/31/98 $17,357 $24,994 $13,202 $17,410
</TABLE>
INVESTOR SHARES
- ---------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ---------------------------------------------------------------
21.72% 18.26% 13.60% 75.36% Without Load
- ---------------------------------------------------------------
17.13% 16.77% 12.62% 68.78% With Load
- ---------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Balanced Fund, Lehman Government/ Lipper Balanced
Investor Shares S&P 500 Composite Index Corporate Bond Index Funds Average
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1/31/94 $ 9,625 $10,000 $10,000 $10,000
5/31/94 $ 9,238 $ 9,579 $ 9,446 $ 9,505
5/31/95 $10,004 $11,510 $10,543 $10,654
5/31/96 $11,693 $14,781 $10,975 $12,556
5/31/97 $13,595 $19,126 $11,842 $14,599
5/31/98 $16,548 $24,994 $13,202 $17,410
</TABLE>
FLEX SHARES
- -------------------------------------------------
Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- -------------------------------------------------
20.85% 17.29% 60.43% Without Load
- -------------------------------------------------
18.85% With Load
- --------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Balanced Fund, Lehman Government/ Lipper Balanced
Flex Shares S&P 500 Composite Index Corporate Bond Index Funds Average
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6/30/95 $10,000 $10,000 $10,000 $10,000
5/31/96 $11,401 $12,549 $10,327 $11,558
5/31/97 $13,157 $16,239 $11,143 $13,438
5/31/98 $15,900 $21,221 $12,422 $16,025
</TABLE>
Past performance is no indication of future performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
11
<PAGE>
STI CLASSIC EMERGING MARKETS EQUITY FUND
----------------------------------------
The STI Classic Emerging Markets Equity Fund (the "Fund") seeks long-term
capital appreciation by investing primarily in equity securities of companies
located in emerging markets that appear undervalued relative to their global
peers.
Emerging markets performances for the year were led by Eastern Europe and Latin
America. The Fund's overweighted positions in these two regions aided our
performance for the year compared to the Fund's benchmark, Morgan Stanley
Capital International ("MSCI") Emerging Markets Free Index.
The Fund's return from June 1997 to May 1998 was -15.74% (Trust Shares). The
Fund outperformed its index, the MSCI Emerging Markets Free Index, by 14.03%.
While calendar year 1997 looked to be very good for emerging markets through the
first six months, this strong performance came to an abrupt halt as economic
pressures within Asian countries came to light. What started as currency
devaluation in Thailand led to multiple currency devaluations and significant
stock price corrections across the region. The economic collapse continues to
show its impact through short-term market and currency volatility.
The deteriorating economic fundamentals of the region have caused weaker
companies to become technically insolvent. And we will most likely see more
companies face the harsh realities that without government subsidies or tariff
protection, they are not competitive and must merge or face business failure.
Fortunately, our bottom-up focus on individual valuations and company
competitive positioning protected us relatively throughout the year. Because we
believed that valuations were too high, we began to reduce our weighting in Asia
before the economic crisis hit.
We shifted these assets towards the Eastern Europe, Middle East and South
African markets. These markets performed well on a relative basis, partly
because they do not have direct business exposures to Asia. For example, in
South Africa we saw strong performance from a number of financial companies as a
result of lower interest-rates.
We believe that the negative economic situation in Asia and its associated
effects to other world markets will be a medium term problem. It will take time
for countries to attract and deploy capital to their domestic markets and
restart domestic growth. That growth will return only when local government
correct past economic policy mistakes.
However, we do believe in the long-term benefits of emerging market growth and
recognize the need for exposure in these regions. A significant portion of the
world's population lives in emerging markets and their demand for the goods and
services to increase the standards of living will undoubtedly push average
economic growth rates higher than developed countries in the future.
/S/ Signature
Ned Dau
Managing Director
12
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance is one
line graph depicting the growth (including reinvestment of dividends and capital
gains) of a hypothetical investment of $10,000 as compared with the growth of a
hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------
Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- --------------------------------------------------
-15.74% 5.00% 11.15%
- --------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Emerging Markets MSCI Emerging Markets
Equity Fund, Trust Shares Free Index
- ------------------------------------------------------------------
3/31/96 $10,000 $10,000
5/31/96 $10,978 $10,292
5/31/97 $13,191 $10,871
5/31/98 $11,115 $ 7,635
*Commenced operations on January 31, 1997.
Past performance is no indication of future performance.
The performance quoted includes past performance of the Common Trust Fund
managed by STI Capital Management, N.A. adjusted for fees and expenses. The
Common Trust Fund was not registered under the 1940 Act and therefore was not
subject to certain investment restrictions which may have adversely affected
performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
13
<PAGE>
STI CLASSIC INTERNATIONAL EQUITY INDEX FUND
-------------------------------------------
The STI Classic International Equity Index Fund (the "Fund") seeks to provide
investment results that correspond to the aggregate price and dividend
performance of the securities included in the Morgan Stanley Capital
International Europe, Australasia, Far East Gross Domestic Product Index (the
"MSCI EAFE-GDP Index"). The Fund has been constructed to have the aggregate
investment characteristics similar to those of the MSCI EAFE-GDP Index. The Fund
limits investments to a representative sample of securities contained within the
Index. Not all securities or countries in the Index will be held in the Fund.
Securities are selected using a statistically-based optimization process. No
attempt is made to manage the Fund using traditional economic, financial and
market analysis. All securities are purchased and held in their local
currencies.
For the year ending May 31, 1998, the Fund met its objective. The Fund's
correlation to the MSCI EAFE-GDP Index was .99. This exceeded the expected
annual correlation of over .95. The Fund's overall performance for the fiscal
year was similar to the MSCI EAFE-GDP Index on a post fee adjusted basis.
/S/ Signature
Robert J. Rhodes, CFA
Group Vice President
/S/ Signature
Stanley J. Cherny
Vice President
14
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- -----------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- -----------------------------------------------------------------
25.82% 13.91% 11.04% 51.76%
- -----------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic International Equity MSCI EAFE-GDP Index Weighted,
Index Fund, Trust Shares in U.S.$ (Price Return)
- -----------------------------------------------------------------------
6/30/94 $10,000 $10,000
5/31/95 $10,331 $10,343
5/31/96 $11,291 $11,255
5/31/97 $12,135 $12,066
5/31/98 $15,269 $14,400
INVESTOR SHARES
- ---------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ---------------------------------------------------------------
25.25% 13.47% 10.58% 49.30% Without load
- ---------------------------------------------------------------
20.54% 12.03% 9.53% 43.69% With load
- ---------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic International Equity MSCI EAFE-GDP Index Weighted,
Index Fund, Investor Shares in U.S.$ (Price Return)
- --------------------------------------------------------------------------------
6/30/94 $ 9,625 $10,000
5/31/95 $ 9,904 $10,343
5/31/96 $10,786 $11,255
5/31/97 $11,554 $12,066
5/31/98 $14,471 $14,400
FLEX SHARES
- -------------------------------------------------
Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- -------------------------------------------------
24.50% 12.82% 43.26% Without load
- -------------------------------------------------
22.50% With load
- -------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic International Equity MSCI EAFE-GDP Index Weighted,
Index Fund, Flex Shares in U.S.$ (Price Return)
------------------------------------------------------------------------------
6/30/95 $10,000 $10,000
5/31/96 $10,911 $11,019
5/31/97 $11,610 $11,813
5/31/98 $14,455 $14,098
Past performance is no indication of future performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
15
<PAGE>
STI CLASSIC INTERNATIONAL EQUITY FUND
-------------------------------------
The STI Classic International Equity Fund (the "Fund") invests in equity
securities of foreign issuers and seeks to provide long term capital
appreciation. We strive to obtain investment results that outperform the
international markets and the average international mutual fund. The Fund
focuses on sector and company fundamentals specifically looking for companies
which exhibit top managements, quality products and sound financial positions.
Our goal is to find companies which fit the above criteria but are selling at a
discount to their global peers.
The Fund's performance for June 1997 to May 1998 was 21.87% (Trust Shares). The
Fund outperformed its index, the MSCI EAFE by 10.76%.
Over the past year, the star regional performer was Europe. Continued low
interest rates across Europe benefited stocks in general. Lower interest costs
reduced the financial burden of companies, thus improving their earnings
outlook. On a macro-economic perspective, the lower rates made stock investments
more attractive than fixed income products while improving economic growth. Low
rates were especially beneficial to stocks in traditional high interest rate,
high inflation countries such as Italy and Spain. The fall in interest rates was
accelerated in Italy and Spain as government officials curtailed monetary and
fiscal policies to meet economic criteria necessary to enter the European
Monetary Union.
Because of the improving interest rate climate and a number of merger
transactions, financial stocks performed well. The Fund holdings in this area
include ING Group (Insurance and Banking in the Netherlands) and AXA SA
(Financial Services in France). European automakers have also performed well as
a group. They benefit from the lower interest rate environment as consumers can
finance autos cheaper. Auto manufacturers also benefited from new model
introductions and more efficient production methods. The Fund held the following
automotive stocks during the year: Volkswagen AG (Germany), Bayerische Motoren
Werke AG (Germany) and Volvo AB (Sweden).
Concerning the future outlook for the European markets, we do not foresee the
same macro-economic environment with the same magnitude of falling interest
rates. However, investment opportunities continue to be bright as company
management continues to rationalize their businesses to compete globally and
increasingly pass on the benefits through higher earnings to shareholders.
The investment environment in the Asian region continues to be difficult. The
economic collapse of countries such as Thailand, Malaysia and Indonesia has
slowed the strong regional economic growth of recent times. Governments and
companies must now deal with past poor decisions of allocating cheap capital
towards industrial and investment decisions that were not justified on a
long-term basis. Japan, one of the world's largest markets, suffers from some of
the same symptoms as their smaller and lesser-developed markets in the regions.
A perfect example of this in Japan is the poor financial state of the banking
sector. Poor allocation of capital by banks toward the construction and real
estate sector has left the sector with large non-performing loan portfolios.
We continue to invest in the companies such as Sony (Consumer Electronics),
Canon (Office Equipment) and Honda (Automobile), which are strong global
competitors and benefit from a weakening yen. We continue to monitor the
situation in Japan and the rest of the region, but do not feel the valuations
are low enough to justify increasing our stake in the region at present.
/S/ Signature
Ned Dau
Managing Director
16
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- --------------------------------------------------------------------------------
21.87% 25.14% 28.11% 128.08%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic International
Equity Fund, Trust Shares MSCI EAFE Index, in U.S.$
- --------------------------------------------------------------------------------
1/31/95 $10,000 $10,000
5/31/95 $11,637 $10,862
5/31/96 $15,179 $12,021
5/31/97 $18,714 $12,928
5/31/98 $22,807 $14,365
INVESTOR SHARES
- ---------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ---------------------------------------------------------------
21.39% 24.76% 27.75% 125.98% Without load
- ---------------------------------------------------------------
16.83% 23.18% 26.31% 117.58% With load
- ---------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic International
Equity Fund, Investor Shares MSCI EAFE Index, in U.S.$
- --------------------------------------------------------------------------------
1/31/95 $ 9,625 $10,000
5/31/95 $11,201 $10,862
5/31/96 $14,585 $12,021
5/31/97 $17,918 $12,928
5/31/98 $21,750 $14,365
FLEX SHARES
- ---------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ---------------------------------------------------------------
20.54% 24.13% 27.18% 122.60% Without load
- ---------------------------------------------------------------
18.54% With load
- -------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic International
Equity Fund, Flex Shares MSCI EAFE Index, in U.S.$
- --------------------------------------------------------------------------------
1/31/95 $10,000 $10,000
5/31/95 $11,637 $10,862
5/31/96 $15,139 $12,021
5/31/97 $18,467 $12,928
5/31/98 $22,260 $14,365
Past performance is no indication of future performance.
The performance quoted includes past performance of the Common Trust Fund
managed by STI Capital Management, N.A. adjusted for fees and expenses. The
Common Trust Fund was not registered under the 1940 Act and therefore was not
subject to certain investment restrictions which may have adversely affected
performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
17
<PAGE>
STI CLASSIC SUNBELT EQUITY FUND
-------------------------------
The objective of the STI Classic Sunbelt Equity Fund (the "Fund") is to provide
capital appreciation by investing in U.S. companies located in the Sunbelt
region. The Fund's philosophy is centered on the belief that a portfolio of
companies with positive earnings trends will generate above average returns over
time. This focus on favorable earnings characteristics has been and remains the
Fund's cornerstone.
The Fund invests in companies which are headquartered or conduct the majority of
their business in the twelve state Sunbelt region which runs from Virginia down
to Florida and over to Texas. The favorable economic and demographic trends in
the Sunbelt have resulted in a vibrant and growing business climate. Such an
environment leads to above average investment opportunities. Key trends in the
Sunbelt are low cost levels, an excellent transportation system, expansion in
personal income and growth in population.
The Fund's investment universe consists of approximately 2,000 public companies,
of which roughly 300 are covered extensively by our nine dedicated research
analysts. Before a company can be considered for investment, it must satisfy
initial screening criteria which include: five year operating history, market
capitalization of a least $50 million, monthly trading volume of $20 million,
management continuity and strong fundamental history. Once the initial screening
is complete, the stocks chosen for purchase generally have strong or improving
growth rates, a demonstrated ability to meet expectations, and rising estimates.
Over time, the companies owned in the Fund have shown above average earnings
growth rates. The above average growth rates have continued through the Fund's
1998 fiscal year and are a direct result of the Fund's bottom up orientation.
Yet the Fund's performance did not reflect these favorable earnings trends and
fundamentals. The reason is that the Sunbelt region is biased towards small and
mid-sized companies. This universe of stocks has continued to be overlooked by
investors who prefer larger more liquid common stocks. We believe that we may
see a shift back toward the earnings driven types of stocks which dominate the
Fund.
/S/ Signature
James P. Foster
Vice President
18
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------------------------------------
Annualized Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year 10 Year Inception Inception
Return Return Return Return to Date to Date
- --------------------------------------------------------------------------------
23.86% 21.64% 15.87% 17.91% 16.30% 1,305.12%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Sunbelt Equity Fund Frank Russell 2000
Trust Shares Growth Index
- --------------------------------------------------------------------------------
5/31/88 $10,000 $10,000
5/31/89 $12,235 $12,233
5/31/90 $14,842 $12,797
5/31/91 $17,278 $13,892
5/31/92 $19,685 $14,997
5/31/93 $24,872 $16,871
5/31/94 $27,797 $17,823
5/31/95 $28,856 $20,083
5/31/96 $41,318 $29,040
5/31/97 $41,930 $27,472
5/31/98 $51,934 $31,826
INVESTOR SHARES
- -------------------------------------------------------------------
Annualized Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year 10 Year Inception Inception
Return Return Return Return to Date to Date
- -------------------------------------------------------------------
23.25% 21.10% 15.29% 17.27% 15.67% 1,177.58% Without load
- -------------------------------------------------------------------
18.62% 19.56% 14.41% 16.83% 15.44% 1,133.22% With load
- -------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Sunbelt Equity Fund Frank Russell 2000
Investor Shares Growth Index
- --------------------------------------------------------------------------------
5/31/88 $ 9,625 $10,000
5/31/89 $11,705 $12,233
5/31/90 $14,131 $12,797
5/31/91 $16,344 $13,892
5/31/92 $18,503 $14,997
5/31/93 $23,250 $16,871
5/31/94 $25,835 $17,823
5/31/95 $26,662 $20,083
5/31/96 $38,014 $29,040
5/31/97 $38,413 $27,472
5/31/98 $47,344 $31,826
FLEX SHARES
- -------------------------------------------------------------------
Annualized Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year 10 Year Inception Inception
Return Return Return Return to Date to Date
- -------------------------------------------------------------------
22.48% 20.38% 15.15% 17.54% 16.10% 1,262.06% Without load
- -------------------------------------------------------------------
20.48% With load
- ---------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Sunbelt Equity Fund Frank Russell 2000
Flex Shares Growth Index
- --------------------------------------------------------------------------------
5/31/88 $10,000 $10,000
5/31/89 $12,235 $12,233
5/31/90 $14,842 $12,797
5/31/91 $17,278 $13,892
5/31/92 $19,685 $14,997
5/31/93 $24,872 $16,871
5/31/94 $27,797 $17,823
5/31/95 $28,856 $20,083
5/31/96 $40,911 $29,040
5/31/97 $41,100 $27,472
5/31/98 $50,339 $31,826
Past performance is no indication of future performance.
The performance quoted includes past performance of the Common Trust Fund
managed by Trusco Capital Management adjusted for fees and expenses. The Common
Trust Fund was not registered under the 1940 Act and therefore was not subject
to certain investment restrictions which may have adversely affected
performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
19
<PAGE>
STI CLASSIC INVESTMENT GRADE TAX-EXEMPT BOND FUND
-------------------------------------------------
The STI Classic Investment Grade Tax-Exempt Bond Fund (the "Fund") seeks to
provide as high a level of total return through federally tax-exempt current
income and capital appreciation as is consistent with the preservation of
capital by investing in investment grade tax-exempt obligations.
In the municipal bond market we try to limit risk as much as possible. We do not
make major maturity shifts. We will bias the Fund based upon our near term
fundamental and technical analysis, however, these will be moderate maturity
shifts. Our style of investing enables us to enhance performance by utilizing
various techniques. One such technique is to emphasize cheap sectors of the
yield curve. Another technique is to be a relative value investor. We try to
overweight undervalued sectors and underweight overvalued sectors. Also, we take
advantage of changes in yield spreads. We buy specific bonds when spreads are
trading historically wide and sell when the spreads are trading historically
narrow. Credit analysis is an important technique especially in today's market.
We try to identify and invest in improving credits and avoid those credits which
are deteriorating. The underlying concept to all these techniques is to enhance
total return without adding risk.
The Fund's return from June 1997 to May 1998 was 8.57% (Trust Shares). The Fund
outperformed its index, the Lehman Brothers 5-Year G.O. Index by 1.61%.
The past year has been a strong period for fixed-income securities. Municipal
securities have cheapened significantly, which has attracted nontraditional
buyers such as insurance companies who bought much of the municipal supply.
Although municipal securities typically lag Treasury bonds in a strong market,
they were already cheap relative to Treasury bonds. With Triple A-rated 20-30
year general obligation municipal bonds yielding 85% of U.S. Treasury bonds,
institutional buyers came into the market, speculating that municipal securities
would outperform. In addition, the retail investor became resigned to the new
low-rate environment.
The surge in supply was primarily because of the low level of interest rates
reached in January, when the 30-year Treasury bond fell to 5.69%. Issuers
attempted to come into the market to refund outstanding issues at these rates.
Credit spreads have been very narrow; as a result, our portfolio has emphasized
high quality bonds, because we were not being adequately compensated for lesser
quality. In addition, if interest rates do back up, then quality spreads are
going to widen out and the lesser credits would be the bonds to avoid.
Because the yield curve is so flat, we continue to buy noncallable bonds in the
10 to 15 year maturity range. For example, we recently purchased some 5.50%
bonds maturing 07/01/09 issued by the Florida Division of Finance. These bonds
are high quality and insured.
The one negative strategy during the quarter was our decision to stick with a
barbell approach (investing in very long-term and very short-term securities),
when the market was backing up. In a rising interest rate environment, the
longer bonds emphasized in the barbell were the most volatile.
Because inflation remains under control, and the Federal Reserve Board is on the
sidelines, we believe that we could see some capital appreciation in the longer
end of the maturity spectrum.
/S/ Signature
Ronald H. Schwartz, CFA, CFP
Managing Director
20
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- --------------------------------------------------------------------------------
8.57% 7.17% 6.59% 34.17%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Investment Grade Lehman Brothers Lipper Intermediate
Tax-Exempt Bond Fund, Trust Shares 5-Year G.O. Index Municipal Debt Average
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
10/31/93 $10,000 $10,000 $10,000
5/31/94 $ 9,976 $ 9,943 $ 9,831
5/31/95 $10,995 $10,627 $10,523
5/31/96 $11,635 $11,131 $10,939
5/31/97 $12,464 $11,807 $11,623
5/31/98 $13,533 $12,629 $12,477
</TABLE>
INVESTOR SHARES
- ------------------------------------------------------------
Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year Inception Inception
Return Return Return to Date to Date
- ------------------------------------------------------------
8.05% 6.71% 7.07% 7.84% 57.03% Without load
- ------------------------------------------------------------
3.98% 5.36% 6.26% 7.16% 51.13% With load
- ------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Investment Grade Lehman Brothers Lipper Intermediate
Tax-Exempt Bond Fund, Investor Shares 5-Year G.O. Index Municipal Debt Average
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/92 $ 9,625 $10,000 $10,000
5/31/93 $10,731 $10,778 $10,895
5/31/94 $11,309 $11,112 $11,216
5/31/95 $12,429 $11,877 $12,006
5/31/96 $13,101 $12,440 $12,481
5/31/97 $13,977 $13,196 $13,261
5/31/98 $15,102 $14,114 $14,236
</TABLE>
FLEX SHARES
- -------------------------------------------------
Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- -------------------------------------------------
7.50% 6.20% 19.76% Without load
- -------------------------------------------------
5.50% With load
- --------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Investment Grade Lehman Brothers Lipper Intermediate
Tax-Exempt Bond Fund, Flex Shares 5-Year G.O. Index Municipal Debt Average
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/95 $10,000 $10,000 $10,000
5/31/96 $10,541 $10,465 $10,442
5/31/97 $11,193 $11,102 $11,095
5/31/98 $12,033 $11,874 $11,910
</TABLE>
Past performance is no indication of future performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
21
<PAGE>
STI CLASSIC FLORIDA TAX-EXEMPT BOND FUND
----------------------------------------
The STI Classic Florida Tax-Exempt Bond Fund (the "Fund") seeks to provide
current income exempt from regular federal income tax for Florida residents and
without undue investment risk. We invest in investment grade municipal bonds
issued by the state of Florida and its municipalities.
In the municipal bond market we try to limit risk as much as possible. We do not
make major maturity shifts. We will bias the Fund based upon our near term
fundamental and technical analysis, however, these will be moderate maturity
shifts. Our style of investing enables us to enhance performance by utilizing
various techniques. One such technique is to emphasize cheap sectors of the
yield curve. Another technique is to be a relative value investor. We try to
overweight undervalued sectors and underweight overvalued sectors. Also, we take
advantage of changes in yield spreads. We buy specific bonds when spreads are
trading historically wide and sell when the spreads are trading historically
narrow. Credit analysis is an important technique especially in today's market.
We try to identify and invest in improving credits and avoid those credits which
are deteriorating. The underlying concept to all these techniques is to enhance
total return without adding risk.
The Fund's return from June 1997 to May 1998 was 8.77% (Trust Shares). The Fund
underperformed its index, the Lehman 10-year Municipal Bond Index by 0.50%.
The past year has been a strong period for fixed-income securities. Municipals
have cheapened significantly, which have attracted nontraditional buyers such as
insurance companies who bought much of the municipal supply. Although municipal
securities typically lag Treasury bonds in a strong market, they were already
cheap relative to Treasury bonds. With Triple A-rated 20-30 year general
obligation municipal bonds yielding 85% of U.S. Treasury bonds, institutional
buyers came into the market, speculating that municipal securities would
outperform. In addition, the retail investor became resigned to the new low-rate
environment.
The surge in supply was primarily because of the low level of interest rates
reached in January, when the 30-year Treasury bond fell to 5.69%. Issuers
attempted to come into the market to refund outstanding issues at these rates.
Credit spreads have been very narrow; as a result, our portfolio has emphasized
high quality bonds, because we were not being adequately compensated for lesser
quality. In addition, if interest rates do back up, then quality spreads are
going to widen out and the lesser credits would be the bonds to avoid.
Because the yield curve is so flat, we continue to buy noncallable bonds in the
10 to 15 year maturity range. For example, we recently purchased some 5.50%
bonds maturing 7/1/09 issued by the Florida Division of Finance. These bonds are
high quality and insured.
The one negative strategy during the quarter was our decision to stick with a
barbell approach when the market was backing up. In a rising interest rate
environment, the longer bonds emphasized in the barbell were the most volatile.
Because inflation remains under control, and the Federal Reserve Board is on the
sidelines, we believe that we could see some capital appreciation in the longer
end of the maturity spectrum.
/S/ Signature
Ronald H. Schwartz, CFA, CFP
Managing Director
22
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- --------------------------------------------------------------------------------
8.77% 6.60% 6.37% 30.79%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Florida Tax-Exempt Lehman 10-Year Municipal Lipper Florida Municipal
Bond Fund, Investor Shares Bond Index Debt Average
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1/31/94 $10,000 $10,000 $10,000
5/31/94 $ 9,786 $ 9,533 $ 9,348
5/31/95 $10,692 $10,389 $10,201
5/31/96 $11,106 $10,880 $10,560
5/31/97 $11,908 $11,769 $11,336
5/31/98 $12,952 $12,860 $12,359
</TABLE>
INVESTOR SHARES
- ---------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ---------------------------------------------------------------
8.46% 6.39% 6.14% 29.70% Without load
- ---------------------------------------------------------------
4.40% 5.03% 5.21% 24.83% With load
- ---------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Florida Tax-Exempt Lehman 10-Year Municipal Lipper Florida Municipal
Bond Fund, Investor Shares Bond Index Debt Average
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1/31/94 $ 9,625 $10,000 $10,000
5/31/94 $ 9,418 $ 9,533 $ 9,348
5/31/95 $10,270 $10,389 $10,201
5/31/96 $10,656 $10,880 $10,560
5/31/97 $11,402 $11,769 $11,336
5/31/98 $12,367 $12,860 $12,359
</TABLE>
FLEX SHARES
- -------------------------------------------------
Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- -------------------------------------------------
8.04% 5.91% 18.81% Without load
- -------------------------------------------------
6.04% With load
- --------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Florida Tax-Exempt Lehman 10-Year Municipal Lipper Florida Municipal
Bond Fund, Flex Shares Bond Index Debt Average
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/95 $10,000 $10,000 $10,000
5/31/96 $10,424 $10,539 $10,488
5/31/97 $11,099 $11,400 $11,259
5/31/98 $11,991 $12,456 $12,275
</TABLE>
Past performance is no indication of future performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
23
<PAGE>
STI CLASSIC GEORGIA TAX-EXEMPT BOND FUND
----------------------------------------
The investment objective of the Georgia Tax-Exempt Bond Fund (the "Fund") seeks
to provide current income exempt from regular federal and state income taxes for
Georgia residents without undue investment risk. Total return for the Fund
includes current income as well as changes in the value of the Fund's assets.
Returns for the Fund reflect our conservative strategy which tends to better
protect our participants from undue principal risk if interest rates rise.
Our investment philosophy in the municipal market is to provide our
shareholders, as conservative investors, with high quality investments, income
stability, and a favorable risk/return ratio. In keeping with our philosophy, we
look for value within the state of Georgia utilizing internal as well as
external credit analysis to identify areas in the state that are possible
quality upgrade candidates, monitoring shifts within the Georgia market which
may create investment opportunities and subsequently allow the Fund to achieve
gains, while at the same time maintaining a geographical diversity to minimize
credit risk. Given our philosophy, and in light of the market's volatile nature
in recent years, we are maintaining a relatively defensive position. The average
maturity and duration may vary slightly in the future, however, depending on our
outlook for the market.
The municipal market was strong in the second half of 1997 due to optimism that
the economy was beginning to slow. In the first half of 1998, however, the
market was essentially flat as investors nervously watched economic data trying
to determine if the economy would continue to show strength which could result
in rising inflation and a tightening by the Federal Reserve.
Issuance of Georgia bonds was fairly active in the last half of 1997. A number
of small Georgia issues have come to market to date in 1998, but few large ones.
We may see more refunding deals if rates stay at theses relatively low levels.
/S/ Signature
Gay B. Cash
Vice President
24
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- --------------------------------------------------------------------------------
8.37% 6.33% 4.84% 22.89%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Georgia Tax-Exempt Lehman 10-Year Municipal Lipper Georgia Municipal
Bond Fund, Trust Shares Bond Index Debt Average
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1/31/94 $10,000 $10,000 $10,000
5/31/94 $ 9,529 $ 9,533 $ 9,338
5/31/95 $10,190 $10,389 $10,124
5/31/96 $10,587 $10,880 $10,495
5/31/97 $11,305 $11,769 $11,300
5/31/98 $12,252 $12,860 $12,359
</TABLE>
INVESTOR SHARES
- ---------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ---------------------------------------------------------------
8.26% 6.12% 4.68% 22.06% Without load
- ---------------------------------------------------------------
4.19% 4.76% 3.76% 17.48% With load
- ---------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Georgia Tax-Exempt Lehman 10-Year Municipal Lipper Georgia Municipal
Bond Fund, Investor Shares Bond Index Debt Average
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1/31/94 $ 9,625 $10,000 $10,000
5/31/94 $ 9,171 $ 9,533 $ 9,338
5/31/95 $ 9,786 $10,389 $10,124
5/31/96 $10,147 $10,880 $10,495
5/31/97 $10,804 $11,769 $11,300
5/31/98 $11,696 $12,860 $12,359
</TABLE>
FLEX SHARES
- -------------------------------------------------
Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- -------------------------------------------------
7.74% 5.34% 16.81% Without load
- -------------------------------------------------
5.74% With load
- --------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Georgia Tax-Exempt Lehman 10-Year Municipal Lipper Georgia Municipal
Bond Fund, Flex Shares Bond Index Debt Average
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/95 $10,000 $10,000 $10,000
5/31/95 $10,370 $10,539 $10,482
5/31/97 $10,998 $11,400 $11,286
5/31/98 $11,850 $12,456 $12,344
</TABLE>
Past performance is no indication of future performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
25
<PAGE>
STI CLASSIC INVESTMENT GRADE BOND FUND
--------------------------------------
The STI Classic Investment Grade Bond Fund (the "Fund") seeks to provide as high
a level of total return through current income and capital appreciation as is
consistent with the preservation of capital primarily by investing in investment
grade fixed income securities.
The Fund utilizes an investment philosophy which minimizes risk, while
attempting to outperform selected market indices. The core portfolio is
structured around the composition of the Lehman Brothers Government/ Corporate
Bond Index. The composition of the index is reviewed and quantitative historical
data is analyzed to determine the optimal spread ranges of the different market
sectors.
Once the optimum market sectors are selected, an over- or under-weighting is
developed in different sectors by investing in well-valued issues. All
securities purchased are carefully reviewed for value. Yield curve analysis and
credit ratings are an important part of this process.
Total return includes not only the current income, but also the changes in the
value of the assets held by the Fund. For the year ended May 31, 1998, the Fund
had a total return of 10.92% (Trust Shares) versus an average return of 11.48%
for the Lipper Intermediate Investment Grade Debt Average.
Interest rates declined for the first eight months of the period and then
established a trading range over the last four months. This decline led to the
higher than average coupon returns as the assets in the Fund appreciated in the
declining rate environment. Generally lower rates during the period were a
result of low inflation and confidence in the Federal Reserve's resolve to
maintain a monetary policy that would prevent large increases in the inflation
rate going forward. Another feature of the fixed income market during the period
was a flattening yield curve as short rates stabilized near the Fed funds rate
and long-term rates fell, reducing the yield advantage between long-term bonds
and incremental yield maturities.
Corporate bonds performed well during the period especially in the shorter
maturities. Concerns about the economic situation in Asia led to bouts of
volatility in the corporate sector, as investors became more credit conscious.
We continue to maintain most of our corporate weightings in the shorter maturity
ranges as we believe the risk versus return equation is currently best in the
shorter maturity range.
Mortgages performed well in somewhat of an unfriendly environment. As interest
rates decline mortgage securities tend to prepay or return principal to
investors. If interest rates decline enough to substantially increase
prepayments, the mortgage sector as a whole can underperform the other sectors
of the fixed income market. With interest rates declining we underweighted the
sector during the period.
The Fund continues to be managed with only moderate shifts in the average
maturity (duration). We seek to enhance total return by monitoring and analyzing
the risk/reward trade-offs of different maturities, exploiting the yield spread
between market sectors, credit analysis and other low risk strategies. By
actively pursuing these strategies, the Fund strives to add total return while
reducing risk.
/S/ Signature
L. Earl Denney, CFA
Managing Director
26
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------------------------------------
Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year Inception Inception
Return Return Return to Date to Date
- --------------------------------------------------------------------------------
10.92% 7.27% 6.63% 7.04% 49.12%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Investment Grade Lehman Brothers Government/ Lipper Intermediate Investment
Bond Fund, Trust Shares Corporate Bond Index Grade Debt Average
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
7/31/92 $10,000 $10,000 $10,000
5/31/93 $10,736 $10,788 $10,710
5/31/94 $10,861 $10,897 $10,750
5/31/95 $11,990 $12,162 $11,847
5/31/96 $12,472 $12,660 $12,301
5/31/97 $13,344 $13,661 $13,246
5/31/98 $14,801 $15,229 $14,551
</TABLE>
INVESTOR SHARES
- ----------------------------------------------------------------
Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year Inception Inception
Return Return Return to Date to Date
- ----------------------------------------------------------------
10.49% 6.85% 6.25% 6.73% 47.55% Without load
- ----------------------------------------------------------------
6.31% 5.50% 5.43% 6.05% 42.01% With load
- ----------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Investment Grade Lehman Brothers Government/ Lipper Intermediate Investment
Bond Fund, Investor Shares Corporate Bond Index Grade Debt Average
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/92 $ 9,625 $10,000 $10,000
5/31/93 $10,486 $11,064 $10,959
5/31/94 $10,577 $11,176 $10,999
5/31/95 $11,639 $12,473 $12,121
5/31/96 $12,046 $12,984 $12,587
5/31/97 $12,849 $14,010 $13,554
5/31/98 $14,197 $15,619 $14,889
</TABLE>
FLEX SHARES
- -------------------------------------------------
Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- -------------------------------------------------
9.99% 6.19% 19.63% Without load
- -------------------------------------------------
7.99% With load
- -------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Investment Grade Lehman Brothers Government/ Lipper Intermediate Investment
Bond Fund, Flex Shares Corporate Bond Index Grade Debt Average
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/95 $10,000 $10,000 $10,000
5/31/96 $10,232 $10,327 $10,319
5/31/97 $10,862 $11,143 $11,112
5/31/98 $11,948 $12,422 $12,206
</TABLE>
Past performance is no indication of future performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
27
<PAGE>
STI CLASSIC SHORT-TERM BOND FUND
--------------------------------
The investment objective of the STI Classic Short-Term Bond Fund (the "Fund") is
to provide as high a level of current income, relative to funds with similar
investment objectives, as is consistent with the preservation of capital
primarily through investment in short to intermediate-term investment grade
fixed income securities. The Fund attempts to capture the yield advantage which
normally exists between money market instruments and short to intermediate-term
bonds. The price volatility of short to intermediate-term bonds is fairly modest
and over time it consistently has been offset by the incremental yield these
instruments offer relative to money market securities. The Fund is managed from
a total return perspective; that is, day to day decisions are made with a view
towards maximizing income and price appreciation. The investment discipline
applied in managing the Fund emphasizes adding value through yield curve, sector
and credit analysis. Investments are made in those sectors, credits, and
segments of the yield curve within the applicable universe which offer the most
attractive risk/reward trade-offs. For example, we study historical yield spread
data of the corporate and mortgage sectors and compare it with the current
environment to identify buying and selling opportunities between various
sectors. We also use internal credit analysis and screening to identify
opportunities in corporate bonds. We look for those instruments that offer
incremental yield for a given level of credit risk.
The total return earned by the Fund over the last twelve months was 7.31% (Trust
Shares), as compared to 6.06% for the Salomon One-Year Treasury Benchmark
On-the-Run and 7.03% for the Salomon 1-3 year Treasury/Government
Sponsored/Corporate Index, neither of which include fees or expenses. We believe
the Fund continues to meet or exceed its objective.
/S/ Signature
David S. Yealy
Vice President
28
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------------------------------------
Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year Inception Inception
Return Return Return to Date to Date
- --------------------------------------------------------------------------------
7.31% 6.01% 5.51% 5.47% 32.01%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Short-Term Bond Fund, Salomon 1-3 Year Treasury/Government Salomon One Year Treasury
Trust Shares Sponsored/Corporate Index Benchmark On-the-Run
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
3/31/93 $10,000 $10,000 $10,000
5/31/93 $10,035 $10,039 $10,035
5/31/94 $10,238 $10,260 $10,303
5/31/95 $11,016 $11,021 $10,965
5/31/96 $11,506 $11,614 $11,593
5/31/97 $12,231 $12,384 $12,315
5/31/98 $13,125 $13,254 $13,061
</TABLE>
INVESTOR SHARES
- -------------------------------------------------------------
Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year Inception Inception
Return Return Return to Date to Date
- -------------------------------------------------------------
7.19% 5.79% 5.31% 5.17% 29.92% Without load
- -------------------------------------------------------------
5.07% 5.10% 4.89% 4.75% 27.27% With load
- -------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Short-Term Bond Fund, Salomon 1-3 Year Treasury/Government Salomon One Year Treasury
Investor Shares Sponsored/Corporate Index Benchmark On-the-Run
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
3/31/93 $ 9,800 $10,000 $10,000
5/31/93 $ 9,838 $10,039 $10,035
5/31/94 $10,017 $10,260 $10,303
5/31/95 $10,762 $11,021 $10,965
5/31/96 $11,218 $11,614 $11,593
5/31/97 $11,887 $12,384 $12,315
5/31/93 $12,742 $13,254 $13,061
</TABLE>
FLEX SHARES
- -------------------------------------------------
Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- -------------------------------------------------
6.84% 5.42% 16.84% Without load
- -------------------------------------------------
4.84% With load
- -------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Short-Term Bond Fund, Salomon 1-3 Year Treasury/Government Salomon One Year Treasury
Flex Shares Sponsored/Corporate Index Benchmark On-the-Run
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/95 $10,000 $10,000 $10,000
5/31/96 $10,359 $10,481 $10,511
5/31/97 $10,941 $11,176 $11,166
5/31/98 $11,689 $11,962 $11,843
</TABLE>
Past performance is no indication of future performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
29
<PAGE>
STI CLASSIC SHORT-TERM U.S. TREASURY SECURITIES FUND
----------------------------------------------------
The investment objective of STI Classic Short-Term U.S. Treasury Securities Fund
(the "Fund") is to provide as high a level of current income, relative to funds
with similar investment objectives, as is consistent with the preservation of
capital through investment exclusively in short-term U.S. Treasury securities.
The goal of the Fund is to capture the yield advantage which normally exists
between money market instruments and short-term bonds. The price volatility of
short-term bonds is very modest and over time has consistently been offset by
the incremental yield of these instruments relative to money market securities.
The Fund is managed from a total return perspective, that is, day to day
decisions are made with a view toward maximizing income and price appreciation.
