<PAGE> 1
BB&T
MUTUAL FUNDS
LETTER FROM THE CHAIRMAN AND INVESTMENT ADVISER
Dear Shareholders:
We are pleased to report that the year ended September 30, 1995, was one of
solid growth for the financial markets and for the BB&T Mutual Funds Group.
During the period, stocks rose dramatically and bonds rebounded smartly from
their 1994 lows. Reflecting investors' renewed interest in the markets and the
solid performance of the BB&T Funds during our first three years of operation,
total net assets under management grew by nearly 40%, rising from $387 million
to $540 million over the 12 months ended September 30, 1995.
NEW FUND OFF TO IMPRESSIVE START
The BB&T Small Company Growth Fund, introduced on December 7, 1994, made a
significant contribution to our growth. Launched with $2.5 million in its
portfolio, the Fund ended the period with approximately $18 million under
management. Its performance, too, was outstanding -- during its first 10 months
of operations, the Fund produced a total return of 45.30% (Investor Shares).+
While it is too early to make any judgment regarding the long-term prospects for
the Fund, we are very encouraged by its outstanding performance to date.
A SOFT LANDING FOR THE ECONOMY
Over the period covered by this report, the Federal Reserve achieved what was
once thought to be virtually impossible -- engineering a soft landing for the
economy. As the impact of the Fed's seven hikes in short-term interest rates
rippled through the economy over the past year, economic momentum slowed,
inflationary pressures eased and investors' nervousness abated. The stock market
roared ahead and at one point seemed poised to break through the 5000 level, as
measured by the Dow Jones Industrial Average. After experiencing one of their
worst years in recent history, bonds bounced back during the first three
quarters of 1995.
TOO MUCH OF A GOOD THING?
It seems, however, that the financial markets can absorb only so much good news.
By midyear, worries about the possibility of a recession surfaced in the markets
and on the airwaves. Indeed, an examination of some of the fundamentals of the
slowdown were reason for concern. Despite substantial increases in productivity
over the past year, wage growth had stagnated. Housing and auto sales were
strong but were being financed, with consumer debt levels rising substantially.
In mid-July, the Federal Reserve took out an insurance policy by easing
short-term interest rates to ward off any threat of recession. As we move into
the fourth quarter of 1995, it appears that the Fed was successful. Inventories
are declining. Consumer interest, if not demand, is reviving and the economy is
showing signs of firming.
- - --------------------------------------------------------------------------------
+With the maximum sales charge of 4.00%, the Fund's total return for the period
was 39.44% (Investor Shares).
<PAGE> 2
A POSITIVE OUTLOOK FOR THE MARKETS
In the months ahead, we expect the economy to grow at a slow and steady annual
pace between 2% and 3%. Inflationary pressures, too, are expected to be very
moderate. Overall, we believe the environment should prove to be a positive one
for both stocks and bonds.
In fact, the inflation picture looks better today than it did six months ago.
Commodity price pressure has subsided. Improving productivity and slow economic
growth in the first half of 1995 have freed up capacity and eased building
bottlenecks. Just as important, unit labor costs (which take into account both
the effects of stagnating real wages and productivity growth) have barely moved
over the past year.
Meanwhile, Congress seems to be making a serious effort to reduce government
spending, and, while it is impossible to predict what legislation might be
passed, it is clear that any credible action in this arena will improve the
environment in the financial markets.
IN CLOSING . . .
We urge you to read the following report closely. In it, you will find a
detailed discussion of the performance of each of the BB&T Mutual Funds during
the year ended September 30, 1995.
Finally, we thank you for your continued confidence in us. We look forward to
providing you with the investment management you expect and serving your
financial needs now and in the future. As always, if you would like a
prospectus, have any questions or require any assistance, please don't hesitate
to call us at 1-800-228-1872.
Sincerely,
LOGO
/s/ J. David Huber
- - ------------------
J. David Huber
Chairman
BB&T Mutual Funds Group
LOGO
/s/ David C. McMahon
- - --------------------
David C. McMahon
Chief Investment Officer and Senior Vice President
Branch Banking and Trust Company
- - --------------------------------------------------------------------------------
Shares of the BB&T Mutual Funds are NOT FDIC INSURED and are not deposits or
obligations of, or guaranteed or endorsed by, Branch Banking and Trust Company
or its affiliates. Investment products involve investment risks, including the
possible loss of principal.
For more complete information on any of the BB&T Mutual Funds, including fees,
expenses and sales charges, please call 1-800-228-1872 for a prospectus. Please
read the prospectus carefully before investing or sending money.
-2-
<PAGE> 3
PERFORMANCE REPORT
THE BB&T GROWTH AND INCOME STOCK FUND
As the economy leveled off and "landed softly" during the first three quarters
of 1995, the stock market ignited and soared to record levels. The bull market
was a broadly based advance, but investors' attention focused particularly on
technology and large-company growth stocks throughout much of the period. More
conservative, value-oriented stocks gained ground as well, but, due primarily to
a lack of investor interest, did not advance as dramatically as technology
issues did during the period.
Consequently, because the Fund is value oriented and invested in mid-sized and
larger companies across a broad spectrum of industries, it underperformed its
industry benchmark. For the 12 months ended September 30, 1995, it posted a gain
of 20.62% (Investor Shares)1 versus a gain of 29.7% in the S&P 500 Stock Index
over the same period.
UPWARD MOMENTUM SLOWS
While a slow-growth environment is positive for stocks long term, it also
creates vulnerability in the short term, particularly for those companies that
reported record-breaking earnings in the first half of 1995. As growth slows
throughout the economy, this kind of performance will be much harder to repeat.
In the months ahead it is possible that moderate economic growth will make
dramatic earnings growth difficult to achieve.
Nonetheless, we are very optimistic about the Fund's prospects. While it is very
difficult to predict when the market's attention will return to value stocks,
the Fund is well positioned for the slow-but-steady growth economy that lies
ahead.
As of September 30, 1995, the Fund's top five holdings were: Aon Corp. (2.57%),
Anheuser-Busch (2.53%), Sprint (2.52%), Lockheed Martin (2.29%) and Royal Dutch
Petroleum (2.24%).
- - --------------------------------------------------------------------------------
1With the maximum sales charge of 4.00%, the Fund's total return for the
12-month period was 15.79% (Investor Shares).
-3-
<PAGE> 4
BB&T GROWTH AND INCOME STOCK FUND
LOGO
The graph that appears on page 4 of the BB&T annual report represents a
comparison between a $10,000 investment made on October 9, 1992, in Trust
Shares and in Investor Shares of the BB&T Growth and Income Stock Fund and in
the S&P 500 Stock Index. The chart indicates that $10,000 invested on October
9, 1992, in Trust Shares would have been worth $14,531 and in Investor Shares
would have been worth $13,841 on September 30, 1995, as opposed to $15,759 had
the $10,000 been invested in the S&P 500 Stock Index.
The table that appears on page 4 indicates that BB&T Growth and Income Stock
Fund Trust Shares had a one-year return of 20.88% and an average annualized
total return since inception on October 9, 1992, of 13.37% and that the Investor
Shares (reflecting the 4.00% maximum sales charge) had a one-year return of
15.79% and an average annualized total return since inception of 11.53%
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T Mutual Funds will fluctuate so that the
shares, when redeemed, may be worth more or less than their original cost.
The performance of the BB&T Growth and Income Stock Fund is measured against the
S&P 500 Stock Index, an unmanaged index generally considered to be
representative of the performance of the U.S. stock market as a whole. The index
does not reflect the deduction of expenses associated with a mutual fund, such
as investment management and fund accounting fees. The Fund's performance
reflects the deduction of fees for these value-added services.
THE BB&T SMALL COMPANY GROWTH FUND 2
Designed for aggressive growth investors, the Small Company Growth Fund was
introduced on December 7, 1994. With holdings in more than 100
small-capitalization, high-growth companies, the portfolio is widely diversified
across a broad spectrum of industries.
During its first 10 months of operations, the Fund had a relatively high
concentration in the technology sector -- causing it to benefit handsomely as
technology stocks led the market's upward surge. As a result, we are extremely
pleased to report that since its inception through September 30, 1995, the Fund
posted a total return of 45.30% (Investor Shares),3 outperforming the 29.23%
return of its benchmark, the Russell 2000, by 16 percentage points.
- - --------------------------------------------------------------------------------
2Small capitalization companies typically carry additional risks since smaller
companies generally have a higher risk of failure and, by definition, are not
as well established as "blue chip" companies. Historically, small-company
stocks have experienced a greater degree of market volatility than stocks on
average.
3With the maximum sales charge of 4.00%, the Fund's total return since inception
was 39.44% (Investor Shares).
-4-
<PAGE> 5
A STRONG START AND SOLID POTENTIAL
While it is far too early to judge the Fund's long-term performance prospects,
we are very pleased with its launch and outstanding performance to date. In
addition, we believe that the Fund is likely to benefit from a change in
investor sentiment.
When the economy is in a slow-growth mode, as it is now, investors seeking
above-average earnings growth have traditionally turned to small-capitalization
growth companies -- the type of companies in which the Fund invests. In the
months ahead, we will continue to seek out companies that show both dynamic
growth potential and financial strength.
As of September 30, 1995, the Fund's top five holdings were: Macromedia (1.74%),
U.S. Robotics (1.70%), Dura Pharmaceuticals (1.50%), Softkey International
(1.47%) and United Waste Systems (1.41%).
BB&T SMALL COMPANY GROWTH FUND
LOGO
The graph that appears on page 5 of the BB&T annual report represents a
comparison between a $10,000 investment made on December 7, 1994, in Trust
Shares and in Investor Shares of the BB&T Small Company Growth Fund and in the
Russell 2000. The chart indicates that $10,000 invested on December 7, 1994,
in Trust Shares would have been worth $14,570 and in Investor Shares would have
been worth $13,944 on September 30, 1995, as opposed to $12,923 had the $10,000
been invested in the Russell 2000.
The table that appears on page 5 indicates that BB&T Small Company Growth Fund
Trust Shares had a aggregate total return of 45.70% and that the Investor
Shares (reflecting the 4.00% maximum sales charge) had and aggregate total
return of 39.44% since the Fund's inception on December 7, 1994.
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T Mutual Funds will fluctuate so that the
shares, when redeemed, may be worth more or less than their original cost.
The performance of the BB&T Small Company Growth Fund is measured against the
Russell 2000, an unmanaged index generally considered to be representative of
the performance of small-capitalization stocks. The index does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance reflects the
deduction of fees for these value-added services.
-5-
<PAGE> 6
THE BB&T BALANCED FUND
The period of the Fund's fiscal year, from October 1, 1994, through September
30, 1995, witnessed a dramatic turnaround in both the stock and bond markets.
After trading in a narrow range throughout most of 1994, stocks were on a
stampede in the first half of 1995, with technology stocks enjoying the most
spectacular gains. Value-oriented stocks, such as those in the Fund's broadly
diversified portfolio, rose solidly during the period despite investors' clear
preference for growth-oriented issues.
In addition, the Fund's holdings in the bond market performed well. As we moved
into 1995, maturities were extended in anticipation of a leveling off and
possible decline in interest rates. Consequently, as rates fell throughout the
spring and summer, the Fund benefited.
The Fund's total return of 18.00% (Investor Shares)4 for the year ended
September 30, 1995, fell between the returns of its two benchmarks, the S&P 500
Stock Index and the Lehman Brothers Intermediate Government Bond Index, which
had returns of 29.7% and 10.6%, respectively, during the period.
LONG-TERM TRENDS ARE UP
The slow-growth, low-inflation environment we anticipate promises to be a good
one for both stocks and bonds. Unless there is an unexpected drop in corporate
profits or a problematic increase in inflation in the short term, we do not
expect to make major changes in the Fund's current allocation. As of September
30, 1995, 48% of the Fund was invested in fixed-income securities, 46% in stocks
and 6% in cash and cash equivalents.
At period's end, the Fund's top five equity holdings were: Hewlett Packard
(1.42%), Royal Dutch Petroleum (1.07%), Monsanto (1.05%), Schering Plough
(0.97%)and SAFECO (0.95%). The Fund's fixed-income holdings were concentrated in
U.S. Treasury securities, and this part of the portfolio had an average maturity
of 5.6 years.
- - --------------------------------------------------------------------------------
4With the maximum sales charge of 4.00%, the Fund's total return for the
12-month period was 13.24% (Investor Shares).