The investment discipline applied in managing the Fund emphasizes adding value
through yield curve analysis. Investments are made in those segments of the
yield curve within the applicable universe which offer the most attractive
risk/reward trade-off.
The total return earned by the Fund over the last twelve months was 6.30% (Trust
Shares), as compared to 5.43% for the Salomon 6-month Treasury Bill Index. We
believe the Fund continues to meet or exceed its objective.
/S/ Signature
David S. Yealy
Vice President
30
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------------------------------------
Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year Inception Inception
Return Return Return to Date to Date
- --------------------------------------------------------------------------------
6.30% 5.60% 5.01% 4.89% 28.26%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Short-Term U.S. Treasury Salomon 1-3 Year Treasury/Government Salomon 6-Month
Securities Fund, Trust Shares Sponsored/Corporate Index Treasury Bill Index
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
3/31/93 $10,000 $10,000 $10,000
5/31/93 $10,024 $10,039 $10,053
5/31/94 $10,242 $10,260 $10,391
5/31/95 $10,868 $11,021 $10,953
5/31/96 $11,382 $11,614 $11,554
5/31/97 $12,038 $12,384 $12,176
5/31/98 $12,796 $13,254 $12,837
</TABLE>
INVESTOR SHARES
- ------------------------------------------------------------------
Annualized Annualized Annualized Cumulative
One Year 3 Year 5 Year Inception Inception
Return Return Return to Date to Date
- ------------------------------------------------------------------
6.04% 5.38% 4.83% 4.71% 27.06% Without load
- ------------------------------------------------------------------
4.97% 5.03% 4.62% 4.51% 25.81% With load
- ------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Short-Term U.S. Treasury Salomon 1-3 Year Treasury/Government Salomon 6-Month
Securities Fund, Investor Shares Sponsored/Corporate Index Treasury Bill Index
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
3/31/93 $ 9,900 $10,000 $10,000
5/31/93 $ 9,921 $10,039 $10,053
5/31/94 $10,121 $10,260 $10,391
5/31/95 $10,731 $11,021 $10,953
5/31/96 $11,216 $11,614 $11,554
5/31/97 $11,843 $12,384 $12,176
5/31/98 $12,559 $13,254 $12,837
</TABLE>
FLEX SHARES
- -------------------------------------------------
Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- -------------------------------------------------
5.90% 4.96% 15.30% Without load
- -------------------------------------------------
3.90% With load
- -------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Short-Term U.S. Treasury Salomon 1-3 Year Treasury/Government Salomon 6-Month
Securities Fund, Flex Shares Sponsored/Corporate Index Treasury Bill Index
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/95 $10,000 $10,000 $10,000
5/31/96 $10,357 $10,481 $10,500
5/31/97 $10,894 $11,176 $11,065
5/31/98 $11,537 $11,962 $11,666
</TABLE>
Past performance is no indication of future performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
31
<PAGE>
STI CLASSIC LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
---------------------------------------------------------
The STI Classic Limited-Term Federal Mortgage Securities Fund (the "Fund") seeks
to provide as high a level of current income as is consistent with the
preservation of capital by investing in mortgage-related securities issued or
guaranteed by U.S. government agencies and instrumentalities.
The Fund's return from June 1997 to May 1998 was 7.12% (Trust Shares). The Fund
underperformed its index, the Lipper Short-Intermediate U.S. Government Fund
Index by .21%.
Over the last year, U.S. economic growth has been more robust than the Federal
Reserve Board would normally tolerate. However, inflation remains subdued and
the economic impact of Asia's financial crisis has yet to be felt in the U.S.,
and economists disagree on its potential impact.
While exports have shown signs of slowing, other economic data such as job
growth, consumer sentiment and consumer spending continue at healthy levels.
While the final end game of this tug-of-war between weakness abroad and strength
at home remains to be seen, this uncertainty suggests that the Federal Reserve
will remain on hold and that the bond market will continue to trade in a range.
Prior to the Asian crisis, the portfolio was structured with a slightly
defensive bias reflecting the strong U.S. economy, and our own view that
mortgages as a sector were rich. We had been holding a large portion of balloon
and seasoned mortgages with 2 to 6 year effective maturities. Economic
expectations were tempered because of developments in the Far East. As a result,
CMOSs were added to the portfolio. These securities performed better during the
declining rates, while continuing to provide a high level of current income.
In addition, there was a very high level of mortgage prepayment activity.
Despite this, the mortgage sector, in aggregate, held its own with returns
roughly equal to the rest of the bond market. Although a significant portion of
the mortgage market remains refinancable, many borrowers have not taken
advantage of these lower rates.
Current valuations suggest an expectation that prepayments will slow because of
apathy or mortgagee financial inflexibility. While this may be true, we believe
that a further significant decline in rates would result in a prolonged period
of mortgage prepayment activity. However, the market does not reflect the
potential risk of additional principal return to mortgage investors. We believe
this creates an unfavorable risk/return environment at this time, especially for
newer, higher coupon production mortgage collateral. To offset this risk, new
purchases will emphasize conservatively structured Agency CMOS. These securities
will provide a significant level of yield above Treasury securities and
considerable protection against early return of principal.
Above all, we continue to favor income as the primary source of return.
Regardless of the market environment, these security combinations should perform
well relative to other short- and intermediate-term fixed income investments.
/S/ Signature
L. Earl Denney, CFA
Managing Director
/S/ Signature
David West, CFA
Principal
32
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- --------------------------------------------------------------------------------
7.12% 6.13% 6.50% 28.49%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Limited-Term Federal Merrill Lynch 1-5 Year Lipper Short/Intermediate
Mortgage Securities Fund, Trust Shares Short/Intermediate U.S. Treasury Index U.S. Government Average
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/94 $10,000 $10,000 $10,000
5/31/95 $10,756 $10,809 $10,740
5/31/96 $11,276 $11,341 $11,182
5/31/97 $12,002 $12,110 $11,896
5/31/98 $12,856 $13,040 $12,768
</TABLE>
INVESTOR SHARES
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ----------------------------------------------------------------
6.95% 5.90% 6.51% 27.61% Without load
- ----------------------------------------------------------------
4.24% 5.01% 5.80% 24.37% With load
- ----------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Limited-Term Federal Merrill Lynch 1-5 Year Lipper Short/Intermediate
Mortgage Securities Fund, Investor Shares Short/Intermediate U.S. Treasury Index U.S. Government Average
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
7/31/94 $ 9,750 $10,000 $10,000
5/31/95 $10,440 $10,697 $10,634
5/31/96 $10,919 $11,223 $11,071
5/31/97 $11,593 $11,984 $11,779
5/31/98 $12,398 $12,904 $12,642
</TABLE>
FLEX SHARES
- --------------------------------------------------------------------------------
Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- -------------------------------------------------
6.49% 5.46% 17.20% Without load
- -------------------------------------------------
4.49% With load
- -------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
STI Classic Limited-Term Federal Merrill Lynch 1-5 Year Lipper Short/Intermediate
Mortgage Securities Fund, Flex Shares Short/Intermediate U.S. Treasury Index U.S. Government Average
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/95 $10,000 $10,000 $10,000
5/31/96 $10,393 $10,431 $10,359
5/31/97 $10,996 $11,139 $11,021
5/31/98 $11,709 $11,994 $11,829
</TABLE>
Past performance is no indication of future performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
33
<PAGE>
STI CLASSIC U.S. GOVERNMENT SECURITIES FUND
-------------------------------------------
The objective for the STI Classic U.S. Government Securities Fund (the "Fund")
is to provide as high a level of current income as is consistent with the
preservation of capital by investing in obligations issued or guaranteed by the
U.S. Government or its agencies or instrumentalities. We believe the Fund met
its objectives for the fiscal year of operations ending May 31, 1998. The Fund
had an annualized one year total return of 10.76% (Trust Class). In addition,
the Fund was comprised of 28% U.S. Treasuries and 63% Government Agency
Mortgage-Backed Securities.
Interest rates fell sharply over the 1 year period ending May 31, 1998 with the
30-year Treasury Bonds 1.12% lower in yield. Although the Mortgage Backed
Securities sector underperformed treasuries, the Fund benefited from a
substantial exposure to 30 year Treasuries.
We feel that domestic economic growth will continue on a moderate sustainable
path and that inflation will remain well controlled. With real interest rates
still above 4% bonds still offer good value and we have positioned the Fund to
take advantage of the current interest rate environment.
/S/ Signature
Charles B. Leonard, CFA
First Vice President
/S/ Signature
Michael L. Ford
Associate
34
<PAGE>
Shown immediately following the Advisor's Discussion of Fund Performance are
three line graphs depicting the growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 as compared with the
growth of a hypothetical investment of $10,000 in the Fund's benchmark(s).
TRUST SHARES
- --------------------------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- --------------------------------------------------------------------------------
10.76% 6.97% 7.73% 32.98%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic U.S. Government Lipper Intermediate Government
Securities Fund, Trust Shares Funds Average
- --------------------------------------------------------------------------------
8/31/94 $10,000 $10,000
5/31/95 $10,832 $10,757
5/31/96 $11,132 $11,113
5/31/97 $11,972 $11,890
5/31/98 $13,260 $12,998
INVESTOR SHARES
- ----------------------------------------------------------------
Annualized Annualized Cumulative
One Year 3 Year Inception Inception
Return Return to Date to Date
- ----------------------------------------------------------------
10.23% 6.59% 7.12% 31.51% Without load
- ----------------------------------------------------------------
6.10% 5.24% 6.09% 26.57% With load
- ----------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic U.S. Government Lipper Intermediate Government
Securities Fund, Investor Shares Funds Average
- --------------------------------------------------------------------------------
6/30/94 $ 9,625 $10,000
5/31/95 $10,571 $10,921
5/31/96 $10,832 $11,282
5/31/97 $11,613 $12,071
5/31/98 $12,801 $13,196
FLEX SHARES
- -------------------------------------------------
Annualized Cumulative
One Year Inception Inception
Return to Date to Date
- -------------------------------------------------
9.78% 5.89% 18.62% Without load
- -------------------------------------------------
7.78% With load
- --------------------
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT:
STI Classic U.S. Government Lipper Intermediate Government
Securities Fund, Flex Shares Funds Average
----------------------------------------------------------------------------
6/30/95 $10,000 $10,000
5/31/96 $10,144 $10,267
5/31/97 $10,810 $10,985
5/31/98 $11,867 $12,009
Past performance is no indication of future performance.
The Funds' comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
35
<PAGE>
[This Page Left Intentionally Blank]
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of
STI Classic Funds:
We have audited the accompanying statements of net assets of the Value Income
Stock, Mid-Cap Equity, Small Cap Equity, Capital Growth, Balanced, Emerging
Markets Equity, International Equity Index, International Equity, Sunbelt
Equity, Investment Grade Tax-Exempt Bond, Florida Tax-Exempt Bond, Georgia
Tax-Exempt Bond, Investment Grade Bond, Short-Term Bond, Short-Term U.S.
Treasury Securities, Limited-Term Federal Mortgage Securities, and U.S.
Government Securities Funds of STI Classic Funds (the "Trust") as of May 31,
1998, and the related statements of operations, changes in net assets, and
financial highlights for the periods presented. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1998, by correspondence with the custodian and the application of
alternative auditing procedures with respect to unsettled securities
transactions. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Value Income Stock, Mid-Cap Equity, Small Cap Equity, Capital Growth, Balanced,
Emerging Markets Equity, International Equity Index, International Equity,
Sunbelt Equity, Investment Grade Tax-Exempt Bond, Florida Tax-Exempt Bond,
Georgia Tax-Exempt Bond, Investment Grade Bond, Short-Term Bond, Short-Term U.S.
Treasury Securities, Limited-Term Federal Mortgage Securities, and U.S.
Government Securities Funds of STI Classic Funds as of May 31, 1998, the results
of their operations, changes in their net assets, and financial highlights for
the periods presented, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Philadelphia, PA
July 24, 1998
37
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
VALUE INCOME STOCK FUND
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
COMMON STOCKS (92.3%)
BASIC MATERIALS (12.4%)
Allegheny Teledyne 1,064,900 $ 24,759
B.F. Goodrich 305,400 15,652
Consolidated Papers 573,400 16,593
Eastman Chemical 309,800 20,757
Engelhard 1,110,600 23,114
Hercules 473,300 20,855
Morton International 387,900 11,807
Nalco Chemical 196,500 7,369
PPG Industries 218,700 15,938
Reynolds Metals 517,100 29,992
Sonoco Products 555,830 19,419
Union Camp 263,200 14,394
Weyerhaeuser 355,900 18,084
Witco Chemical 277,800 10,539
Worthington Industries 776,800 13,691
-----------
262,963
-----------
CAPITAL GOODS (12.0%)
AMP 830,000 31,540
Cooper Industries 246,300 15,856
Crown Cork & Seal 652,400 33,843
Federal Signal 737,600 16,504
General Signal 359,800 14,797
Harris 440,000 21,202
Johnson Controls 283,200 16,850
National Service Industries 189,700 9,675
Pall 1,367,500 27,094
Tecumseh Products, Cl A 308,300 15,376
Tenneco 686,900 28,592
Thomas & Betts 423,300 22,620
-----------
253,949
-----------
COMMUNICATION SERVICES (5.4%)
Alltel 790,300 31,167
Ameritech 967,300 41,050
Frontier 347,500 10,577
GTE 553,900 32,299
-----------
115,093
-----------
- ------------------------------------------------------------
SHARES VALUE (000)
- ------------------------------------------------------------
CONSUMER CYCLICALS (8.7%)
American Greetings, Cl A 442,300 $ 21,009
Genuine Parts 607,600 20,620
H & R Block 517,100 22,752
ITT Industries 562,300 20,735
J.C. Penney 312,600 22,449
May Department Stores 500,000 32,156
TRW 535,200 28,667
Wallace Computer Services 585,500 15,662
-----------
184,050
-----------
CONSUMER STAPLES (16.4%)
American Stores 1,395,200 34,793
Anheuser Busch 693,700 31,867
Bestfoods 412,800 23,297
ConAgra 1,701,700 49,775
Food Lion, Cl A 984,100 9,533
General Mills 474,600 32,391
Hormel Foods 348,600 11,722
International Flavors &
Fragrances 697,700 33,490
Kimberly Clark 996,800 49,404
McCormick 470,900 15,775
R.R. Donnelley & Sons 325,300 14,638
Rubbermaid 527,300 17,203
Seagram 511,300 22,465
-----------
346,353
-----------
ENERGY (9.9%)
Atlantic Richfield 419,900 33,120
Kerr-McGee 402,900 25,483
Mobil 533,100 41,582
Murphy Oil 443,000 22,288
Texaco 776,000 44,814
Unocal 1,209,800 43,099
-----------
210,386
-----------
38
<PAGE>
================================================================================
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
FINANCIALS (13.7%)
American Financial Group 393,600 $ 17,786
American General 309,400 20,768
AmSouth Bancorp 401,175 15,420
BankBoston 153,800 16,207
Chase Manhattan Bank 117,600 15,986
Cigna 603,900 41,367
Crestar Financial 284,900 16,364
Hibernia, Cl A 813,200 17,077
Jefferson-Pilot 278,100 15,921
Magna Group 173,100 9,618
Safeco 682,300 31,727
TIG Holdings 429,600 10,633
Transamerica 180,600 20,769
Union Planters 250,700 14,666
Wells Fargo 51,700 18,690
Willis Corroon PLC, ADR 577,000 7,465
-----------
290,464
-----------
HEALTH CARE (6.1%)
Baxter International 612,600 35,033
C.R. Bard 687,500 23,848
Mallinckrodt 660,000 20,336
Pharmacia Upjohn ADR 1,110,200 49,057
-----------
128,274
-----------
TECHNOLOGY (0.9%)
EG&G 582,700 18,355
-----------
UTILITIES (6.8%)
Cinergy 553,300 17,879
Consolidated Natural Gas 570,300 32,258
GPU 562,200 21,645
Pacificorp 664,500 15,325
Questar 315,100 12,781
Scana 679,500 19,578
Sonat 623,100 24,418
-----------
143,884
-----------
- -----------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- -----------------------------------------------------------
Total Common Stocks
(Cost $1,754,836) $ 1,953,771
-----------
REPURCHASE AGREEMENTS (8.1%)
Deutsche Bank
5.58%, dated 05/29/98, matures
06/01/98, repurchase price
$77,181,210 (collateralized by
FHLMC obligation: total
market value $78,688,244) (H) $77,145 77,145
Salomon Brothers
5.58%, dated 05/29/98, matures
06/01/98, repurchase price
$93,672,579 (collateralized by
various FHLMC and FNMA
obligations: total market
value $102,625,423) (H) 93,629 93,629
-----------
Total Repurchase Agreements
(Cost $170,774) 170,774
-----------
Total Investments (100.4%)
(Cost $1,925,610) 2,124,545
-----------
OTHER ASSETS AND LIABILITIES, NET (-0.4%) (8,006)
-----------
39
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
VALUE INCOME STOCK FUND--CONCLUDED
- ------------------------------------------------------------
VALUE (000)
- ------------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 124,116,815
outstanding shares of beneficial interest $1,362,503
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 15,185,947
outstanding shares of beneficial interest 173,234
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 13,126,024
outstanding shares of beneficial interest 174,097
Undistributed net investment income 6,050
Accumulated net realized gain on investments 201,720
Unrealized appreciation on investments 198,935
----------
Total Net Assets (100.0%) $2,116,539
==========
- ----------------------------------------------------------
VALUE
- ----------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 13.90
==========
Net Asset Value and Redemption Price
Per Share -- Investor Shares $ 13.87
==========
Maximum Offering Price Per Share --
Investor Class ($13.87 / 96.25%) $ 14.41
==========
Net Asset Value, Offering and Redemption
Price Per Share -- Flex Shares (1) $ 13.75
==========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
40
<PAGE>
================================================================================
MID-CAP EQUITY FUND
- ----------------------------------------------------------
SHARES VALUE (000)
- ----------------------------------------------------------
COMMON STOCKS (97.8%)
CAPITAL GOODS (11.9%)
Allied Waste Industries* 515,700 $ 13,666
Danka Business Systems ADR 172,400 2,909
Herman Miller 209,100 5,789
Hubbell, Cl B 93,100 4,382
U.S. Filter* 494,400 15,048
Watsco 126,600 3,719
---------
45,513
---------
COMMUNICATION SERVICES (1.0%)
LCI International* 100,400 3,759
---------
CONSUMER CYCLICALS (23.3%)
Barnes & Noble* 119,100 4,035
BJ's Wholesale Club* 167,400 6,612
Borders Group* 170,100 5,273
Ethan Allen Interiors 108,700 5,469
Family Dollar Stores 330,800 5,479
Harley-Davidson 292,500 10,457
International Speedway* 120,800 3,684
Just for Feet* 104,800 2,299
Men's Wearhouse* 234,900 10,013
Norrell 186,700 4,212
Office Depot* 82,000 2,419
Radiant Systems* 160,700 2,642
Ralph Lauren* 240,600 7,338
Saks Holdings* 214,300 5,049
Samsonite* 169,400 4,870
Staff Leasing* 125,400 3,574
West Marine* 289,400 5,553
---------
88,978
---------
CONSUMER STAPLES (13.3%)
Avis Rent A Car* 283,300 6,870
Cracker Barrel Old Country Stores 218,300 7,040
Dial 233,400 5,791
Hannaford Brothers 94,300 4,167
Interstate Bakeries 318,700 10,278
- ----------------------------------------------------------
SHARES VALUE (000)
- ----------------------------------------------------------
CONSUMER STAPLES--CONTINUED
Papa John's International* 189,300 $ 7,880
US Foodservice* 126,600 4,194
Wendy's International 189,200 4,671
---------
50,891
---------
ENERGY (8.5%)
Anadarko Petroleum 46,100 3,043
EEX* 628,200 6,203
National-Oilwell Inc* 58,100 2,030
Newpark Resources* 316,800 5,762
Santa Fe International 112,200 3,913
Valero Energy 166,300 5,426
Western Atlas* 69,600 6,025
---------
32,402
---------
FINANCIALS (8.5%)
Colonial Bancgroup 158,200 5,122
Dime Bancorp 197,800 5,773
First Security 277,162 6,305
First Virginia Banks 73,200 3,825
Hibernia, Cl A 225,700 4,740
North Fork Bancorporation 234,300 5,638
Western Bancorp 21,500 924
---------
32,327
---------
HEALTH CARE (12.3%)
Acuson Corp* 358,300 6,852
Allergan 46,700 1,961
Biogen* 82,800 3,643
DePuy* 126,500 3,779
Dura Pharmaceuticals* 236,000 6,151
Jones Pharmaceuticals 208,500 6,411
Mylan Laboratories 211,200 6,336
Quorum Health Group* 65,100 1,957
Watson Pharmaceuticals* 229,800 10,054
---------
47,144
---------
41
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
MID-CAP EQUITY FUND--CONCLUDED
- ------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- ------------------------------------------------------------
TECHNOLOGY (15.3%)
ADC Telecommunications* 290,900 $ 8,182
Fiserv* 135,200 7,973
Flextronics International* 223,200 8,844
Intuit* 82,900 3,928
Networks Associates* 165,240 10,121
PMT Services* 248,200 4,840
Sawtek* 351,100 9,008
Teradyne* 183,300 5,636
---------
58,532
---------
TRANSPORTATION (3.0%)
CNF Transportation 164,600 6,759
Sanmina* 59,400 4,626
---------
11,385
---------
UTILITIES (0.7%)
Southwest Gas 117,000 2,559
---------
Total Common Stocks
(Cost $333,621) 373,490
---------
REPURCHASE AGREEMENT (3.9%)
Merrill Lynch
5.53%, dated 05/29/98, matures
06/01/98, repurchase price
$14,779,462 (collateralized by
GNMA obligation: total market
value $15,068,947) (H) $14,773 14,773
---------
Total Repurchase Agreement
(Cost $14,773) 14,773
---------
Total Investments (101.7%)
(Cost $348,394) 388,263
---------
OTHER ASSETS AND LIABILITIES, NET (-1.7%) (6,466)
---------
- -----------------------------------------------------------
VALUE (000)
- -----------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 24,497,672
outstanding shares of beneficial interest $ 273,201
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 1,823,608
outstanding shares of beneficial interest 20,703
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 1,418,645
outstanding shares of beneficial interest 18,063
Accumulated net operating loss (1)
Accumulated net realized gain on investments 29,962
Net unrealized appreciation on investments 39,869
---------
Total Net Assets 100.0% $ 381,797
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 13.79
=========
Net Asset Value and Redemption Price
Per Share -- Investor Shares $ 13.67
=========
Maximum Offering Price Per Share --
Investor Class ($13.67 / 96.25%) $ 14.20
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Flex Shares (1) $ 13.42
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FORDESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
42
<PAGE>
===============================================================================
SMALL CAP EQUITY FUND
- ------------------------------------------------------------
SHARES VALUE (000)
- ------------------------------------------------------------
COMMON STOCKS (93.2%)
BASIC MATERIALS (15.5%)
Ameron 78,500 $ 4,720
Carpenter Technology 159,900 8,475
Columbus Mckinnon 94,400 2,749
Commonwealth Industries 299,000 4,373
General Chemical Group 184,400 4,702
H. B. Fuller 105,700 6,619
Jannock Limited 242,900 3,340
Lilly Industries, Cl A 327,500 6,386
Madeco ADR 241,800 3,083
Quimica y Minera Chile ADR 193,200 6,653
Texas Industries 190,400 11,305
Wausau-Mosinee Paper 205,000 4,382
---------
66,787
---------
CAPITAL GOODS (13.4%)
A.M. Castle 189,700 4,268
American Woodmark 132,000 3,663
Belden 104,600 4,151
DT Industries 112,800 3,268
Furon 204,700 3,262
General Binding 15,100 515
Hardinge 64,300 2,540
Kaman 262,400 4,822
LSI Industries 133,300 2,749
Regal Beloit 409,500 13,360
Rock Tenn, Cl A 158,000 2,321
Toro 88,800 3,102
Valmont Industries 232,400 4,648
Watts Industries, Cl A 214,900 5,010
---------
57,679
---------
CONSUMER CYCLICALS (23.1%)
Brown Group 400,500 7,184
Bush Industries 291,700 7,839
Guilford Mills 296,950 8,018
Harman International 272,800 11,611
K2 505,500 10,110
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
CONSUMER CYCLICALS--CONTINUED
Kimball International* 352,200 $ 8,673
Libbey 126,700 4,989
Norrell 562,700 12,696
Ritchie Bros. Auctioneers* 136,900 3,713
Smith (A.O.) 93,600 4,727
Sotheby's Holdings, Cl A 422,800 9,724
Springs Industries, Cl A 81,900 4,597
Sturm Ruger 304,400 5,669
---------
99,550
---------
CONSUMER STAPLES (11.3%)
Angelica 205,900 4,633
Banta 273,900 8,679
Bowne & Company 122,800 5,257
Chemed 77,500 2,853
Ingles Markets, Cl A 237,000 2,963
Nash Finch 213,900 3,610
Standard Register 260,100 9,380
Universal Foods 388,600 9,254
York Group 117,800 2,113
---------
48,742
---------
ENERGY (3.6%)
Chesapeake Energy 1,086,800 4,687
Giant Industries 424,500 7,986
Quaker State 173,300 2,935
---------
15,608
---------
FINANCIALS (8.4%)
Administradora de Fondos de
Pensiones Provida ADR 176,000 2,959
Annuity & Life Re Holdings* 164,700 3,757
ARM Financial Group 125,000 2,555
Banco Latinamericano
de Exportaciones 115,100 3,856
Klamath First Bancorp 111,100 2,201
National Bancorp of Alaska 14,800 472
Seacoast Banking of Florida 51,300 2,001
43
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
SMALL CAP EQUITY FUND--CONCLUDED
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
FINANCIALS--CONTINUED
Student Loan 62,200 $ 3,001
Westcorp 392,300 4,757
Westerfed Financial 166,300 4,074
Willis Corroon PLC, ADR 495,800 6,414
---------
36,047
---------
HEALTH CARE (7.0%)
Block Drug, Cl A 73,400 3,211
Invacare 187,000 4,932
London International Group ADR 279,400 4,890
Medeva PLC, ADR 591,900 6,696
Vital Signs 293,300 5,096
West Company 187,800 5,540
---------
30,365
---------
TECHNOLOGY (4.2%)
Dallas Semiconductor 159,400 5,370
Fluke 183,500 5,895
Innovex 292,800 5,435
Methode Electronics, Cl A 115,900 1,478
---------
18,178
---------
TRANSPORTATION (4.8%)
Knightsbridge Tankers Limited* 150,700 4,351
Pittston Burlington 334,500 5,875
Sea Containers 238,500 9,644
Western Star Truck Holdings 53,600 965
---------
20,835
---------
UTILITIES (1.9%)
Northwest Natural Gas 106,850 2,938
Nui 114,800 2,827
TNP Enterprises 81,500 2,654
---------
8,419
---------
Total Common Stocks
(Cost $377,626) 402,210
---------
- -----------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- -----------------------------------------------------------
PREFERRED STOCKS (0.9%)
BASIC MATERIALS (0.9%)
Coeur D'Alene Mines, CV
to 0.8260 Share, Callable
03/15/99 @ 21.622 299,800 $ 3,916
---------
Total Preferred Stocks
(Cost $4,811) 3,916
---------
REPURCHASE AGREEMENT (6.8%)
Greenwich
5.57%, dated 05/29/98, matures
06/01/98, repurchase price
$29,225,441 (collateralized by
FNMA obligations: total market
value $29,801,117) (H) $29,212 29,212
---------
Total Repurchase Agreement
(Cost $29,212) 29,212
---------
Total Investments (100.9%)
(Cost $411,649) 435,338
---------
OTHER ASSETS AND LIABILITIES, NET (-0.9%) (3,884)
---------
44
<PAGE>
================================================================================
- -----------------------------------------------------------
VALUE (000)
- -----------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 30,355,957
outstanding shares of beneficial interest $348,236
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 3,172,170
outstanding shares of beneficial interest 39,827
Undistributed net investment income 669
Accumulated net realized gain on investments 19,033
Unrealized appreciation on investments 23,689
---------
Total Net Assets 100.0% $ 431,454
=========
- -----------------------------------------------------------
VALUE
- -----------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share-- Trust Shares $ 12.88
=========
Net Asset Value, Offering and Redemption
Price Per Share-- Flex Shares (1) $ 12.80
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
45
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
CAPITAL GROWTH FUND
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
COMMON STOCKS (84.4%)
BASIC MATERIALS (3.1%)
Air Products & Chemicals 195,000 $ 16,965
ConAgra 499,200 14,602
Ecolab 138,900 4,289
Morton International 197,800 6,021
Praxair 350,000 17,259
---------
59,136
---------
CAPITAL GOODS (14.9%)
Allied Signal 623,000 26,633
Allied Waste Industries* 156,300 4,142
Avery Dennison 74,100 3,839
Boeing 186,500 8,882
Culligan Water Technologies* 186,200 10,392
Dover 105,100 3,941
Emerson Electric 108,000 6,561
General Electric 645,700 53,835
Honeywell 275,800 23,150
Hubbell, Cl B 21,400 1,007
Molten Metal Technology* 43,500 10
Newell 343,500 16,574
Parker Hannifin 100,300 4,119
Textron 29,200 2,166
Thermo Electron* 265,600 9,329
Tyco International 476,180 26,368
U.S. Filter* 36,400 1,108
United Technologies 415,400 39,048
USA Waste Services* 549,145 25,913
W.W. Grainger 171,500 18,104
---------
285,121
---------
COMMUNICATION SERVICES (2.6%)
Ameritech 139,400 5,916
BellSouth 50,800 3,277
Century Telephone Enterprises 71,000 3,146
Ericsson Telephone ADR 277,500 7,735
MCI Communications 351,700 18,805
Northern Telecom 39,300 2,515
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
COMMUNICATION SERVICES--CONTINUED
Southern New England
Telecommunications 10,800 $ 695
Worldcom* 148,700 6,766
---------
48,855
---------
CONSUMER CYCLICALS (13.8%)
Abercrombie & Fitch, Cl A 266,984 11,280
Acnielsen* 1 --
Bed Bath & Beyond* 47,300 2,374
Boron Lepore & Associates* 30,600 903
Carnival 452,700 30,670
Consolidated Stores* 242,400 9,257
Costco* 411,100 23,792
Federated Department Stores* 279,900 14,502
Gannett 77,100 5,084
Home Depot 6,348 499
Intimate Brands 174,400 5,003
Lear* 255,400 13,632
Limited 72,500 2,411
Lowe's Companies 278,600 22,062
Manpower 175,600 7,540
Masco 509,000 28,631
Mattel 350,500 13,275
McGraw-Hill 263,800 20,626
Office Depot* 458,900 13,538
Omnicom Group 12,000 562
Republic Industries* 77,300 1,904
Sherwin Williams 188,963 6,283
Staples* 228,750 5,747
Starwood Lodging Trust REIT 113,234 5,343
Tandy 347,300 15,368
Viking Office Products* 82,200 2,350
Wal-Mart Stores 24,100 1,330
---------
263,966
---------
46
<PAGE>
================================================================================
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
CONSUMER STAPLES (10.5%)
Avon Products 203,600 $ 16,657
Campbell Soup 34,600 1,886
Cendant* 600,623 13,026
Clorox 110,000 9,185
Colgate-Palmolive 84,400 7,343
CVS 413,600 29,030
Flowers Industries 54,800 1,130
Fred Meyer* 107,900 4,640
Gillette 46,600 5,458
International Home Foods* 4,900 133
PepsiCo 232,100 9,473
Philip Morris 531,550 19,867
Ralston Purina 219,400 24,422
Rite Aid 195,800 7,012
Safeway* 529,200 19,283
Sara Lee 218,700 12,876
Unilever ADR 135,850 10,724
US Foodservice* 251,950 8,346
---------
200,491
---------
ENERGY (4.3%)
British Petroleum ADR 166,228 14,732
Chevron 81,800 6,534
EVI Weatherford Inc* 87,875 4,443
Halliburton 393,000 18,618
Mobil 105,800 8,252
Schlumberger 94,600 7,385
Texaco 241,900 13,970
Union Pacific Resources Group 257,959 5,224
Unocal 86,100 3,067
---------
82,225
---------
FINANCIALS (13.8%)
American International Group 181,975 22,531
AmSouth Bancorp 4,800 184
Associates First Capital 142,000 10,623
Banc One 93,610 5,160
Bank of New York 57,400 3,509
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
FINANCIALS--CONTINUED
Bank United, Cl A 63,100 $ 3,155
BankAmerica 94,700 7,831
BankBoston 75,500 7,956
Beneficial 55,900 7,491
Chase Manhattan Bank 28,100 3,820
Citicorp 28,000 4,175
CMAC Investment 53,500 3,237
Conseco 117,800 5,492
Crestar Financial 20,700 1,189
Cullen/Frost Bankers 79,400 4,302
FHLMC 448,800 20,420
First American of Tennessee 26,000 1,206
First Chicago NBD 57,200 5,001
First Commerce 159,100 12,261
First Commercial 14,000 969
First Security 24,200 551
First Tennessee National 102,600 3,258
Fleet Financial Group 179,588 14,726
FNMA 39,500 2,365
Golden State Bancorp* 14,700 563
H.F. Ahmanson 78,600 5,993
Household International 68,700 9,296
Mellon Bank 314,800 21,229
MGIC Investment 201,200 12,059
National City 30,840 2,089
PNC Bank 187,900 10,851
Regions Financial 72,800 2,994
State Street 9,400 648
Summit Bancorp 16,700 837
Sunamerica 136,000 6,613
Torchmark 326,600 14,003
Travelers 265,894 16,220
U.S. Bancorp 118,100 4,621
Washington Mutual 61,580 4,349
---------
263,777
---------
47
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
CAPITAL GROWTH FUND--CONTINUED
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
HEALTH CARE (8.7%)
Abbott Laboratories 212,800 $ 15,787
American Home Products 438,600 21,190
Baxter International 98,100 5,610
Boston Scientific* 24,400 1,555
Bristol-Myers Squibb 338,500 36,389
Eli Lilly 177,300 10,893
Healthsouth* 493,619 14,006
Johnson & Johnson 126,500 8,736
Merck 192,482 22,532
Tenet Healthcare* 402,000 14,070
U.S. Surgical 31,700 1,260
Warner Lambert 233,100 14,875
----------
166,903
----------
TECHNOLOGY (9.7%)
3Com* 48,500 1,231
Analog Devices* 57,100 1,410
Automatic Data Processing 174,400 11,096
Ceridian* 355,800 19,213
Cisco Systems* 361,950 27,372
Compaq Computer 143,400 3,917
EMC* 204,700 8,482
IBM 212,100 24,895
Intel 209,500 14,966
Lucent Technologies 123,864 8,787
Microsoft* 339,900 28,828
Networks Associates* 125,300 7,675
Sun Microsystems* 91,500 3,666
Texas Instruments 66,400 3,411
Xerox 189,000 19,420
----------
184,369
----------
TRANSPORTATION (3.0%)
AMR* 29,000 4,464
Burlington Northern Santa Fe 251,700 25,044
Continental Airlines, Cl B* 59,300 3,354
Delta Air Lines 152,300 17,514
Trans World Air* 94,400 6,950
----------
57,326
----------
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
Total Common Stocks
(Cost $1,282,946) $1,612,169
----------
PREFERRED STOCKS (2.5%)
CAPITAL GOODS (0.2%)
Ingersoll-Rand, CV
to 0.4282 Share 160,000 3,900
----------
CONSUMER STAPLES (0.2%)
Suiza Capital Trust, CV to
0.6390 Share, Callable
04/01/01 @ 51.719 (B)* 60,000 2,910
----------
ENERGY (0.9%)
Belco Oil & Gas, CV to
1.1292 Shares, Callable
03/10/01 @ 25* 71,000 1,376
EVI , CV to 0.6250 Share,
Callable 11/04/00 @ 51.75 (B) 164,400 7,645
Unocal, CV to 1.1748 Shares,
Callable 09/03/00 @ 50 154,000 8,335
----------
17,356
----------
FINANCE (0.3%)
Conseco Financial Trust, CV
to 0.9363 share* 65,000 3,343
United Financial, CV to
1.6530 Shares, Callable
07/01/98 @ 45.188 48,500 1,764
----------
5,107
----------
TECHNOLOGY (0.9%)
Microsoft, CV to 1 Share 187,500 17,508
----------
TRANSPORTATION (0.2%)
Trans World Air, CV to 2.4668
Shares, Callable 03/15/99 @ 50* 58,000 2,124
Trans World Air, CV to 6.3291
Shares, Callable 12/15/00
@ 53.238 (B) 23,000 1,693
----------
3,817
----------
48
<PAGE>
================================================================================
- -----------------------------------------------------------
FACE AMOUNT
(000)/SHARES VALUE (000)
- -----------------------------------------------------------
Total Preferred Stocks
(Cost $46,619) $ 50,598
----------
CONVERTIBLE BONDS (1.8%)
Coeur D'alene, CV to
57.3066 Shares
7.250%, 10/31/05 $ 2,000 1,705
Continental Airlines, CV to
33.1181 Shares, Callable
04/15/99 @ 104.73
6.750%, 04/15/06 1,350 2,599
Home Depot, CV to 21.6998
Shares, Callable 10/02/99
@ 100.81
3.250%, 10/01/01 10,000 17,325
Molten Metal Technology, CV to
25.8065 Shares, Callable
05/01/99 @ 102.75 (B)
5.500%, 05/01/06 9,500 629
Network Associates, CV to 5.6920
Shares, Callable 02/13/03
@ 49.452 (A) (B)
0.000%, 02/13/18 10,000 4,350
USA Waste Services, CV to 33.0797
Shares, Callable 06/01/99
@ 101.8 (B)
4.500%, 06/01/01 3,000 4,740
USA Waste Services, CV to 35.3243
Shares, Callable 03/15/99
@ 102.5
5.000%, 03/01/06 1,350 2,292
----------
Total Convertible Bonds
(Cost $28,522) 33,640
----------
REGULATED INVESTMENT COMPANIES (0.6%)
CVS, TRACES* 70,000 4,944
Dollar General, STRYPES* 174,800 6,773
----------
Total Regulated Investment Companies
(Cost $11,829) 11,717
----------
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
REPURCHASE AGREEMENTS (11.2%)
Deutsche Bank
5.59%, dated 05/29/98, matures
06/01/98, repurchase price
$17,064,601 (collateralized by
FHLMC obligation: total
market value $17,397,784) (H) $ 17,057 $ 17,057
Greenwich
5.59%, dated 05/29/98, matures
06/01/98, repurchase price
$31,543,226 (collateralized
by FHLMC and FNMA
obligations: total market value
$32,161,612) (H) 31,529 31,529
Salomon Brothers
5.59%, dated 05/29/98, matures
06/01/98, repurchase price
$166,139,955 (collateralized by
various FHLMC and FNMA
obligations: total market
value $169,833,329) (H) 166,063 166,063
----------
Total Repurchase Agreements
(Cost $214,649) 214,649
----------
Total Investments (100.7%)
(Cost $1,584,565) 1,922,773
----------
OTHER ASSETS AND LIABILITIES, NET (-0.7%) (12,472)
----------
49
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
CAPITAL GROWTH FUND--CONCLUDED
- -----------------------------------------------------------
VALUE (000)
- -----------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 93,020,666
outstanding shares of beneficial interest $1,112,047
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 16,497,457
outstanding shares of beneficial interest 194,911
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 6,577,743
outstanding shares of beneficial interest 98,697
Undistributed net investment income 3,728
Accumulated net realized gain on investments 162,710
Net unrealized appreciation on investments 338,208
----------
Total Net Assets (100.0%) $1,910,301
==========
- -----------------------------------------------------------
VALUE
- -----------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 16.48
==========
Net Asset Value and Redemption Price