-6-
<PAGE> 7
BB&T BALANCED FUND
LOGO
The graph that appears on page 7 of the BB&T annual report represents a
comparison between a $10,000 investment made on July 1, 1993, in Trust shares
and Investor Shares of the BB&T Balanced Fund and in the S&P 500 Stock Index
and the Lehman Brothers Intermediate Government Bond Index. The chart
indicates that $10,000 invested on July 1, 1993, in Trust Shares would have
been worth $12,095 and in Investor Shares would have been worth $11,576 on
September 30, 1995, as opposed to $13,800 had the $10,000 been invested in the
S&P 500 Stock Index and $11,124 had the money been invested in the Lehman
Brothers Intermediate Government Bond Index.
The table that appears on page 7 indicates that BB&T Balanced Fund Trust Shares
had a one-year return of 18.23% and an average annualized total return since
inception on July 1, 1993, of 8.81% and that the Investor Shares (reflecting
the 4.00% maximum sales charge) had a one-year return of 13.24% and an average
annualized total return since inception of 6.71%.
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T Mutual Funds will fluctuate so that the
shares, when redeemed, may be worth more or less than their original cost.
The performance of the BB&T Balanced Fund is measured against the S&P 500 Stock
Index, an unmanaged index generally considered to be representative of the
performance of the stock market as a whole, and against the Lehman Brothers
Intermediate Government Bond Index, widely used as a broad measure of the
performance of U.S. Government bonds with maturities of less than 10 years. The
indices do not reflect the deduction of expenses associated with a mutual fund,
such as investment management and fund accounting fees. The Fund's performance
reflects the deduction of fees for these value-added services.
THE BB&T INTERMEDIATE U.S. GOVERNMENT BOND FUND AND
THE BB&T SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
While 1994 was a year marked by rapidly rising interest rates and record losses
in the bond markets, 1995 provided bond investors with a dramatic turnaround as
slower economic growth, subdued inflation and a more accommodating Federal
Reserve all helped to bring interest rates down sharply.
In late 1994, we began lengthening maturities in both portfolios, reflecting our
belief that yield levels appeared too high given our outlook for relatively low
inflation and only modest economic growth. As a result, the Funds' Trust Shares
and Investor Shares (without the maximum sales charge) outperformed their
benchmarks as rates moved downward through the past spring and summer.
For the 12 months ended September 30, 1995, the Intermediate U.S. Government
Bond Fund posted a total return of 12.63% (Investor Shares)5 and the
Short-Intermediate U.S. Government Income Fund, 8.74% (Investor Shares),5
compared to 10.6% for the Lehman Brothers Intermediate Government Bond Index and
8.2% for the Lehman Brothers 1-3 Year Government Bond Index, respectively.
- - --------------------------------------------------------------------------------
5With the maximum sales charge of 2.00%, the Intermediate U.S. Government Bond
Fund had a total return of 10.38% (Investor Shares) for the 12-month period and
the Short-Intermediate U.S. Government Income Fund returned 6.52% (Investor
Shares).
-7-
<PAGE> 8
FAVORABLE OUTLOOK CONTINUES FOR BONDS
Meaningful Federal budget reductions in Washington could give the fixed-income
markets a substantial boost. Whether this will occur any time in the near
future, however, is uncertain. Nevertheless, we anticipate continuing positive
performance in the fixed-income markets as inflation remains well contained and
the economy maintains a moderate pace of growth. The combination of these
factors, we believe, is likely to prompt a further reduction in interest rates
by the Federal Reserve.
As of September 30, 1995, the average maturity of the Intermediate U.S.
Government Bond Fund was 6.6 years and of the Short-Intermediate U.S. Government
Income Fund, 3.6 years.
As is characteristic of our investment style, our fixed-income portfolios remain
fully invested and are heavily concentrated in debt obligations of the U.S.
Government and its agencies. No major changes are anticipated in the maturity
structure or allocation of either portfolio in the months ahead.
BB&T INTERMEDIATE U.S. GOVERNMENT BOND FUND
LOGO
The graph that appears on page 8 of the BB&T annual report represents a
comparison between a $10,000 investment made on October 9, 1992, in Trust
Shares and in Investor Shares of the BB&T Intermediate U.S. Government Bond
Fund and in the Lehman Brothers Intermediate Government Bond Index. The chart
indicates that $10,000 invested on October 9, 1992, in Trust Shares would have
been worth $11,976 and in Investor Shares would have been worth $11,658 on
September 30, 1995, as opposed to $11,791 had the $10,000 been invested in the
Lehman Brothers Intermediate Government Bond Index.
The table that appears on page 8 indicates that BB&T Intermediate U.S.
Government Bond Fund Trust Shares had a one-year return of 12.91% and an
average annualized total return since inception on October 9, 1992, of 6.24%
and that the Investor Shares (reflecting the 2.00% maximum sales charge) had a
one-year return of 10.38% and an average annualized total return since
inception of 5.29%.
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T Mutual Funds will fluctuate so that the
shares, when redeemed, may be worth more or less than their original cost.
The performance of the BB&T Intermediate U.S. Government Bond Fund is measured
against the Lehman Brothers Intermediate Government Bond Index, widely used as a
broad measure of the performance of U.S. Government bonds with maturities of
less than 10 years. The index does not reflect the deduction of expenses
associated with a mutual fund, such as investment management and fund accounting
fees. The Fund's performance reflects the deduction of fees for these
value-added services.
-8-
<PAGE> 9
BB&T SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
The graph that appears on page 9 of the BB&T annual report represents a
comparison between a $10,000 investment made on November 30, 1992, in Trust
Shares of the BB&T Short-Intermediate U.S. Government Income Fund and in the
Lehman Brothers 1-3 Year Government Bond Index. The chart indicates that
$10,000 invested on November 30, 1992, in Trust Shares would have been worth
$11,579 and in Investor Shares would have been worth $11,280 on September 30,
1995, as opposed to $11,568 had the $10,000 been invested in the Lehman
Brothers 1-3 Year Government Bond Index.
The table that appears on page 9 indicates that BB&T Short-Intermediate U.S.
Government Income Fund Trust Shares had a one-year return of 9.01% and an
average annualized total return since inception on November 30, 1992, of 5.30%
and that the Investor Shares (reflecting the 2.00% maximum sales charge) had a
one-year return of 6.52% and an average annualized total return since inception
of 4.34%
LOGO
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T Mutual Funds will fluctuate so that the
shares, when redeemed, may be worth more or less than their original cost.