Per Share -- Investor Shares $ 16.43
==========
Maximum Offering Price Per Share --
Investor Class ($16.43 / 96.25%) $ 17.07
==========
Net Asset Value, Offering and Redemption
Price Per Share -- Flex Shares (1) $ 16.22
==========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
50
<PAGE>
================================================================================
BALANCED FUND
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
COMMON STOCKS (57.6%)
BASIC MATERIALS (1.7%)
Air Products & Chemicals 15,700 $ 1,366
Ecolab 11,300 349
Morton International 15,900 484
Praxair 29,000 1,430
Viking Office Products* 6,700 192
----------
3,821
----------
CAPITAL GOODS (9.7%)
Allied Signal 50,200 2,146
Allied Waste Industries* 16,600 440
Avery Dennison 6,000 311
Boeing 15,000 714
Culligan Water Technologies* 15,000 837
Dover 5,900 221
Emerson Electric 8,800 535
General Electric 52,400 4,369
Honeywell 22,300 1,872
Hubbell, Cl B 1,700 80
Molten Metal Technology* 19,100 5
Parker Hannifin 8,100 333
Textron 2,200 163
Thermo Electron* 21,400 752
Tyco International 38,598 2,137
U.S. Filter* 2,900 88
United Technologies 33,500 3,149
USA Waste Services* 43,805 2,067
W.W. Grainger 13,900 1,467
----------
21,686
----------
COMMUNICATION SERVICES (1.6%)
Ameritech 10,900 463
BellSouth 3,800 245
Century Telephone Enterprises 5,600 248
Ericsson Telephone ADR 22,400 624
MCI Communications 23,100 1,235
Northern Telecom 3,300 211
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
COMMUNICATION SERVICES--CONTINUED
Southern New England
Telecommunications 1,500 $ 97
Worldcom* 11,900 541
----------
3,664
----------
CONSUMER CYCLICALS (10.7%)
Abercrombie & Fitch, Cl A* 21,526 909
Bed Bath & Beyond* 3,800 191
Boron Lepore & Associates* 2,500 74
Carnival 36,600 2,480
ConAgra 40,400 1,182
Consolidated Stores* 19,400 741
Costco* 33,200 1,921
CVS 33,300 2,337
Federated Department Stores* 22,600 1,171
Gannett 6,200 409
Home Depot 600 47
Intimate Brands 13,400 384
Lear* 20,000 1,067
Limited 5,700 190
Lowe's Companies 22,400 1,774
Masco 41,100 2,312
Mattel 28,150 1,066
McGraw-Hill 21,300 1,665
Office Depot* 36,000 1,062
Omnicom Group 900 42
Republic Industries* 8,200 202
Sherwin Williams 15,300 509
Staples* 18,500 465
Starwood Lodging Trust REIT 9,155 432
Tandy 27,900 1,235
Wal-Mart Stores 2,600 143
----------
24,010
----------
CONSUMER STAPLES (6.5%)
Avon Products 16,100 1,317
Cendant* 48,358 1,049
Clorox 8,900 743
51
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
BALANCED FUND--CONTINUED
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
CONSUMER STAPLES--CONTINUED
Colgate-Palmolive 7,400 $ 644
Flowers Industries 5,400 111
Fred Meyer* 8,500 365
Gillette 3,700 433
International Home Foods* 400 11
Newell 27,700 1,337
PepsiCo 18,800 767
Philip Morris 42,800 1,600
Ralston Purina 17,700 1,970
Rite Aid 15,800 566
Safeway* 42,400 1,545
Sara Lee 17,700 1,042
Unilever ADR 6,700 529
US Foodservice* 19,580 649
----------
14,678
----------
ENERGY (3.2%)
British Petroleum ADR 13,407 1,188
Chevron 6,600 527
EVI Weatherford Inc* 13,445 680
Halliburton 31,600 1,497
Mobil 8,500 663
Schlumberger 7,600 593
Texaco 23,300 1,346
Union Pacific Resources Group 20,722 420
Unocal 6,900 246
----------
7,160
----------
FINANCIALS (10.1%)
American International Group 14,650 1,814
AmSouth Bancorp 400 15
Associates First Capital 11,400 853
Banc One 7,392 407
Bank of New York 4,500 275
Bank United, Cl A 10,300 515
BankAmerica 8,300 686
BankBoston 5,800 611
Beneficial 4,500 603
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
FINANCIALS--CONTINUED
Chase Manhattan Bank 2,600 $ 353
Citicorp 2,800 418
CMAC Investment 5,000 302
Conseco 9,600 448
Crestar Financial 1,600 92
Cullen/Frost Bankers 6,200 336
FHLMC 35,900 1,633
First American of Tennessee 1,900 88
First Chicago NBD 4,700 411
First Commerce 12,700 979
First Security 2,000 46
First Tennessee National 14,400 457
Fleet Financial Group 14,499 1,189
FNMA 5,800 347
H.F. Ahmanson 6,300 480
Household International 6,300 852
Mellon Bank 25,400 1,713
MGIC Investment 16,300 977
National City 2,160 146
PNC Bank 16,400 947
Regions Financial 5,900 243
State Street 800 55
Summit Bancorp 1,400 70
Sunamerica 10,900 530
Torchmark 26,400 1,132
Travelers 21,349 1,302
U.S. Bancorp 9,600 376
Washington Mutual 5,310 375
----------
22,076
----------
HEALTH CARE (5.9%)
Abbott Laboratories 16,200 1,202
American Home Products 34,300 1,657
Baxter International 7,900 452
Boston Scientific* 2,000 127
Bristol-Myers Squibb 27,300 2,935
52
<PAGE>
================================================================================
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
HEALTH CARE--CONTINUED
Eli Lilly 14,300 $ 879
Healthsouth* 40,028 1,136
Johnson & Johnson 10,200 704
Merck 15,600 1,826
Tenet Healthcare* 32,500 1,137
U.S. Surgical 2,600 103
Warner Lambert 18,600 1,187
----------
13,345
----------
TECHNOLOGY (6.4%)
3Com* 3,200 81
Analog Devices* 4,600 114
Automatic Data Processing 13,800 878
Ceridian* 28,600 1,544
Cisco Systems* 29,400 2,223
Compaq Computer 11,600 317
EMC* 16,200 671
IBM 17,100 2,007
Intel 15,100 1,079
Lucent Technologies 9,808 696
Microsoft* 23,400 1,985
Networks Associates* 10,200 625
Sun Microsystems* 7,900 316
Texas Instruments 5,400 277
Xerox 15,100 1,552
----------
14,365
----------
TRANSPORTATION (2.0%)
AMR* 2,300 354
Burlington Northern Santa Fe 20,000 1,990
Continental Airlines, Cl B* 4,800 271
Delta Air Lines 12,300 1,415
Trans World Air* 5,800 427
----------
4,457
----------
Total Common Stocks
(Cost $105,720) 129,262
----------
- -----------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- -----------------------------------------------------------
PREFERRED STOCKS (1.0%)
CAPITAL GOODS (0.2%)
Ingersoll-Rand, CV to
0.4282 Share* 15,000 $ 366
----------
ENERGY (0.1%)
EVI , CV to 0.6250 Share,
Callable 11/04/00 @ 51.75 (B)* 5,600 260
----------
FINANCE (0.2%)
Conseco Financial Trust,
CV to 0.9363 Share* 10,000 514
----------
TECHNOLOGY (0.5%)
Microsoft, CV to 1 Share 12,500 1,167
----------
Total Preferred Stocks
(Cost $2,144) 2,307
----------
CORPORATE OBLIGATIONS (18.5%)
FINANCE (13.3%)
Aristar
6.750%, 05/15/99 $ 1,500 1,510
AT&T Capital, MTN
6.410%, 08/13/99 2,250 2,250
Countrywide Home Loan,
Ser F, MTN
6.840%, 10/22/04 400 412
6.510%, 02/11/05 2,300 2,309
Ford Motor Credit
7.000%, 09/25/01 2,250 2,315
6.500%, 02/28/02 2,100 2,129
General Motors Acceptance
7.125%, 05/01/01 1,900 1,952
General Motors Acceptance, MTN
7.050%, 04/23/02 1,000 1,030
Great Western Financial
8.600%, 02/01/02 800 858
Homeside Lending, MTN
6.875%, 05/15/00 3,400 3,443
53
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
BALANCED FUND--CONCLUDED
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
FINANCE--CONTINUED
International Lease Finance,
Ser J, MTN
5.957%, 01/15/02 $ 700 $ 696
Merrill Lynch, Ser B, MTN
6.060%, 10/15/01 4,000 3,990
Morgan Stanley, Ser C, MTN,
Callable 3/9/2001 @ 100
6.090%, 03/09/11 1,500 1,500
Salomon
7.300%, 05/15/02 1,750 1,816
Salomon Smith Barney
6.250%, 01/15/05 1,750 1,730
SunAmerica
6.200%, 10/31/99 2,000 2,005
----------
29,945
----------
INDUSTRIAL (5.2%)
American Home Products
7.700%, 02/15/00 1,000 1,030
7.900%, 02/15/05 1,850 2,017
Bausch & Lomb
6.750%, 12/15/04 1,000 1,019
Ikon Capital, MTN
6.730%, 06/15/01 1,000 1,014
Lockheed Martin
6.550%, 05/15/99 2,000 2,010
Philip Morris
7.250%, 09/15/01 2,100 2,155
7.500%, 04/01/04 1,000 1,051
Praxair
6.900%, 11/01/06 1,250 1,302
----------
11,598
----------
Total Corporate Obligations
(Cost $41,274) 41,543
----------
- -----------------------------------------------------------
FACE AMOUNT
(000)/SHARES VALUE (000)
- -----------------------------------------------------------
CONVERTIBLE BONDS (1.0%)
Marriott International, CV to
8.7600 Shares, Callable 03/25/99
@ 60.371 (A) (D)
0.000%, 03/25/11 $1,000 $ 676
Staples, CV to 45.4545 Shares,
Callable 10/01/98 @ 101.8 (B)
4.500%, 10/01/00 500 862
CONVERTIBLE BONDS--CONTINUED
USA Waste Services, CV to
35.3243 Shares, Callable
03/15/99 @ 102.5
5.000%, 03/01/06 355 603
----------
Total Convertible Bonds
(Cost $1,541) 2,141
----------
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (2.4%)
FHLMC
8.000%, 06/01/02 327 333
7.500%, 09/01/03 863 879
FNMA
7.000%, 10/01/03 4,029 4,086
----------
Total U.S. Agency Mortgage-Backed Obligations
(Cost $5,267) 5,298
----------
U.S. TREASURY OBLIGATIONS (13.4%)
U.S. Treasury Bonds
7.500%, 11/15/16 5,300 6,259
8.125%, 08/15/19 9,200 11,657
6.000%, 02/15/26 4,650 4,725
U.S. Treasury Notes
6.375%, 04/30/99 500 504
5.875%, 11/30/01 2,300 2,321
6.625%, 03/31/02 1,200 1,242
5.875%, 11/15/05 3,400 3,448
----------
Total U.S. Treasury Obligations
(Cost $28,253) 30,156
----------
54
<PAGE>
================================================================================
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
BANK NOTE (0.7%)
Capital One
6.530%, 11/26/99 $ 1,450 $ 1,452
----------
Total Bank Note
(Cost $1,450) 1,452
----------
REGULATED INVESTMENT COMPANIES (0.2%)
Dollar General, STRYPES* 14,100 546
----------
Total Regulated Investment Companies
(Cost $556) $ 546
----------
REPURCHASE AGREEMENT (5.2%)
Merrill Lynch
5.53%, dated 05/29/98, matures
06/01/98, repurchase price
$11,721,271 (collateralized by
various GNMA obligations:
total market value
$11,954,302) (H) 11,716 11,716
----------
Total Repurchase Agreement
(Cost $11,716) 11,716
----------
Total Investments (100.0%)
(Cost $197,921) 224,421
----------
OTHER ASSETS AND LIABILITIES, NET (0.0%) (18)
----------
- -----------------------------------------------------------
VALUE (000)
- -----------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 14,399,980
outstanding shares of beneficial interest $152,733
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 632,425
outstanding shares of beneficial interest 6,807
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 2,121,418
outstanding shares of beneficial interest 26,099
Undistributed net investment income 784
Accumulated net realized gain on investments 11,480
Net unrealized appreciation on investments 26,500
--------
Total Net Assets 100.0% $224,403
========
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 13.09
========
Net Asset Value and Redemption Price
Per Share -- Investor Shares $ 13.14
========
Maximum Offering Price Per Share --
Investor Class ($13.14 / 96.25%) $ 13.65
========
Net Asset Value, Offering and Redemption
Price Per Share -- Flex Shares (1) $ 13.02
========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
55
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
EMERGING MARKETS EQUITY FUND
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
FOREIGN COMMON STOCKS (87.0%)
ARGENTINA (4.2%)
Capex, Cl A 33,700 $ 133
Massalin Particulares, Cl B 38,800 194
Metrogas ADR 32,204 290
Quilmes Industrial 22,000 212
Transportadora de Gas
del Sur ADR 33,000 353
YPF ADR, Cl D 8,650 269
---------
1,451
---------
BRAZIL (6.7%)
Makro Atacadista GDR 15,800 197
Makro Atacadista GDR (B) 11,700 109
Petrobras ADR 13,500 264
Souza Cruz 63,500 439
Telebras ADR 6,330 675
Telesp Celular* 1,690,000 98
Telec De Sao Paulo* 1,690,000 257
Unibanco 9,100 285
---------
2,324
---------
CHILE (2.9%)
Administradora de Fondos de
Pensiones Provida ADR 29,500 496
Banco De A. Edwards 17,000 236
Quimica Y Minera Chile ADR 8,300 286
---------
1,018
---------
COLOMBIA (1.4%)
Banco Ganadero ADR 15,600 291
Bancolombia 87,924 201
---------
492
---------
CZECH REPUBLIC (1.2%)
Spt Telecom* 3,300 424
---------
ECUADOR (0.4%)
LA Cemento Nacional GDR 800 128
---------
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
GREECE (5.4%)
Greek Telecom 26,085 $ 766
Hellas Can Packaging 25,500 437
Papastratos Cigarettes 25,400 653
---------
1,856
---------
HONG KONG (4.8%)
China Hong Kong Photo 790,000 112
Guangdong Kelon
Electric Holding 188,000 180
HSBC Holdings 14,744 358
National Mutual Asia 866,000 609
Seoul Horizon Trust 17,000 82
Techtronic Industries 1,350,000 314
---------
1,655
---------
HUNGARY (0.4%)
Egis 3,925 144
---------
INDIA (3.6%)
Hindalco GDR 2,700 37
Hindalco Industries GDR 10,500 158
Mahanagar Telephone
Nigam GDR* 26,500 348
Videsh Sanchar Nigam GDR 60,000 712
---------
1,255
---------
INDONESIA (1.4%)
Budi Acid Jaya, F 231,250 21
Citra Marga Nusaphala, F 944,000 31
Dankos Laboratories, F 665,000 28
Indonesian Satellite, F 96,000 128
Modern Photo Film, F 356,000 32
PT Jaya Real Property, F 754,000 23
PT Timbang Timah 350,000 218
---------
481
---------
56
<PAGE>
================================================================================
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
ISRAEL (6.5%)
Bank Leumi Le-Israel 145,000 $ 293
Blue Square Stores* 42,300 524
ECI Telecommunications 25,000 803
Israel Chemicals 274,000 348
Nice Systems ADR* 8,000 292
---------
2,260
---------
MALAYSIA (4.9%)
Aluminium of Malaysia 231,000 42
Berjaya Sports Toto 150,000 314
IOI Corp 325,000 219
Petronas Dagangan 170,000 177
RJ Reynolds 305,000 477
Technology Resources Industries 635,000 461
---------
1,690
---------
MEXICO (12.6%)
Grupo Carso 78,000 402
Grupo Continental 167,750 567
Grupo Financiero Banorte, Cl B 216,935 292
Grupo Radio Centro ADR 16,000 206
Herdez, Cl B 518,000 276
Kimberly Clark, Cl A 100,000 418
Grupo Industrial Maseca ADR 17,000 146
Nacional de Drogas, Cl L 622,000 424
Panamerican Beverage, Cl A 9,000 304
San Luis Cpo 97,000 422
Telefonos de Mexico ADR 19,000 901
---------
4,358
---------
PANAMA (0.3%)
Banco Latinamericano
de Exportaciones 2,800 94
---------
PERU (3.1%)
CPT Telefoncia del Peru 34,000 735
Credicorp 14,630 232
Telefonica del Peru, Cl B 50,500 108
---------
1,075
---------
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
PHILIPPINES (3.7%)
Bacnotan Consolidated 155,940 $ 239
Benpres Holdings (B)* 72,440 268
First Philippene Holdings 209,250 156
Music* 1,000,000 247
Philippine Long Distance 14,000 360
---------
1,270
---------
POLAND (1.2%)
Bank Handlowy 25,000 430
---------
PORTUGAL (8.7%)
Banco Totta & Acores 35,000 1,296
Cimentos de Portugal 15,720 602
Electricidade de Portugal 12,500 661
Portugal Telecom ADR 8,200 433
---------
2,992
---------
SINGAPORE (1.9%)
Amtek Engineering 246,000 119
Elec & Eltek International 56,400 254
Oversea Chinese Bank 73,000 290
---------
663
---------
SOUTH AFRICA (8.7%)
Amalgated Banks of South Africa 56,235 442
Barlow 26,600 218
Kersaf Investments 68,600 386
Liberty Life Association of Africa 14,400 400
Rembrandt Group 48,800 402
Richemont 26,500 373
South African Breweries 13,600 384
Suncrush 147,535 395
---------
3,000
---------
SOUTH KOREA (1.4%)
Dae Duck Electronics 3,800 186
SK Telecom 968 293
---------
479
---------
57
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
EMERGING MARKETS EQUITY FUND--CONCLUDED
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
THAILAND (1.5%)
Advanced Info Service, F 27,000 $ 147
Delta Electronics, F 37,500 283
KR Precision, F 46,500 91
---------
521
---------
Total Foreign Common Stocks
(Cost $34,886) 30,060
---------
FOREIGN PREFERRED STOCKS (6.9%)
Banco Itau SA 1,070,000 637
Brahma 600,000 350
Cemig 15,603,450 516
Fertilizantes Fosfatados 43,000,000 170
Globex Utilidades 30,800 260
Lojas Renner 5,500,000 189
Petrol Brasileiros 1,300,000 251
---------
Total Foreign Preferred Stocks
(Cost $2,879) 2,373
---------
TIME DEPOSIT (6.7%)
Cayman Time Deposit
5.125%, 06/01/98 2,300,000 2,300
---------
Total Time Deposit
(Cost $2,300) 2,300
---------
Total Investments (100.5%)
(Cost $40,066) 34,733
---------
OTHER ASSETS AND LIABILITIES, NET (-0.5%) (179)
---------
- -----------------------------------------------------------
VALUE (000)
- -----------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 3,896,622
outstanding shares of beneficial interest $ 41,007
Undistributed net investment income 298
Accumulated net realized loss on
investments and foreign
currency transactions (1,418)
Net unrealized depreciation on investments (5,333)
---------
Total Net Assets (100.0%) $ 34,554
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 8.87
=========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
58
<PAGE>
================================================================================
INTERNATIONAL EQUITY INDEX FUND
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
FOREIGN COMMON STOCKS (94.1%)
AUSTRALIA (2.2%)
Amcor 13,361 $ 62
Broken Hill Proprietary 20,656 177
Coles Myer 30,235 136
CSR 27,994 82
Lend Lease 4,481 96
Mount Isa Mines Holdings 42,910 22
National Australia Bank 13,886 192
Newscorp 33,881 209
Pacific Dunlop 28,455 51
Rio Tinto 5,542 67
Western Mining 20,202 63
Westpac Banking 36,880 243
---------
1,400
---------
AUSTRIA (1.9%)
Bank of Austria 2,658 239
Creditanstalt Bankverein 2,035 242
Ea - Generali 343 117
Oest El Wirtsch, Cl A 2,245 264
OMV 1,715 248
Wienerberger Baustoff 401 99
---------
1,209
---------
BELGIUM (2.3%)
Bekaert 30 24
Delhaize Freres 1,000 69
Electrabel 1,000 250
Fortis 700 200
Generale Banque 370 271
Groupe Bruxelles Lambert 450 99
Kredietbank 290 203
Petrofina 440 181
Royale Belge 175 68
Solvay, Cl A 1,250 92
Union Minere 680 46
---------
1,503
---------
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
DENMARK (1.6%)
Carlsberg, Cl B 1,427 $ 99
D/S 1912, Cl B 25 228
D/S Svendborg, Cl B 10 131
Danisco 1,810 113
Novo Nordisk, Cl B 1,370 216
Ratin, Cl B 251 49
Sophus Berendsen, Cl B 251 10
Tele Danmark, Cl B 1,908 179
---------
1,025
---------
FINLAND (1.2%)
Merita 19,200 121
Nokia Oyj, Cl A 2,000 132
Nokia, Cl K 4,600 301
Outokumpu Oy Akt, Cl A 3,100 44
Rauma 303 6
UPM - Kymmene 6,600 191
---------
795
---------
FRANCE (14.6%)
Accor 847 232
Air Liquide 1,886 372
Alcatel Alsthom 2,238 479
Axa 4,748 540
Banque National Paris, Cl A 3,350 286
Bouygues 950 172
Carrefour 603 368
Cie Bancaire 710 130
Cie de Saint Gobain 2,265 447
Cie Generale des Eaux 2,045 411
Compagnie de Suez 15 --
Elf Aquitaine 3,282 456
Elf Sanofi 2,573 301
Eridania Beghin - Say 983 215
Generale Des Eaux Warrants* 2,045 4
Groupe Danone 1,552 418
Havas 1,300 102
L'Oreal 1,084 538
59
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
INTERNATIONAL EQUITY INDEX FUND--CONTINUED
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
FRANCE--CONTINUED
Lafarge Coppee 2,218 $ 225
Legrand 670 185
Louis Vuitton - Moet Hennessy 1,502 315
Lyonnaise des Eaux Dumez 2,480 423
Michelin, Cl B 2,844 176
Paribas 958 98
Pernod - Ricard 2,179 162
Peugeot 1,201 235
Pinault - Printemps Redoute 400 329
Promodes 333 162
Rhone - Poulenc, Cl A 6,900 383
Schneider 3,877 328
Societe Generale 1,830 362
Total Compaigne, Cl B 4,470 555
Unibail 400 55
---------
9,464
---------
GERMANY (18.2%)
Aachener & Munchener Bete 810 93
Allianz 4,380 1,384
BASF 14,200 658
Bayer 11,410 545
Bayerische Hypotheken
und Wechselbank 5,750 362
Bayerische Vereinsbank 2,360 198
Biersdorf 2,640 161
Daimler - Benz 9,230 930
Degussa 2,490 159
Deutsche Bank 8,120 699
Dresdner Bank Frankfurt 4,600 259
Heidelberger Zement 2,024 203
Hochtief 260 12
Karstadt 525 274
Linde 291 215
Lufthansa 11,380 284
Man Muenchen 31 12
Mannesmann 703 688
Metro AG 7,351 468
Muenchener Rueckvers 1,110 504
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
GERMANY--CONTINUED
Preussag 11 $ 4
RWE 6,340 337
SAP 1,400 723
Schering 1,810 212
Siemens 11,790 761
Thyssen 1,001 261
Veba 10,910 717
Viag 533 299
Volkswagen 461 374
---------
11,796
---------
HONG KONG (0.5%)
Cathay Pacific Airways 9,000 6
Cheung Kong Holdings 13,000 70
CLP Holdings 7,500 32
Hang Seng Bank 7,600 57
Hong Kong Telecommunications 27,200 49
Hutchison Whampoa 12,800 67
Sun Hung Kai Properties 6,600 32
Swire Pacific 9,000 33
---------
346
---------
ITALY (13.1%)
Assicurazioni Generali 42,670 1,371
Banca Commerciale Italiana 33,500 198
Benetton Group 9,825 214
Credito Italiano 23,000 128
Edison 28,500 272
ENI 76,000 537
Fiat 131,900 590
Fiat Non-Convertible 46,200 122
Istituto Bancario san
Paolo di Torino 29,591 463
Istituto Nazionale 181,919 566
Italgas 5,000 23
Mediobanca 26,450 356
Montedison 134,680 186
Olivetti 91,200 134
Parmalat Finanziaria 87,800 183
Pirelli 90,000 297
60
<PAGE>
================================================================================
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
ITALY--CONTINUED
RAS 6,635 $ 105
Sirti 19,500 121
Telecom Italia 127,222 961
Telecom Italia Mobile 195,802 1,157
Telecom Italia Mobile di Risp 101,664 369
Telecom Italia Rinascente 26,627 144
---------
8,497
---------
JAPAN (15.5%)
Ajinomoto 15,000 126
Asahi Bank 20,000 75
Asahi Chemical Industries 15,000 52
Asahi Glass 12,000 65
Bank of Tokyo - Mitsubushi 24,000 247
Bank of Yokohama 11,000 27
Bridgestone 9,000 205
Chiba Bank 12,000 43
Chiyoda 5,000 6
Citizen Watch 11,000 84
Cosmo Oil 12,000 20
Dai Nippon Printing 12,000 198
Daiei 11,000 31
Daiwa Kosho Lease 5,000 20
Daiwa Securities 18,000 69
Ebara 8,000 72
Fanuc 900 33
Fuji Bank 24,000 118
Fuji Photo Film 5,000 169
Fujitsu 18,000 207
Furukawa Electric 15,000 48
Hankyu 2,000 8
Hitachi 32,000 211
Honda Motor 5,000 170
Industrial Bank of Japan 20,000 123
Ito Ham Foods 1,000 4
Ito Yokado 4,000 199
Itochu 31,000 70
Japan Air Lines* 16,000 41
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
JAPAN--CONTINUED
Japan Energy 11,000 $ 11
Joyo Bank 14,300 51
Jusco 3,000 52
Kansai Electric Power 9,800 156
Kao 7,000 105
Kawasaki Steel 19,000 30
Kinki Nippon Railway 26,000 125
Kirin Brewery 15,000 140
Komatsu 13,000 54
Kubota 23,000 56
Kyocera 3,000 146
Marui 4,000 61
Matsushita Electric 18,000 282
Mitsubishi 21,000 127
Mitsubishi Chemical 16,000 29
Mitsubishi Electric 23,000 54
Mitsubishi Estate 5,000 44
Mitsubishi Heavy Industries 43,000 150
Mitsubishi Materials 35,000 68
Mitsubishi Trust & Banking 13,000 115
Mitsui 17,000 87
Mitsui Trust & Banking 13,000 31
Mitsukoshi 7,000 18
Murata Manufacturing 1,000 29
NEC 15,000 153
New Oji Paper 9,000 38
Nichido Fire & Marine Insurance 15,000 78
Nippon Express 5,000 27
Nippon Oil 16,000 50
Nippon Paper Industries 1,000 4
Nippon Sharyo 5,000 12
Nippon Steel 39,000 66
Nippon Yusen 27,000 93
Nippondenso 7,000 119
Nissan Motor 32,000 97
NKK 24,000 20
Nomura Securities 19,000 207
Obayashi 13,000 48
61
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
INTERNATIONAL EQUITY INDEX FUND--CONTINUED
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
JAPAN--CONTINUED
Odakyu Electric Railway 24,000 $ 78
Olympus Optical 8,000 75
Osaka Gas 44,000 95
Sakura Bank 25,000 74
Sankyo 7,000 169
Sanyo Electric 4,000 11
Sega Enterprises 1,600 30
Sekisui Chemical 7,000 35
Sekisui House 7,000 52
Sharp 10,000 75
Shimizu 3,000 8
Shin - Etsu Chemical 7,000 130
Shizuoka Bank 9,000 97
Skylark 3,000 28
Sony 3,500 296
Sumitomo Bank 28,000 262
Sumitomo Chemical 20,000 54
Sumitomo Metal 26,000 40
Taisei 35,000 68
Takeda Chemical 15,000 388
Tobu Railway 15,000 43
Tohoku Electric Power 5,300 72
Tokai Bank 20,000 111
Tokio Marine & Fire Insurance 34,000 322
Tokyo Electric Power 15,900 304
Tokyo Gas 26,000 54
Tokyu 10,000 33
Toppan Printing 11,000 120
Toray 24,000 120
Tostem 3,000 38
Toto 7,700 51
Toyo Seikan Kaisha 3,300 39
Toyoda Automatic Loom 4,000 70
Toyota Motor 31,000 768
Yamaichi Securities 15,000 --
Yamanouchi Pharmaceutical 1,000 22
Yasuda Trust & Banking 5,000 6
---------
10,012
---------
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
NETHERLANDS (3.2%)
ABN Amro Holding 7,740 $ 187
Akzo Nobel 470 98
ING Groep 4,704 323
Koninklijke 2,986 167
Koninklijke Nederlanden
Papierfabriek 960 28
Philips Electronics 1,836 174
Royal Dutch Petroleum 11,520 656
Unilever 3,760 299
Wolters Kluwer 772 108
---------
2,040
---------
NORWAY (0.9%)
Bergesen, Cl A 2,650 53
Hafslund Nycomed, Cl B 2,200 10
Kvaerner 1,400 53
Norsk Hydro 6,525 296
Nycomed Asa, Cl B 2,300 52
Uni Storebrand* 9,987 93
---------
557
---------
SPAIN (5.2%)
Argentaria Bancaria de Espana 2,316 197
Autopistas CESA 6,347 102
Banco Bilbao Vizcaya 11,213 563
Banco Central Hispano 5,430 178
Banco de Santander 5,119 258
Dragados Construccion 2,565 80
Endesa 15,892 381
Fomento de Construcciones
Contratas 1,392 70
Gas Natural 2,512 172
Iberdola 13,406 221
Mapfre 2,036 79
Repsol 6,279 349
Telefonica de Espana 15,076 674
Union Electrica Fenosa 4,929 61
---------
3,385
---------
62
<PAGE>
================================================================================
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
SWEDEN (2.1%)
ABB AB, Cl A 6,300 $ 102
Asticus* 675 8
Astra AB, Cl A 13,266 267
Diligentia 1,350 12
Electrolux, Cl B 800 80
Ericsson, Cl B 14,000 399
Granges 550 10
Skandinaviska Enskilda Banken 7,700 128
Skanska, Cl B 1,800 85
Stora Kopparbergs Bergslags, Cl A 2,500 41
Svenska Cellulosa, Cl B 4,000 110
Swedish Match 4,500 16
Volvo, Cl B 3,950 126
---------
1,384
---------
SWITZERLAND (2.2%)
Nestle 172 368
Novartis 184 311
Roche Holdings, Genusshein 23 237
Roche Holdlings, Bearer 7 116
Schweizerische Bankgesellschaft 120 202
Swiss Bank 575 208
---------
1,442
---------
UNITED KINGDOM (9.4%)
Abbey National 8,291 148
Barclays Bank 14,416 385
Bass 8,451 155
Bass, Cl B* 9,466 13
BAT Industries 22,460 202
BG 18,333 95
BG, Cl B* 20,778 10
Blue Circle Industries 12,797 82
British Petroleum 41,753 613
British Telecommunications 20,475 214
BTR 35,692 118
BTR, Cl B* 43,929 27
Cable & Wireless 22,390 253
Centrica* 20,778 33
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
UNITED KINGDOM--CONTINUED
Diageo 35,812 $ 405
Diageo, Cl B* 5,637 47
Energy Group 9,677 133
General Electric 21,236 174
Glaxo Wellcome 19,999 538
Great Universal Stores 7,352 104
Hanson 12,096 71
HSBC Holdings 7,895 206
Imperial Chemical 11,454 217
Marks & Spencer 40,514 361
National Power 9,177 85
Reuters Group 11,375 130
RMC Group 2,799 53
RTZ 13,785 172
Sainsbury, J. 11,344 90
Smithkline Beecham 40,668 440
Unilever 24,920 274
Vodafone Group 22,646 249
---------
6,097
---------
Total Foreign Common Stocks
(Cost $43,189) 60,952
---------
FOREIGN PREFERRED STOCKS (1.5%)
GERMANY (1.3%)
RWE 3,730 151
SAP 980 544
Volkswagen 247 149
---------
844
---------
ITALY (0.2%)
Fiat 47,080 126
---------
Total Foreign Preferred Stocks
(Cost $365) 970
---------
63
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
INTERNATIONAL EQUITY INDEX FUND--CONCLUDED
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
CASH EQUIVALENT (0.0%)
Highmark Diversified
Money Market Fund $10,411 $ 10
---------
Total Cash Equivalent
(Cost $10) 10
---------
Total Investments (95.6%)
(Cost $43,564) 61,932
---------
OTHER ASSETS AND LIABILITIES, NET (4.4%) 2,878
---------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 4,222,238
outstanding shares of beneficial interest 37,231
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 540,956
outstanding shares of beneficial interest 5,453
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 111,603
outstanding shares of beneficial interest 1,243
Undistributed net investment income 259
Accumulated net realized gain on
investments and foreign
currency transactions 2,261
Net unrealized appreciation
on investments 18,368
Net unrealized depreciation foreign
currency and translation of other
assets and liabilities in foreign
currency investments (5)
---------
Total Net Assets (100.0%) $ 64,810
=========
- -----------------------------------------------------------
VALUE
- -----------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 13.31
=========
Net Asset Value, Offering Price and
Redemption Price Per Share --
Investor Shares $ 13.20
=========
Maximum Offering Price Per Share --
Investor Shares ($13.20 / 96.25%) $ 13.71
=========
Net Asset Value, Offering Price and
Redemption Price Per Share -- Flex Shares (1) $ 13.17
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
64
<PAGE>
================================================================================
INTERNATIONAL EQUITY FUND
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
FOREIGN COMMON STOCKS (92.5%)
ARGENTINA (0.3%)
YPF ADR, Cl D 69,850 $ 2,170
---------
AUSTRALIA (2.5%)
Australia & New Zealand
Bank Group 1,206,840 8,556
QBE Insurance 2,037,904 8,345
---------
16,901
---------
CANADA (0.5%)
Suncor 97,527 3,448
---------
FINLAND (0.8%)
Sampo Insurance, Cl A 116,000 5,391
---------
FRANCE (10.9%)
Accor 24,300 6,665
AXA 124,000 14,114
Credit Local De France 82,630 11,228
Elf Aquitaine 100,300 13,931
Groupe Danone 24,500 6,597
Moulinex* 105,580 2,991
Suez Lyonnaise des Eaux 52,000 8,874
Technip 60,500 8,676
---------
73,076
---------
GERMANY (9.1%)
Allianz 30,830 9,745
Bayer 133,600 6,387
Bayerische Motoren Werke 5,800 6,137
Bayerische Motoren Werke - New* 1,160 1,222
Buderus 12,440 6,135
Commerzbank 128,000 5,187
Hoechst 166,000 8,280
Man 6,000 2,387
Preussag 22,040 8,041
Veba 105,000 6,897
---------
60,418
----------
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
GREECE (1.7%)
Greek Telecom 390,243 $ 11,463
---------
HONG KONG (1.5%)
Hutchison Whampoa 1,315,000 6,873
National Mutual Asia 4,286,000 3,015
Sung Hung Kai Properties 5,312 26
---------
9,914
---------
INDONESIA (0.0%)
Modern Photo Film, F 1,440,000 128
---------
ISRAEL (1.3%)
ECI Telecommunications 94,500 3,036
Teva Pharmaceuticals ADR 133,200 5,461
---------
8,497
---------
ITALY (7.3%)
Banca Popolare di Milano 970,000 8,724
ENI 1,318,000 9,314
Istituto Banc San Paolo 531,700 8,387
Montedison 3,175,000 4,386
Saipem 854,000 4,967
Telecom Italia 1,692,630 12,784
---------
48,562
---------
JAPAN (8.9%)
Canon 368,000 8,767
Eisai 408,000 5,414
Fuji Photo Film 182,000 6,162
Honda Motor 216,000 7,360
Sankyo 252,000 6,076
Sony 99,400 8,396
Takefuji 62,000 3,070
TDK 85,000 6,676
Terumo 491,000 7,426
---------
59,347
---------
65
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
INTERNATIONAL EQUITY FUND--CONCLUDED
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
NETHERLANDS (7.0%)
Akzo Nobel 38,200 $ 7,980
ING Groep 321,000 22,039
Koninklijke PTT Nederland 91,300 5,102
New Holland 169,300 4,021
Philips Electronics 81,900 7,781
---------
46,923
---------
NEW ZEALAND (0.7%)
Fletcher Challenge
Building Division 2,653,748 4,360
---------
PANAMA (0.8%)
Banco Latinamericano
de Exportaciones 150,400 5,038
---------
NORWAY (2.3%)
Petroleum Geo Services ADR* 127,000 8,319
Sparebanken Nor 232,000 6,928
---------
15,247
---------
PERU (0.8%)
CPT Telefoncia del Peru 164,100 3,549
Credicorp 127,213 2,020
---------
5,569
---------
PHILIPPINES (0.3%)
Benpres Holdings GDR, (B) 590,984 2,185
---------
PORTUGAL (1.8%)
Banco Espirito Santo 144,480 5,087
Bco Espirito Santo Rights 15,049 150
Portugal Telecom ADR 130,000 6,857
---------
12,094
---------
SINGAPORE (0.6%)
Overseas Chinese Bank 1,083,000 4,304
---------
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
SPAIN (3.4%)
Repsol 166,000 $ 9,226
Telefonica de Espana 296,727 13,260
---------
22,486
---------
SWEDEN (1.1%)
Volvo, Cl B 230,000 7,352
---------
SWITZERLAND (9.1%)
Asea Brown Boveri Group 4,565 7,733
Credit Suisse Group 22,000 4,840
Nestle 7,500 16,061
Novartis, Registered 9,815 16,613
Swiss Bank 42,300 15,273
---------
60,520
---------
UNITED KINGDOM (19.8%)
Allied Domecq 408,800 4,021
Bank of Ireland 788,148 14,808
Bass 580,982 10,669
British Aerospace 1,308,000 11,594
British Petroleum 708,579 10,399
Diageo 718,200 8,119
General Electric 1,072,000 8,785
Ladbroke Group 1,170,000 6,608
Laporte 497,900 6,957
Lucasvarity 2,175,776 9,590
National Westminster Bank 160,000 2,923
Next 1,068,000 9,658
Siebe 500,000 12,529
SmithKline Beecham 600,758 6,507
Storehouse 1,953,695 8,898
---------
132,065
---------
Total Foreign Common Stocks
(Cost $504,598) 617,458
---------
66
<PAGE>
================================================================================
- -----------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- -----------------------------------------------------------
FOREIGN PREFERRED STOCKS (2.2%)
Gea 18,500 $ 7,154
Man 25,200 7,542
---------
Total Foreign Preferred Stocks
(Cost $11,834) 14,696
---------
TIME DEPOSIT (4.8%)
Cayman Time Deposit
5.125%, 06/01/98 $32,000 32,000
---------
Total Time Deposit
(Cost $32,000) 32,000
---------
Total Investments (99.5%)
(Cost $548,433) 664,154
---------
OTHER ASSETS AND LIABILITIES, NET (0.5%) 3,423
---------
- -----------------------------------------------------------
VALUE (000)
- -----------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 41,926,884
outstanding shares of beneficial interest $481,962
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 1,164,900
outstanding shares of beneficial interest 14,451
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 1,441,816
outstanding shares of beneficial interest 19,112
Undistributed net investment income 2,660
Accumulated net realized gain on
investments and foreign
currency transactions 33,758
Net unrealized appreciation on investments 115,721
Net unrealized depreciation foreign
currency and translation of other
assets and liabilities in foreign
currency investments (87)
---------
Total Net Assets (100.0%) $667,577
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 15.00
=========
Net Asset Value, Offering Price and
Redemption Price Per Share --
Investor Shares $ 14.92
=========
Maximum Offering Price Per Share --
Investor Shares ($14.92 / 96.25%) $ 15.50
=========
Net Asset Value, Offering Price and
Redemption Price Per Share -- Flex Shares (1) $ 14.68
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FORDESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
67
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
SUNBELT EQUITY FUND
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
COMMON STOCKS (91.7%)
CAPITAL GOODS (12.3%)
American Buildings* 144,152 $ 4,937
American Homestar* 228,868 4,863
Artesyn Technologies* 234,751 3,851
Aviall* 119,542 1,748
Blount International 182,723 5,151
Centex 67,601 2,417
Citation* 90,069 1,723
Kellstrom Industries* 169,004 4,700
Kuhlman 111,238 4,700
Maverick Tube* 214,288 3,241
Miller Industries* 407,070 2,900
Owens & Minor Holding 109,719 1,289
Palm Harbor Homes* 154,596 6,445
Roper Industries 75,829 2,517
Tristar Aerospace* 98,529 1,595
UNIFAB International* 161,289 3,085
Watsco 99,449 2,921
---------
58,083
---------
COMMUNICATION SERVICES (3.1%)
Cellstar* 124,905 3,759
Premiere Technologies* 166,678 3,979
Superior TeleCom* 64,999 2,576
World Access* 134,017 4,205
---------
14,519
---------
CONSUMER CYCLICALS (14.6%)
AHL Services* 70,928 2,296
Apple South 199,235 2,615
Barnett* 228,919 4,149
Books-A-Million* 346,060 1,774
Central Parking 98,229 4,402
Claire's Stores 107,515 2,023
Family Dollar Stores 345,140 5,716
Friedman's, Cl A* 51,506 1,017
Knight-Ridder 84,503 4,822
Lowe's Companies 71,826 5,688
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
CONSUMER CYCLICALS--CONTINUED
O'Charleys* 141,141 $ 2,937
Pier 1 Imports 84,502 2,033
Play By Play Toys & Novelties* 91,743 1,514
Policy Management Systems* 50,480 4,165
Promus Hotel* 68,911 2,980
Renters Choice* 92,136 2,453
Staffmark* 208,981 7,680
Stein Mart* 349,868 5,510
Suburban Lodges of America* 230,460 3,702
Tractor Supply* 52,876 1,276
---------
68,752
---------
CONSUMER STAPLES (3.7%)
Educational Medical* 147,418 1,483
Food Lion, Cl A 390,782 3,786
Outback Steakhouse* 117,264 4,324
Richfood Holdings 128,298 3,135
Sonic* 221,818 4,589
---------
17,317
---------
ENERGY (17.4%)
Anadarko Petroleum 108,562 7,165
BJ Services* 204,507 6,685
Camco International 112,559 7,851
Core Laboratories N.V.* 224,583 5,937
Diamond Offshore Drilling 103,035 4,926
Ensco International 153,291 3,880
Global Industries* 523,164 11,150
Global Marine* 135,164 3,016
J. Ray McDermott S.A.* 103,606 4,183
Nuevo Energy* 172,828 5,617
Oceaneering International* 95,593 2,055
St. Mary Land & Exploration 74,358 2,026
Stone Energy* 265,790 9,419
Transocean Offshore 84,359 4,160
World Fuel Services 229,589 4,047
---------
82,117
---------
68
<PAGE>
================================================================================
- -----------------------------------------------------------
SHARES VALUE (000)
- -----------------------------------------------------------
FINANCIALS (17.7%)
AmSouth Bancorp 86,166 $ 3,312
Bank United, Cl A 56,281 2,814
Capital One Financial 29,408 2,935
CCB Financial 49,101 5,377
Compass Bancshares 126,011 5,982
Crestar Financial 89,697 5,152
Cullen/Frost Bankers 21,011 1,139
Equity Inns REIT 206,362 2,954
Fairfield Communities* 619,987 12,671
Hibernia, Cl A 194,050 4,075
Nova* 170,195 5,606
PMT Services* 412,872 8,051
Profit Recovery Group
International* 159,389 3,905
Regions Financial 132,479 5,448
Texas Regional Bancshares, Cl A 61,382 1,964
Triad Guaranty* 217,159 7,166
Union Planters 57,356 3,355
Winston Hotels REIT 108,493 1,302
---------
83,208
---------
HEALTH CARE (3.3%)
Pharmerica* 203,637 2,482
PSS World Medical Inc* 138,327 1,729
Quorum Health Group* 217,034 6,525
Serologicals* 164,406 4,850
---------
15,586
---------
TECHNOLOGY (14.4%)
Acxiom* 225,828 4,884
Benchmark Electronics* 250,023 5,047
Billing Information Concepts* 126,854 2,949
CHS Electronics* 247,862 4,926
Cybex Computer Products* 134,506 3,094
Datastream Systems* 119,543 2,540
Harbinger* 273,798 6,374
HBO 119,541 6,900
Input/Output* 299,044 6,579
- -----------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- -----------------------------------------------------------
TECHNOLOGY--CONTINUED
National Data 83,857 $ 3,145
Nichols Research* 232,020 5,568
SCB Computer Technology* 823,338 9,880
Sterling Commerce* 146,782 5,825
---------
67,711
---------
TRANSPORTATION (5.2%)
Comair 111,571 2,971
Covenant Transportation
Incorporated, Cl A* 205,932 3,372
Hunt J B Transportation Services 398,433 11,928
Southwest Airlines 108,029 2,883
USA Truck* 210,914 3,164
---------
24,318
---------
Total Common Stocks
(Cost $305,611) 431,611
---------
CONVERTIBLE BONDS (6.3%)
Career Horizons, CV to 88.1057
Shares, Callable 11/01/98 @ 104
7.000%, 11/01/02 $1,904 5,543
Diamond Offshore, CV to 24.6910
Shares, Callable 02/22/01 @ 102.08
3.750%, 02/15/07 3,286 4,223
Pier 1 Imports, CV to 81.1030
Shares, Callable 10/01/99 @ 103
5.750%, 10/01/03 2,388 4,842
Pride International, CV to 81.6330
Shares, Callable 03/01/99 @ 103.125
6.250%, 02/15/06 4,806 8,987
Sci Systems, CV to 41.0172 Shares,
Callable 05/01/99 @ 103.5
5.000%, 05/01/06 3,917 5,831
---------
Total Convertible Bonds
(Cost $27,463) 29,426
---------
69
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
SUNBELT EQUITY FUND--CONCLUDED
- -----------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- -----------------------------------------------------------
REGULATED INVESTMENT COMPANIES (1.0%)
Dollar General, STRYPES* 126,752 $ 4,912
---------
Total Regulated Investment Companies
(Cost $4,999) 4,912
---------
REPURCHASE AGREEMENT (1.9%)
Swiss Bank
5.51%, dated 05/29/98, matures
06/01/98, repurchase price
$9,182,045 (collateralized by U.S.
Treasury Note and US Treasury
Bond: total market
value $9,368,147) (H) $9,178 9,178
---------
Total Repurchase Agreement
(Cost $9,178) 9,178
---------
Total Investments (100.9%)
(Cost $347,251) 475,127
---------
OTHER ASSETS AND LIABILITIES, NET (-0.9%) (4,276)
---------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 28,568,437
outstanding shares of beneficial interest 291,256
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 2,089,279
outstanding shares of beneficial interest 20,090
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 552,859
outstanding shares of beneficial interest 7,265
Undistributed net investment income 40
Accumulated net realized gain on investments 24,324
Net unrealized appreciation on investments 127,876
---------
Total Net Assets (100.0%) $ 470,851
=========
- -----------------------------------------------------------
VALUE
- -----------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 15.12
=========
Net Asset Value and Redemption Price
Per Share -- Investor Shares $ 14.77
=========
Maximum Offering Price Per Share --
Investor Class ($14.77 / 96.25%) $ 15.35
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Flex Shares (1) $ 14.60
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
70
<PAGE>
================================================================================
INVESTMENT GRADE TAX-EXEMPT BOND FUND
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
MUNICIPAL BONDS (104.9%)
ALABAMA (2.0%)
State Docks Department, Docks
Facility, RB (MBIA)
5.250%, 10/01/99 $1,500 $ 1,525
5.250%, 10/01/00 1,000 1,025
5.250%, 10/01/01 1,000 1,033
---------
3,583
---------
ARIZONA (2.5%)
Maricopa County, University School
District No. 80 (Chandler), GO,
Partially Prerefunded 07/01/01
@ 101 (FGIC) (F)
6.400%, 07/01/10 3,050 3,265
Scottsdale, GO
5.500%, 07/01/14 1,250 1,344
---------
4,609
---------
CALIFORNIA (3.6%)
Metropolitan Water District,
Southern California Waterworks,
RB, Callable 01/01/08 @ 101
5.500%, 07/01/10 2,785 3,007
Orange County, Loma Ridge Data
Center Project, COP, Prefunded
06/01/19 @ 100 (AMBAC) (F)
6.000%, 06/01/21 2,075 2,292
San Bernardino, J.T. Powers
Financing Authority, Central
City Merged Project, Ser A,
Tax Allocation (AMBAC)
5.750%, 07/01/18 1,230 1,351
---------
6,650
---------
DISTRICT OF COLUMBIA (1.1%)
District of Columbia, American
College Obstetricians, RB,
Callable 08/15/01 @ 102 (AMBAC)
6.500%, 08/15/18 1,930 2,088
---------
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
FLORIDA (12.9%)
Orange County, State Health
Facilities Authority, Orlando
Regional Healthcare, RB (MBIA)
6.250%, 10/01/13 $1,000 $ 1,158
State, Board of Education, Capital
Outlay, Ser C, GO, Callable
06/01/03 @ 101
5.700%, 06/01/11 4,000 4,245
State, Finance Department,
Environmental Protection,
Preservation 2000, Ser A, RB (FSA)
5.500%, 07/01/09 7,500 8,176
State, Finance Department, Ser A,
RB, Prerefunded 07/01/02
@ 100 (MBIA) (G)
6.250%, 07/01/13 2,500 2,724
Tampa, Allegany Health, RB,
Prerefunded 12/01/99
@ 102 (FGIC) (F)
7.375%, 12/01/23 3,500 3,746
Tampa, Occupational License Tax,
Ser A, RB (FGIC) (C)
3.900%, 10/01/18 3,600 3,600
---------
23,649
---------
GEORGIA (4.8%)
Clayton County, Water
Authority, RB
5.000%, 05/01/13 1,050 1,070
5.100%, 05/01/15 2,365 2,413
5.100%, 05/01/16 1,615 1,638
Fulton County, Development
Authority, Special Facilities
Revenue, Delta Airlines Project,
RB, AMT, Callable 05/01/08 @ 101
5.300%, 05/01/13 1,000 997
State, GO
7.250%, 07/01/99 1,305 1,354
71
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
INVESTMENT GRADE TAX-EXEMPT BOND FUND--CONTINUED
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
GEORGIA--CONTINUED
State, Municipal Electric Authority,
Ser B, RB (FGIC)
6.250%, 01/01/12 $1,150 $ 1,319
---------
8,791
---------
ILLINOIS (11.6%)
State, Financial Authority, Provena
Health, Ser A, RB (MBIA)
5.500%, 05/15/06 3,260 3,458
State, Financial Authority, Provena
Health, Ser A, RB, Callable
05/15/08 @ 101 (MBIA)
5.500%, 05/15/11 2,500 2,624
State, GO, Prerefunded
06/01/01 @ 102
6.600%, 06/01/12 2,350 2,562
State, Health Facilities Authority,
Rockford Health System,
RB (AMBAC)
5.500%, 08/15/05 525 557
State, Health Facilities Authority,
Trinity Medical Center Project,
RB, Callable 07/01/02 @ 102 (FSA)
7.000%, 07/01/12 5,000 5,561
State, Regional Transportation
Authority, RB (FGIC)
6.000%, 06/01/15 2,000 2,249
State, Regional Transportation
Authority, Ser A, RB, Callable
06/01/02 @ 102 (AMBAC)
6.500%, 06/01/15 3,830 4,169
---------
21,180
---------
MARYLAND (2.2%)
Baltimore, Metropolitan District,
GO, Callable 07/01/02 @ 102
5.900%, 07/01/04 1,000 1,081
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
MARYLAND--CONTINUED
Baltimore, Water Project, Ser A,
RB, Callable 07/01/06 @ 101 (FGIC)
5.800%, 07/01/15 $2,800 $ 3,005
---------
4,086
---------
MASSACHUSETTS (2.6%)
Boston, City Hospital Project, RB,
Prerefunded 08/15/98
@ 100 (FHA) (F)
7.650%, 02/15/10 1,265 1,385
State, Water Reserves Authority,
Ser C, RB (FGIC-TCRS)
5.250%, 12/01/15 3,250 3,390
---------
4,775
---------
MINNESOTA (0.6%)
Minneapolis, Special School District
No 001, Ser A, COP, Callable
02/01/06 @ 100 (MBIA)
5.700%, 02/01/09 1,000 1,073
---------
MISSOURI (1.6%)
St. Louis, Water Utility
Improvements, RB, Callable
07/01/04 @ 102 (FGIC)
5.950%, 07/01/06 1,170 1,287
State, Health & Educational Facilities
Authority, Health Care Projects,
Ser B, ETM, RB, Callable
06/01/00 @ 102 (MBIA) (F)
7.000%, 06/01/05 1,500 1,664
---------
2,951
---------
NEBRASKA (1.2%)
Omaha, Public Power & Electric
Authority, Ser A, RB, Prerefunded
02/01/02 @ 101.5 (F)
6.500%, 02/01/17 2,000 2,189
---------
72
<PAGE>
================================================================================
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
NEW JERSEY (0.9%)
State, Health Care Facilities
Financing Authority, Cathedral
Health Services, RB
(MBIA) (FHA)
5.500%, 02/01/11 $1,605 $ 1,708
---------
NEW YORK (14.1%)
New York, Ser F, GO
5.250%, 08/01/04 2,000 2,084
New York, Ser F, GO (FGIC-TCRS)
5.250%, 08/01/05 3,110 3,277
New York, Ser G, GO (FGIC-TCRS)
5.000%, 08/01/05 4,000 4,154
New York, Ser H, GO,
Callable 08/01/08 @ 100
5.500%, 08/01/13 3,000 3,105
Oneida-Herkimer, Solid Waste
Management Authority, RB (FSA)
5.500%, 04/01/14 1,285 1,369
State, Dormitory Authority, RB,
Callable 07/01/14 @ 100 (FSA)
5.750%, 07/01/18 1,800 1,984
State, Dormitory Authority,
Ser A, RB (AMBAC)
6.000%, 07/01/10 1,550 1,751
5.750%, 07/01/13 1,000 1,103
State, Dormitory Authority,
Ser A, RB (FGIC-TCRS)
5.750%, 07/01/07 1,000 1,093
State, Dormitory Authority,
Ser A, RB (MBIA)
5.750%, 07/01/08 2,000 2,199
5.750%, 07/01/13 1,300 1,434
State, Urban Development,
Sr. Lien, RB, Callable
07/01/06 @ 102
5.500%, 07/01/16 2,250 2,344
---------
25,897
---------
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
NORTH CAROLINA (0.6%)
Onslow County, GO, Callable
03/01/05 @ 101.5 (MBIA)
5.600%, 03/01/08 $1,000 $ 1,079
---------
OHIO (3.3%)
Cleveland, City School District,
Ser A, GO, Callable 12/01/02
@ 102 (FGIC)
5.875%, 12/01/11 1,650 1,774
Hamilton County, Hamilton
County Football Project,
Ser B, RB, Callable 06/01/08
@ 101 (MBIA)
5.375%, 12/01/11 4,000 4,223
---------
5,997
---------
PENNSYLVANIA (6.0%)
Allegheny County, Hospital
Development Authority, Ohio
Valley General, RB, Callable
04/01/03 @ 100 (MBIA)
5.875%, 04/01/11 1,500 1,584
Allegheny County, Pittsburgh
International Airport,
Ser A, RB (MBIA)
5.750%, 01/01/11 2,500 2,703
5.750%, 01/01/13 4,000 4,330
Berks County, GO, Callable
11/15/02 @ 100 (FGIC)
5.750%, 11/15/12 2,255 2,371
---------
10,988
---------
PUERTO RICO (0.7%)
Commonwealth, Electric Power
Authority, Ser T, RB, Prerefunded
07/01/04 @ 102 (F)
6.375%, 07/01/24 1,200 1,358
---------
73
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
INVESTMENT GRADE TAX-EXEMPT BOND FUND--CONCLUDED
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
SOUTH DAKOTA (1.8%)
State, Health & Educational Facility
Authority, St. Lukes Midland
Regional Medical, RB, Callable
07/01/01 @ 102 (MBIA)
6.625%, 07/01/11 $3,000 $ 3,241
---------
TENNESSEE (3.5%)
Metropolitan Nashville Airport,
Ser C, RB, Callable 07/01/01
@ 102 (FGIC)
6.600%, 07/01/15 3,900 4,223
Shelby County, GO, Prerefunded
12/01/00 @ 102 (G)
6.250%, 12/01/09 2,000 2,146
---------
6,369
---------
TEXAS (7.4%)
Amarillo, Health Facilities
Corporation, Baptist Saint
Anthonys Hospital, RB (FSA)
5.500%, 01/01/11 1,000 1,063
5.500%, 01/01/13 1,000 1,061
North Central, Health Facility
Development, Health Resources
System, Ser B, RB, Callable
02/15/08 @ 102 (MBIA)
5.750%, 02/15/13 2,120 2,283
Richardson, GO, Callable
02/15/08 @ 100
5.500%, 02/15/09 3,615 3,885
State, Water Development Board,
Revolving Fund, Senior Lien,
RB, Callable 07/15/02 @ 102
6.000%, 07/15/03 2,000 2,169
Travis County, GO, Callable
03/01/08 @ 100
5.000%, 03/01/09 2,055 2,130
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
TEXAS--CONTINUED
University of Texas, Ser B, RB
6.300%, 08/15/99 $1,000 $ 1,030
---------
13,621
---------
UTAH (3.8%)
State, Intermountain Power Agency,
Power Supply, Ser A, RB (AMBAC)
6.500%, 07/01/11 1,500 1,762
State, Intermountain Power
Agency, Power Supply,
Ser E, RB (FSA)
6.250%, 07/01/08 3,000 3,419
6.250%, 07/01/09 1,545 1,769
---------
6,950
---------
WASHINGTON (11.8%)
King County, Ser C, GO,
Callable 06/01/03 @ 100
4.600%, 06/01/04 5,000 5,087
State, Health Care Facilities,
Swedish Health Systems, RB,
Callable 11/15/08 @ 101 (AMBAC)
5.500%, 11/15/12 2,000 2,103
State, Health Care Facilities,
Virginia Mason Medical
Center Project, Ser B, RB (MBIA)
4.000%, 02/15/27 8,500 8,500
State, Ser B, GO, Callable
05/01/04 @ 100
5.750%, 05/01/14 5,600 5,871
---------
21,561
---------
74
<PAGE>
================================================================================
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
WEST VIRGINIA (1.2%)
West Virginia University,
University Projects,
Ser A, RB (MBIA)
5.500%, 04/01/13 $1,000 $ 1,072
5.500%, 04/01/14 1,000 1,069
---------
2,141
---------
WISCONSIN (3.1%)
State, Health & Elderly Facility,
Childrens Hospital of
Wisconsin, RB (AMBAC)
5.500%, 02/15/11 1,300 1,378
5.625%, 02/15/13 2,690 2,884
5.625%, 02/15/14 1,250 1,337
---------
5,599
---------
Total Municipal Bonds
(Cost $189,435) 192,133
---------
CASH EQUIVALENTS (6.9%)
AIM Management Institutional
Tax-Free Portfolio (C) 6,992 6,992
SEI Tax-Exempt Trust Institutional
Tax-Free Portfolio (C) 5,656 5,656
---------
Total Cash Equivalents
(Cost $12,648) 12,648
---------
Total Investments (111.8%)
(Cost $202,083) 204,781
---------
OTHER ASSETS AND LIABILITIES (-11.8%)
Securities Purchased Payable (28,219)
Other Assets and Liabilities, Net 6,602
---------
Total Other Assets and Liabilities (21,617)
---------
- -----------------------------------------------------------
VALUE (000)
- -----------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 12,864,803
outstanding shares of beneficial interest $ 142,338
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 2,467,705
outstanding shares of beneficial interest 26,273
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 736,855
outstanding shares of beneficial interest 8,349
Undistributed net investment income 4
Accumulated net realized gain on investments 3,502
Net unrealized appreciation on investments 2,698
---------
Total Net Assets (100.0%) $ 183,164
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 11.40
=========
Net Asset Value and Redemption Price
Per Share -- Investor Shares $ 11.41
=========
Maximum Offering Price Per Share --
Investor Class ($11.41 / 96.25%) $ 11.85
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Flex Shares (1) $ 11.40
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
75
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
FLORIDA TAX-EXEMPT BOND FUND
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
MUNICIPAL BONDS (98.5%)
FLORIDA (91.1%)
Bay County, School District
Sales Tax, RB (FSA)
4.500%, 06/01/06 $1,900 $ 1,923
Brevard County, School Board,
Ser A, COP (AMBAC)
5.400%, 07/01/12 1,500 1,607
Brevard County, State Health
Facilities Authority, Holmes
Medical Center Project, RB,
Callable 10/01/03 @ 102 (MBIA)
5.700%, 10/01/08 3,000 3,233
Brevard County, State Health
Facilities Authority, Wuesthoff
Memorial Hospital
Project, RB (MBIA)
6.250%, 04/01/06 930 1,046
Broward County, Port Facilities,
Ser B, RB, AMT, Callable
@ 101 09/01/08 (MBIA)
5.000%, 09/01/18 2,000 1,953
Broward County, School District,
COP, Callable 07/01/07
@ 101 (AMBAC)
5.100%, 07/01/09 1,465 1,535
Cape Canaveral, Hospital
District, RB, Callable
01/01/2008 @ 101
5.250%, 01/01/18 1,000 978
Citrus County, Pollution Control,
Florida Power, RB
Callable 08/01/02 @ 102
6.350%, 02/01/22 335 363
Dade County, Ser CC,
GO (AMBAC)
7.125%, 10/01/11 1,810 2,249
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
Dade County, Aviation Revenue,
RB, AMT, Callable 10/01/02
@ 102 (MBIA)
6.600%, 10/01/22 $ 825 $ 902
Dade County, Aviation Revenue,
Ser A, RB, Callable 10/01/05
@ 102 (AMBAC)
6.000%, 10/01/09 500 554
Dade County, School Board, Ser B,
COP (AMBAC)
5.750%, 08/01/03 600 645
Dade County, School District, GO,
Prerefunded 07/01/99 @ 102 (F)
7.375%, 07/01/08 250 264
Dade County, Seaport, RB (MBIA)
6.200%, 10/01/08 750 856
6.500%, 10/01/09 1,000 1,175
6.200%, 10/01/10 1,000 1,152
Dade County, State Educational
Facilities Authority, University
of Miami, RB Callable 04/01/06
@ 102 (MBIA)
5.750%, 04/01/20 2,000 2,115
Dade County, State Educational
Facilities Authority, University
of Miami, Ser A, RB (MBIA)
6.000%, 04/01/08 755 843
Dade County, Water & Sewer
System, RB (FGIC)
6.250%, 10/01/09 750 865
Deerfield Beach, Water & Sewer
Revenue, RB (FGIC)
6.125%, 10/01/06 250 282
Gainesville, Utility Systems,
Ser A, RB
5.750%, 10/01/04 1,300 1,415
5.750%, 10/01/09 500 557
76
<PAGE>
================================================================================
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
Gulf Breeze, Local Government
Lien, Ser B, RB, Mandatory
Tender 12/01/08 (FGIC)
5.650%, 12/01/15 $ 460 $ 502
Gulf Breeze, Local Government
Lien, Ser B, RB, Mandatory
Tender 12/01/09 (FGIC)
5.750%, 12/01/15 410 448
Hillsborough County, Capital
Improvement Program, ETM,
RB (FGIC) (F)
5.900%, 08/01/04 300 328
Hillsborough County, Capital
Improvement Program, County
Center Project, Ser B, RB,
Callable 07/01/06 @ 102 (MBIA)
5.000%, 07/01/08 1,000 1,030
Hillsborough County, School
Board Revenue, COP, Callable
07/01/06 @ 100 (MBIA)
5.875%, 07/01/08 1,000 1,106
Hillsborough County, University
Community Hospital, RB (MBIA)
6.500%, 08/15/19 145 173
Indian Trace Community, Water
Management Split Benefit,
Ser A-1, RB, Callable 05/01/05
@ 102 (MBIA)
5.500%, 05/01/07 455 493
Jacksonville, Excise Tax, Ser B, RB,
AMT, Callable 10/01/03
@ 100 (FGIC)
5.200%, 10/01/04 1,500 1,558
Jacksonville, River City Renaissance
Project, RB (FGIC)
6.000%, 10/01/04 3,430 3,780
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
Jacksonville, State Health Facilities
Authority, Charity Obligation
Group, Ser A, RB, Callable
08/15/07 @ 101 (MBIA)
5.250%, 08/15/15 $2,000 $ 2,044
Jacksonville, Water & Sewer
Revenue, RB, Callable 10/01/06
@ 102, Prerefunded 09/30/08
@ 101 (MBIA) (G)
5.000%, 10/01/20 610 643
Lakeland, Electric & Water
Revenue, RB
6.650%, 10/01/98 100 101
Lakeland, Electric & Water
Revenue, RB (FGIC)
6.500%, 10/01/05 1,000 1,140
6.000%, 10/01/07 1,000 1,125
Manatee County, Community
Redevelopment Administration,
Center Project, RB, Callable
04/01/00 @ 102 (MBIA)
7.000%, 04/01/08 1,000 1,070
Martin County, State Health
Facilities Authority, Martin
Memorial Medical Center,
Ser B, RB, Callable 11/15/07
@ 102 (MBIA)
5.150%, 11/15/11 1,070 1,110
Miami-Dade County, Special
Obligation, RB, Callable 04/01/08
@ 86.6 (MBIA) (A)
0.000%, 10/01/11 1,635 852
North Broward, Hospital District
Revenue, ETM, RB (MBIA) (G)
5.950%, 01/01/01 1,000 1,047
Orange County, Public Facilities
Revenue, Ser A, RB, Callable
10/01/04 @ 102 (AMBAC)
5.650%, 10/01/07 200 217
77
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
FLORIDA TAX-EXEMPT BOND FUND--CONTINUED
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
Orange County, State Health
Facilities Authority, Orlando
Regional Healthcare, RB (MBIA)
6.250%, 10/01/13 $1,000 $ 1,158
Orange County, State Housing
Finance Authority, Single
Family Mortgage, Ser B, RB,
Callable 09/01/07 @ 102
5.800%, 09/01/17 760 791
Orange County, Tourist
Development, Ser B, RB,
Prerefunded 10/01/02 @
100 (AMBAC)
6.000%, 10/01/21 250 269
Orlando, Community Water &
Electric Revenue, Ser D, RB
6.750%, 10/01/17 2,885 3,526
Osceola County, COP (AMBAC)
6.250%, 06/01/01 1,760 1,873
6.250%, 06/01/04 2,105 2,337
6.250%, 06/01/05 2,240 2,508
Palm Beach, Solid Waste Authority,
Ser A, RB (AMBAC)
6.000%, 10/01/09 2,525 2,856
Palm Beach, State Health Facilities
Authority, JFK Medical Center
Project, RB, Prerefunded 12/01/03
@ 102 (FSA) (F)
5.750%, 12/01/14 165 180
Palm Beach County, Apartment
System, RB, Callable 10/01/01
@ 102 (MBIA)
7.625%, 10/01/04 1,410 1,588
Pinellas County, Morton Plant
Health Systems Project, RB,
Callable 11/15/03 @ 102 (MBIA)
5.500%, 11/15/08 1,500 1,599
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
Pinellas County, State Housing
Finance Authority, Single Family
Mortgage, Ser C, RB, Callable
03/01/07 @ 102
5.050%, 09/01/07 $ 215 $ 220
5.100%, 09/01/08 230 235
Plant City, Utility System
Revenue, RB (MBIA)
6.000%, 10/01/15 400 453
Reedy Creek, Utility Revenue,
Ser 1991-1, RB, Prerefunded
10/01/01 @ 101 (MBIA) (F)
6.250%, 10/01/11 405 437
South Broward, Hospital
District, RB, Callable 05/01/03
@ 102 (AMBAC)
7.500%, 05/01/08 1,920 2,221
State, Board of Education, Ser B,
GO, Callable 06/01/01 @ 101
6.000%, 06/01/22 500 528
State, Board of Education, Ser C,
GO, Prerefunded 06/01/97
@ 102 (ETM) (F)
7.100%, 06/01/07 190 193
State, Board of Education, Capital
Outlay, Ser B, GO (F)
6.000%, 06/01/02 1,000 1,065
State, Board of Education, Capital
Outlay, Ser B, GO, Callable
06/01/02 @ 101
5.900%, 06/01/12 450 476
6.000%, 06/01/15 170 180
State, Board of Education, Capital
Outlay, Ser C, GO, Callable
06/01/03 @ 101
5.700%, 06/01/11 2,305 2,446
78
<PAGE>
================================================================================
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
State, Department of Transportation,
Right of Way, GO
6.000%, 07/01/06 $1,000 $ 1,115
State, Department of Transportation,
Turnpike Authority,
Ser A, RB (AMBAC)
5.500%, 07/01/03 1,000 1,064
State, Department of Transportation,
Turnpike Authority, Ser A, RB,
Callable 07/01/08 @ 101 (FGIC)
5.000%, 07/01/23 2,500 2,458
State, Finance Department,
Department of Natural Resources,
Preservation 2000, Ser A, RB,
Prerefunded 07/01/01 @ 102
(AMBAC) (F)
6.750%, 07/01/06 80 88
State, Finance Department,
Environmental Protection,
Preservation 2000, Ser A, RB (FSA)
5.500%, 07/01/08 1,000 1,088
5.500%, 07/01/09 3,000 3,271
State, Finance Department,
Environmental Protection,
Preservation 2000,
Ser B, RB (AMBAC)
6.000%, 07/01/09 3,000 3,395
State, Keys, Aqueduct Authority
Revenue, RB, Prerefunded
09/01/01 @ 101 (AMBAC)
6.750%, 09/01/21 170 186
State, Municipal Power Agency,
Saint Lucie Project, ETM, RB,
Callable 12/08/97 @ 100 (F)
5.000%, 10/01/17 500 502
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
Sunrise, Utility System, RB,
Callable 10/01/2018
@ 100 (AMBAC)
5.200%, 10/01/22 $2,000 $ 2,045
5.000%, 10/01/28 1,500 1,495
Tallahassee, Utility System, Ser B,
RB, Prerefunded
10/01/99 @ 102 (F)
6.900%, 10/01/14 240 254
Tampa, RB, Callable 10/1/01
@ 102 (AMBAC)
7.050%, 10/01/07 1,000 1,107
Tampa, Health System, Catholic
Health, Ser A-1, RB (MBIA)
5.250%, 11/15/04 1,000 1,054
Tampa, Health System, Catholic
Health, Ser A-1, RB, Callable
11/15/08 @ 102 (MBIA)
5.250%, 11/15/11 2,300 2,396
Tampa, Health System, Catholic
Health, Ser A-2, RB, Callable
11/15/08 @ 102 (AMBAC)
5.250%, 11/15/10 2,030 2,096
---------
96,032
---------
PUERTO RICO (7.4%)
Commonwealth, GO (MBIA)
5.750%, 07/01/12 2,000 2,215
5.650%, 07/01/15 1,000 1,091
Commonwealth, Highway &
Transportation Authority,
Ser Z, RB (MBIA)
6.250%, 07/01/14 2,000 2,320
Electric Power Authority,
RB (MBIA)
6.125%, 07/01/09 1,000 1,143
Electric Power Authority, Ser S, RB
5.500%, 07/01/00 200 206
79
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
FLORIDA TAX-EXEMPT BOND FUND--CONCLUDED
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
Public Buildings Authority
Revenue, Guaranteed
Government Facilities,
Ser A, RB (AMBAC)
6.250%, 07/01/14 $ 750 $ 870
---------
7,845
---------
Total Municipal Bonds
(Cost $100,743) 103,877
---------
CASH EQUIVALENTS (3.3%)
AIM Management Institutional
Tax-Free Portfolio (C) 2,706 2,706
SEI Tax-Exempt Trust Institutional
Tax-Free Portfolio (C) 794 794
---------
Total Cash Equivalents
(Cost $3,500) 3,500
---------
Total Investments (101.8%)
(Cost $104,243) 107,377
---------
OTHER ASSETS AND LIABILITIES, NET (-1.8%) (1,897)
---------
- -----------------------------------------------------------
VALUE (000)
- -----------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 8,764,559
outstanding shares of beneficial interest $ 90,819
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 315,231
outstanding shares of beneficial interest 3,119
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 760,024
outstanding shares of beneficial interest 7,944
Undistributed net investment income 1
Accumulated net realized gain
on investments 463
Net unrealized appreciation on investments 3,134
---------
Total Net Assets (100.0%) $ 105,480
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 10.72
=========
Net Asset Value and Redemption
Price Per Share -- Investor Shares $ 10.72
=========
Maximum Offering Price Per Share --
Investor Class ($10.72 / 96.25%) $ 11.14
=========
Net Asset Value, Offering and
Redemption Price Per Share -- Flex Shares (1) $ 10.74
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
80
<PAGE>
================================================================================
GEORGIA TAX-EXEMPT BOND FUND
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
MUNICIPAL BONDS (94.3%)
GEORGIA (94.3%)
Albany-Dougherty County, State
Hospital Authority, Ser B,
Anticipation Certificate,
Prerefunded 09/01/00 @ 102
(AMBAC) (F)
7.500%, 09/01/20 $ 255 $ 279
Alpharetta, GO
5.000%, 05/01/07 1,650 1,726
Athens, Water & Sewer Revenue,
ETM, RB (F)
5.700%, 07/01/00 165 171
Atlanta, Airport Facility,
RB (AMBAC)
6.000%, 01/01/03 1,000 1,075
6.000%, 01/01/04 500 544
6.500%, 01/01/06 1,000 1,135
Metro Atlanta, Rapid Tranit
Authority, Ser N, RB
6.000%, 07/01/07 1,000 1,119
Augusta, Water & Sewer Revenue,
RB, Prerefunded 05/01/02 @ 102 (F)
6.200%, 05/01/03 130 142
Bibb County, GO
7.000%, 01/01/04 985 1,118
Burke County, Development
Authority, Pollution Control,
Oglethorpe Power, Ser A, RB,
VRDN (FGIC) (C) (D)
3.900%, 01/01/16 2,500 2,500
Cartersville, Water & Sewer
Revenue, RB, Callable 07/01/08
@102 (FSA)
5.000%, 07/01/12 1,255 1,269
Clayton County, Water & Sewer
Authority, RB (MBIA)
5.000%, 05/01/11 750 769
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
Clayton County, Water Authority,
RB, Callable 05/01/06 @ 102
(AMBAC)
5.350%, 05/01/09 $1,500 $ 1,599
Cobb County, GO
5.000%, 02/01/03 1,025 1,063
Cobb County, Recreational Facilities
Improvements, GO,
Callable 01/01/07 @ 101
5.125%, 01/01/15 850 863
Cobb County, Water & Sewer
Authority, RB, Callable
07/01/04 @ 102
5.125%, 07/01/05 345 363
Cobb County & Marietta, Coliseum
& Exhibit Hall Authority, RB (MBIA)
5.500%, 10/01/12 940 1,016
Cobb County & Marietta,
Water Authority, RB
5.100%, 11/01/04 1,000 1,051
Columbus, Georgia Water & Sewer,
RB, Callable 11/01/07 @ 102 (FGIC)
5.625%, 05/01/13 1,055 1,131
Dalton, Utilities Revenue RB (MBIA)
6.000%, 01/01/08 2,000 2,240
Dalton-Whitfield County, Hospital
Authority, RB, Prerefunded
07/01/00 @ 102 (F)
7.000%, 07/01/03 355 383
DeKalb County, Development
Authority, Emory University
Project, Ser A, RB
5.375%, 11/01/05 1,650 1,764
DeKalb County, Development
Authority, Emory University
Project, Ser A, RB,
Callable 11/01/05 @ 101
5.200%, 11/01/08 500 528
81
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
GEORGIA TAX-EXEMPT BOND FUND--CONTINUED
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
DeKalb County, School District,
Ser A, GO
6.250%, 07/01/11 $1,500 $ 1,735
Douglas County, School
District, GO (MBIA)
5.650%, 01/01/09 805 868
Douglasville - Douglas County,
Water & Sewer Authority,
RB (AMBAC)
5.625%, 06/01/15 350 380
East Point, Building Authority, RB,
Callable 02/01/06 @ 102 (AMBAC)
4.800%, 02/01/07 535 549
Fayette County, School District, GO
6.250%, 03/01/07 450 510
Fayette County, Water Authority,
ETM, RB (MBIA) (F)
8.550%, 10/01/01 300 341
Forsyth County, School District, GO
6.500%, 07/01/06 1,000 1,144
Forsyth County, School
District, GO (MBIA)
5.350%, 07/01/10 780 822
Fulco, Hospital Authority, Catholic
Health East, Ser A, RB, Anticipation
Certificate, Callable 11/15/2008
@ 102 (MBIA)
5.250%, 11/15/12 1,000 1,037
Fulton County, Hospital Authority,
Northside Hospital Project, Ser B,
RB, Prerefunded 10/01/02
@ 102 (MBIA) (F)
6.600%, 10/01/11 2,000 2,228
Gwinnett County, Recreation
Authority, RB
5.800%, 02/01/06 785 860
5.875%, 02/01/07 1,390 1,538
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
Gwinnett County, School
District, GO
6.400%, 02/01/06 $ 500 $ 567
Gwinnett County, School
District, Ser B, GO
6.400%, 02/01/07 1,000 1,144
Gwinnett County, Water & Sewer
Authority, RB, Callable
08/01/07 @ 102
5.250%, 08/01/18 780 790
Gwinnett County, Water & Sewer
Authority, RB, Callable
08/01/08 @ 102
5.000%, 08/01/12 500 511
5.000%, 08/01/13 800 814
Hall County, School District,
Ser B, GO
6.300%, 12/01/05 675 760
Henry County, GO
6.300%, 08/01/08 300 344
Henry County, Henry Medical
Center Project, Callable 07/01/07
@ 102 (AMBAC)
5.500%, 07/01/08 2,460 2,664
Henry County, School District,
Ser A, GO
6.150%, 08/01/06 150 168
6.450%, 08/01/11 500 586
Henry County, School District,
Ser B, GO (MBIA)
5.500%, 08/01/01 350 366
Henry County, Water & Sewer
Authority, RB (AMBAC)
6.150%, 02/01/20 1,750 2,024
Medical Center Hospital Authority,
Columbus Regional Healthcare
System, Callable 08/01/05
@ 102, RB (MBIA)
6.000%, 08/01/06 1,000 1,110
82
<PAGE>
================================================================================
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
Meriwether County, School
District, GO (FSA)
7.000%, 02/01/06 $ 740 $ 866
5.500%, 02/01/16 1,000 1,041
Milledgeville, Water & Sewer
Revenue, RB (FSA)
6.000%, 12/01/16 1,000 1,130
6.000%, 12/01/21 1,000 1,142
Paulding County, School District,
Ser A, GO
6.625%, 02/01/07 1,000 1,156
6.625%, 02/01/08 500 585
Private Colleges & Universities
Facilities Authority, Emory
University Project, Ser A, RB,
Callable 11/01/07 @ 100
5.000%, 11/01/10 1,000 1,034
Private Colleges & Universities
Facilities Authority, Emory
University Project, Ser C, RB,
Callable 10/01/02 @ 102
5.900%, 10/01/04 305 331
Private Colleges & Universities
Facilities Authority, Mercer
University Project, RB (MBIA)
6.400%, 11/01/11 500 587
Private Colleges & Universities
Facilities Authority, Spelman
College Project, RB (FGIC)
6.000%, 06/01/09 475 523
Putnam County, School District,
GO, Callable 2/01/08 @ 102
4.500%, 02/01/12 930 901
Richmond County, Water & Sewer
Revenue, Ser A, RB, Callable
10/01/06 @ 102 (FGIC)
5.125%, 10/01/17 1,000 1,002
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
Rockdale County, School District,
RB, Prerefunded
01/01/99 @ 102 (F)
6.400%, 01/01/05 $ 150 $ 155
Savannah, Water & Sewer
Revenue, ETM, RB (F)
6.450%, 12/01/04 1,000 1,127
Smyrna, Development Authority, RB
5.600%, 02/01/20 735 792
State GO, Ser C
6.500%, 04/01/08 1,000 1,166
6.250%, 08/01/08 1,360 1,564
State Housing & Financial Authority,
Single Family Mortgage, Ser B,
Sub-ser B-1, Callable 06/01/05
@ 102, RB
5.550%, 12/01/07 550 579
State Housing & Financial Authority,
Single Family Mortgage, Ser B,
Sub-ser B-1, Callable 06/01/06
@ 102, RB (FHA)
5.550%, 12/01/10 325 337
5.600%, 12/01/11 450 467
State Housing & Financial Authority,
Single Family Mortgage, Ser C,
Sub-ser C-1, Callable 12/01/07
@ 101.5, RB
5.550%, 12/01/16 500 517
State Municipal Electric Authority,
ETM, RB, Callable
01/12/98 @ 101 (F)
8.000%, 01/01/15 465 616
State, Tollway Authority,
Georgia 400 Project, RB
5.000%, 07/01/09 1,280 1,338
Upper Oconee Basin, Water Authority,
RB, Callable 07/01/08 @ 102 (FGIC)
5.000%, 07/01/12 500 507
83
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
GEORGIA TAX-EXEMPT BOND FUND--CONCLUDED
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
Vidalia, Water & Sewer Revenue,
ETM, RB (F)
6.000%, 07/01/07 $ 605 $ 679
Walker County, School District, GO
5.000%, 02/01/03 1,000 1,036
Walker, Dade, and Catoosa Counties,
Hutchinson Medical, Ser A, RB,
Callable 10/01/07 @ 102 (FSA)
5.500%, 10/01/08 1,370 1,474
---------
70,360
---------
Total Municipal Bonds
(Cost $68,096) 70,360
---------
CASH EQUIVALENT (4.2%)
AIM Management Institutional
Tax-Free Portfolio (C) 3,106 3,106
---------
Total Cash Equivalent
(Cost $3,106) 3,106
---------
Total Investments (98.5%)
(Cost $71,202) 73,466
---------
OTHER ASSETS AND LIABILITIES, NET (1.5%) 1,136
---------
- -----------------------------------------------------------
VALUE (000)
- -----------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 6,165,879
outstanding shares of beneficial interest $ 60,321
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 392,414
outstanding shares of beneficial interest 3,836
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 816,778
outstanding shares of beneficial interest 8,050
Undistributed net investment income 1
Accumulated net realized gain
on investments 130
Net unrealized appreciation on investments 2,264
---------
Total Net Assets (100.0%) $ 74,602
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 10.11
=========
Net Asset Value and Redemption
Price Per Share -- Investor Shares $ 10.13
=========
Maximum Offering Price Per Share --
Investor Class ($10.13 / 96.25%) $ 10.52
=========
Net Asset Value, Offering and
Redemption Price Per Share -- Flex Shares (1) $ 10.12
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
84
<PAGE>
INVESTMENT GRADE BOND FUND
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
U.S. TREASURY OBLIGATIONS (31.7%)
U.S. Treasury Bonds
7.500%, 11/15/16 $60,000 $ 70,855
8.125%, 08/15/19 87,950 111,438
6.000%, 02/15/26 47,875 48,651
U.S. Treasury Notes
5.875%, 11/30/01 5,000 5,045
6.625%, 03/31/02 12,000 12,418
5.875%, 11/15/05 17,500 17,747
---------
Total U.S. Treasury Obligations
(Cost $245,576) 266,154
---------
CORPORATE OBLIGATIONS (55.1%)
FINANCE (39.0%)
Aristar
6.750%, 05/15/99 23,000 23,151
AT&T Capital, MTN
6.410%, 08/13/99 26,000 26,005
Countrywide Home Loan, MTN
6.840%, 10/22/04 5,000 5,144
6.510%, 02/11/05 23,300 23,387
Ford Motor Credit
7.000%, 09/25/01 24,100 24,793
6.500%, 02/28/02 23,500 23,823
General Motors Acceptance
7.125%, 05/01/01 23,500 24,146
General Motors Acceptance, MTN
7.050%, 04/23/02 10,300 10,609
Great Western Financial
8.600%, 02/01/02 9,800 10,510
Homeside Lending, MTN
6.875%, 05/15/00 29,200 29,565
International Lease Finance, MTN
5.957%, 01/15/02 7,150 7,105
Merrill Lynch, MTN
6.060%, 10/15/01 41,500 41,396
Morgan Stanley, MTN,
Callable 03/09/01 @ 100
6.090%, 03/09/11 12,000 12,000
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
FINANCE--CONTINUED
Salomon
7.300%, 05/15/02 $20,000 $ 20,750
Salomon Smith Barney
6.250%, 01/15/05 20,000 19,775
SunAmerica
6.200%, 10/31/99 25,000 25,058
---------
327,217
---------
INDUSTRIAL (16.1%)
American Home Products
7.700%, 02/15/00 11,750 12,103
7.900%, 02/15/05 21,300 23,217
Bausch & Lomb
6.750%, 12/15/04 11,800 12,021
Ikon Capital, MTN
6.730%, 06/15/01 13,000 13,179
Lockheed Martin
6.550%, 05/15/99 16,000 16,080
Philip Morris
7.250%, 09/15/01 24,500 25,143
7.500%, 04/01/04 14,500 15,243
Praxair
6.900%, 11/01/06 17,725 18,456
---------
135,442
---------
Total Corporate Obligations
(Cost $459,288) 462,659
---------
U.S. GOVERNMENT AGENCY OBLIGATIONS (7.2%)
FHLMC
8.000%, 06/01/02 4,586 4,669
7.500%, 09/01/03 12,948 13,179
FNMA
7.000%, 10/01/03 41,842 42,431
---------
Total U.S. Government Agency Obligations
(Cost $59,936) 60,279
---------
85
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
INVESTMENT GRADE BOND FUND--CONCLUDED
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
BANK NOTE (1.7%)
Capital One
6.530%, 11/26/99 $14,500 $ 14,518
---------
Total Bank Note
(Cost $14,500) 14,518
---------
REPURCHASE AGREEMENTS (3.6%)
Deutsche Bank
5.50%, dated 05/29/98, matures
06/01/98, repurchase price
$21,876,757 (collateralized by
U.S. Treasury Note: total market
value $22,304,576) (H) 21,867 21,867
Swiss Bank
5.52%, dated 05/29/98, matures
06/01/98, repurchase price
$8,448,982 (collateralized by
U.S. Treasury Note and U.S.