The performance of the BB&T Short-Intermediate U.S. Government Income Fund is
measured against the Lehman Brothers 1-3 Year Government Bond Index, widely used
as a measure of the performance of U.S. Government bonds in that maturity range.
The index does not reflect the deduction of expenses associated with a mutual
fund, such as investment management and fund accounting fees. The Fund's
performance reflects the deduction of fees for these value-added services.
THE BB&T NORTH CAROLINA INTERMEDIATE TAX-FREE FUND 6
Lack of supply, fear of defaults and the prospect of tax reform plagued the
municipal markets throughout the year ended September 30, 1995. During the first
10 months of 1995, the number of newly issued municipal bonds dropped 24% from
1994 levels as taxpayers pressured officials to reduce debt. After acknowledging
a loss of some $1.7 billion due to derivatives trading, Orange County,
California, defaulted on its debt in December 1994 -- and sent a wave of anxiety
through the marketplace. As if all this weren't enough, investors were bedeviled
regularly by news reports on tax reform proposals and their possible impact on
the tax-exempt status of municipal bonds.
Given this uncertain environment, we approached the marketplace very cautiously
throughout the year. However, our emphasis on quality -- which, we believe, best
serves the capital preservation objectives of our shareholders -- caused the
Fund to underperform its benchmark.
- - --------------------------------------------------------------------------------
6The Fund's income may be subject to certain state and local taxes and,
depending on your tax status, to the federal alternative minimum tax.
-9-
<PAGE> 10
For the year ended September 30, 1995, the Fund had a total return of 7.61%
(Investor Shares)7 compared to 9.3% for the Lehman Brothers 5-Year General
Obligations Index. In judging Fund performance, investors should keep in mind
that the index includes bonds with lower credit quality than those in the Fund's
portfolio and bonds issued primarily by municipalities outside of North
Carolina.
REFORM UNLIKELY BEFORE THE ELECTION
Long term, it seems that some sort of tax reform is inevitable. Short term,
however, we expect heated debate to continue. This, combined with short supply
and credit concerns, is likely to still worry investors. Consequently, in the
months ahead, we expect to continue to maintain our conservative investment
posture.
As of September 30, 1995, the Fund held laddered maturities of high-quality
North Carolina municipal bonds. On that date, all securities in the Fund were
rated A+ or better, and the Fund's overall credit quality was AA, with 84% of
the assets invested in general obligation bonds and 13% in revenue bonds.
General obligation bonds are backed by the taxing power of a municipality;
revenue bonds depend on fees, such as tolls paid on bridges and roads, to make
debt repayment.
BB&T NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
The graph that appears on page 10 of the BB&T annyal report represents a
comparison between a $10,000 investment made on October 16, 1992, in Trust
Shares and Investor Shares of the BB&T North Carolina Intermediate Tax-Free
Fund and in the Lehman Brothers 5-Year General Obligations Index. The chart
indicates that $10,000 invested on October 16, 1992, in Trust Shares would have
been worth $11,355 and in Investor Shares would have been worth $11,097 on
September 30, 1995, as opposed to $11,856 had the $10,000 been invested in the
Lehman Brothers 5-Year General Obligations Index.
The table that appears on page 10 indicates that BB&T North Carolina
Intermediate Tax-Free Fund Trust Shares had a one-year return of 7.77% and
average annualize return since inception on October 16, 1992, of 4.39% and that
the Investor Shares (reflecting the 2.00% maximum sales charge) had a one-year
return of 5.45% and an average annualized total return since inception of
3.58%.
LOGO
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T Mutual Funds will fluctuate so that the
shares, when redeemed, may be worth more or less than their original cost.
The performance of the BB&T North Carolina Intermediate Tax-Free Fund is
measured against the Lehman Brothers 5-Year General Obligations Index, widely
used as a broad measure of the performance of tax-exempt municipal securities
with an average maturity of five years. The index does not reflect the deduction
of expenses associated with a mutual fund, such as investment management and
fund accounting fees. The Fund's performance reflects the deduction of fees for
these value-added services.
- - --------------------------------------------------------------------------------
7With the maximum sales charge of 2.00%, the North Carolina Intermediate
Tax-Free Fund's total return was 5.45% (Investor Shares) for the 12-month
period.
-10-
<PAGE> 11
THE U.S. TREASURY MONEY MARKET FUND
After a year of increasing short-term interest rates, the Federal Reserve
reversed direction and lowered rates slightly in July 1995. Anticipating such a
move, the Fund was approximately 51% invested in a laddered portfolio of U.S.
Treasury securities with 49% invested in overnight repurchase agreements,
positioning the Fund to benefit when rates were lowered.
As of September 30, 1995, the average maturity of the portfolio was 36 days. As
always, we continue to monitor the credit quality of all issuers very closely.
At period's end, the average credit quality of the portfolio was AAA.
Some of the fees of the Funds are currently being waived, resulting in higher
total returns than would occur if the full fees were charged. The composition of
the Funds' holdings is subject to change. Although the BB&T U.S. Treasury Money
Market Fund seeks to maintain a stable net asset value of $1.00 per share, there
is no assurance that it will be able to do so.
The BB&T Mutual Funds are distributed by BISYS Fund Services.
Shares in the Funds involve investment risks, including possible loss of
principal, so that an investor's shares when redeemed, may be worth more or less
than their original cost. Fund shares are not deposits or obligations of, or
guaranteed or endorsed by, Branch Banking and Trust Company or its affiliates,
nor are they insured by the FDIC or any other agency.
-11-
<PAGE> 12
TABLE OF CONTENTS
Independent Auditors' Report
PAGE 13
Statements of Assets and Liabilities
PAGE 14
Statements of Operations
PAGE 16
Statements of Changes in Net Assets
PAGE 18
Schedules of Portfolio Investments
PAGE 25
Notes to Financial Statements
PAGE 38
Financial Highlights
PAGE 44
-12-
<PAGE> 13
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees of
BB&T Mutual Funds Group:
We have audited the accompanying statements of assets and liabilities of the
BB&T Mutual Funds Group -- U.S. Treasury Money Market Fund, Short-Intermediate
U.S. Government Income Fund, Intermediate U.S. Government Bond Fund, North
Carolina Intermediate Tax-Free Fund, Growth and Income Stock Fund, Balanced Fund
and Small Company Growth Fund, including the schedules of portfolio investments,
as of September 30, 1995, and the related statements of operations, statements
of changes in net assets and the financial highlights for each of the periods
indicated herein. These financial statements and the financial highlights are
the responsibility of the BB&T Mutual Funds Group'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 verification of securities owned as of
September 30, 1995, by confirmation with the custodian and other appropriate
audit procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds comprising the BB&T Mutual Funds Group at September
30, 1995, the results of their operations, the changes in their net assets and
the financial highlights for each of the periods indicated herein, in conformity
with generally accepted accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
November 16, 1995
-13-
<PAGE> 14
BB&T MUTUAL FUNDS GROUP
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
U.S.
TREASURY SHORT-INTERMEDIATE INTERMEDIATE
MONEY MARKET U.S. GOVERNMENT U.S. GOVERNMENT
FUND INCOME FUND BOND FUND
------------ ------------------ ---------------
<S> <C> <C> <C>
ASSETS:
Investments, at value...................................... $ 69,290,147 $ 51,455,190 $83,046,793
Repurchase agreements...................................... 65,333,196
------------ ------------------ ---------------
134,623,343 51,455,190 83,046,793
Interest receivable........................................ 29,661 943,873 1,197,107
Prepaid expenses........................................... 5,655 2,183
------------ ------------------ ---------------
Total Assets....................................... 134,653,004 52,404,718 84,246,083
------------ ------------------ ---------------
LIABILITIES:
Dividends payable.......................................... 524,888 247,666 420,056
Accrued expenses and other payables:
Investment advisory fees............................... 42,299 21,753 34,373
Administration fees.................................... 21,150 8,701 13,749
Distribution fees...................................... 2,642 1,463 1,100
Accounting and transfer agent fees..................... 3,845 5,320 5,451
Other.................................................. 27,242 13,350 19,533
------------ ------------------ ---------------
Total Liabilities.................................. 622,066 298,253 494,262
------------ ------------------ ---------------
NET ASSETS:
Capital.................................................... 134,030,938 53,283,058 83,739,873
Undistributed net investment income........................ 5,718
Net unrealized appreciation on investments................. 141,131 1,222,853
Accumulated undistributed net realized losses on investment
transactions............................................. (1,317,724) (1,216,623)
------------ ------------------ ---------------
Net Assets......................................... $134,030,938 $ 52,106,465 $83,751,821
============= ================= ===============
Net Assets
Investor Class......................................... $ 13,947,892 $ 7,101,935 $ 5,173,383
Trust Class............................................ 120,083,046 45,004,530 78,578,438
------------ ------------------ ---------------
Total.............................................. $134,030,938 $ 52,106,465 $83,751,821
============= ================= ===============
Outstanding units of beneficial interest (shares)
Investor Class......................................... 13,947,892 718,579 523,612
Trust Class............................................ 120,083,046 4,551,421 7,944,872
------------ ------------------ ---------------
Total.............................................. 134,030,938 5,270,000 8,468,484
============= ================= ===============
Net asset value
Investor Class--redemption price per share............. $ 1.00 $ 9.88 $ 9.88
Trust Class--offering and redemption price per share... 1.00 9.89 9.89
============= ================= ===============
Maximum Sales Charge (Investor Class)...................... 2.00% 2.00%
================= ===============
Maximum Offering Price (100%/(100%-Maximum Sales Charge) of
net asset value adjusted to nearest cent) per
share--Investor Class.................................... $ 1.00 (a) $ 10.08 $ 10.08
============= ================= ===============
Investments, at cost....................................... $134,623,343 $ 51,314,059 $81,823,940
============= ================= ===============
</TABLE>
- - ---------
(a) Offering price and redemption price are the same for the U.S. Treasury Money
Market Fund.
See notes to financial statements.
-14-
<PAGE> 15
BB&T MUTUAL FUNDS GROUP
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
NORTH CAROLINA GROWTH AND SMALL COMPANY
INTERMEDIATE INCOME STOCK BALANCED GROWTH
TAX-FREE FUND FUND FUND FUND
-------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value.............................. $ 36,466,086 $157,031,202 $58,704,084 $18,035,329
Cash............................................... 478
Interest and dividends receivable.................. 479,205 338,347 579,035 16,644
Unamortized organization costs..................... 13,229
Receivable from adviser............................ 20,079
Prepaid expenses................................... 6,059 11,596 8,032
------------- ----------- ----------- ------------
Total Assets............................... 36,951,350 157,381,145 59,291,151 18,085,759
------------- ----------- ----------- ------------
LIABILITIES:
Dividends payable.................................. 109,860 212,313 186,699
Payable to brokers for investments purchased....... 597,510
Accrued expenses and other payables:
Investment advisory fees....................... 15,212 62,774 23,769 14,190
Administration fees............................ 4,564 25,110 9,508 2,838
Distribution fees.............................. 1,085 2,195 1,910 210
Accounting and transfer agent fees............. 3,674 5,575 5,174 3,390
Other.......................................... 9,024 30,683 13,330 7,499
------------- ----------- ----------- -------------
Total Liabilities.......................... 143,419 936,160 240,390 28,127
------------- ----------- ----------- -------------
NET ASSETS:
Capital............................................ 36,477,531 132,510,060 54,397,463 14,633,202
Undistributed net investment loss.................. (92,263)
Net unrealized appreciation on investments......... 408,350 23,024,049 5,045,189 3,781,210
Accumulated undistributed net realized gains
(losses) on investment transactions.............. (77,950) 910,876 (391,891) (264,517)
------------- ----------- ----------- ------------
Net Assets................................. $ 36,807,931 $156,444,985 $59,050,761 $18,057,632
============= =========== =========== ============
Net Assets
Investor Class................................. $ 8,716,921 $10,842,146 $ 9,256,795 $ 1,095,603
Trust Class.................................... 28,091,010 145,602,839 49,793,966 16,962,029
------------- ----------- ----------- ------------
Total...................................... $ 36,807,931 $156,444,985 $59,050,761 $18,057,632
============= ============= =========== ============
Outstanding units of beneficial interest (shares)
Investor Class................................. 858,931 836,152 838,797 75,426
Trust Class.................................... 2,767,497 11,210,329 4,520,644 1,164,384
------------- ----------- ----------- ------------
Total...................................... 3,626,428 12,046,481 5,359,441 1,239,810
============= =========== =========== ============
Net asset value
Investor Class--redemption price per share..... $ 10.15 $ 12.97 $ 11.04 $ 14.53
Trust Class--offering and redemption price per
share........................................ 10.15 12.99 11.01 14.57
============= =========== ========== ============
Maximum Sales Charge (Investor Class).............. 2.00% 4.00% 4.00% 4.00%
============= =========== ========== ============
Maximum Offering Price (100%/(100%-Maximum Sales
Charge) of net asset value adjusted to nearest
cent) per share--Investor Class.................. $ 10.36 $ 13.51 $ 11.50 $ 15.14
============= =========== ========== ============
Investments, at cost............................... $ 36,057,736 $134,007,153 $53,658,895 $14,254,119
============= =========== ========== ============
</TABLE>
See notes to financial statements.