Treasury Bond: total market
value $8,622,434) (H) 8,445 8,445
---------
Total Repurchase Agreements
(Cost $30,312) 30,312
---------
Total Investments (99.3%)
(Cost $809,612) 833,922
---------
OTHER ASSETS AND LIABILITIES, NET (0.7%) 5,946
---------
- -----------------------------------------------------------
VALUE (000)
- -----------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 74,493,579
outstanding shares of beneficial interest $ 771,578
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 3,124,013
outstanding shares of beneficial interest 32,828
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 1,230,012
outstanding shares of beneficial interest 12,857
Overdistributed net investment income (188)
Accumulated net realized loss on investments (1,517)
Net unrealized appreciation on investments 24,310
---------
Total Net Assets (100.0%) $ 839,868
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 10.65
=========
Net Asset Value and Redemption Price
Per Share -- Investor Shares $ 10.65
=========
Maximum Offering Price Per Share --
Investor Class ($10.65 / 96.25%) $ 11.06
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Flex Shares (1) $ 10.66
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
86
<PAGE>
SHORT-TERM BOND FUND
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
U.S. TREASURY OBLIGATIONS (29.1%)
U.S. Treasury Notes
4.750%, 10/31/98 $9,000 $ 8,975
5.500%, 02/28/99 4,750 4,751
5.875%, 07/31/99 5,000 5,017
5.625%, 10/31/99 3,000 3,003
7.500%, 11/15/01 6,500 6,885
5.750%, 08/15/03 1,000 1,008
U.S. Treasury STRIPS
0.000%, 08/15/03 1,250 939
0.000%, 11/15/04 8,000 5,594
---------
Total U.S. Treasury Obligations
(Cost $35,982) 36,172
---------
CORPORATE OBLIGATIONS (48.9%)
FINANCE (21.2%)
American Express
6.750%, 06/23/04 3,000 3,097
American General
5.900%, 01/15/03 2,000 1,977
6.250%, 03/15/03 1,100 1,101
Associates of North America, MTN
5.980%, 12/19/00 1,250 1,248
7.080%, 04/15/03 1,500 1,554
Bankers Trust New York
6.625%, 07/30/99 2,250 2,264
Beneficial, MTN
6.490%, 09/27/00 1,000 1,009
Chrysler Financial
9.500%, 12/15/99 1,000 1,051
Dean Witter Discover, MTN
6.000%, 02/08/01 1,000 1,001
First Chicago NBD, MTN
6.500%, 11/01/01 2,250 2,275
Ford Motor Credit
6.500%, 02/28/02 725 735
6.000%, 01/14/03 2,000 1,990
General Motors Acceptance
6.000%, 02/01/02 750 745
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
FINANCE --CONTINUED
HFC Limited
6.000%, 06/30/98 $2,000 $ 2,000
Household Finance
9.625%, 07/15/00 1,250 1,337
International Lease Finance, MTN
5.810%, 07/10/00 2,000 1,995
Norwest Financial
7.200%, 04/01/04 1,000 1,054
---------
26,433
---------
INDUSTRIAL (22.7%)
Clark Equipment
9.750%, 03/01/01 1,250 1,350
Computer Associates (B)
6.375%, 04/15/05 2,300 2,297
Dayton Hudson
6.800%, 10/01/01 2,250 2,289
5.950%, 06/15/10 500 500
General Foods
6.000%, 06/15/01 500 498
IBM, MTN
6.037%, 08/07/00 1,250 1,255
Philip Morris
7.500%, 01/15/02 1,250 1,295
RJR Nabisco
6.800%, 09/01/01 1,500 1,526
Sears Roebuck Acceptance, MTN
6.920%, 06/17/04 2,250 2,337
Tenneco
10.075%, 02/01/01 3,000 3,278
TRW, MTN
9.000%, 02/09/01 1,000 1,071
Union Pacific
7.060%, 05/15/03 1,500 1,556
USAA, MTN (B)
8.880%, 09/21/99 2,000 2,071
87
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
SHORT-TERM BOND FUND--CONCLUDED
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
INDUSTRIAL--CONTINUED
Wal-Mart, Callable/Putable
02/01/00 @ 100
5.650%, 02/01/10 $3,000 $ 2,985
Walt Disney, MTN
5.600%, 01/13/00 2,500 2,491
Walt Disney Euro, MTN
6.250%, 06/21/99 1,500 1,500
---------
28,299
---------
UTILITIES (5.0%)
Bellsouth Savings
9.125%, 07/01/03 1,767 1,935
Indiana & Michigan Power, MTN
6.400%, 03/01/00 2,250 2,264
NYNEX Credit, MTN
6.900%, 06/15/99 2,000 2,018
---------
6,217
---------
Total Corporate Obligations
(Cost $60,397) 60,949
---------
U.S. GOVERNMENT AGENCY OBLIGATIONS (6.7%)
FFCB, Callable 11/06/98 @ 100
6.330%, 11/06/00 2,500 2,503
FHLB
5.510%, 02/06/01 2,750 2,736
FHLMC, Callable 06/30/98 @ 100 (C)
5.375%, 04/13/00 1,000 982
FNMA, MTN
5.760%, 02/26/01 2,100 2,095
---------
Total U.S. Government Agency Obligations
(Cost $8,257) 8,316
---------
U.S. AGENCY MORTGAGE-BACKED
OBLIGATIONS (2.4%)
FHLMC
8.000%, 01/01/00 540 553
6.500%, 12/01/00 2,014 2,031
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
U.S. AGENCY MORTGAGE-BACKED
OBLIGATIONS--CONTINUED
FNMA
8.500%, 11/01/01 $ 354 $ 366
---------
Total U.S. Agency Mortgage-Backed
Obligations
(Cost $2,932) 2,950
---------
ASSET-BACKED SECURITIES (8.5%)
Arcadia Auto Receivables Trust,
Ser 1997-B, Cl A3
6.300%, 07/16/01 2,500 2,509
Discover Card Master Trust,
Ser 1997-2, Cl A
6.792%, 04/16/10 3,000 3,018
Iroquois Trust, Ser 1997-3, Cl A (B)
6.680%, 11/10/03 3,000 3,005
Metris Master Trust,
Ser 1997-1, Cl A
6.870%, 10/20/05 2,000 2,066
---------
Total Asset-Backed Securities
(Cost $10,555) 10,598
---------
CASH EQUIVALENT (3.9%)
SEI Daily Income Trust Prime
Obligation Portfolio (C) 4,869 4,869
---------
Total Cash Equivalent
(Cost $4,869) 4,869
---------
Total Investments (99.5%)
(Cost $122,992) 123,854
---------
OTHER ASSETS AND LIABILITIES, NET (0.5%) 627
---------
88
<PAGE>
- -----------------------------------------------------------
VALUE (000)
- -----------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 11,978,220
outstanding shares of beneficial interest $ 119,361
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 193,503
outstanding shares of beneficial interest 1,935
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 209,663
outstanding shares of beneficial interest 2,103
Undistributed net investment income 143
Accumulated net realized gain
on investments 77
Net unrealized appreciation on investments 862
---------
Total Net Assets (100.0%) $ 124,481
=========
- -----------------------------------------------------------
VALUE
- -----------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 10.05
=========
Net Asset Value and Redemption Price
Per Share -- Investor Shares $ 10.07
=========
Maximum Offering Price Per Share --
Investor Class ($10.07 / 98.00%) $ 10.28
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Flex Shares (1) $ 10.07
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
89
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
SHORT-TERM U.S. TREASURY SECURITIES FUND
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
U.S. TREASURY OBLIGATIONS (96.8%)
U.S. Treasury Notes
5.500%, 11/15/98 $ 1,600 $ 1,600
6.375%, 05/15/99 1,900 1,915
6.875%, 07/31/99 4,250 4,312
6.000%, 08/15/99 2,500 2,513
5.875%, 11/15/99 2,000 2,009
5.625%, 11/30/99 17,000 17,021
5.875%, 02/15/00 2,250 2,262
6.875%, 03/31/00 1,250 1,279
6.125%, 07/31/00 2,250 2,276
5.750%, 10/31/00 2,000 2,009
5.375%, 02/15/01 12,800 12,743
---------
Total U.S. Treasury Obligations
(Cost $49,758) 49,939
---------
CASH EQUIVALENT (1.7%)
SEI Daily Income Trust
Treasury II Portfolio (C) 872 872
---------
Total Cash Equivalent
(Cost $872) 872
---------
Total Investments (98.5%)
(Cost $50,630) 50,811
---------
OTHER ASSETS AND LIABILITIES, NET (1.5%) 799
---------
- -----------------------------------------------------------
VALUE (000)
- -----------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 4,708,139
outstanding shares of beneficial interest $ 46,966
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 328,871
outstanding shares of beneficial interest 3,311
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 142,073
outstanding shares of beneficial interest 1,416
Overdistributed net investment income (53)
Accumulated net realized loss
on investments (211)
Net unrealized appreciation on investments 181
---------
Total Net Assets (100.0%) $ 51,610
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 9.97
=========
Net Asset Value and Redemption Price
Per Share -- Investor Shares $ 9.96
=========
Maximum Offering Price Per Share --
Investor Class ($9.96 / 99.00%) $ 10.06
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Flex Shares (1) $ 9.94
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
90
<PAGE>
LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
U.S. TREASURY OBLIGATIONS (21.1%)
U.S. Treasury Notes
7.875%, 08/15/01 $ 5,750 $ 6,130
6.375%, 09/30/01 8,900 9,106
6.250%, 01/31/02 14,300 14,603
---------
Total U.S. Treasury Obligations
(Cost $29,786) 29,839
---------
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (77.0%)
FHLMC
8.000%, 06/01/02 655 667
7.000%, 10/01/02 3,639 3,689
8.000%, 12/01/02 1,998 2,042
7.000%, 03/01/04 11,345 11,519
FHLMC REMIC, Ser 1624-KC
6.000%, 06/15/08 11,084 11,044
FHLMC REMIC, Ser 1666-E
6.000%, 12/15/19 5,000 4,989
FHLMC REMIC, Ser 1614-H
6.000%, 06/15/20 4,550 4,545
FHLMC REMIC, Ser 29-Q
7.500%, 06/25/20 15,000 15,479
FHLMC TBA
6.500%, 02/01/13 10,300 10,355
FNMA
6.140%, 03/24/03 7,100 7,079
7.500%, 07/01/03 5,864 5,962
7.000%, 10/01/03 11,622 11,786
7.000%, 03/01/04 12,463 12,639
8.500%, 04/01/17 863 912
FNMA REMIC, Ser 1993-223PH
6.050%, 10/25/22 5,375 5,327
GNMA
9.000%, 11/15/17 1,090 1,180
---------
Total U.S. Agency Mortgage-Backed Obligations
(Cost $108,381) 109,214
---------
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
CASH EQUIVALENT (8.8%)
SEI Liquid Asset Trust Prime
Obligation Portfolio (C) $12,436 $ 12,436
---------
Total Cash Equivalent
(Cost $12,436) 12,436
---------
Total Investments (106.9%)
(Cost $150,603) 151,489
---------
OTHER ASSETS AND LIABILITIES (-6.9%)
Securities Purchased Payable (10,355)
Other Assets and Liabilities, Net 602
---------
Total Other Assets and Liabilities (9,753)
---------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 13,586,482
outstanding shares of beneficial interest 136,353
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 267,580
outstanding shares of beneficial interest 2,694
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 152,467
outstanding shares of beneficial interest 1,543
Overdistributed net investment income (2)
Accumulated net realized gain
on investments 262
Net unrealized appreciation on investments 886
---------
Total Net Assets (100.0%) $ 141,736
=========
91
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND--CONCLUDED
- -----------------------------------------------------------
VALUE
- -----------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 10.12
=========
Net Asset Value and Redemption Price
Per Share -- Investor Shares $ 10.11
=========
Maximum Offering Price Per Share --
Investor Class ($10.11 / 97.50%) $ 10.37
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Flex Shares (1) $ 10.12
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
92
<PAGE>
U.S. GOVERNMENT SECURITIES FUND
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
U.S. TREASURY OBLIGATIONS (25.2%)
U.S. Treasury Bonds
7.750%, 11/30/99 $ 200 $ 206
7.250%, 05/15/16 1,000 1,153
6.875%, 08/15/25 1,000 1,133
6.000%, 02/15/26 2,000 2,032
U.S. Treasury Notes
8.500%, 11/15/00 1,000 1,067
8.000%, 05/15/01 200 213
7.500%, 11/15/01 200 212
7.500%, 05/15/02 750 800
7.250%, 05/15/04 500 541
7.875%, 11/15/04 275 308
7.500%, 02/15/05 500 552
6.500%, 10/15/06 750 791
6.625%, 05/15/07 1,050 1,120
7.625%, 02/15/25 400 493
---------
Total U.S. Treasury Obligations
(Cost $10,187) 10,621
---------
U.S. AGENCY MORTGAGE-BACKED
OBLIGATIONS (65.1%)
FHLMC
6.000%, 02/01/01 93 93
7.000%, 01/01/09 104 107
7.000%, 04/01/09 287 293
7.000%, 08/01/10 726 741
7.000%, 05/01/12 868 886
6.500%, 12/01/12 1,586 1,596
FHLMC REMIC, Ser 2039, Cl PC
6.000%, 05/15/09 1,000 997
FNMA
6.000%, 11/01/07 874 874
7.500%, 06/01/11 737 760
7.000%, 09/17/11 1,107 1,129
7.000%, 05/01/12 902 920
7.000%, 06/01/12 880 898
7.000%, 07/01/12 872 889
7.000%, 10/01/16 762 773
7.500%, 04/01/27 815 839
6.500%, 03/01/28 998 992
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
FNMA REMIC, Ser 1997-6, Cl H
7.000%, 08/18/08 $1,058 $ 1,096
FNMA REMIC, Ser G93-40, Cl VC
6.500%, 08/25/10 261 259
FNMA REMIC, Ser 1997-34, Cl VC
7.500%, 05/01/12 1,000 1,029
FNMA REMIC, Ser 1996-9, Cl H
6.500%, 11/25/13 1,337 1,350
FNMA REMIC, Ser 1993-156, Cl B
6.500%, 04/25/18 100 100
FNMA REMIC, Ser 1996-68, Cl C
6.500%, 08/18/18 1,000 1,005
FNMA REMIC, Ser 1990-143, Cl J
8.750%, 12/25/20 111 118
GNMA
7.500%, 10/20/09 56 58
8.250%, 01/15/12 74 78
9.000%, 04/15/17 381 409
8.500%, 05/15/17 703 743
10.000%, 06/15/19 3 4
7.500%, 05/15/22 523 539
7.000%, 11/15/22 419 426
8.000%, 02/15/23 30 32
8.500%, 03/15/23 55 59
7.500%, 04/15/23 125 130
7.500%, 09/15/23 765 789
6.500%, 10/15/23 946 942
7.000%, 01/15/24 136 138
7.500%, 04/15/24 749 772
7.000%, 06/15/24 831 845
8.000%, 08/15/24 67 70
8.000%, 09/15/24 22 24
8.000%, 10/15/24 30 32
8.000%, 11/15/24 27 29
8.500%, 12/15/24 59 63
8.500%, 02/15/25 21 23
7.000%, 12/15/25 463 471
6.500%, 02/15/28 989 984
93
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
U.S. GOVERNMENT SECURITIES FUND--CONCLUDED
- -----------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -----------------------------------------------------------
GNMA REMIC, Ser 1995-6A, Cl E
7.500%, 05/20/23 $1,000 $ 1,029
GNMA REMIC, Ser 1998-9, Cl D
6.500%, 08/20/24 1,000 994
---------
Total U.S. Agency Mortgage-Backed
Obligations
(Cost $26,868) 27,427
---------
CASH EQUIVALENTS (9.5%)
SEI Daily Income Trust
Government II Portfolio (C) 2,021 2,021
SEI Daily Income Trust
Treasury II Portfolio (C) 2,004 2,004
---------
Total Cash Equivalents
(Cost $4,025) 4,025
---------
Total Investments (99.8%)
(Cost $41,080) 42,073
---------
OTHER ASSETS AND LIABILITIES, NET (0.2%) 73
---------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 3,337,251
outstanding shares of beneficial interest 34,056
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 308,451
outstanding shares of beneficial interest 3,145
Fund shares of the Flex Class
(unlimited authorization -- no
par value) based on 384,656
outstanding shares of beneficial interest 3,958
Accumulated net realized loss
on investments (6)
Net unrealized appreciation on investments 993
---------
Total Net Assets (100.0%) $ 42,146
=========
- -----------------------------------------------------------
VALUE
- -----------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $ 10.46
=========
Net Asset Value and Redemption Price
Per Share -- Investor Shares $ 10.45
=========
Maximum Offering Price Per Share --
Investor Class ($10.45 / 96.25%) $ 10.86
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Flex Shares (1) $ 10.46
=========
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 95.
94
<PAGE>
================================================================================
KEY TO ABBREVIATIONS USED IN
THE STATEMENT OF NET ASSETS
ADR American Depository Receipt
AMBAC Security insured by the American Municipal
Bond Assurance Corporation
AMT Alternative Minimum Tax
Cl Class
COP Certificate of Participation
CV Convertible Security
ETM Escrowed to Maturity
F Foreign Registry Shares
FFCB Federal Farm Credit Bank
FGIC Security insured by the Financial Guaranty
Insurance Company
FHA Federal Housing Administration
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Security insured by Financial Security
Assurance
GDR Global Depository Receipt
GDS Global Depository Shares
GNMA Government National Mortgage Association
GO General Obligation
MBIA Security Insured by the Municipal Bond
Insurance Association
MTN Medium Term Note
PLC Public Limited Corporation
RB Revenue Bond
REIT Real Estate Investment Trust
REMIC Real Estate Mortgage Investment Conduit
Ser Series
STRIPS Separately Traded Registered Interest and
Principal Security
STRYPES Structured Yield Product Exchange Securities
TBA To Be Announced (see Notes to
Financial Statements)
TCRS Transferrable Custodial Receipts
TRACES Trust Automatic Common Exchange Securities
VRDN Variable Rate Demand Note
* Non-income producing securities
(A) Zero Coupon Bond
(B) Private Placement Security
(C) Variable rate security. The rate reported on the Statement of Net
Assets is the rate in effect on May 31, 1998.
(D) Put and demand features exist requiring the issuer to repurchase the
instrument prior to maturity.
(E) Securities are held in connection with a letter of credit issued by
a major bank.
(F) Collateralized by U.S. Government Securities
(G) Collateralized by State and Local Government Securities
(H) Tri-Party Repurchase Agreement
95
<PAGE>
STATEMENT OF OPERATIONS (000)
================================================================================
STI CLASSIC FUNDS FOR THE YEAR ENDED MAY 31, 1998
<TABLE>
<CAPTION>
MID-CAP SMALL-CAP
VALUE INCOME EQUITY EQUITY
STOCK FUND FUND FUND
---------- --------- ---------
06/01/97- 06/01/97- 06/01/97-
05/31/98 05/31/98 05/31/98
---------- --------- ---------
<S> <C> <C> <C>
Income:
Interest Income .................................................................. $ 7,447 $ 1,222 $ 639
Dividend Income .................................................................. 47,287 1,990 6,459
Less: Foreign Taxes Withheld ..................................................... -- -- --
-------- ------- -------
Total Investment Income .......................................................... 54,734 3,212 7,098
-------- ------- -------
Expenses:
Investment Advisory Fees ......................................................... 15,826 4,269 3,579
Less: Investment Advisory Fees Waived ............................................ -- (423) (329)
Administrator Fees ............................................................... 1,428 267 230
Transfer Agent Fees -- Trust Shares .............................................. 17 19 16
Transfer Agent Fees -- Investor Shares ........................................... 52 33 --
Transfer Agent Fees -- Flex Shares ............................................... 118 28 43
Transfer Agent Out of Pocket Fees ................................................ 221 42 41
Printing Expenses ................................................................ 171 44 53
Custody Fees ..................................................................... 86 15 15
Professional Fees ................................................................ 110 26 30
Trustee Fees ..................................................................... 31 6 5
Registration Fees ................................................................ 205 35 102
Distribution Fees -- Investor Shares ............................................. 631 100 --
Less: Distribution Fees Waived -- Investor Shares ................................ -- (29) --
Distribution Fees -- Flex Shares ................................................. 1,241 143 188
Less: Distribution Fees Waived -- Flex Shares .................................... (7) (19) (32)
Insurance and Other Fees ......................................................... 42 8 8
Amortization of Deferred Organization Costs ...................................... 7 -- 22
-------- ------- -------
Total Expenses ................................................................... 20,179 4,564 3,971
-------- ------- -------
Net Investment Income (Loss) ..................................................... 34,555 (1,352) 3,127
-------- ------- -------
Net Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss) on Securities Sold ...................................... 319,982 54,941 32,653
Net Realized Loss on Foreign Currency Transactions ............................... -- -- --
Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and
Translation of Other Assets and Liabilities in Foreign Currency ................ -- -- --
Net Change in Unrealized Appreciation (Depreciation) on Investments .............. 44,518 14,034 16,045
-------- ------- -------
Total Net Realized and Unrealized Gain (Loss)
on Investments ................................................................. 364,500 68,975 48,698
-------- ------- -------
Net Increase (Decrease) in Net Assets from Operations ............................ $399,055 $67,623 $51,825
======== ======= =======
CAPITAL EMERGING
GROWTH BALANCED MARKETS
FUND FUND EQUITY FUND
--------- --------- ---------
06/01/97- 06/01/97- 06/01/97-
05/31/98 05/31/98 05/31/98
--------- --------- ---------
<S> <C> <C> <C>
Income:
Interest Income ................................................................... $ 10,774 $ 5,176 $ 167
Dividend Income ................................................................... 19,143 1,350 1,009
Less: Foreign Taxes Withheld ...................................................... -- -- (69)
-------- ------- -------
Total Investment Income ........................................................... 29,917 6,526 1,107
-------- ------- -------
Expenses:
Investment Advisory Fees .......................................................... 19,426 1,787 533
Less: Investment Advisory Fees Waived ............................................. (1,819) (225) (90)
Administrator Fees ................................................................ 1,218 136 29
Transfer Agent Fees -- Trust Shares ............................................... 19 19 16
Transfer Agent Fees -- Investor Shares ............................................ 161 17 --
Transfer Agent Fees -- Flex Shares ................................................ 69 22 --
Transfer Agent Out of Pocket Fees ................................................. 187 21 4
Printing Expenses ................................................................. 133 10 8
Custody Fees ...................................................................... 74 9 89
Professional Fees ................................................................. 95 11 5
Trustee Fees ...................................................................... 26 3 1
Registration Fees ................................................................. 193 23 6
Distribution Fees -- Investor Shares .............................................. 1,677 19 --
Less: Distribution Fees Waived -- Investor Shares ................................. (235) (14) --
Distribution Fees -- Flex Shares .................................................. 674 138 --
Less: Distribution Fees Waived -- Flex Shares ..................................... 1 (12) --
Insurance and Other Fees .......................................................... 35 4 16
Amortization of Deferred Organization Costs ....................................... -- -- 22
-------- ------- -------
Total Expenses .................................................................... 21,934 1,968 639
-------- ------- -------
Net Investment Income (Loss) ...................................................... 7,983 4,558 468
-------- ------- -------
Net Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss) on Securities Sold ....................................... 261,636 17,885 (875)
Net Realized Loss on Foreign Currency Transactions ................................ -- -- (61)
Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and
Translation of Other Assets and Liabilities in Foreign Currency ................. -- -- (1)
Net Change in Unrealized Appreciation (Depreciation) on Investments ............... 157,396 14,594 (7,440)
-------- ------- -------
Total Net Realized and Unrealized Gain (Loss)
on Investments .................................................................. 419,032 32,479 (8,377)
-------- ------- -------
Net Increase (Decrease) in Net Assets from Operations ............................. $427,015 $37,037 $(7,909)
======== ======= =======
INTERNATIONAL INTERNATIONAL
EQUITY EQUITY SUNBELT
INDEX FUND FUND EQUITY FUND
--------- --------- ---------
06/01/97- 06/01/97- 06/01/97-
05/31/98 05/31/98 05/31/98
--------- --------- ---------
<S> <C> <C> <C>
Income:
Interest Income ................................................................... $ 34 $ 1,352 $ 326
Dividend Income ................................................................... 1,157 11,474 854
Less: Foreign Taxes Withheld ...................................................... (19) (819) --
------- -------- -------
Total Investment Income ........................................................... 1,172 12,007 1,180
------- -------- -------
Expenses:
Investment Advisory Fees .......................................................... 543 7,201 5,288
Less: Investment Advisory Fees Waived ............................................. (77) (70) (516)
Administrator Fees ................................................................ 43 416 330
Transfer Agent Fees -- Trust Shares ................................................ 17 19 20
Transfer Agent Fees -- Investor Shares ............................................. 19 18 48
Transfer Agent Fees -- Flex Shares ................................................. 14 19 21
Transfer Agent Out of Pocket Fees ................................................. 4 35 54
Printing Expenses ................................................................. 3 22 54
Custody Fees ...................................................................... 77 753 22
Professional Fees ................................................................. 2 19 35
Trustee Fees ...................................................................... 2 3 7
Registration Fees ................................................................. 1 44 29
Distribution Fees -- Investor Shares .............................................. 24 46 132
Less: Distribution Fees Waived -- Investor Shares ................................. (16) (12) (40)
Distribution Fees -- Flex Shares .................................................. 10 158 67
Less: Distribution Fees Waived -- Flex Shares ..................................... (8) (9) (17)
Insurance and Other Fees .......................................................... 12 23 10
Amortization of Deferred Organization Costs ....................................... 4 2 --
------- -------- -------
Total Expenses .................................................................... 674 8,687 5,544
------- -------- -------
Net Investment Income (Loss) ...................................................... 498 3,320 (4,364)
------- -------- -------
Net Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss) on Securities Sold ....................................... 3,349 61,173 49,778
Net Realized Loss on Foreign Currency Transactions ................................ (46) (1,410) --
Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and
Translation of Other Assets and Liabilities in Foreign Currency ................. 19 (93) --
Net Change in Unrealized Appreciation (Depreciation) on Investments ............... 9,866 50,891 46,313
------- -------- -------
Total Net Realized and Unrealized Gain (Loss)
on Investments .................................................................. 13,188 110,561 96,091
------- -------- -------
Net Increase (Decrease) in Net Assets from Operations ............................. $13,686 $113,881 $91,727
======= ======== =======
<FN>
Amounts designated as "--" are either $0 or round to $0.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
96 & 97
<PAGE>
STATEMENT OF OPERATIONS (000) (concluded)
================================================================================
STI CLASSIC FUNDS FOR THE YEAR ENDED MAY 31, 1998
<TABLE>
<CAPTION>
INVESTMENT GRADE FLORIDA TENNESSEE GEORGIA
TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT
BOND FUND BOND FUND BOND FUND BOND FUND
--------- --------- --------- ---------
06/01/97- 06/01/97- 06/01/97- 06/01/97-
05/31/98 05/31/98 04/13/98* 05/31/98
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Interest Income .............................................. $ 8,234 $4,010 $260 $2,881
------- ------ ---- ------
Expenses:
Investment Advisory Fees .................................. 1,327 540 34 394
Less: Investment Advisory Fees Waived ..................... (208) (121) (34) (93)
Less: Contribution from Advisor ........................... -- -- (10) --
Administrator Fees ........................................ 128 61 4 44
Transfer Agent Fees -- Trust Shares ....................... 19 18 16 16
Transfer Agent Fees -- Investor Shares .................... 41 12 12 13
Transfer Agent Fees -- Flex Shares ........................ 14 14 11 15
Transfer Agent Out of Pocket Fees ......................... 23 9 1 7
Printing Expenses ......................................... 20 6 1 5
Custody Fees .............................................. 13 4 -- 3
Professional Fees ......................................... 18 6 -- 4
Trustee Fees .............................................. 6 1 -- 1
Registration Fees ......................................... 12 18 -- 11
Distribution Fees -- Investor Shares ...................... 126 6 2 7
Less: Distribution Fees Waived -- Investor Shares ......... (49) (6) (1) (7)
Distribution Fees -- Flex Shares .......................... 59 61 26 61
Less: Distribution Fees Waived -- Flex Shares ............. (20) (31) (9) (31)
Insurance and Other Fees .................................. 6 2 1 1
Amortization of Deferred Organization Costs ............... -- -- -- --
------- ------ ---- ------
Total Expenses ............................................ 1,535 600 54 451
------- ------ ---- ------
Net Investment Income ........................................ 6,699 3,410 206 2,430
------- ------ ---- ------
Net Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain on Securities Sold ...................... 6,478 720 34 195
Net Change in Unrealized Appreciation (Depreciation)
on Investments ......................................... 1,225 2,334 (120) 1,962
------- ------ ---- ------
Total Net Realized and Unrealized Gain
on Investments ......................................... 7,703 3,054 (86) 2,157
------- ------ ---- ------
Net Increase in Net Assets from Operations ................... $14,402 $6,464 $120 $4,587
======= ====== ==== ======
SHORT-TERM
INVESTMENT U.S. TREASURY LIMITED-TERM
GRADE BOND SHORT-TERM SECURITIES FEDERAL MORTGAGE
FUND BOND FUND FUND SECURITIES FUND
--------- --------- --------- ----------------
06/01/97- 06/01/97- 06/01/97- 06/01/97-
05/31/98 05/31/98 05/31/98 05/31/98
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Interest Income ............................................ $49,084 $6,779 $2,059 $8,865
------- ------ ------ ------
Expenses:
Investment Advisory Fees ................................ 5,647 719 229 899
Less: Investment Advisory Fees Waived ................... (794) (165) (78) (159)
Less: Contribution from Advisor ......................... -- -- -- --
Administrator Fees ...................................... 550 80 26 99
Transfer Agent Fees -- Trust Shares ..................... 16 18 17 20
Transfer Agent Fees -- Investor Shares .................. 31 14 13 13
Transfer Agent Fees -- Flex Shares ...................... 21 15 14 15
Transfer Agent Out of Pocket Fees ....................... 90 13 4 14
Printing Expenses ....................................... 86 12 3 10
Custody Fees ............................................ 36 4 1 6
Professional Fees ....................................... 59 6 2 3
Trustee Fees ............................................ 12 2 1 2
Registration Fees ....................................... 79 16 7 --
Distribution Fees -- Investor Shares .................... 141 5 6 6
Less: Distribution Fees Waived -- Investor Shares ....... (44) (5) (6) (5)
Distribution Fees -- Flex Shares ........................ 87 14 13 15
Less: Distribution Fees Waived -- Flex Shares ........... (31) (13) (13) (15)
Insurance and Other Fees ................................ 16 3 1 3
Amortization of Deferred Organization Costs ............. -- 5 3 3
------- ------ ------ ------
Total Expenses .......................................... 6,002 743 243 929
------- ------ ------ ------
Net Investment Income ...................................... 43,082 6,036 1,816 7,936
------- ------ ------ ------
Net Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain on Securities Sold .................... 10,888 502 47 502
Net Change in Unrealized Appreciation (Depreciation)
on Investments ....................................... 24,005 1,163 211 1,031
------- ------ ------ ------
Total Net Realized and Unrealized Gain
on Investments ....................................... 34,893 1,665 258 1,533
------- ------ ------ ------
Net Increase in Net Assets from Operations ................. $77,975 $7,701 $2,074 $9,469
======= ====== ====== ======
U.S.