-15-
<PAGE> 16
BB&T MUTUAL FUNDS GROUP
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
U.S.
TREASURY SHORT-INTERMEDIATE INTERMEDIATE
MONEY MARKET U.S. GOVERNMENT U.S. GOVERNMENT
FUND INCOME FUND BOND FUND
------------ ------------------ ---------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income............................................ $5,842,430 $ 3,394,971 $ 5,704,702
----------- ------------ -----------
Total Income......................................... 5,842,430 3,394,971 5,704,702
----------- ------------ -----------
EXPENSES:
Investment advisory fees................................... 409,837 303,486 469,936
Administration fees........................................ 204,919 101,143 156,602
Distribution fees.......................................... 29,664 38,279 30,397
Custodian and accounting fees.............................. 53,477 51,806 51,815
Legal and audit fees....................................... 27,165 15,447 23,432
Organization costs......................................... 207 828 413
Trustees' fees and expenses................................ 6,713 3,111 5,666
Transfer agent fees........................................ 36,680 45,715 44,295
Registration and filing fees............................... 241 4,338 1,765
Printing costs............................................. 18,292 16,975 21,728
Other...................................................... 5,758 3,443 5,268
Expenses voluntarily reduced............................... (36,486) (93,829) (131,239)
----------- ------------ -----------
Total Expenses....................................... 756,467 490,742 680,078
----------- ------------ -----------
Net Investment Income...................................... 5,085,963 2,904,229 5,024,624
----------- ------------ -----------
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized losses on investment transactions............. (1,125,416) (1,194,343)
Change in unrealized appreciation on investments........... 2,643,412 5,832,579
----------- ------------ -----------
Net realized/unrealized gains on investments............... 1,517,996 4,638,236
----------- ------------ -----------
Change in net assets resulting from operations............. $5,085,963 $ 4,422,225 $ 9,662,860
=========== ============ ===========
</TABLE>
See notes to financial statements.
-16-
<PAGE> 17
BB&T MUTUAL FUNDS GROUP
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
NORTH CAROLINA GROWTH AND SMALL COMPANY
INTERMEDIATE INCOME STOCK BALANCED GROWTH
TAX-FREE FUND FUND FUND FUND(A)
-------------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income.................................... $1,771,895 $ 323,820 $2,055,182 $ 64,787
Dividend income.................................... 3,405,070 653,671 2,512
---------- ----------- ---------- -----------
Total Income................................. 1,771,895 3,728,890 2,708,853 67,299
---------- ----------- ---------- -----------
EXPENSES:
Investment advisory fees........................... 227,111 858,300 368,838 68,262
Administration fees................................ 75,704 231,951 99,630 13,648
Distribution fees.................................. 45,536 43,873 41,978 1,885
Custodian and accounting fees...................... 46,277 55,906 54,031 58,570
Legal and audit fees............................... 10,984 34,424 14,910 4,043
Organization costs................................. 138 344 10,747
Trustees' fees and expenses........................ 2,746 8,029 3,649 608
Transfer agent fees................................ 43,044 60,847 46,029 25,785
Registration and filing fees....................... 4,242 7,181 6,395 1,366
Printing costs..................................... 14,836 14,079 6,314 1,789
Other.............................................. 2,679 6,853 3,375 70
Expenses voluntarily reduced....................... (117,564) (350,340) (165,028) (7,132)
---------- ----------- ---------- ------------
Total expenses before reimbursement.......... 355,733 971,447 480,121 179,641
Reimbursement of expenses.................... (20,079)
---------- ----------- ---------- ------------
Total Expenses............................... 355,733 971,447 480,121 159,562
---------- ----------- ---------- ------------
Net Investment Income (Loss)....................... 1,416,162 2,757,443 2,228,732 (92,263)
---------- ----------- ---------- -----------
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gains (losses) on investment
transactions..................................... (77,950) 1,084,821 (361,045) (264,517)
Change in unrealized appreciation on investments... 1,483,907 18,939,826 6,451,498 3,781,210
---------- ----------- ---------- -----------
Net realized/unrealized gains on investments....... 1,405,957 20,024,647 6,090,453 3,516,693
---------- ----------- ---------- -----------
Change in net assets resulting from operations..... $2,822,119 $22,782,090 $8,319,185 $ 3,424,430
========== =========== ========== ===========
</TABLE>
- - ---------
(a) For the period from December 7, 1994 (commencement of operations) through
September 30, 1995.
See notes to financial statements.