GOVERNMENT
SECURITIES FUND
---------
06/01/97-
05/31/98
---------
<S> <C>
Interest Income ............................................ $2,183
------
Expenses:
Investment Advisory Fees ................................ 241
Less: Investment Advisory Fees Waived ................... (55)
Less: Contribution from Advisor ......................... --
Administrator Fees ...................................... 24
Transfer Agent Fees -- Trust Shares ..................... 19
Transfer Agent Fees -- Investor Shares .................. 14
Transfer Agent Fees -- Flex Shares ...................... 16
Transfer Agent Out of Pocket Fees ....................... 3
Printing Expenses ....................................... 3
Custody Fees ............................................ 2
Professional Fees ....................................... 1
Trustee Fees ............................................ --
Registration Fees ....................................... 1
Distribution Fees -- Investor Shares .................... 10
Less: Distribution Fees Waived -- Investor Shares ....... (9)
Distribution Fees -- Flex Shares ........................ 33
Less: Distribution Fees Waived -- Flex Shares ........... (16)
Insurance and Other Fees ................................ --
Amortization of Deferred Organization Costs ............. 2
------
Total Expenses .......................................... 289
------
Net Investment Income ...................................... 1,894
------
Net Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain on Securities Sold .................... 55
Net Change in Unrealized Appreciation (Depreciation)
on Investments ....................................... 1,207
------
Total Net Realized and Unrealized Gain
on Investments ....................................... 1,262
------
Net Increase in Net Assets from Operations ................. $3,156
======
<FN>
*Discontinued operations
Amounts designated as "--" are either $0 or round to $0.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
98 & 99
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000)
================================================================================
STI CLASSIC FUNDS FOR THE PERIODS ENDED MAY 31,
<TABLE>
<CAPTION>
VALUE INCOME MID-CAP EQUITY SMALL CAP
STOCK FUND FUND EQUITY FUND
------------------- ------------------- --------------------
06/01/97- 06/01/96- 06/01/97- 06/01/96- 06/01/97- 01/31/97*-
05/31/98 05/31/97 05/31/98 05/31/97 05/31/98 05/31/97
--------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net Investment Income (Loss) .............................. $ 34,555 $ 35,049 $ (1,352) $ 513 $ 3,127 $ 521
Net Realized Gain (Loss) on Investments ................... 319,982 243,189 54,941 33,978 32,653 1,757
Net Realized Loss on Foreign Currency
Transactions ............................................ -- -- -- -- -- --
Net Change in Unrealized Appreciation (Depreciation) on
Foreign Currency and Translation of Other Assets and
Liabilities in Foreign Currency ......................... -- -- -- -- -- --
Net Change in Unrealized Appreciation (Depreciation)
on Investments .......................................... 44,518 33,953 14,034 4,912 16,045 7,644
---------- ---------- -------- -------- -------- --------
Increase (Decrease) in Net Assets from Operations ....... 399,055 312,191 67,623 39,403 51,825 9,922
---------- ---------- -------- -------- -------- --------
Distributions to Shareholders:
Net Investment Income:
Trust Shares ............................................ (30,991) (30,805) -- (962) (2,704) (205)
Investor Shares ......................................... (2,838) (2,820) -- (17) -- --
Flex Shares ............................................. (1,104) (606) -- -- (70) --
Capital Gains:
Trust Shares ............................................ (262,191) (166,191) (44,446) (24,244) (14,480) --
Investor Shares ......................................... (29,671) (18,030) (3,025) (1,770) -- --
Flex Shares ............................................. (19,217) (5,570) (1,899) (676) (897) --
---------- ---------- -------- -------- -------- --------
Total Distributions ....................................... (346,012) (224,022) (49,370) (27,669) (18,151) (205)
---------- ---------- -------- -------- -------- --------
Capital Transactions (1):
Trust Shares:
Proceeds from Shares Issued ............................. 381,039 380,339 146,386 113,386 272,776 126,046
Reinvestment of Cash Distributions ...................... 269,446 179,808 41,347 22,790 15,603 137
Cost of Shares Repurchased .............................. (459,701) (392,524) (153,972) (113,291) (61,475) (4,851)
---------- ---------- -------- -------- -------- --------
Increase (Decrease) in Net Assets From Trust Share
Transactions ............................................ 190,784 167,623 33,761 22,885 226,904 121,332
---------- ---------- -------- -------- -------- --------
Investor Shares:
Proceeds from Shares Issued ............................. 35,483 31,242 6,110 5,664 -- --
Reinvestment of Cash Distributions ...................... 32,233 20,626 3,019 1,783 -- --
Cost of Shares Repurchased .............................. (28,503) (24,774) (5,606) (5,934) -- --
---------- ---------- -------- -------- -------- --------
Increase (Decrease) in Net Assets From Investor
Share Transactions ...................................... 39,213 27,094 3,523 1,513 -- --
---------- ---------- -------- -------- -------- --------
Flex Shares:
Proceeds from Shares Issued ............................. 106,762 43,363 10,574 5,680 42,359 --
Reinvestment of Cash Distributions ...................... 20,054 6,080 1,885 666 958 --
Cost of Shares Repurchased .............................. (20,844) (6,096) (3,934) (1,648) (3,490) --
---------- ---------- -------- -------- -------- --------
Increase (Decrease) in Net Assets From
Flex Share Transactions ................................. 105,972 43,347 8,525 4,698 39,827 --
---------- ---------- -------- -------- -------- --------
Increase (Decrease) in Net Assets From Share
Transactions .......................................... 335,969 238,064 45,809 29,096 266,731 121,332
---------- ---------- -------- -------- -------- --------
Total Increase (Decrease) in Net Assets ............... 389,012 326,233 64,062 40,830 300,405 131,049
---------- ---------- -------- -------- -------- --------
Net Assets:
Beginning of Period ....................................... 1,727,527 1,401,294 317,735 276,905 131,049 --
---------- ---------- -------- -------- -------- --------
End of Period ............................................. $2,116,539 $1,727,527 $381,797 $317,735 $431,454 $131,049
========== ========== ======== ======== ======== ========
(1)Shares Issued and Redeemed:
Trust Shares:
Shares Issued ........................................... 26,871 29,343 10,517 9,011 22,065 12,290
Shares Issued in Lieu of Cash Distributions ............. 21,156 14,654 3,378 1,853 1,294 13
Shares Redeemed ......................................... (32,467) (30,076) (11,149) (9,008) (4,840) (466)
---------- ---------- -------- -------- -------- --------
Net Trust Share Transactions .............................. 15,560 13,921 2,746 1,856 18,519 11,837
---------- ---------- -------- -------- -------- --------
Investor Shares:
Shares Issued ........................................... 2,518 2,411 445 455 -- --
Shares Issued in Lieu of Cash Distributions ............. 2,538 1,683 248 145 -- --
Shares Redeemed ......................................... (2,003) (1,906) (407) (472) -- --
---------- ---------- -------- -------- -------- --------
Net Investor Share Transactions ........................... 3,053 2,188 286 128 -- --
---------- ---------- -------- -------- -------- --------
Flex Shares:
Shares Issued ........................................... 7,617 3,360 777 459 3,366 --
Shares Issued in Lieu of Cash Distributions ............. 1,597 500 158 55 80 --
Shares Redeemed ......................................... (1,488) (470) (292) (134) (273) --
---------- ---------- -------- -------- -------- --------
Net Flex Share Transactions ............................... 7,726 3,390 643 380 3,173 --
========== ========== ======== ======== ======== ========
Net Change in Capital Shares .............................. 26,339 19,499 3,675 2,364 21,692 11,837
---------- ---------- -------- -------- -------- --------
EMERGING
CAPITAL GROWTH FUND BALANCED FUND MARKETS EQUITY FUND
------------------- ------------------- --------------------
06/01/97- 06/01/96- 06/01/97- 06/01/96- 06/01/97- 01/31/97*-
05/31/98 05/31/97 05/31/98 05/31/97 05/31/98 05/31/97
--------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net Investment Income (Loss) .............................. $ 7,983 $ 8,603 $ 4,558 $ 3,521 $ 468 $ 144
Net Realized Gain (Loss) on Investments ................... 250,797 221,554 17,091 11,411 (875) 80
Net Realized Loss on Foreign Currency
Transactions ............................................ -- -- -- -- (61) (18)
Net Change in Unrealized Appreciation (Depreciation) on
Foreign Currency and Translation of Other Assets and
Liabilities in Foreign Currency ......................... -- -- -- -- (1) --
Net Change in Unrealized Appreciation (Depreciation)
on Investments .......................................... 168,235 43,851 15,388 5,223 (7,440) 2,108
---------- ---------- -------- -------- ------- -------
Increase (Decrease) in Net Assets from Operations ....... 427,015 274,008 37,037 20,155 (7,909) 2,314
---------- ---------- -------- -------- ------- -------
Distributions to Shareholders:
Net Investment Income:
Trust Shares ............................................ (7,798) (7,993) (4,197) (3,051) (314) --
Investor Shares ......................................... (28) (338) (154) (139) -- --
Flex Shares ............................................. -- -- (204) (77) -- --
Capital Gains:
Trust Shares ............................................ (200,074) (180,731) (12,908) (9,775) (544) --
Investor Shares ......................................... (36,216) (35,976) (536) (505) -- --
Flex Shares ............................................. (9,643) (3,858) (972) (388) -- --
---------- ---------- -------- -------- ------- -------
Total Distributions ....................................... (253,759) (228,896) (18,971) (13,935) (858) --
---------- ---------- -------- -------- ------- -------
Capital Transactions (1):
Trust Shares:
Proceeds from Shares Issued ............................. 466,511 295,281 53,532 75,303 23,819 42,043
Reinvestment of Cash Distributions ...................... 197,282 178,092 16,935 12,606 805 --
Cost of Shares Repurchased .............................. (358,832) (406,707) (49,610) (54,011) (20,798) (4,862)
---------- ---------- -------- -------- ------- -------
Increase (Decrease) in Net Assets From Trust Share
Transactions ............................................ 304,961 66,666 20,857 33,898 3,826 37,181
---------- ---------- -------- -------- ------- -------
Investor Shares:
Proceeds from Shares Issued ............................. 29,116 22,778 2,150 1,430 -- --
Reinvestment of Cash Distributions ...................... 35,990 36,046 680 633 -- --
Cost of Shares Repurchased .............................. (37,738) (38,034) (1,166) (1,149) -- --
---------- ---------- -------- -------- ------- -------
Increase (Decrease) in Net Assets From Investor
Share Transactions ...................................... 27,368 20,790 1,664 914 -- --
---------- ---------- -------- -------- ------- -------
Flex Shares:
Proceeds from Shares Issued ............................. 67,377 23,389 21,409 3,065 -- --
Reinvestment of Cash Distributions ...................... 9,528 3,813 1,164 462 -- --
Cost of Shares Repurchased .............................. (12,730) (2,774) (2,194) (787) -- --
---------- ---------- -------- -------- ------- -------
Increase (Decrease) in Net Assets From
Flex Share Transactions ................................. 64,175 24,428 20,379 2,740 -- --
---------- ---------- -------- -------- ------- -------
Increase (Decrease) in Net Assets From Share
Transactions .......................................... 396,504 111,884 42,900 37,552 3,826 37,181
---------- ---------- -------- -------- ------- -------
Total Increase (Decrease) in Net Assets ............... 569,760 156,996 60,966 43,772 (4,941) 39,495
---------- ---------- -------- -------- ------- -------
Net Assets:
Beginning of Period ....................................... 1,340,541 1,183,545 163,437 119,665 39,495 --
---------- ---------- -------- -------- ------- -------
End of Period ............................................. $1,910,301 $1,340,541 $224,403 $163,437 $34,554 $39,495
========== ========== ======== ======== ======= =======
(1)Shares Issued and Redeemed:
Trust Shares:
Shares Issued ........................................... 29,548 20,391 4,245 6,572 2,344 4,128
Shares Issued in Lieu of Cash Distributions ............. 13,725 13,369 1,402 1,122 92 --
Shares Redeemed ......................................... (22,177) (27,687) (3,922) (4,686) (2,199) (468)
---------- ---------- -------- -------- ------- -------
Net Trust Share Transactions .............................. 21,096 6,073 1,725 3,008 237 3,660
---------- ---------- -------- -------- ------- -------
Investor Shares:
Shares Issued ........................................... 1,812 1,573 167 122 -- --
Shares Issued in Lieu of Cash Distributions ............. 2,518 2,717 56 56 -- --
Shares Redeemed ......................................... (2,349) (2,607) (92) (99) -- --
---------- ---------- -------- -------- ------- -------
Net Investor Share Transactions ........................... 1,981 1,683 131 79 -- --
---------- ---------- -------- -------- ------- -------
Flex Shares:
Shares Issued ........................................... 4,242 1,620 1,688 265 -- --
Shares Issued in Lieu of Cash Distributions ............. 674 289 97 41 -- --
Shares Redeemed ......................................... (795) (191) (173) (68) -- --
---------- ---------- -------- -------- ------- -------
Net Flex Share Transactions ............................... 4,121 1,718 1,612 238 -- --
========== ========== ======== ======== ======= =======
Net Change in Capital Shares .............................. 27,198 9,474 3,468 3,325 237 3,660
---------- ---------- -------- -------- ------- -------
INTERNATIONAL INTERNATIONAL
EQUITY EQUITY
INDEX FUND FUND SUNBELT EQUITY FUND
------------------- ------------------- -------------------
06/01/97- 06/01/96- 06/01/97- 06/01/96- 06/01/97- 06/01/96-
05/31/98 05/31/97 05/31/98 05/31/97 05/31/98 05/31/97
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net Investment Income (Loss) .............................. $ 498 $ 482 $ 3,320 $ 1,788 $ (4,364) $ (2,928)
Net Realized Gain (Loss) on Investments ................... 3,349 4,148 61,173 31,885 49,778 24,062
Net Realized Loss on Foreign Currency
Transactions ............................................ (46) (50) (1,410) (949) -- --
Net Change in Unrealized Appreciation (Depreciation) on
Foreign Currency and Translation of Other Assets and
Liabilities in Foreign Currency ......................... 19 (21) (52) 16 -- --
Net Change in Unrealized Appreciation (Depreciation)
on Investments .......................................... 9,866 (466) 50,746 51,213 46,313 (18,818)
------- ------- -------- -------- -------- --------
Increase (Decrease) in Net Assets from Operations ....... 13,686 4,093 113,881 83,953 91,727 2,316
------- ------- -------- -------- -------- --------
Distributions to Shareholders:
Net Investment Income:
Trust Shares ............................................ (489) (614) (1,649) (638) -- --
Investor Shares ......................................... (34) (35) (5) -- -- --
Flex Shares ............................................. -- -- -- -- -- --
Capital Gains:
Trust Shares ............................................ (2,914) (1,696) (49,334) (9,573) (32,274) (29,932)
Investor Shares ......................................... (343) (154) (1,347) (182) (2,333) (2,119)
Flex Shares ............................................. (54) (27) (1,526) (75) (516) (360)
------- ------- -------- -------- -------- --------
Total Distributions ....................................... (3,834) (2,526) (53,861) (10,468) (35,123) (32,411)
------- ------- -------- -------- -------- --------
Capital Transactions (1):
Trust Shares:
Proceeds from Shares Issued ............................. 8,458 21,944 292,707 382,588 207,154 208,763
Reinvestment of Cash Distributions ...................... 3,057 1,958 47,572 9,386 30,202 27,551
Cost of Shares Repurchased .............................. (17,470) (62,693) (258,050) (187,406) (238,878) (239,412)
------- ------- -------- -------- -------- --------
Increase (Decrease) in Net Assets From Trust Share
Transactions ............................................ (5,955) (38,791) 82,229 204,568 (1,522) (3,098)
------- ------- -------- -------- -------- --------
Investor Shares:
Proceeds from Shares Issued ............................. 2,516 2,579 7,487 7,794 5,150 6,043
Reinvestment of Cash Distributions ...................... 375 189 1,351 181 2,323 2,111
Cost of Shares Repurchased .............................. (2,400) (2,981) (3,549) (2,060) (8,619) (7,103)
------- ------- -------- -------- -------- --------
Increase (Decrease) in Net Assets From Investor
Share Transactions ...................................... 491 (213) 5,289 5,915 (1,146) 1,051
------- ------- -------- -------- -------- --------
Flex Shares:
Proceeds from Shares Issued ............................. 788 334 14,405 7,049 3,848 3,978
Reinvestment of Cash Distributions ...................... 53 27 1,507 74 515 354
Cost of Shares Repurchased .............................. (427) (410) (4,407) (424) (2,603) (1,172)
------- ------- -------- -------- -------- --------
Increase (Decrease) in Net Assets From
Flex Share Transactions ................................. 414 (49) 11,505 6,699 1,760 3,160
------- ------- -------- -------- -------- --------
Increase (Decrease) in Net Assets From Share
Transactions .......................................... (5,050) (39,053) 99,023 217,182 (908) 1,113
------- ------- -------- -------- -------- --------
Total Increase (Decrease) in Net Assets ............... 4,802 (37,486) 159,043 290,667 55,696 (29,982)
------- ------- -------- -------- -------- --------
Net Assets:
Beginning of Period ....................................... 60,008 97,494 508,374 217,707 415,155 444,137
------- ------- -------- -------- -------- --------
End of Period ............................................. $64,810 $60,008 $667,577 $508,374 $470,851 $415,155
======= ======= ======== ======== ======== ========
(1)Shares Issued and Redeemed:
Trust Shares:
Shares Issued ........................................... 700 2,030 20,687 31,059 13,707 16,289
Shares Issued in Lieu of Cash Distributions ............. 277 184 3,744 785 2,213 2,176
Shares Redeemed ......................................... (1,473) (5,800) (18,402) (14,649) (16,065) (18,979)
------- ------- -------- -------- -------- --------
Net Trust Share Transactions .............................. (496) (3,586) 6,029 17,195 (145) (514)
------- ------- -------- -------- -------- --------
Investor Shares:
Shares Issued ........................................... 210 241 526 634 353 473
Shares Issued in Lieu of Cash Distributions ............. 34 18 107 15 174 169
Shares Redeemed ......................................... (201) (277) (254) (166) (590) (569)
------- ------- -------- -------- -------- --------
Net Investor Share Transactions ........................... 43 (18) 379 483 (63) 73
------- ------- -------- -------- -------- --------
Flex Shares:
Shares Issued ........................................... 63 31 1,021 566 260 310
Shares Issued in Lieu of Cash Distributions ............. 5 3 121 6 39 29
Shares Redeemed ......................................... (36) (38) (322) (34) (184) (95)
------- ------- -------- -------- -------- --------
Net Flex Share Transactions ............................... 32 (4) 820 538 115 244
======= ======= ======== ======== ======== ========
Net Change in Capital Shares .............................. (421) (3,608) 7,228 18,216 (93) (197)
------- ------- -------- -------- -------- --------
<FN>
*Commencement of operations.
Amounts designated as "--" are either $0 or round to $0.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
100 & 101
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) (concluded)
================================================================================
STI CLASSIC FUNDS FOR THE PERIODS ENDED MAY 31,
<TABLE>
<CAPTION>
FLORIDA TENNESSEE
INVESTMENT GRADE TAX- TAX-EXEMPT TAX-EXEMPT
EXEMPT BOND FUND BOND FUND BOND FUND
-------------------- --------------------- --------------------
06/01/97- 06/01/96- 06/01/97- 06/01/96- 06/01/97- 06/01/96-
05/31/98 05/31/97 05/31/98 05/31/97 04/13/98* 05/31/97
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net Investment Income ...................... $ 6,699 $ 6,631 $ 3,410 $ 1,999 $ 206 $ 227
Net Realized Gain (Loss) on Investments .... 6,478 2,924 720 (209) 34 (11)
Net Change in Unrealized Appreciation
(Depreciation) on Investments ............ 1,225 2,169 2,334 1,157 (120) 153
-------- -------- -------- ------- ------ ------
Increase in Net Assets from Operations ... 14,402 11,724 6,464 2,947 120 369
-------- -------- -------- ------- ------ ------
Distributions to Shareholders:
Net Investment Income:
Trust Shares ............................. (5,523) (5,248) (3,070) (1,748) (66) (74)
Investor Shares .......................... (1,002) (1,226) (128) (154) (46) (65)
Flex Shares .............................. (173) (159) (211) (101) (94) (88)
Capital Gains:
Trust Shares ............................. (3,989) (2,384) (42) (126) -- --
Investor Shares .......................... (799) (623) (2) (11) (6) --
Flex Shares .............................. (152) (92) (3) (9) (16) --
-------- -------- -------- ------- ------ ------
Total Distributions ........................ (11,638) (9,732) (3,456) (2,149) (228) (227)
-------- -------- -------- ------- ------ ------
Capital Transactions (1):
Trust Shares:
Proceeds from Shares Issued .............. 39,596 45,948 59,209 27,976 1,692 1,241
Reinvestment of Cash Distributions ....... 4,599 3,196 420 314 11 33
Cost of Shares Repurchased ............... (38,924) (36,027) (18,838) (9,265) (3,616) (1,174)
-------- -------- -------- ------- ------ ------
Increase (Decrease) in Net Assets From
Trust Share Transactions ................. 5,271 13,117 40,791 19,025 (1,913) 100
-------- -------- -------- ------- ------ ------
Investor Shares:
Proceeds from Shares Issued .............. 2,484 2,163 870 923 169 450
Reinvestment of Cash Distributions ....... 1,614 1,619 101 128 43 51
Cost of Shares Repurchased ............... (8,284) (9,763) (955) (1,919) (1,782) (459)
-------- -------- -------- ------- ------ ------
Increase (Decrease) in Net Assets From
Investor Share Transactions .............. (4,186) (5,981) 16 (868) (1,570) 42
-------- -------- -------- ------- ------ ------
Flex Shares:
Proceeds from Shares Issued .............. 6,179 1,973 6,969 1,182 1,061 836
Reinvestment of Cash Distributions ....... 296 222 172 80 82 53
Cost of Shares Repurchased ............... (2,842) (3,111) (2,189) (1,011) (3,632) (456)
-------- -------- -------- ------- ------ ------
Increase (Decrease) in Net Assets From
Flex Share Transactions .................. 3,633 (916) 4,952 251 (2,489) 433
-------- -------- -------- ------- ------ ------
Increase (Decrease) in Net Assets
From Share Transactions ................ 4,718 6,220 45,759 18,408 (5,972) 575
-------- -------- -------- ------- ------ ------
Total Increase (Decrease) in
Net Assets .......................... 7,482 8,212 48,767 19,206 (6,080) 717
-------- -------- -------- ------- ------ ------
Net Assets:
Beginning of Period ........................ 175,682 167,470 56,713 37,507 6,080 5,363
-------- -------- -------- ------- ------ ------
End of Period .............................. $183,164 $175,682 $105,480 $56,713 $ -- $6,080
======== ======== ======== ======= ====== ======
(1)Shares Issued and Redeemed:
Trust Shares:
Shares Issued ............................ 3,486 4,112 5,591 2,728 158 130
Shares Issued in Lieu of Cash
Distributions ......................... 407 286 40 31 1 3
Shares Redeemed .......................... (3,425) (3,216) (1,777) (907) (364) (122)
-------- -------- -------- ------- ------ ------
Net Trust Share Transactions ............... 468 1,182 3,854 1,852 (205) 11
-------- -------- -------- ------- ------ ------
Investor Shares:
Shares Issued ............................ 218 193 82 89 11 47
Shares Issued in Lieu of Cash
Distributions .......................... 142 144 10 13 4 5
Shares Redeemed .......................... (727) (869) (90) (188) (181) (48)
-------- -------- -------- ------- ------ ------
Net Investor Share Transactions ............ (367) (532) 2 (86) (166) 4
-------- -------- -------- ------- ------ ------
Flex Shares:
Shares Issued ............................ 544 176 658 115 100 88
Shares Issued in Lieu of Cash
Distributions .......................... 26 20 16 8 8 6
Shares Redeemed .......................... (250) (277) (205) (99) (368) (48)
-------- -------- -------- ------- ------ ------
Net Flex Share Transactions ................ 320 (81) 469 24 (260) 46
======== ======== ======== ======= ====== ======
Net Change in Capital Shares ............... 421 569 4,325 1,790 (631) 61
-------- -------- -------- ------- ------ ------
GEORGIA
TAX-EXEMPT INVESTMENT GRADE SHORT-TERM
BOND FUND BOND FUND BOND FUND
------------------- ------------------- -------------------
06/01/97- 06/01/96- 06/01/97- 06/01/96- 06/01/97- 06/01/96-
05/31/98 05/31/97 05/31/98 05/31/97 05/31/98 05/31/97
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net Investment Income ...................... $ 2,430 $ 1,589 $ 43,082 $ 37,964 $ 6,036 $ 5,152
Net Realized Gain (Loss) on Investments .... 195 7 10,888 (5,113) 502 (321)
Net Change in Unrealized Appreciation
(Depreciation) on Investments ............ 1,962 882 24,005 10,558 1,163 1,027
------- ------- -------- -------- -------- -------
Increase in Net Assets from Operations ... 4,587 2,478 77,975 43,409 7,701 5,858
------- ------- -------- -------- -------- -------
Distributions to Shareholders:
Net Investment Income:
Trust Shares ............................. (2,075) (1,285) (40,937) (35,713) (5,864) (4,983)
Investor Shares .......................... (147) (139) (1,729) (1,950) (106) (120)
Flex Shares .............................. (207) (165) (416) (270) (67) (51)
Capital Gains:
Trust Shares ............................. (61) (153) -- -- (100) (311)
Investor Shares .......................... (4) (17) -- -- (2) (7)
Flex Shares .............................. (7) (26) -- -- (1) (4)
------- ------- -------- -------- -------- -------
Total Distributions ........................ (2,501) (1,785) (43,082) (37,933) (6,140) (5,476)
------- ------- -------- -------- -------- -------
Capital Transactions (1):
Trust Shares:
Proceeds from Shares Issued .............. 34,479 29,571 258,775 218,768 59,682 43,385
Reinvestment of Cash Distributions ....... 924 761 30,522 27,532 3,238 3,426
Cost of Shares Repurchased ............... (14,516) (14,098) (162,448) (217,253) (33,705) (48,636)
------- ------- -------- -------- -------- -------
Increase (Decrease) in Net Assets From
Trust Share Transactions ................. 20,887 16,234 126,849 29,047 29,215 (1,825)
------- ------- -------- -------- -------- -------
Investor Shares:
Proceeds from Shares Issued .............. 1,508 573 5,860 5,838 190 602
Reinvestment of Cash Distributions ....... 131 137 1,609 1,770 103 111
Cost of Shares Repurchased ............... (1,314) (677) (8,920) (10,944) (560) (1,240)
------- ------- -------- -------- -------- -------
Increase (Decrease) in Net Assets From
Investor Share Transactions .............. 325 33 (1,451) (3,336) (267) (527)
------- ------- -------- -------- -------- -------
Flex Shares:
Proceeds from Shares Issued .............. 4,983 1,697 9,584 3,077 1,392 523
Reinvestment of Cash Distributions ....... 186 172 351 237 65 50
Cost of Shares Repurchased ............... (1,770) (1,499) (2,932) (2,217) (441) (469)
------- ------- -------- -------- -------- -------
Increase (Decrease) in Net Assets From
Flex Share Transactions .................. 3,399 370 7,003 1,097 1,016 104
------- ------- -------- -------- -------- -------
Increase (Decrease) in Net Assets
From Share Transactions ................ 24,611 16,637 132,401 26,808 29,964 (2,248)
------- ------- -------- -------- -------- -------
Total Increase (Decrease) in
Net Assets .......................... 26,697 17,330 167,294 32,284 31,525 (1,866)
------- ------- -------- -------- -------- -------
Net Assets:
Beginning of Period ........................ 47,905 30,575 672,574 640,290 92,956 94,822
------- ------- -------- -------- -------- -------
End of Period .............................. $74,602 $47,905 $839,868 $672,574 $124,481 $92,956
======= ======= ======== ======== ======== =======
(1)Shares Issued and Redeemed:
Trust Shares:
Shares Issued ............................ 3,445 3,062 24,713 21,475 5,955 4,380
Shares Issued in Lieu of Cash
Distributions ......................... 92 78 2,915 2,709 323 345
Shares Redeemed .......................... (1,456) (1,457) (15,497) (21,378) (3,364) (4,902)
------- ------- -------- -------- -------- -------
Net Trust Share Transactions ............... 2,081 1,683 12,131 2,806 2,914 (177)
------- ------- -------- -------- -------- -------
Investor Shares:
Shares Issued ............................ 149 59 557 575 19 61
Shares Issued in Lieu of Cash
Distributions .......................... 13 14 154 174 10 11
Shares Redeemed .......................... (131) (70) (852) (1,076) (56) (125)
------- ------- -------- -------- -------- -------
Net Investor Share Transactions ............ 31 3 (141) (327) (27) (53)
------- ------- -------- -------- -------- -------
Flex Shares:
Shares Issued ............................ 495 175 908 303 139 52
Shares Issued in Lieu of Cash
Distributions .......................... 19 18 33 23 6 5
Shares Redeemed .......................... (176) (154) (278) (218) (44) (47)
------- ------- -------- -------- -------- -------
Net Flex Share Transactions ................ 338 39 663 108 101 10
======= ======= ======== ======== ======== =======
Net Change in Capital Shares ............... 2,450 1,725 12,653 2,587 2,988 (220)
------- ------- -------- -------- -------- -------
SHORT-TERM U.S. TREASURY LIMITED-TERM FEDERAL U. S. GOVERNMENT
SECURITIES FUND MORTGAGE SECURITIES FUND SECURITIES FUND
------------------- ------------------- --------------------
06/01/97- 06/01/96- 06/01/97- 06/01/96- 06/01/97- 06/01/96-
05/31/98 05/31/97 05/31/98 05/31/97 05/31/98 05/31/97
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net Investment Income ...................... $ 1,816 $ 1,238 $ 7,936 $ 6,160 $ 1,894 $ 1,220
Net Realized Gain (Loss) on Investments .... 47 (25) 502 1 55 (17)
Net Change in Unrealized Appreciation
(Depreciation) on Investments ............ 211 88 1,031 303 1,207 214
------- ------- -------- -------- ------- -------
Increase in Net Assets from Operations ... 2,074 1,301 9,469 6,464 3,156 1,417
------- ------- -------- -------- ------- -------
Distributions to Shareholders:
Net Investment Income:
Trust Shares ............................. (1,575) (934) (7,721) (5,933) (1,585) (916)
Investor Shares .......................... (178) (205) (135) (146) (141) (147)
Flex Shares .............................. (63) (99) (78) (81) (168) (157)
Capital Gains:
Trust Shares ............................. -- -- (194) (159) -- --
Investor Shares .......................... -- -- (3) (4) -- --
Flex Shares .............................. -- -- (2) (3) -- --
------- ------- -------- -------- ------- -------
Total Distributions ........................ (1,816) (1,238) (8,133) (6,326) (1,894) (1,220)
------- ------- -------- -------- ------- -------
Capital Transactions (1):
Trust Shares:
Proceeds from Shares Issued .............. 33,653 17,856 43,610 75,207 20,160 19,904
Reinvestment of Cash Distributions ....... 661 465 5,346 4,139 380 297
Cost of Shares Repurchased ............... (9,594) (6,510) (36,666) (28,939) (6,142) (11,131)
------- ------- -------- -------- ------- -------
Increase (Decrease) in Net Assets From
Trust Share Transactions ................. 24,720 11,811 12,290 50,407 14,398 9,070
------- ------- -------- -------- ------- -------
Investor Shares:
Proceeds from Shares Issued .............. 479 745 1,128 1,381 1,625 1,272
Reinvestment of Cash Distributions ....... 180 204 131 141 134 140
Cost of Shares Repurchased ............... (1,338) (1,238) (1,006) (1,615) (880) (1,599)
------- ------- -------- -------- ------- -------
Increase (Decrease) in Net Assets From
Investor Share Transactions .............. (679) (289) 253 (93) 879 (187)
------- ------- -------- -------- ------- -------
Flex Shares:
Proceeds from Shares Issued .............. 1,012 825 691 500 2,695 764
Reinvestment of Cash Distributions ....... 56 85 75 72 145 130
Cost of Shares Repurchased ............... (757) (2,259) (647) (517) (1,748) (958)
------- ------- -------- -------- ------- -------
Increase (Decrease) in Net Assets From
Flex Share Transactions .................. 311 (1,349) 119 55 1,092 (64)
------- ------- -------- -------- ------- -------
Increase (Decrease) in Net Assets
From Share Transactions ................ 24,352 10,173 12,662 50,369 16,369 8,819
------- ------- -------- -------- ------- -------
Total Increase (Decrease) in
Net Assets .......................... 24,610 10,236 13,998 50,507 17,631 9,016
------- ------- -------- -------- ------- -------
Net Assets:
Beginning of Period ........................ 27,000 16,764 127,738 77,231 24,515 15,499
------- ------- -------- -------- ------- -------
End of Period .............................. $51,610 $27,000 $141,736 $127,738 $42,146 $24,515
======= ======= ======== ======== ======= =======
(1)Shares Issued and Redeemed:
Trust Shares:
Shares Issued ............................ 3,381 1,806 4,313 7,497 1,949 1,986
Shares Issued in Lieu of Cash
Distributions ......................... 66 47 529 413 37 30
Shares Redeemed .......................... (965) (659) (3,626) (2,886) (592) (1,110)
------- ------- -------- -------- ------- -------
Net Trust Share Transactions ............... 2,482 1,194 1,216 5,024 1,394 906
------- ------- -------- -------- ------- -------
Investor Shares:
Shares Issued ............................ 48 75 112 138 157 127
Shares Issued in Lieu of Cash
Distributions .......................... 18 21 13 14 13 14
Shares Redeemed .......................... (134) (125) (100) (161) (85) (159)
------- ------- -------- -------- ------- -------
Net Investor Share Transactions ............ (68) (29) 25 (9) 85 (18)
------- ------- -------- -------- ------- -------
Flex Shares:
Shares Issued ............................ 102 84 68 50 260 77
Shares Issued in Lieu of Cash
Distributions .......................... 6 9 7 7 14 13
Shares Redeemed .......................... (76) (228) (64) (51) (169) (95)
------- ------- -------- -------- ------- -------
Net Flex Share Transactions ................ 32 (135) 11 6 105 (5)
======= ======= ======== ======== ======= =======
Net Change in Capital Shares ............... 2,446 1,030 1,252 5,021 1,584 883
------- ------- -------- -------- ------- -------
<FN>
*Discontinued operations
Amounts designated as "--" are either $0 or round to $0.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
102 & 103
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
STI CLASSIC FUNDS FOR THE PERIODS ENDED MAY 31.