-17-
<PAGE> 18
BB&T MUTUAL FUNDS GROUP
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET FUND
----------------------------------------------------------------------------------
TOTAL INVESTOR TRUST TOTAL INVESTOR
------------------------------------------------ -----------------------------
<S> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
------------------------------------------------ -----------------------------
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income........... $ 5,085,963 $ 285,363 $ 4,800,600 $ 2,401,193 $ 28,928
------------- ------------ ------------- ------------- -----------
Change in net assets resulting
from operations................. 5,085,963 285,363 4,800,600 2,401,193 28,928
------------- ------------ ------------- ------------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income...... (5,085,963) (285,363) (4,800,600) (2,401,193) (28,928)
------------- ------------ ------------- ------------- -----------
Change in net assets from
shareholder distributions....... (5,085,963) (285,363) (4,800,600) (2,401,193) (28,928)
------------- ------------ ------------- ------------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..... 413,983,846 39,015,125 374,968,721 436,739,006 8,607,901
Dividends reinvested............ 507,038 235,433 271,605 105,939 21,083
Cost of shares redeemed......... (359,409,516) (26,788,169) (332,621,347) (433,136,762) (7,422,587)
------------- ------------ ------------- ------------- -----------
Change in net assets from share
transactions.................... 55,081,368 12,462,389 42,618,979 3,708,183 1,206,397
------------- ------------ ------------- ------------- -----------
Change in net assets.............. 55,081,368 12,462,389 42,618,979 3,708,183 1,206,397
NET ASSETS:
Beginning of period............. 78,949,570 1,485,503 77,464,067 75,241,387 279,106
------------- ------------ ------------- ------------- -----------
End of period................... $ 134,030,938 $ 13,947,892 $ 120,083,046 $ 78,949,570 $ 1,485,503
============= ============ ============= ============= ===========
SHARE TRANSACTIONS:
Issued.......................... 413,983,846 39,015,125 374,968,721 436,739,006 8,607,901
Reinvested...................... 507,038 235,433 271,605 105,939 21,083
Redeemed........................ (359,409,516) (26,788,169) (332,621,347) (433,136,762) (7,422,587)
------------- ------------ ------------- ------------- -----------
Change in shares.................. 55,081,368 12,462,389 42,618,979 3,708,183 1,206,397
============ =========== ============ ============ ==========
<CAPTION>
TRUST
<S> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income........... $ 2,372,265
-------------
Change in net assets resulting
from operations................. 2,372,265
-------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income...... (2,372,265)
-------------
Change in net assets from
shareholder distributions....... (2,372,265)
-------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..... 428,131,105
Dividends reinvested............ 84,856
Cost of shares redeemed......... (425,714,175)
-------------
Change in net assets from share
transactions.................... 2,501,786
-------------
Change in net assets.............. 2,501,786
NET ASSETS:
Beginning of period............. 74,962,281
-------------
End of period................... $ 77,464,067
============
SHARE TRANSACTIONS:
Issued.......................... 428,131,105
Reinvested...................... 84,856
Redeemed........................ (425,714,175)
-------------
Change in shares.................. 2,501,786
============
</TABLE>
See notes to financial statements.
-18-
<PAGE> 19
BB&T MUTUAL FUNDS GROUP
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
----------------------------------------------------------------------------------------------
TOTAL INVESTOR TRUST TOTAL INVESTOR TRUST
--------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
--------------------------------------------- --------------------------------------------
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income........... $ 2,904,229 $ 421,136 $ 2,483,093 $ 2,667,188 $ 751,097 $ 1,916,091
Net realized losses on
investment transactions....... (1,125,416) (193,547) (931,869) (192,308) (49,485) (142,823)
Net change in unrealized
appreciation (depreciation) on
investments................... 2,643,412 384,878 2,258,534 (3,405,619) (1,030,587) (2,375,032)
----------- ---------- ----------- ----------- ---------- ----------
Change in net assets resulting
from operations................. 4,422,225 612,467 3,809,758 (930,739) (328,975) (601,764)
----------- ---------- ----------- ----------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income...... (2,904,229) (421,136) (2,483,093) (2,667,188) (751,192) (1,915,996)
From net realized gains on
investments................... (26,544) (8,671) (17,873)
----------- ---------- ----------- ----------- ---------- ----------
Change in net assets from
shareholder distributions....... (2,904,229) (421,136) (2,483,093) (2,693,732) (759,863) (1,933,869)
----------- ---------- ----------- ----------- ---------- ----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..... 16,642,791 238,092 16,404,699 20,838,661 5,917,567 14,921,094
Dividends reinvested............ 778,260 335,908 442,352 859,609 586,860 272,749
Cost of shares redeemed......... (15,385,757) (4,008,351) (11,377,406) (19,081,759) (9,985,347) (9,096,412)
----------- ---------- ----------- ----------- ---------- ----------
Change in net assets from share
transactions.................... 2,035,294 (3,434,351) 5,469,645 2,616,511 (3,480,920) 6,097,431
----------- ---------- ----------- ----------- ---------- ----------
Change in net assets.............. 3,553,290 (3,243,020) 6,796,310 (1,007,960) (4,569,758) 3,561,798
NET ASSETS:
Beginning of period............. 48,553,175 10,344,955 38,208,220 49,561,135 14,914,713 34,646,422
----------- ---------- ----------- ----------- ---------- ----------
End of period................... $ 52,106,465 $ 7,101,935 $ 45,004,530 $ 48,553,175 $10,344,955 $38,208,220
=========== ========== =========== =========== ========== ==========
SHARE TRANSACTIONS:
Issued.......................... 1,718,480 24,465 1,694,015 2,082,458 586,106 1,496,352
Reinvested...................... 80,130 34,730 45,400 86,281 58,821 27,460
Redeemed........................ (1,581,451) (417,677) (1,163,774) (1,929,430) (1,017,081) (912,349)
----------- ---------- ----------- ----------- ---------- ----------
Change in shares.................. 217,159 (358,482) 575,641 239,309 (372,154) 611,463
=========== ========== =========== =========== ========== ==========
</TABLE>
See notes to financial statements.