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
<TABLE>
<CAPTION>
NET REALIZED AND
NET UNREALIZED GAINS
NET ASSET VALUE INVESTMENT (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM
BEGINNING OF PERIOD INCOME (LOSS) ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS
------------------- ------------ ---------------- --------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
VALUE INCOME STOCK FUND
Trust Shares
1998 $13.71 $ 0.26 $ 2.62 $(0.27) $(2.42)
1997 13.15 0.30 2.32 (0.30) (1.76)
1996 11.59 0.35 2.71 (0.34) (1.16)
1995 10.54 0.32 1.56 (0.32) (0.51)
1994 10.23 0.29 0.70 (0.32) (0.36)
Investor Shares
1998 $13.68 $ 0.20 $ 2.62 $(0.21) $(2.42)
1997 13.13 0.25 2.32 (0.26) (1.76)
1996 11.58 0.30 2.71 (0.30) (1.16)
1995 10.52 0.28 1.56 (0.27) (0.51)
1994 10.23 0.26 0.67 (0.27) (0.37)
Flex Shares
1998 $13.61 $ 0.12 $ 2.57 $(0.13) $(2.42)
1997 13.08 0.18 2.29 (0.18) (1.76)
1996(1) 11.59 0.26 2.65 (0.26) (1.16)
MID-CAP EQUITY FUND (B)
Trust Shares
1998 $13.21 $ -- $ 2.54 $ -- $(1.96)
1997 12.76 0.03 1.69 (0.05) (1.22)
1996 11.00 0.08 2.63 (0.08) (0.87)
1995 9.85 0.08 1.15 (0.08) --
1994(2) 10.00 0.02 (0.16) (0.01) --
Investor Shares
1998 $13.17 $(0.03) $ 2.49 $ -- $(1.96)
1997 12.74 (0.03) 1.69 (0.01) (1.22)
1996 10.99 0.03 2.62 (0.03) (0.87)
1995 9.84 0.03 1.15 (0.03) --
1994(3) 10.00 0.01 (0.17) -- --
Flex Shares
1998 $13.04 $(0.04) $ 2.38 $ -- (1.96)
1997 12.69 (0.07) 1.64 -- (1.22)
1996(4) 11.13 -- 2.45 (0.02) (0.87)
SMALL CAP EQUITY FUND
Trust Shares
1998 $11.07 $ 0.14 $ 2.41 $(0.12) $(0.62)
1997(5) 10.00 0.05 1.04 (0.02) --
Flex Shares
1998(6) $11.28 $ 0.03 $ 2.17 $(0.06) $(0.62)
RATIO OF
NET ASSET NET ASSETS RATIO OF NET INVESTMENT
VALUE END TOTAL END OF EXPENSES TO INCOME (LOSS) TO
OF PERIOD RETURN (A) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS
--------- --------- ----------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
VALUE INCOME STOCK FUND
Trust Shares
1998 $13.90 23.10% $1,725,418 0.92% 1.85%
1997 13.71 22.18% 1,488,062 0.91% 2.40%
1996 13.15 27.91% 1,244,399 0.92% 2.86%
1995 11.59 19.06% 991,977 0.95% 3.16%
1994 10.54 9.95% 573,082 0.88% 3.21%
Investor Shares
1998 $13.87 22.71% $ 210,591 1.27% 1.47%
1997 13.68 21.69% 165,999 1.30% 2.01%
1996 13.13 27.39% 130,597 1.30% 2.47%
1995 11.58 18.71% 92,256 1.30% 2.80%
1994 10.52 9.27% 60,589 1.25% 2.80%
Flex Shares
1998 $13.75 21.76% $ 180,530 2.01% 0.78%
1997 13.61 20.91% 73,466 2.00% 1.33%
1996(1) 13.08 26.52%* 26,298 2.00%* 1.72%*
MID-CAP EQUITY FUND (B)
Trust Shares
1998 $13.79 21.14% $ 337,825 1.16% (0.29%)
1997 13.21 14.23% 287,370 1.15% 0.23%
1996 12.76 25.54% 253,905 1.15% 0.70%
1995 11.00 12.56% 125,562 1.15% 0.88%
1994(2) 9.85 (1.39%)** 57,036 1.15%* 1.20%*
Investor Shares
1998 $13.67 20.56% $ 24,930 1.61% (0.75%)
1997 13.17 13.76% 20,245 1.60% (0.21%)
1996 12.74 24.93% 17,971 1.60% 0.25%
1995 10.99 11.96% 7,345 1.60% 0.43%
1994(3) 9.84 (1.60%)** 3,004 1.60%* 0.74%*
Flex Shares
1998 $13.42 19.80% $ 19,042 2.21% (1.37%)
1997 13.04 13.06% 10,120 2.20% (0.85%)
1996(4) 12.69 23.00%* 5,029 2.20%* (0.37%)*
SMALL CAP EQUITY FUND
Trust Shares
1998 $12.88 23.59% $ 390,841 1.21% 1.07%
1997(5) 11.07 10.97%** 131,049 1.20%* 1.86%*
Flex Shares
1998(6) $12.80 22.29%** $ 40,613 2.06%* 0.01%*
RATIO OF
RATIO OF NET INVESTMENT
EXPENSES TO INCOME (LOSS) TO
AVERAGE NET ASSETS AVERAGE NET ASSETS PORTFOLIO
(EXCLUDING WAIVERS (EXCLUDING WAIVERS TURNOVER
AND REIMBURSEMENTS) AND REIMBURSEMENTS) RATE
------------------ ------------------- ---------
<S> <C> <C> <C> <C>
VALUE INCOME STOCK FUND
Trust Shares
1998 0.92% 1.85% 99%
1997 0.91% 2.40% 105%
1996 0.92% 2.86% 134%
1995 0.95% 3.16% 126%
1994 0.97% 3.12% 149%
Investor Shares
1998 1.27% 1.47% 99%
1997 1.31% 2.00% 105%
1996 1.37% 2.40% 134%
1995 1.41% 2.69% 126%
1994 1.44% 2.61% 149%
Flex Shares
1998 2.01% 0.78% 99%
1997 2.03% 1.30% 105%
1996(1) 2.15%* 1.57%* 134%
MID-CAP EQUITY FUND (B)
Trust Shares
1998 1.27% (0.40%) 129%
1997 1.26% 0.12% 152%
1996 1.29% 0.56% 116%
1995 1.32% 0.71% 66%
1994(2) 1.68%* 0.67%* 8%
Investor Shares
1998 1.84% (0.98%) 129%
1997 1.85% (0.46%) 152%
1996 1.96% (0.11%) 116%
1995 2.27% (0.24%) 66%
1994(3) 4.60%* (2.26%)* 8%
Flex Shares
1998 2.47% (1.63%) 129%
1997 2.58% (1.23%) 152%
1996(4) 3.04%* (1.21%)* 116%
SMALL CAP EQUITY FUND
Trust Shares
1998 1.31% 0.97% 55%
1997(5) 1.37%* 1.69%* 27%
Flex Shares
1998(6) 2.35%* (0.28%)* 55%
<FN>
* Annualized.
** Return is for the period indicated and has not been annualized.
(1) Commenced operations on June 1, 1995.
(2) Commenced operations on February 2, 1994.
(3) Commenced operations on February 1, 1994.
(4) Commenced operations on June 5, 1995.
(5) Commenced operations on January 31, 1997.
(6) Commenced operations on June 5, 1997.
(A) Total return figures do not reflect applicable sales loads.
(B) During the fiscal year ended May 31, 1996, the Aggressive Growth Fund
changed its name to the Mid-Cap Equity Fund.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
104 & 105
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
================================================================================
STI CLASSIC FUNDS FOR THE PERIODS ENDED MAY 31.
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
<TABLE>
<CAPTION>
NET REALIZED AND
NET UNREALIZED GAINS
NET ASSET VALUE INVESTMENT (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM
BEGINNING OF PERIOD INCOME (LOSS) ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS
------------------- ------------ ---------------- --------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL GROWTH FUND
Trust Shares
1998 $15.09 $ 0.09 $ 3.96 $(0.09) $(2.57)
1997 14.90 0.12 3.13 (0.12) (2.94)
1996 12.18 0.12 3.32 (0.13) (0.59)
1995 11.99 0.16 0.57 (0.14) (0.40)
1994 11.95 0.16 0.31 (0.17) (0.26)
Investor Shares
1998 $15.06 $(0.01) $ 3.95 $ -- $(2.57)
1997 14.89 0.03 3.10 (0.02) (2.94)
1996 12.17 0.03 3.32 (0.04) (0.59)
1995 11.98 0.09 0.57 (0.07) (0.40)
1994 11.93 0.09 0.31 (0.09) (0.26)
Flex Shares
1998 $14.96 $(0.04) $ 3.87 $ -- $(2.57)
1997 14.84 (0.01) 3.07 -- (2.94)
1996(1) 12.20 0.02 3.26 (0.05) (0.59)
BALANCED FUND
Trust Shares
1998 $11.94 $ 0.31 $ 2.19 $(0.32) $(1.03)
1997 11.55 0.33 1.47 (0.32) (1.09)
1996 10.26 0.33 1.41 (0.34) (0.11)
1995 9.76 0.33 0.49 (0.32) --
1994(2) 10.00 0.11 (0.29) (0.06) --
Investor Shares
1998 $11.99 $ 0.28 $ 2.19 $(0.29) $(1.03)
1997 11.60 0.29 1.48 (0.29) (1.09)
1996 10.30 0.30 1.41 (0.30) (0.11)
1995 9.79 0.28 0.51 (0.28) --
1994(3) 10.00 0.03 (0.24) -- --
Flex Shares
1998 $11.90 $ 0.20 $ 2.16 $(0.21) $(1.03)
1997 11.53 0.22 1.45 (0.21) (1.09)
1996(4) 10.36 0.24 1.29 (0.25) (0.11)
EMERGING MARKETS EQUITY FUND
Trust Shares
1998 $10.79 $ 0.16 $(1.86) $(0.08) $(0.14)
1997(5) 10.00 0.04 0.75 -- --
INTERNATIONAL EQUITY INDEX FUND
Trust Shares
1998 $11.34 $ 0.11 $ 2.65 $(0.11) $(0.68)
1997 10.96 0.10 0.69 (0.11) (0.30)
1996 10.24 0.10 0.84 (0.13) (0.09)
1995(6) 10.00 0.08 0.19 (0.02) (0.01)
Investor Shares
1998 $11.26 $ 0.16 $ 2.53 $(0.07) $(0.68)
1997 10.88 0.03 0.72 (0.07) (0.30)
1996 10.20 0.05 0.85 (0.13) (0.09)
1995(6) 10.00 0.05 0.17 (0.01) (0.01)
Flex Shares
1998 $11.24 $ 0.17 $ 2.44 $ -- $(0.68)
1997 10.87 (0.05) 0.72 -- (0.30)
1996(7) 10.24 -- 0.82 (0.10) (0.09)
RATIO OF
NET ASSET NET ASSETS RATIO OF NET INVESTMENT
VALUE END TOTAL END OF EXPENSES TO INCOME (LOSS) TO
OF PERIOD RETURN (A) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS
--------- --------- ----------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL GROWTH FUND
Trust Shares
1998 $16.48 29.51% $1,532,587 1.16% 0.61%
1997 15.09 24.66% 1,085,128 1.15% 0.83%
1996 14.90 28.97% 981,498 1.15% 0.90%
1995 12.18 6.63% 984,205 1.15% 1.38%
1994 11.99 3.87% 891,870 1.15% 1.25%
Investor Shares
1998 $16.43 28.71% $ 271,044 1.81% (0.03%)
1997 15.06 23.74% 218,660 1.80% 0.19%
1996 14.89 28.18% 191,078 1.80% 0.24%
1995 12.17 5.93% 160,875 1.80% 0.73%
1994 11.98 3.26% 170,795 1.80% 0.64%
Flex Shares
1998 $16.22 28.12% $ 106,670 2.26% (0.46%)
1997 14.96 23.24% 36,753 2.27% (0.29%)
1996(1) 14.84 27.48%* 10,969 2.27%* (0.29%)*
BALANCED FUND
Trust Shares
1998 $13.09 22.15% $ 188,465 0.96% 2.51%
1997 11.94 16.66% 151,358 0.95% 2.89%
1996 11.55 17.26% 111,638 0.95% 3.00%
1995 10.26 8.72% 89,051 0.95% 3.44%
1994(2) 9.76 (1.78%)** 90,579 0.95%* 2.76%*
Investor Shares
1998 $13.14 21.72% $ 8,313 1.26% 2.21%
1997 11.99 16.27% 6,012 1.25% 2.58%
1996 11.60 16.88% 4,896 1.25% 2.70%
1995 10.30 8.29% 3,765 1.25% 3.17%
1994(3) 9.79 (2.10%)** 2,311 1.25%* 2.46%*
Flex Shares
1998 $13.02 20.85% $ 27,625 2.02% 1.41%
1997 11.90 15.40% 6,067 2.01% 1.84%
1996(4) 11.53 15.58%* 3,131 2.00%* 1.85%*
EMERGING MARKETS EQUITY FUND
Trust Shares
1998 $ 8.87 (15.74%) $ 34,554 1.56% 1.14%
1997(5) 10.79 7.90%** 39,495 1.55%* 1.37%*
INTERNATIONAL EQUITY INDEX FUND
Trust Shares
1998 $13.31 25.82% $ 56,200 1.06% 0.88%
1997 11.34 7.48% 53,516 1.05% 0.71%
1996 10.96 9.29% 90,980 1.05% 0.84%
1995(6) 10.24 2.69%** 89,446 1.05%* 1.13%*
Investor Shares
1998 $13.20 25.25% $ 7,141 1.46% 0.50%
1997 11.26 7.12% 5,592 1.45% 0.28%
1996 10.88 8.90% 5,597 1.45% 0.48%
1995(6) 10.20 2.18%** 3,960 1.45%* 0.67%*
Flex Shares
1998 $13.17 24.50% $ 1,469 2.11% (0.03%)
1997 11.24 6.41% 900 2.10% (0.39%)
1996(7) 10.87 8.32%** 917 2.10%* (0.24%)*
RATIO OF
RATIO OF NET INVESTMENT
EXPENSES TO INCOME (LOSS) TO
AVERAGE NET ASSETS AVERAGE NET ASSETS PORTFOLIO
(EXCLUDING WAIVERS (EXCLUDING WAIVERS TURNOVER
AND REIMBURSEMENTS) AND REIMBURSEMENTS) RATE
------------------ ------------------- ---------
<S> <C> <C> <C> <C>
CAPITAL GROWTH FUND
Trust Shares
1998 1.27% 0.50% 194%
1997 1.25% 0.73% 141%
1996 1.27% 0.78% 156%
1995 1.28% 1.25% 128%
1994 1.29% 1.11% 124%
Investor Shares
1998 2.01% (0.23%) 194%
1997 2.02% (0.03%) 141%
1996 2.08% (0.04%) 156%
1995 2.10% 0.43% 128%
1994 2.11% 0.33% 124%
Flex Shares
1998 2.37% (0.57%) 194%
1997 2.43% (0.45%) 141%
1996(1) 2.68%* (0.70%)* 156%
BALANCED FUND
Trust Shares
1998 1.08% 2.39% 154%
1997 1.08% 2.76% 197%
1996 1.09% 2.86% 155%
1995 1.11% 3.28% 157%
1994(2) 1.25%* 2.46%* 106%
Investor Shares
1998 1.59% 1.88% 154%
1997 1.64% 2.19% 197%
1996 1.89% 2.06% 155%
1995 1.80% 2.62% 157%
1994(3) 4.91%* (1.20%)* 106%
Flex Shares
1998 2.23% 1.20% 154%
1997 2.45% 1.40% 197%
1996(4) 2.97%* 0.88%* 155%
EMERGING MARKETS EQUITY FUND
Trust Shares
1998 1.78% 0.92% 74%
1997(5) 2.04%* 0.88%* 24%
INTERNATIONAL EQUITY INDEX FUND
Trust Shares
1998 1.18% 0.76% 1%
1997 1.15% 0.61% 2%
1996 1.19% 0.70% 30%
1995(6) 1.31%* 0.87%* 10%
Investor Shares
1998 1.84% 0.12% 1%
1997 1.88% (0.15%) 2%
1996 2.06% (0.13%) 30%
1995(6) 2.44%* (0.32%)* 10%
Flex Shares
1998 3.52% (1.44%) 1%
1997 3.69% (1.98%) 2%
1996(7) 4.14%* (2.28%)* 30%
<FN>
* Annualized.
** Return is for the period indicated and has not been annualized.
(1) Commenced operations on June 1, 1995.
(2) Commenced operations on January 3, 1994.
(3) Commenced operations on January 4, 1994.
(4) Commenced operations on June 14, 1995.
(5) Commenced operations on January 31, 1997.
(6) Commenced operations on June 6, 1994.
(7) Commenced operations on June 8, 1995.
(A) Total return figures do not reflect applicable sales loads.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
106 & 107
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
================================================================================
STI CLASSIC FUNDS FOR THE PERIODS ENDED MAY 31.
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
<TABLE>
<CAPTION>
NET REALIZED AND
NET UNREALIZED GAINS
NET ASSET VALUE INVESTMENT (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM
BEGINNING OF PERIOD INCOME (LOSS) ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS
------------------- ------------ ---------------- --------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL EQUITY FUND
Trust Shares
1998 $13.63 $ 0.04 $ 2.69 $(0.04) $(1.32)
1997 11.40 0.03 2.57 (0.02) (0.35)
1996(1) 10.00 0.05 1.35 -- --
Investor Shares
1998 $13.58 $ 0.02 $ 2.64 $ -- $(1.32)
1997 11.38 (0.01) 2.56 -- (0.35)
1996(2) 10.44 0.04 0.90 -- --
Flex Shares
1998 $13.47 $0.07 $ 2.46 $ -- $(1.32)
1997 11.37 (0.04) 2.49 -- (0.35)
1996(2) 10.44 0.02 0.91 -- --
SUNBELT EQUITY FUND
Trust Shares
1998 $13.28 $0.01 $ 3.03 $ -- $(1.20)
1997 14.11 (0.09) 0.25 -- (0.99)
1996 10.03 (0.04) 4.32 -- (0.20)
1995 9.70 (0.01) 0.38 -- (0.04)
1994(3) 10.00 -- (0.30) -- --
Investor Shares
1998 $13.06 $(0.07) $ 2.98 $ -- $(1.20)
1997 13.95 (0.14) 0.24 -- (0.99)
1996 9.96 (0.11) 4.30 -- (0.20)
1995 9.69 (0.05) 0.36 -- (0.04)
1994(4) 10.00 (0.02) (0.29) -- --
Flex Shares
1998 $13.00 $(0.09) $ 2.89 $ -- $(1.20)
1997 13.97 (0.14) 0.16 -- (0.99)
1996(5) 10.20 (0.07) 4.04 -- (0.20)
INVESTMENT GRADE TAX-EXEMPT BOND FUND
Trust Shares
1998 $11.22 $ 0.44 $ 0.50 $(0.44) $(0.32)
1997 11.10 0.44 0.33 (0.44) (0.21)
1996 11.28 0.45 0.19 (0.45) (0.37)
1995 10.68 0.46 0.60 (0.46) --
1994(6) 11.37 0.22 (0.34) (0.22) (0.35)
Investor Shares
1998 $11.24 $ 0.39 $ 0.49 $(0.39) $(0.32)
1997 11.12 0.40 0.33 (0.40) (0.21)
1996 11.30 0.41 0.19 (0.41) (0.37)
1995 10.69 0.42 0.61 (0.42) --
1994 10.79 0.33 0.25 (0.33) (0.35)
Flex Shares
1998 $11.23 $ 0.33 $ 0.49 $(0.33) $(0.32)
1997 11.11 0.35 0.33 (0.35) (0.21)
1996(7) 11.30 0.37 0.18 (0.37) (0.37)
RATIO OF
RATIO OF EXPENSES TO
NET ASSET NET ASSETS RATIO OF NET INVESTMENT AVERAGE NET ASSETS
VALUE END TOTAL END OF EXPENSES TO INCOME (LOSS) TO (EXCLUDING WAIVERS
OF PERIOD RETURN (A) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS)
--------- --------- ----------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INTERNATIONAL EQUITY FUND
Trust Shares
1998 $15.00 21.87% $ 628,870 1.47% 0.61% 1.48%
1997 13.63 23.29% 489,325 1.46% 0.51% 1.51%
1996(1) 11.40 14.00%** 213,306 1.46%* 1.36%* 1.65%*
Investor Shares
1998 $14.92 21.39% $ 17,383 1.82% 0.24% 1.91%
1997 13.58 22.85% 10,674 1.81% 0.18% 2.05%
1996(2) 11.38 9.00%** 3,448 1.81%* 1.73%* 3.14%*
Flex Shares
1998 $14.68 20.54% $ 21,164 2.52% (0.46%) 2.58%
1997 13.47 21.98% 8,375 2.51% (0.27%) 3.03%
1996(2) 11.37 8.91%** 953 2.51%* 1.08%* 5.86%*
SUNBELT EQUITY FUND
Trust Shares
1998 $15.12 23.86% $ 431,921 1.16% (0.90%) 1.27%
1997 13.28 1.48% 381,371 1.15% (0.65%) 1.26%
1996 14.11 43.19% 412,430 1.15% (0.34%) 1.28%
1995 10.03 3.81% 258,908 1.15% (0.12%) 1.30%
1994(3) 9.70 (2.99%)** 128,280 1.15%* (0.19%)* 1.58%*
Investor Shares
1998 $14.77 23.25% $ 30,860 1.61% (1.35%) 1.86%
1997 13.06 1.05% 28,095 1.60% (1.10%) 1.84%
1996 13.95 42.58% 29,002 1.60% (0.79%) 1.93%
1995 9.96 3.20% 22,180 1.60% (0.57%) 1.98%
1994(4) 9.69 (3.10%)** 16,077 1.60%* (0.63%)* 2.04%*
Flex Shares
1998 $14.60 22.48% $ 8,070 2.21% (1.96%) 2.58%
1997 13.00 0.46% 5,689 2.20% (1.72%) 2.69%
1996(5) 13.97 39.86%* 2,705 2.20%* (1.43%)* 3.62%*
INVESTMENT GRADE TAX-EXEMPT BOND FUND
Trust Shares
1998 $11.40 8.57% $ 146,606 0.76% 3.83% 0.88%
1997 11.22 7.13% 139,144 0.75% 3.96% 0.86%
1996 11.10 5.82% 124,507 0.75% 4.01% 0.89%
1995 11.28 10.21% 78,208 0.75% 4.34% 0.91%
1994(6) 10.68 (1.10%)** 44,595 0.75%* 3.46%* 0.95%*
Investor Shares
1998 $11.41 8.05% $ 28,159 1.16% 3.43% 1.43%
1997 11.24 6.69% 31,857 1.15% 3.56% 1.38%
1996 11.12 5.40% 37,427 1.15% 3.61% 1.42%
1995 11.30 9.91% 41,693 1.15% 3.88% 1.43%
1994 10.69 5.37% 46,182 1.14% 2.96% 1.51%
Flex Shares
1998 $11.40 7.50% $ 8,399 1.64% 2.95% 2.10%
1997 11.23 6.19% 4,681 1.63% 3.08% 2.15%
1996(7) 11.11 4.91%* 5,536 1.63%* 3.12%* 2.25%*
RATIO OF
NET INVESTMENT
INCOME (LOSS) TO
AVERAGE NET ASSETS PORTFOLIO
(EXCLUDING WAIVERS TURNOVER
AND REIMBURSEMENTS) RATE
------------------- ---------
<S> <C> <C> <C>
INTERNATIONAL EQUITY FUND
Trust Shares
1998 0.60% 108%
1997 0.46% 139%
1996(1) 1.17%* 113%
Investor Shares
1998 0.15% 108%
1997 (0.06%) 139%
1996(2) 0.40%* 113%
Flex Shares
1998 (0.52%) 108%
1997 (0.79%) 139%
1996(2) (2.27%)* 113%
SUNBELT EQUITY FUND
Trust Shares
1998 (1.01%) 70%
1997 (0.76%) 72%
1996 (0.47%) 106%
1995 (0.27%) 80%
1994(3) (0.62%)* 21%
Investor Shares
1998 (1.60%) 70%
1997 (1.34%) 72%
1996 (1.12%) 106%
1995 (0.95%) 80%
1994(4) (1.07%)* 21%
Flex Shares
1998 (2.33%) 70%
1997 (2.21%) 72%
1996(5) (2.85%)* 106%
INVESTMENT GRADE TAX-EXEMPT
Trust Shares
1998 3.71% 378%
1997 3.85% 489%
1996 3.87% 514%
1995 4.18% 592%
1994(6) 3.26%* 432%
Investor Shares
1998 3.16% 378%
1997 3.33% 489%
1996 3.34% 514%
1995 3.60% 592%
1994 2.59% 432%
Flex Shares
1998 2.49% 378%
1997 2.56% 489%
1996(7) 2.50%* 514%
<FN>
* Annualized.
** Return is for the period indicated and has not been annualized.
(1) Commenced operations on December 1, 1995.
(2) Commenced operations on January 2, 1996.
(3) Commenced operations on January 3, 1994.
(4) Commenced operations on January 4, 1994.
(5) Commenced operations on June 5, 1995.
(6) Commenced operations on October 21, 1993.
(7) Commenced operations on June 1, 1995.
(A) Total return figures do not reflect applicable sales loads.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
108 & 109
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
================================================================================
STI CLASSIC FUNDS FOR THE PERIODS ENDED MAY 31.
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
<TABLE>
<CAPTION>
NET REALIZED AND
NET UNREALIZED GAINS
NET ASSET VALUE INVESTMENT (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM
BEGINNING OF PERIOD INCOME ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS
------------------- ------------ ---------------- --------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
FLORIDA TAX-EXEMPT BOND FUND
Trust Shares
1998 $10.28 $ 0.44 $ 0.45 $(0.44) $(0.01)
1997 10.06 0.46 0.25 (0.46) (0.03)
1996 10.18 0.46 (0.07) (0.46) (0.05)
1995 9.75 0.44 0.43 (0.44) --
1994(1) 10.00 0.13 (0.25) (0.13) --
Investor Shares
1998 $10.29 $ 0.42 $ 0.44 $(0.42) $(0.01)
1997 10.07 0.44 0.25 (0.44) (0.03)
1996 10.18 0.44 (0.06) (0.44) (0.05)
1995 9.75 0.42 0.43 (0.42) --
1994(2) 10.00 0.13 (0.25) (0.13) --
Flex Shares
1998 $10.30 $ 0.37 $ 0.45 $(0.37) $(0.01)
1997 10.08 0.39 0.25 (0.39) (0.03)
1996(3) 10.19 0.39 (0.06) (0.39) (0.05)
TENNESSEE TAX-EXEMPT BOND FUND
Trust Shares
1998(4) $ 9.63 $ 0.36 $ 0.25 $(0.36) $(0.07)
1997 9.40 0.43 0.23 (0.43) --
1996 9.50 0.43 (0.11) (0.42) --
1995 9.22 0.44 0.28 (0.44) --
1994(5) 10.00 0.12 (0.77) (0.13) --
Investor Shares
1998(4) $ 9.65 $ 0.35 $ 0.23 $(0.35) $(0.07)
1997 9.42 0.41 0.23 (0.41) --
1996 9.53 0.41 (0.10) (0.42) --
1995 9.23 0.44 0.29 (0.43) --
1994(6) 10.00 0.13 (0.77) (0.13) --
Flex Shares
1998(4) $ 9.64 $ 0.31 $ 0.24 $(0.31) $(0.07)
1997 9.41 0.37 0.23 (0.37) --
1996(7) 9.59 0.37 (0.18) (0.37) --
GEORGIA TAX-EXEMPT BOND FUND
Trust Shares
1998 $ 9.73 $ 0.41 $ 0.39 $(0.41) $(0.01)
1997 9.56 0.42 0.22 (0.42) (0.05)
1996 9.63 0.43 (0.05) (0.43) (0.02)
1995 9.42 0.42 0.21 (0.42) --
1994 (2) 10.00 0.14 (0.58) (0.14) --
Investor Shares
1998 $ 9.74 $ 0.39 $ 0.40 $(0.39) $(0.01)
1997 9.58 0.40 0.21 (0.40) (0.05)
1996 9.65 0.41 (0.05) (0.41) (0.02)
1995 9.44 0.40 0.21 (0.40) --
1994 (6) 10.00 0.13 (0.56) (0.13) --
Flex Shares
1998 $ 9.73 $ 0.34 $ 0.40 $(0.34) $(0.01)
1997 9.56 0.35 0.22 (0.35) (0.05)
1996(8) 9.72 0.36 (0.14) (0.36) (0.02)
RATIO OF
NET ASSET NET ASSETS RATIO OF NET INVESTMENT
VALUE END TOTAL END OF EXPENSES TO INCOME TO
OF PERIOD RETURN (A) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS
--------- --------- ----------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
FLORIDA TAX-EXEMPT BOND FUND
Trust Shares
1998 $10.72 8.77% $93,939 0.66% 4.16%
1997 10.28 7.22% 50,487 0.65% 4.48%
1996 10.06 3.87% 30,790 0.65% 4.49%
1995 10.18 9.26% 10,118 0.65% 4.63%
1994(1) 9.75 (1.19%)** 3,192 0.65%* 3.86%*
Investor Shares
1998 $10.72 8.46% $ 3,381 0.86% 3.98%
1997 10.29 7.00% 3,226 0.85% 4.28%
1996 10.07 3.76% 4,025 0.85% 4.28%
1995 10.18 9.04% 3,320 0.85% 4.36%
1994(2) 9.75 (1.22%)** 2,280 0.85%* 3.67%*
Flex Shares
1998 $10.74 8.04% $ 8,160 1.36% 3.45%
1997 10.30 6.48% 3,000 1.35% 3.78%
1996(3) 10.08 3.27%* 2,692 1.35%* 3.79%*
TENNESSEE TAX-EXEMPT BOND FUND
Trust Shares
1998(4) $ 9.81 6.47%** $ -- 0.66% 4.67%
1997 9.63 7.16% 1,973 0.65% 4.51%
1996 9.40 3.43% 1,823 0.65% 4.49%
1995 9.50 8.17% 1,664 0.65% 4.90%
1994(5) 9.22 (6.52%)** 594 0.65%* 4.24%*
Investor Shares
1998(4) $ 9.81 6.06%** $ -- 0.86% 4.37%
1997 9.65 6.93% 1,602 0.85% 4.31%
1996 9.42 3.28% 1,523 0.85% 4.29%
1995 9.53 8.24% 1,170 0.85% 4.70%
1994(6) 9.23 (6.39%)** 1,127 0.85%* 3.74%*
Flex Shares
1998(4) $ 9.81 5.75%** $ -- 1.36% 3.39%
1997 9.64 6.42% 2,505 1.35% 3.81%
1996(7) 9.41 1.98%* 2,017 1.34%* 3.80%*
GEORGIA TAX-EXEMPT BOND FUND
Trust Shares
1998 $10.11 8.37% $62,363 0.66% 4.09%
1997 9.73 6.79% 39,732 0.65% 4.31%
1996 9.56 3.89% 22,950 0.65% 4.36%
1995 9.63 6.94% 13,187 0.65% 4.56%
1994 (2) 9.42 (4.43%)** 4,338 0.65%* 4.12%*
Investor Shares
1998 $10.13 8.26% $ 3,975 0.86% 3.89%
1997 9.74 6.47% 3,511 0.85% 4.10%
1996 9.58 3.69% 3,418 0.85% 4.17%
1995 9.65 6.70% 3,268 0.85% 4.31%
1994 (6) 9.44 (4.29%)** 3,300 0.85%* 3.93%*
Flex Shares
1998 $10.12 7.74% $ 8,264 1.36% 3.39%
1997 9.73 6.06% 4,662 1.35% 3.60%
1996(8) 9.56 2.25%* 4,207 1.35%* 3.66%*
RATIO OF
RATIO OF NET INVESTMENT
EXPENSES TO INCOME TO
AVERAGE NET ASSETS AVERAGE NET ASSETS PORTFOLIO
(EXCLUDING WAIVERS (EXCLUDING WAIVERS TURNOVER
AND REIMBURSEMENTS) AND REIMBURSEMENTS) RATE
------------------ ------------------- ---------
<S> <C> <C> <C> <C>
FLORIDA TAX-EXEMPT BOND FUND
Trust Shares
1998 0.80% 4.02% 69%
1997 0.80% 4.33% 135%
1996 0.88% 4.26% 63%
1995 1.13% 4.15% 105%
1994(1) 1.12%* 3.39%* 53%
Investor Shares
1998 1.34% 3.50% 69%
1997 1.31% 3.82% 135%
1996 1.36% 3.77% 63%
1995 1.50% 3.71% 105%
1994(2) 3.20%* 1.32%* 53%
Flex Shares
1998 2.01% 2.80% 69%
1997 2.28% 2.85% 135%
1996(3) 2.54%* 2.60%* 63%
TENNESSEE TAX-EXEMPT BOND FUND
Trust Shares
1998(4) 1.79% 3.54% 14%
1997 1.72% 3.44% 16%
1996 1.68% 3.46% 41%
1995 2.65% 2.90% 28%
1994(5) 1.43%* 3.46%* 13%
Investor Shares
1998(4) 2.04% 3.19% 14%
1997 1.76% 3.40% 16%
1996 2.08% 3.06% 41%
1995 2.10% 3.45% 28%
1994(6) 6.60%* (2.01%)* 13%
Flex Shares
1998(4) 2.26% 2.49% 14%
1997 2.34% 2.82% 16%
1996(7) 2.74%* 2.40%* 41%
GEORGIA TAX-EXEMPT BOND FUND
Trust Shares
1998 0.81% 3.94% 7%
1997 0.81% 4.15% 15%
1996 0.89% 4.12% 60%
1995 0.98% 4.23% 25%
1994 (2) 1.06%* 3.71%* 26%
Investor Shares
1998 1.30% 3.45% 7%
1997 1.33% 3.62% 15%
1996 1.41% 3.61% 60%
1995 1.43% 3.73% 25%
1994 (6) 2.36%* 2.42%* 26%
Flex Shares
1998 2.02% 2.73% 7%
1997 2.07% 2.88% 15%
1996(8) 2.35%* 2.66%* 60%
<FN>
* Annualized.
** Return is for the period indicated and has not been annualized.
(1) Commenced operations on January 25, 1994.
(2) Commenced operations on January 18, 1994.
(3) Commenced operations on June 1, 1995.
(4) Discontinued operations on April 13, 1998.
(5) Commenced operations on January 27, 1994.
(6) Commenced operations on January 19, 1994.
(7) Commenced operations on June 5, 1995.
(8) Commenced operations on June 6, 1995.
(A) Total return figures do not reflect applicable sales loads.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
110 & 111
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
================================================================================
STI CLASSIC FUNDS FOR THE PERIODS ENDED MAY 31.
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
<TABLE>
<CAPTION>
NET REALIZED AND
NET UNREALIZED GAINS
NET ASSET VALUE INVESTMENT (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM
BEGINNING OF PERIOD INCOME ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS
------------------- ------------ ---------------- --------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT GRADE BOND FUND
Trust Shares
1998 $10.16 $ 0.60 $ 0.49 $(0.60) $ --
1997 10.07 0.60 0.09 (0.60) --
1996 10.26 0.60 (0.19) (0.60) --
1995 9.89 0.61 0.37 (0.61) --
1994 10.45 0.50 (0.36) (0.50) (0.20)
Investor Shares
1998 $10.16 $ 0.55 $ 0.49 $(0.55) $ --
1997 10.06 0.56 0.10 (0.56) --
1996 10.26 0.56 (0.20) (0.56) --
1995 9.89 0.57 0.38 (0.58) --
1994 10.44 0.46 (0.35) (0.46) (0.20)
Flex Shares
1998 $10.17 $ 0.51 $ 0.49 $(0.51) $ --
1997 10.07 0.51 0.10 (0.51) --
1996(1) 10.33 0.52 (0.26) (0.52) --
SHORT-TERM BOND FUND
Trust Shares
1998 $ 9.90 $ 0.55 $ 0.16 $(0.55) $(0.01)
1997 9.86 0.53 0.07 (0.53) (0.03)
1996 9.98 0.54 (0.10) (0.54) (0.02)
1995 9.79 0.53 0.19 (0.53) --
1994 10.01 0.42 (0.21) (0.42) (0.01)
Investor Shares
1998 $ 9.91 $ 0.53 $ 0.17 $(0.53) $(0.01)
1997 9.88 0.51 0.06 (0.51) (0.03)
1996 10.01 0.52 (0.10) (0.53) (0.02)
1995 9.81 0.51 0.19 (0.50) --
1994 10.03 0.40 (0.21) (0.40) (0.01)
Flex Shares
1998 $ 9.91 $ 0.50 $ 0.17 $(0.50) $(0.01)
1997 9.88 0.48 0.06 (0.48) (0.03)
1996(2) 10.02 0.47 (0.12) (0.47) (0.02)
RATIO OF
NET ASSET NET ASSETS RATIO OF NET INVESTMENT
VALUE END TOTAL END OF EXPENSES TO INCOME TO
OF PERIOD RETURN (A) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS
--------- --------- ----------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT GRADE BOND FUND
Trust Shares
1998 $10.65 10.92% $793,488 0.76% 5.67%
1997 10.16 6.99% 633,646 0.75% 5.89%
1996 10.07 4.02% 599,514 0.75% 5.81%
1995 10.26 10.39% 543,308 0.75% 6.22%
1994 9.89 1.17% 460,538 0.75% 4.77%
Investor Shares
1998 $10.65 10.49% $ 33,269 1.14% 5.29%
1997 10.16 6.66% 33,165 1.15% 5.48%
1996 10.06 3.50% 36,155 1.15% 5.40%
1995 10.26 10.04% 33,772 1.15% 5.79%
1994 9.89 0.86% 35,775 1.14% 4.39%
Flex Shares
1998 $10.66 9.99% $ 13,111 1.65% 4.76%
1997 10.17 6.16% 5,763 1.64% 5.00%
1996(1) 10.07 2.50%* 4,621 1.64%* 4.84%*
SHORT-TERM BOND FUND
Trust Shares
1998 $10.05 7.31% $120,422 0.66% 5.47%
1997 9.90 6.30% 89,701 0.65% 5.37%
1996 9.86 4.45% 91,156 0.65% 5.39%
1995 9.98 7.60% 60,952 0.65% 5.49%
1994 9.79 2.02% 34,772 0.65% 4.15%
Investor Shares
1998 $10.07 7.19% $ 1,949 0.86% 5.27%
1997 9.91 5.97% 2,182 0.85% 5.16%
1996 9.88 4.23% 2,700 0.85% 5.20%
1995 10.01 7.44% 2,609 0.85% 5.24%
1994 9.81 1.81% 2,381 0.85% 3.94%
Flex Shares
1998 $10.07 6.84% $ 2,110 1.21% 4.93%
1997 9.91 5.62% 1,073 1.20% 4.82%
1996(2) 9.88 3.73%* 966 1.20%* 4.77%*
RATIO OF
RATIO OF NET INVESTMENT
EXPENSES TO INCOME TO
AVERAGE NET ASSETS AVERAGE NET ASSETS PORTFOLIO
(EXCLUDING WAIVERS (EXCLUDING WAIVERS TURNOVER
AND REIMBURSEMENTS) AND REIMBURSEMENTS) RATE
------------------ ------------------- ---------
<S> <C> <C> <C> <C>
INVESTMENT GRADE BOND FUND
Trust Shares
1998 0.86% 5.57% 109%
1997 0.85% 5.79% 298%
1996 0.87% 5.69% 184%
1995 0.88% 6.09% 238%
1994 0.88% 4.64% 259%
Investor Shares
1998 1.38% 5.05% 109%
1997 1.41% 5.22% 298%
1996 1.44% 5.11% 184%
1995 1.49% 5.45% 238%
1994 1.41% 4.12% 259%
Flex Shares
1998 2.11% 4.30% 109%
1997 2.20% 4.44% 298%
1996(1) 2.49%* 3.99%* 184%
SHORT-TERM BOND FUND
Trust Shares
1998 0.79% 5.34% 87%
1997 0.78% 5.24% 118%
1996 0.81% 5.23% 163%
1995 0.85% 5.29% 200%
1994 0.85% 3.95% 75%
Investor Shares
1998 1.71% 4.42% 87%
1997 1.58% 4.43% 118%
1996 1.72% 4.33% 163%
1995 1.56% 4.53% 200%
1994 2.52% 2.27% 75%
Flex Shares
1998 2.85% 3.29% 87%
1997 3.02% 3.00% 118%
1996(2) 4.06%* 1.91%* 163%
<FN>
* Annualized.
(1) Commenced operations on June 7, 1995.
(2) Commenced operations on June 20, 1995.
(A) Total return figures do not reflect applicable sales loads.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
112 & 113
<PAGE>
FINANCIAL HIGHLIGHTS (concluded)
================================================================================
STI CLASSIC FUNDS FOR THE PERIODS ENDED MAY 31.
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
<TABLE>
<CAPTION>
NET REALIZED AND
NET UNREALIZED GAINS
NET ASSET VALUE INVESTMENT (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM
BEGINNING OF PERIOD INCOME ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS
------------------- ------------ ---------------- --------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
SHORT-TERM U.S. TREASURY SECURITIES FUND
Trust Shares
1998 $ 9.88 $ 0.51 $ 0.10 $(0.52) $ --
1997 9.84 0.51 0.04 (0.51) --
1996 9.93 0.55 (0.09) (0.55) --
1995 9.82 0.47 0.11 (0.47) --
1994 9.98 0.33 (0.11) (0.33) (0.05)
Investor Shares
1998 $ 9.88 $ 0.49 $ 0.09 $(0.50) $ --
1997 9.84 0.50 0.04 (0.50) --
1996 9.94 0.54 (0.10) (0.54) --
1995 9.83 0.46 0.11 (0.46) --
1994 9.99 0.32 (0.12) (0.31) (0.05)
Flex Shares
1998 $ 9.85 $ 0.47 $ 0.10 $(0.48) $ --
1997 9.82 0.47 0.03 (0.47) --
1996(1) 9.96 0.48 (0.14) (0.48) --
LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
Trust Shares
1998 $10.02 $ 0.58 $ 0.11 $(0.58) $(0.01)
1997 9.99 0.58 0.04 (0.58) (0.01)
1996 10.11 0.62 (0.14) (0.60) --
1995(2) 10.00 0.58 0.13 (0.60) --
Investor Shares
1998 $10.00 $ 0.56 $ 0.12 $(0.56) $(0.01)
1997 9.97 0.56 0.04 (0.56) (0.01)
1996 10.11 0.60 (0.14) (0.60) --
1995(3) 9.98 0.58 0.13 (0.58) --
Flex Shares
1998 $10.02 $ 0.52 $ 0.11 $(0.52) $(0.01)
1997 9.99 0.52 0.04 (0.52) (0.01)
1996(4) 10.14 0.55 (0.15) (0.55) --
U.S. GOVERNMENT SECURITIES FUND
Trust Shares
1998 $10.02 $ 0.61 $ 0.44 $(0.61) $ --
1997 9.91 0.62 0.11 (0.62) --
1996 10.27 0.62 (0.33) (0.62) (0.03)
1995(5) 9.98 0.53 0.29 (0.53) --
Investor Shares
1998 $10.02 $ 0.57 $ 0.43 $(0.57) $ --
1997 9.90 0.58 0.12 (0.58) --
1996 10.26 0.59 (0.33) (0.59) (0.03)
1995(6) 10.00 0.56 0.26 (0.56) --
Flex Shares
1998 $10.02 $ 0.52 $ 0.44 $(0.52) $ --
1997 9.91 0.53 0.11 (0.53) --
1996(4) 10.31 0.52 (0.37) (0.52) (0.03)
RATIO OF
NET ASSET NET ASSETS RATIO OF NET INVESTMENT
VALUE END TOTAL END OF EXPENSES TO INCOME TO
OF PERIOD RETURN (A) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS
--------- --------- ----------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
SHORT-TERM U.S. TREASURY SECURITIES FUND
Trust Shares
1998 $ 9.97 6.30% $ 46,920 0.66% 5.19%
1997 9.88 5.76% 21,988 0.65% 5.23%
1996 9.84 4.73% 10,149 0.65% 5.56%
1995 9.93 6.11% 9,599 0.65% 4.91%
1994 9.82 2.17% 12,723 0.65% 3.23%
Investor Shares
1998 $ 9.96 6.04% $ 3,277 0.81% 5.07%
1997 9.88 5.59% 3,921 0.80% 5.05%
1996 9.84 4.52% 4,192 0.80% 5.43%
1995 9.94 6.03% 7,144 0.80% 4.74%
1994 9.83 2.01% 4,841 0.78% 3.11%
Flex Shares
1998 $ 9.94 5.90% $ 1,413 1.06% 4.81%
1997 9.85 5.19% 1,091 1.05% 4.75%
1996(1) 9.82 3.72%* 2,423 1.05%* 5.03%*
LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
Trust Shares
1998 $10.12 7.12% $137,488 0.66% 5.75%
1997 10.02 6.43% 123,903 0.65% 5.81%
1996 9.99 4.84% 73,370 0.65% 6.04%
1995(2) 10.11 7.50%** 41,823 0.65%* 6.43%*
Investor Shares
1998 $10.11 6.95% $ 2,705 0.91% 5.50%
1997 10.00 6.17% 2,426 0.90% 5.55%
1996 9.97 4.59% 2,512 0.90% 5.75%
1995(3) 10.11 7.45%** 623 0.90%* 6.27%*
Flex Shares
1998 $10.12 6.49% $ 1,543 1.26% 5.16%
1997 10.02 5.80% 1,409 1.25% 5.20%
1996(4) 9.99 4.10%* 1,349 1.25%* 5.38%*
U.S. GOVERNMENT SECURITIES FUND
Trust Shares
1998 $10.46 10.76% $ 34,899 0.76% 5.93%
1997 10.02 7.54% 19,471 0.75% 6.19%
1996 9.91 2.77% 10,277 0.75% 6.05%
1995(5) 10.27 8.64%** 3,291 0.75%* 6.67%*
Investor Shares
1998 $10.45 10.23% $ 3,225 1.16% 5.53%
1997 10.02 7.21% 2,243 1.15% 5.76%
1996 9.90 2.47% 2,396 1.15% 5.68%
1995(6) 10.26 8.61%** 589 1.15%* 6.08%*
Flex Shares
1998 $10.46 9.78% $ 4,022 1.67% 5.02%
1997 10.02 6.57% 2,801 1.66% 5.26%
1996(4) 9.91 1.42%* 2,826 1.66%* 5.18%*
RATIO OF
RATIO OF NET INVESTMENT
EXPENSES TO INCOME TO
AVERAGE NET ASSETS AVERAGE NET ASSETS PORTFOLIO
(EXCLUDING WAIVERS (EXCLUDING WAIVERS TURNOVER
AND REIMBURSEMENTS) AND REIMBURSEMENTS) RATE
------------------ ------------------- ---------
<S> <C> <C> <C> <C>
SHORT-TERM U.S. TREASURY SECURITIES FUND
Trust Shares
1998 0.84% 5.01% 39%
1997 0.92% 4.96% 93%
1996 1.00% 5.21% 94%
1995 1.08% 4.48% 88%
1994 0.81% 3.07% 117%
Investor Shares
1998 1.33% 4.55% 39%
1997 1.35% 4.50% 93%
1996 1.32% 4.91% 94%
1995 1.33% 4.21% 88%
1994 1.41% 2.48% 117%
Flex Shares
1998 2.87% 3.00% 39%
1997 2.51% 3.29% 93%
1996(1) 2.97%* 3.11%* 94%
LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
Trust Shares
1998 0.77% 5.64% 163%
1997 0.78% 5.68% 133%
1996 0.84% 5.85% 83%
1995(2) 0.93%* 6.15%* 68%
Investor Shares
1998 1.51% 4.90% 163%
1997 1.48% 4.97% 133%
1996 2.25% 4.40% 83%
1995(3) 7.74%* (0.57%)* 68%
Flex Shares
1998 2.72% 3.70% 163%
1997 2.66% 3.79% 133%
1996(4) 3.59%* 3.04%* 83%
U.S. GOVERNMENT SECURITIES FUND
Trust Shares
1998 0.92% 5.77% 14%
1997 1.02% 5.92% 21%
1996 1.25% 5.55% 83%
1995(5) 3.33%* 4.09%* 30%
Investor Shares
1998 1.76% 4.93% 14%
1997 1.79% 5.12% 21%
1996 2.50% 4.33% 83%
1995(6) 6.84%* 0.39%* 30%
Flex Shares
1998 2.32% 4.37% 14%
1997 2.42% 4.50% 21%
1996(4) 2.86%* 3.98%* 83%
<FN>
* Annualized.
** Return is for the period indicated and has not been annualized.
(1) Commenced operations on June 22, 1995.
(2) Commenced operations on June 7, 1994.
(3) Commenced operations on July 17, 1994.
(4) Commenced operations on June 7, 1995.
(5) Commenced operations on July 31, 1994.
(6) Commenced operations on June 9, 1994.
(A) Total return figures do not reflect applicable sales loads.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
114 & 115
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
1. Organization:
The STI Classic Funds (the "Trust") was organized as a Massachusetts Business
Trust under a Declaration of Trust dated January 15, 1992. The Trust is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company with twenty-two portfolios: the Value Income Stock
Fund, the Mid-Cap Equity Fund, the Small Cap Equity Fund, the Capital Growth
Fund, the Balanced Fund, the Emerging Markets Equity Fund, the International
Equity Index Fund, the International Equity Fund, the Sunbelt Equity Fund, the
Investment Grade Tax-Exempt Bond Fund, the Florida Tax-Exempt Bond Fund, the
Georgia Tax-Exempt Bond Fund, the Investment Grade Bond Fund, the Short-Term
Bond Fund, the Short-Term U.S. Treasury Securities Fund, the Limited-Term
Federal Mortgage Securities Fund, and the U.S. Government Securities Fund,
(collectively the "Non-Dollar Funds"), the Prime Quality Money Market Fund, the
U.S. Government Securities Money Market Fund, the Tax-Exempt Money Market Fund,
the Classic Institutional Cash Management Money Market Fund and the Classic
Institutional U.S. Treasury Securities Money Market Fund, (collectively the
"Money Market Funds"). The assets of each portfolio are segregated, and a
shareholder's interest is limited to the Fund in which shares are held. Each
Fund's prospectus provides a description of the Fund's investment objectives,
policies and strategies. The financial statements of the Classic Institutional
Cash Management Money Market Fund, the Classic Institutional U.S. Treasury Money
Market Fund, the Prime Quality Money Market Fund, the U.S. Government Securities
Money Market Fund and the Tax-Exempt Money Market Fund are not presented herein,
but are presented separately.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Trust.
SECURITY VALUATION -- Investment securities held by the Non-Dollar Funds
that are listed on a securities exchange for which market quotations are
available are valued at the last quoted sales price each business day. If
there is no such reported sale, these securities and unlisted securities
for which market quotations are readily available are valued at the most
recently quoted bid price. Foreign securities in the Emerging Markets
Equity Fund, the International Equity Fund and the International Equity
Index Fund are valued based upon quotations from the primary market in
which they are traded. Debt obligations with sixty days or less remaining
until maturity may be valued at their amortized cost.
FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a
regulated investment company for Federal income tax purposes and distribute
all of its taxable income and net capital gains. Accordingly, no provisions
for Federal income taxes are required.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Dividend income is recognized on the ex-dividend date and interest income
is recognized on an accrual basis. Costs used in determining net realized
gains and losses on the sales of investment securities are those of the
specific securities sold adjusted for the accretion and amortization of
purchase discounts and premiums during the respective holding period.
Purchase discounts and premiums on securities held by the Non-Dollar Funds
are accreted and amortized to maturity using the scientific interest
method, which approximates the effective interest method.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of the repurchase agreements ensure that the market
value of the collateral, including accrued interest thereon, is sufficient
in the event of default of the counterparty. If the counterparty defaults
and the value of the collateral declines or if the counterparty enters into
an
116
<PAGE>
================================================================================
insolvency proceeding, realization of the collateral by the Funds may be
delayed or limited.
NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is
calculated each business day, by dividing the total value of each Fund's
assets, less liabilities, by the number of shares outstanding. The maximum
offering price per share for Investor shares of the Investment Grade Bond,
the Investment Grade Tax-Exempt Bond, the Capital Growth, the Value Income
Stock, the Sunbelt Equity, the Mid-Cap Equity, the Balanced, the Florida
Tax-Exempt Bond, the Georgia Tax-Exempt Bond, the U.S. Government
Securities, the International Equity, and the International Equity Index
Funds is equal to the net asset value per share plus a sales load of 3.75%.
The maximum offering price per share for Investor shares of the Short-Term
U.S. Treasury Securities Fund is equal to the net asset value per share
plus a sales load of 1.00%. The maximum offering price per share for
Investor shares of the Short-Term Bond Fund is equal to the net asset value
per share plus a sales load of 2.00%. The maximum offering price per share
for Investor shares of the Limited-Term Federal Mortgage Securities Fund is
equal to the net asset value per share plus a sales load of 2.50%.
Flex Shares of the Funds may be purchased at their net asset value. Shares
redeemed within the first year after purchase will be subject to a
contingent deferred sales charge ("CDSC") equal to 2.00% of the net asset
value of the shares at the time of redemption. The CDSC will not apply to
shares redeemed after such time.
FOREIGN CURRENCY TRANSLATION -- The books and records of the Emerging
Markets Equity, the International Equity and the International Equity Index
Funds are maintained in U.S. dollars on the following basis:
(I) market value of investment securities, assets and liabilities at
the current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses
at the relevant rates of exchange prevailing on the respective
dates of such transactions.
The Emerging Markets Equity, the International Equity and the International
Equity Index Funds do not isolate that portion of gains and losses on
investments in equity securities that is due to changes in the foreign
exchange rates from that which is due to changes in market prices of equity
securities.
The Emerging Markets Equity, the International Equity and the International
Equity Index Funds report certain foreign currency related transactions as
components of realized and unrealized gains and losses for financial
reporting purposes, whereas such components are treated as ordinary income
for Federal income tax purposes.
TBA PURCHASE COMMITMENTS -- The Fixed Income Portfolios may enter into
"TBA" (To Be Announced) purchase commitments to purchase securities for a
fixed price at a future date beyond customary settlement time. TBA purchase
commitments may be considered securities in themselves, and involve a risk
of loss if the value of the security to be purchased declines prior to
settlement date, which risk is in addition to the risk of decline in the
value of the funds' other assets. Unsettled TBA purchase commitments are
valued at the current market value of the underlying securities, generally
according to the procedures described under "Security Valuation."
OTHER -- Expenses that are directly related to a specific Fund are charged
to that Fund. Class specific expenses are borne by that class. Other
117
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
operating expenses of the Trust are pro-rated to the Funds on the basis of
relative net assets. Fund expenses are pro-rated to the respective classes
on the basis of relative net assets.
Distributions from net investment income of the Investment Grade Bond, the
Investment Grade Tax-Exempt Bond, the Short-Term U.S. Treasury Securities, the
Short-Term Bond, the Florida Tax-Exempt Bond, the Georgia Tax-Exempt Bond, the
U.S. Government Securities and the Limited-Term Federal Mortgage Securities
Funds are declared each business day and paid to shareholders on a monthly
basis. Distributions from net investment income are declared and paid each
calendar quarter by the Capital Growth, the Value Income Stock, the Sunbelt
Equity, the Mid-Cap Equity, the Small Cap Equity and the Balanced Funds.
Distributions from net investment income are declared and paid annually by the
Emerging Markets Equity, the International Equity and the International Equity
Index Funds. Any net realized capital gains on sales of securities are
distributed to shareholders at least annually.
RECLASSIFICATION OF COMPONENTS OF NET ASSETS -- The timing and
characterization of certain income and capital gains distributions are
determined annually in accordance with federal tax regulations which may
differ from generally accepted accounting principles. As a result, net
investment income (loss) and net realized gain (loss) on investment
transactions for a reporting period may differ significantly from
distributions during such period. These book/tax differences may be
temporary or permanent in nature. To the extent these differences are
permanent, they are charged or credited to paid-in-capital or accumulated
net realized gain, as appropriate, in the period that the differences
arise. Accordingly, the following permanent differences, primarily
attributable to a net operating loss in the Sunbelt Equity and Mid-Cap
Equity Funds and the classification of short-term capital gains and
ordinary income for tax purposes related to the other funds, have been
reclassified to/from the following accounts:
UNDISTRIBUTED
ACCUMULATED NET INVESTMENT
PAID-IN-CAPITAL REALIZED GAIN INCOME
(000) (000) (000)
-------------- ------------- --------------
Mid-Cap Equity Fund $ -- $(1,361) $1,361
International Equity
Index Fund -- (67) 67
Sunbelt Equity Fund -- (4,365) 4,365
Investment Grade
Bond Fund -- 188 (188)
Short Term U.S. Treasury
Securities Fund 53 -- (53)
These reclassifications have no effect on net assets or net asset values
per share.
USE OF ESTIMATES -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that effect the reported
amount of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and reported amounts
of revenues and expenses during the reporting period. Actual amounts could
differ from these estimates.
3. Organization Costs and Transactions with Affiliates:
The Trust incurred organization costs of approximately $808,836 including
approximately $395,594 relating to state registration fees. These costs have
been deferred in the accounts of the Funds and are being amortized on a straight
line basis over a period of sixty months commencing with operations with the
exception of state registration fees, which are being amortized over a period of
twelve months. The costs include legal fees of approximately $60,383 for
organizational work performed by a law firm of which two officers of the Trust
are partners. On March 18, 1992, the Trust sold initial shares of beneficial
interest to SEI Fund Resources (the "Administrator"). In the event any of the
initial shares of the Trust are
118
<PAGE>
================================================================================
redeemed by any holder thereof during the period that the Trust is amortizing
its organizational costs, the redemption proceeds payable to the holder thereof
will be reduced by the unamortized organizational costs in the same ratio as the
number of initial shares being redeemed bears to the number of initial shares
outstanding at the time of redemption.
In April 1998, the AICPA issued Statement of Position (SOP) No. 98-5, "Reporting
on the Costs of Start-Up Activities." This SOP provides guidance on the
financial reporting of start-up costs and organization costs and requires costs
of start-up activities and organization costs to be expensed as incurred.
Investment companies that began operations prior to June 30, 1998 can adopt the
SOP prospectively. Therefore, previously capitalized organization costs will
continue to be amortized as discussed above. Any future start-up or organization
costs will be expensed as incurred.
Certain officers of the Trust are also officers of the Administrator and/or SEI
Investments Distribution Co. (the "Distributor"). Such officers are paid no fees
by the Trust for serving as officers of the Trust.
4. Administration, Transfer Agency Servicing and Distribution Agreements:
The Trust and the Administrator are parties to an Administration Agreement dated
May 29, 1995, as amended November 19, 1997 under which the Administrator
provides administrative services for an annual fee (expressed as a percentage of
the combined average daily net assets of the Trust and STI Classic Variable
Trust) of: .12% up to $1 billion, .09% on the next $4 billion, .07% on the next
$3 billion, .065% on the next $2 billion and .06% for over $10 billion.
The Trust and Federated Services Company are parties to a Transfer Agency
servicing agreement dated May 14, 1994 under which Federated Services Company
provides transfer agency services to the Trust.
The Trust and the Distributor are parties to a Distribution Agreement dated May
29, 1995 regarding the Flex Shares and a Distribution Agreement dated November
21, 1995 with respect to the Trust and Investor shares. The Distributor will
receive no fees for its distribution services under this agreement for the Trust
Shares of any Fund. With respect to the Investor Shares and Flex Shares, the
Distributor receives amounts, pursuant to a Distribution Plan and (in the case
of Flex Shares) a Distribution and Service Plan, as outlined in the table in
footnote 5 under the column titled "Distribution Fee".
5. Investment Advisory and Custodian Agreements:
The Trust and STI Capital Management, N.A., ("STI Capital Management, N.A."),
Trusco Capital Management ("Trusco") and the SunTrust Bank, Atlanta have entered
into advisory agreements dated May 29, 1992, June 15, 1993, and December 20,
1993 respectively.
Under terms of the respective agreements, the Funds are charged the following
annual fees based upon average daily net assets:
MAXIMUM
FLEX
SHARE
MAXIMUM DISTRI-
MAXIMUM TRUST INVESTOR INVESTOR BUTION FLEX
ANNUAL SHARE SHARE SHARE AND SHARE
ADVISORY MAXIMUM DISTRI- MAXIMUM SERVICE MAXIMUM
FEE EXPENSE BUTION FEE EXPENSE FEE EXPENSE
-------- ------- ---------- --------- --------- ---------
TRUSCO:
International
Equity Index
Fund* ........... .90% 1.07% .38% 1.47% 1.00% 2.12%
Sunbelt Equity
Fund ............ 1.15% 1.17% .43% 1.62% 1.00% 2.22%
Short-Term Bond
Fund ............ .65% .67% .23% .87% 1.00% 1.22%
Short-Term U.S.
Treasury
Securities
Fund ............ .65% .67% .18% .82% 1.00% 1.07%
U.S. Government
Securities
Fund ............ .74% .77% .38% 1.17% 1.00% 1.68%
119
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
MAXIMUM
FLEX
SHARE
MAXIMUM DISTRI-
MAXIMUM TRUST INVESTOR INVESTOR BUTION FLEX
ANNUAL SHARE SHARE SHARE AND SHARE
ADVISORY MAXIMUM DISTRI- MAXIMUM SERVICE MAXIMUM
FEE EXPENSE BUTION FEE EXPENSE FEE EXPENSE
-------- ------- ---------- --------- --------- ---------
STI CAPITAL MANAGEMENT, N.A.:
Value Income
Stock Fund ..... .80% .97% .33% 1.32% 1.00% 2.02%
Mid-Cap Equity
Fund ........... 1.15% 1.17% .43% 1.62% 1.00% 2.22%
Capital Growth
Fund ........... 1.15% 1.17% .68% 1.82% 1.00% 2.29%
Balanced Fund ... .95% .97% .28% 1.27% 1.00% 2.03%
Small Cap
Equity Fund .... 1.15% 1.22% -- -- 1.00% 2.27%
Investment
Grade
Tax-Exempt
Bond Fund ...... .74% .77% .43% 1.17% 1.00% 1.65%
Florida
Tax-Exempt
Bond Fund ...... .65% .67% .18% .87% 1.00% 1.37%
Investment
Grade Bond
Fund ........... .74% .77% .43% 1.17% 1.00% 1.66%
Limited-Term
Federal Mortgage
Securities
Fund ........... .65% .67% .23% .92% 1.00% 1.27%
International
Equity Fund .... 1.25% 1.48% .33% 1.83% 1.00% 2.53%
Emerging Markets
Equity Fund .... 1.30% 1.57% -- -- -- --
SUNTRUST BANK, ATLANTA:
Georgia
Tax-Exempt
Bond Fund ...... .65% .67% .18% .87% 1.00% 1.37%
- -----------------
*Trusco and STI Capital Management, N.A. serve as joint advisors to the
International Equity Index Fund.
The Investment Advisors, the Administrator and the Distributor have voluntarily
agreed to waive all or a portion of their fees (and to reimburse Funds'
expenses) in order to limit operating expenses to an amount as outlined in the
table above. Fee waivers and expense reimbursements are voluntary and may be
terminated at any time.
SunTrust Bank, Atlanta, formerly Trust Company Bank, acts as custodian for all
the Funds except the Emerging Markets Equity, the International Equity and the
International Equity Index Funds who utilize the Bank of New York as custodian.
Fees of the Custodians are paid on the basis of the net assets of the Funds. The
Custodians play no role in determining the investment policies of the Trust or
which securities are to be purchased or sold in the Funds.
6. Investment Transactions:
The cost of purchases and the proceeds from sales
of securities, excluding short-term investments and U.S. Government Securities,
for the period ended May 31, 1998, were as follows:
PURCHASES SALES
(000) (000)
---------- ----------
Value Income Stock Fund ......................... $1,823,064 $1,833,225
Mid-Cap Equity Fund ............................. 462,331 452,146
Small Cap Equity Fund ........................... 395,884 165,654
Capital Growth Fund ............................. 3,011,738 2,973,522
Balanced Fund ................................... 243,053 224,046
Emerging Markets Equity Fund .................... 32,742 28,074
International Equity Index Fund ................. 380 9,635
International Equity Fund ....................... 618,831 592,164
Sunbelt Equity Fund ............................. 315,836 349,887
Investment Grade Tax-Exempt Bond Fund ........... 622,469 612,020
Florida Tax-Exempt Bond Fund .................... 107,098 54,005
Georgia Tax-Exempt Bond Fund .................... 27,063 4,038
Investment Grade Bond Fund ...................... 400,821 403,885
Short-Term Bond Fund ............................ 71,095 49,153
Short-Term U.S. Treasury Securities Fund ........ -- --
Limited-Term Federal Mortgage Securities Fund ... -- --
U.S. Government Securities Fund ................. -- --
The cost of purchases and proceeds from sales of U.S. Government Securities
were:
PURCHASES SALES
(000) (000)
---------- --------
Value Income Stock Fund ......................... -- --
Mid-Cap Equity Fund ............................. -- --
Small Cap Equity Fund ........................... -- --
Capital Growth Fund ............................. -- --
Balanced Fund ................................... $ 56,022 $ 42,074
Sunbelt Equity .................................. -- --
Investment Grade Tax-Exempt Bond Fund ........... -- --
Florida Tax-Exempt Bond Fund .................... -- --
Georgia Tax-Exempt Bond Fund .................... -- --
Investment Grade Bond Fund ...................... 523,591 391,661
Short-Term Bond Fund ............................ 41,473 37,414
Short-Term U.S. Treasury Securities Fund ........ 36,733 13,221
Limited-Term Federal Mortgage Securities Fund ... 227,048 214,041
U.S. Government Securities Fund ................. 18,245 4,491
120
<PAGE>
================================================================================
At May 31, 1998, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes were not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the Funds
at May 31, 1998, were as follows:
VALUE INCOME MID-CAP SMALL CAP CAPITAL
STOCK EQUITY EQUITY GROWTH
FUND FUND FUND FUND
(000) (000) (000) (000)
------------ ------ --------- -------
Aggregate gross unrealized
appreciation .......... $250,063 $60,515 $47,134 $365,433
Aggregate gross unrealized
depreciation .......... (51,128) (20,646) (23,445) (27,225)
-------- ------- ------- --------
Net unrealized appreciation $198,935 $39,869 $23,689 $338,208
======== ======= ======= ========
<TABLE>
<CAPTION>
EMERGING INTERNATIONAL INTERNATIONAL SUNBELT
BALANCED MARKETS EQUITY EQUITY EQUITY
FUND EQUITY FUND INDEX FUND FUND FUND
(000) (000) (000) (000) (000)
-------- ----------- ------------ ------------- -------
<S> <C> <C> <C> <C> <C>
Aggregate gross
unrealized\
appreciation ...... $28,791 $ 3,787 $25,403 $134,163 $141,883
Aggregate gross
unrealized
depreciation ...... (2,291) (9,120) (7,035) (18,442) (14,007)
------- ------- ------- -------- --------
Net unrealized
appreciation/
(depreciation) .... $26,500 $(5,333) $18,368 $115,721 $127,876
======= ======= ======= ======== ========
</TABLE>
INVESTMENT
GRADE
TAX-EXEMPT FLORIDA
BOND TAX-EXEMPT
FUND BOND FUND
(000) (000)
---------- ----------
Aggregate gross unrealized appreciation ... $2,731 $3,227
Aggregate gross unrealized depreciation ... (33) (93)
------ ------
Net unrealized appreciation ............... $2,698 $3,134
====== ======
INVESTMENT
GEORGIA GRADE SHORT-
TAX-EXEMPT BOND TERM BOND
FUND FUND FUND
(000) (000) (000)
---------- ---------- ---------
Aggregate gross unrealized appreciation .. $2,313 $24,778 $934
Aggregate gross unrealized depreciation .. (49) (468) (72)
------ ------- ----
Net unrealized appreciation .............. $2,264 $24,310 $862
====== ======= ====
SHORT- LIMITED-
TERM TERM
U.S. FEDERAL U.S.
TREASURY MORTGAGE GOVERNMENT
SECURITIES SECURITIES SECURITIES
FUND FUND FUND
(000) (000) (000)
---------- ---------- ----------
Aggregate gross unrealized appreciation $182 $909 $995
Aggregate gross unrealized depreciation (1) (23) (2)
---- ---- ----
Net unrealized appreciation $181 $886 $993
==== ==== ====
Subsequent to October 31, 1997, the Funds recognized net capital losses for tax
purposes that have been deferred to 1998 and can be used to offset future
capital gains at May 31, 1998. The Funds also had capital loss carryforwards at
May 31, 1998 as follows:
<TABLE>
<CAPTION>
CAPITAL LOSS POST
CARRYOVER EXPIRES EXPIRES EXPIRES 10/31
5/31/98 2003 2004 2005 DEFERRED
FUND (000) (000) (000) (000) LOSS
------------ ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Emerging Markets
EquityFund $ -- $ -- $-- $-- $1,283
Short-Term U.S. Treasury
Securities Fund 211 182 29 -- --
</TABLE>
For tax purposes, the losses in the Funds can be carried forward for a maximum
of eight years to offset any net realized capital gains.
7. Concentration of Credit Risk:
The Investment Grade Bond Fund, the Short-Term Bond Fund and the Balanced Fund
invest primarily in investment grade obligations rated at least BBB or better by
S&P or Baa or better by Moody's or, if not rated, are determined by the Advisor
to be of comparable quality. The Investment Grade Tax-Exempt Fund invests
primarily in investment grade municipal securities. Municipal securities must be
rated BBB or better by S&P or Baa or better by Moody's in the case of bonds;
SP-1, SP-2 or MIG-1, MIG-2 in the case of notes; A-1, A-2 or P-1, P-2 in the
case of commercial
121
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded)
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
paper; and VMIG-1, VMIG-2 in the case of variable rate demand obligations. The
Short-Term U.S. Treasury Securities Fund invests exclusively in obligations
issued by the U.S. Treasury with a maximum remaining maturity of 3 years or
less. The Florida Tax-Exempt Bond Fund and the Georgia Tax-Exempt Bond Fund,
invest primarily in municipal bonds concentrated in each of their respective
states. Municipal securities must be rated BBB or better by S&P or Baa or better
by Moody's in the case of bonds; A-1, A-2 or P-1, P-2 in the case of tax-exempt
commercial paper; and VMIG-1, VMIG-2 in the case of variable rate demand
obligations. The U.S. Government Securities Fund invests primarily in
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, including mortgage backed securities. The Limited-Term
Federal Mortgage Securities Fund invests in mortgage related securities issued
or guaranteed by U.S. Government agencies. Up to 35% of the U.S. Government
Securities Fund and the Limited-Term Federal Mortgage Securities Fund may be
invested in corporate, or government bonds that carry a rating of BBB or better
by S&P or Baa or better by Moody's. The ability of the issuers of the securities
held by the Funds to meet their obligations may be affected by economic
developments in a specific industry, state or region, or by changing business
conditions.
122
<PAGE>
NOTICE TO SHAREHOLDERS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998 UNAUDITED
For shareholders that do not have a May 31, 1998 tax year end, this notice is
for informational purposes only. For shareholders with a May 31, 1998 tax year
end, please consult your tax advisor as to the pertinence of this notice. For
the fiscal year ended May 31, 1998, each portfolio is designating the following
items with regard to distributions paid during the year:
<TABLE>
<CAPTION>
LONG TERM MID TERM
(20% RATE) (28% RATE) ORDINARY
CAPITAL GAINS CAPITAL GAINS INCOME TAX-EXEMPT TOTAL QUALIFYING
FUND DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS INTEREST DISTRIBUTIONS DIVIDENDS (1)
------------------------ ------------- ------------- ------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Value Income Stock 8.24% 24.62% 67.14% 0.00% 100.00% 22.28%
Mid-Cap Equity 7.96% 21.63% 70.41% 0.00% 100.00% 10.81%
Small Cap Equity 0.00% 0.00% 100.00% 0.00% 100.00% 25.53%
Capital Growth 7.15% 27.60% 65.25% 0.00% 100.00% 8.45%
Balanced 5.51% 19.31% 75.18% 0.00% 100.00% 6.74%
Emerging Markets Equity 0.00% 0.00% 100.00% 0.00% 100.00% 0.00%
International Equity Index 26.23% 59.39% 14.38% 0.00% 100.00% 0.00%
International Equity 7.80% 10.23% 81.97% 0.00% 100.00% 0.00%
Sunbelt Equity 53.08% 46.92% 0.00% 0.00% 100.00% 0.00%
Investment Grade Tax-Exempt Bond 3.24% 0.49% 42.69% 53.59% 100.00% 0.00%
Florida Tax-Exempt Bond 0.00% 0.00% 2.39% 97.61% 100.00% 0.00%
Georgia Tax-Exempt Bond 2.12% 0.87% 1.50% 95.50% 100.00% 0.00%
Investment Grade Bond 0.00% 0.00% 100.00% 0.00% 100.00% 0.00%
Short-Term Bond 0.03% 0.63% 99.34% 0.00% 100.00% 0.00%
Short-Term U.S. Treasury Securities 0.00% 0.00% 100.00% 0.00% 100.00% 0.00%
Limited-Term Federal Mortgage Securities 0.30% 0.06% 99.64% 0.00% 100.00% 0.00%
U.S. Government Securities 0.00% 0.00% 100.00% 0.00% 100.00% 0.00%
<FN>
- ------------------
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction and is reflected as a percentage of "Ordinary
Income Distribution".
</FN>
</TABLE>
123
<PAGE>
NOTICE TO SHAREHOLDERS (concluded)
================================================================================
STI CLASSIC FUNDS MAY 31, 1998 UNAUDITED
For taxpayers filing on a calendar year basis, this notice is for informational
purposes only.
The STI Classic International Equity Fund, STI Classic International Equity
Index Fund and the STI Classic Emerging Markets Fund have made an election under
ss. 853 of the Internal Revenue Code (the "Code") to provide a foreign tax
deduction or credit to their shareholders for the fiscal year ended May 31,
1998. The information provided is pertinent to taxpayers who meet the following
two criteria:
1) they file a U.S. Federal Income Tax Return and
2) held shares of the fund on the December 30, 1997 dividend record date and
satisfy the applicable requirements of the Code.
The amount per share of income from, and foreign taxes paid to, each country is
listed in the following schedules.
STI EMERGING MARKETS FUND
GROSS FOREIGN
COUNTRY DIVIDEND TAXES PAID
- ------- -------- ---------
Argentina 0.0132 0.0000
Belize 0.0003 0.0000
Brazil 0.0119 0.0026
Chile 0.0027 0.0019
Columbia 0.0027 0.0005
Ecuador 0.0009 0.0000
Greece 0.0055 0.0000
Hong Kong 0.0061 0.0000
Hungary 0.0002 0.0000
India 0.0011 0.0001
Indonesia 0.0049 0.0019
Israel 0.0021 0.0012
Malaysia 0.0039 0.0027
Mexico 0.0057 0.0000
Peru 0.0018 0.0000
Philippines 0.0005 0.0003
Portugal 0.0036 0.0011
Singapore 0.0014 0.0004
South Africa 0.0066 0.0000
Thailand 0.0051 0.0004
Zinbawe 0.0001 0.0000
------ ------
0.0803 0.0131
STI INTERNATIONAL EQUITY INDEX FUND
GROSS FOREIGN
COUNTRY DIVIDEND TAXES PAID
- ------- -------- ---------
Australia 0.0032 0.0002
Austria 0.0008 0.0004
Belgium 0.0023 0.0012
Denmark 0.0006 0.0003
Finland 0.0008 0.0005
France 0.0116 0.0051
Germany 0.0090 0.0045
Great Britain 0.0119 0.0064
Hong Kong 0.0015 0.0000
Italy 0.0066 0.0030
Japan 0.0060 0.0033
Netherlands 0.0027 0.0010
Norway 0.0008 0.0004
Spain 0.0045 0.0023
Sweden 0.0012 0.0007
Switzerland 0.0006 0.0009
------ ------
0.0641 0.0302
STI INTERNATIONAL EQUITY FUND
GROSS FOREIGN
COUNTRY DIVIDEND TAXES PAID
- ------- -------- ---------
Argentina 0.0001 0.0000
Australia 0.0002 0.0004
Brazil 0.0003 0.0013
Canada 0.0001 0.0008
Denmark 0.0001 0.0002
Finland 0.0002 0.0016
France 0.0006 0.0048
Germany 0.0002 0.0009
Great Britain 0.0010 0.0068
Greece 0.0001 0.0000
Hong Kong 0.0001 0.0000
Indonesia 0.0000 0.0001
Israel 0.0000 0.0002
Italy 0.0002 0.0008
Japan 0.0001 0.0008
Malaysia 0.0000 0.0004
Netherlands 0.0004 0.0021
New Zealand 0.0001 0.0008
Peru 0.0001 0.0000
Portugal 0.0001 0.0003
Singapore 0.0000 0.0003
South Africa 0.0001 0.0000
Spain 0.0001 0.0010
Switzerland 0.0002 0.0017
Sweden 0.0001 0.0006
------ ------
0.0045 0.0259
Due to recent changes brought about by the Taxpayer Relief Act of 1997, a
portion of the foreign taxes paid and passed through to shareholders may not
qualify to be taken as a credit on your tax return but will be eligible as a
foreign income tax deduction. All of the foreign taxes paid by each of the funds
above qualifies to be used as a credit.
Please consult your tax advisor for proper treatment of this information.
124
<PAGE>
<PAGE>
INVESTMENT ADVISORS
STI Capital Management, N.A.
Trusco Capital Management, Inc.
SunTrust Bank, Atlanta
STI Classic Funds are not deposits, are not
insured or guaranteed by the FDIC or any other
government agency, and are not endorsed by and
do not constitute obligations of SunTrust
Banks, Inc. or any other of its affiliates.
Investment in the Funds involves risk,
including the possible loss of principal. There
is no guarantee that any STI Classic Fund will
achieve its investment objective. The STI
Classic Funds are advised by affiliates of
SunTrust Banks, Inc.
DISTRIBUTOR
SEI Investments Distribution Co.
This information must be preceded or
accompanied by a current prospectus for
each Fund described.