-19-
<PAGE> 20
BB&T MUTUAL FUNDS GROUP
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
------------------------------------------------------------------------------
TOTAL INVESTOR TRUST TOTAL INVESTOR
--------------------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
--------------------------------------------- ----------------------------
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income........... $ 5,024,624 $ 377,937 $ 4,646,687 $ 4,275,563 $ 412,238
Net realized losses on
investment transactions....... (1,194,343) (97,955) (1,096,388) (16,562) (1,816)
Net change in unrealized
appreciation (depreciation) on
investments................... 5,832,579 454,421 5,378,158 (7,226,527) (752,184)
------------ ----------- ------------ ------------ -----------
Change in net assets resulting
from operations................. 9,662,860 734,403 8,928,457 (2,967,526) (341,762)
------------ ----------- ------------ ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income...... (5,024,624) (377,937) (4,646,687) (4,275,563) (412,292)
From net realized gains on
investments................... (104,773) (9,254)
------------ ----------- ------------ ------------ -----------
Change in net assets from
shareholder distributions....... (5,024,624) (377,937) (4,646,687) (4,380,336) (421,546)
------------ ----------- ------------ ------------ -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..... 23,171,044 322,927 22,848,117 36,134,520 3,133,265
Dividends reinvested............ 3,929,840 320,094 3,609,746 3,571,711 342,161
Cost of shares redeemed......... (23,210,413) (2,597,921) (20,612,492) (22,189,202) (1,177,879)
------------ ----------- ------------ ------------ -----------
Change in net assets from share
transactions.................... 3,890,471 (1,954,900) 5,845,371 17,517,029 2,297,547
------------ ----------- ------------ ------------ -----------
Change in net assets.............. 8,528,707 (1,598,434) 10,127,141 10,169,167 1,534,239
NET ASSETS:
Beginning of period............. 75,223,114 6,771,817 68,451,297 65,053,947 5,237,578
------------ ----------- ------------ ------------ -----------
End of period................... $ 83,751,821 $ 5,173,383 $ 78,578,438 $ 75,223,114 $ 6,771,817
============ =========== ============ ============ ===========
SHARE TRANSACTIONS:
Issued.......................... 2,419,901 34,521 2,385,380 3,706,922 310,750
Reinvested...................... 414,007 33,838 380,169 362,184 34,820
Redeemed........................ (2,420,431) (270,549) (2,149,882) (2,268,815) (123,726)
------------ ----------- ------------ ------------ -----------
Change in shares.................. 413,477 (202,190) 615,667 1,800,291 221,844
============ =========== ============ ============ ===========
<CAPTION>
TRUST
<S> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income........... $ 3,863,325
Net realized losses on
investment transactions....... (14,746)
Net change in unrealized
appreciation (depreciation) on
investments................... (6,474,343)
------------
Change in net assets resulting
from operations................. (2,625,764)
------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income...... (3,863,271)
From net realized gains on
investments................... (95,519)
------------
Change in net assets from
shareholder distributions....... (3,958,790)
------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..... 33,001,255
Dividends reinvested............ 3,229,550
Cost of shares redeemed......... (21,011,323)
------------
Change in net assets from share
transactions.................... 15,219,482
------------
Change in net assets.............. 8,634,928
NET ASSETS:
Beginning of period............. 59,816,369
------------
End of period................... $ 68,451,297
============
SHARE TRANSACTIONS:
Issued.......................... 3,396,172
Reinvested...................... 327,364
Redeemed........................ (2,145,089)
------------
Change in shares.................. 1,578,447
============
</TABLE>
See notes to financial statements.
-20-
<PAGE> 21
BB&T MUTUAL FUNDS GROUP
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
----------------------------------------------------------------------------------------------
TOTAL INVESTOR TRUST TOTAL INVESTOR TRUST
--------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
--------------------------------------------- --------------------------------------------
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income........... $ 1,416,162 $ 330,842 $ 1,085,320 $ 1,385,916 $ 495,411 $ 890,505
Net realized losses on
investment transactions....... (77,950) (17,801) (60,149)
Net change in unrealized
appreciation (depreciation) on
investments................... 1,483,907 318,089 1,165,818 (1,872,922) (719,709) (1,153,213)
------------ ----------- ------------ ------------ ----------- -----------
Change in net assets resulting
from operations................. 2,822,119 631,130 2,190,989 (487,006) (224,298) (262,708)
------------ ----------- ------------ ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income...... (1,416,162) (330,842) (1,085,320) (1,385,916) (495,443) (890,473)
From net realized gains on
investments................... (42,900) (17,774) (25,126)
------------ ----------- ------------ ------------ ----------- -----------
Change in net assets from
shareholder distributions....... (1,416,162) (330,842) (1,085,320) (1,428,816) (513,217) (915,599)
------------ ----------- ------------ ------------ ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..... 10,916,979 560,783 10,356,196 17,551,624 5,538,486 12,013,138
Dividends reinvested............ 278,161 278,140 21 438,378 438,368 10
Cost of shares redeemed......... (14,646,808) (3,505,541) (11,141,267) (11,043,767) (7,851,161) (3,192,606)
------------ ----------- ------------ ------------ ----------- -----------
Change in net assets from share
transactions.................... (3,451,668) (2,666,618) (785,050) 6,946,235 (1,874,307) 8,820,542
------------ ----------- ------------ ------------ ----------- -----------
Change in net assets.............. (2,045,711) (2,366,330) 320,619 5,030,413 (2,611,822) 7,642,235
NET ASSETS:
Beginning of period............. 38,853,642 11,083,251 27,770,391 33,823,229 13,695,073 20,128,156
------------ ----------- ------------ ------------ ----------- -----------
End of period................... $ 36,807,931 $ 8,716,921 $ 28,091,010 $ 38,853,642 $11,083,251 $27,770,391
============ =========== ============ ============ =========== ===========
SHARE TRANSACTIONS:
Issued.......................... 1,107,634 56,493 1,051,141 1,746,068 546,801 1,199,267
Reinvested...................... 28,266 28,264 2 43,495 43,494 1
Redeemed........................ (1,480,683) (358,791) (1,121,892) (1,105,431) (788,108) (317,323)
------------ ----------- ------------ ------------ ----------- -----------
Change in shares.................. (344,783) (274,034) (70,749) 684,132 (197,813) 881,945
=========== =========== ============ ============ =========== ===========
</TABLE>
See notes to financial statements.
-21-
<PAGE> 22
BB&T MUTUAL FUNDS GROUP
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
----------------------------------------------------------------------------------------------
TOTAL INVESTOR TRUST TOTAL INVESTOR TRUST
--------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
--------------------------------------------- --------------------------------------------
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income........... $ 2,757,443 $ 188,855 $ 2,568,588 $ 2,380,026 $ 165,916 $ 2,214,110
Net realized gains on investment
transactions.................. 1,084,821 83,203 1,001,618 2,230,099 173,474 2,056,625
Net change in unrealized
appreciation (depreciation) on
investments................... 18,939,826 1,403,235 17,536,591 (1,357,242) (104,932) (1,252,310)
------------ ----------- ------------ ------------ ---------- ------------
Change in net assets resulting
from operations................. 22,782,090 1,675,293 21,106,797 3,252,883 234,458 3,018,425
------------ ----------- ------------ ------------ ---------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income...... (2,757,443) (187,792) (2,569,651) (2,380,026) (169,426) (2,210,600)
From net realized gains on
investments................... (1,084,821) (83,203) (1,001,618) (965,529) (68,029) (897,500)
In excess of net realized gains
on investments................ (1,260,922) (108,268) (1,152,654)
------------ ----------- ------------ ------------ ---------- ------------
Change in net assets from
shareholder distributions....... (5,103,186) (379,263) (4,723,923) (3,345,555) (237,455) (3,108,100)
------------ ----------- ------------ ------------ ---------- ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..... 57,688,354 2,464,804 55,223,550 37,024,984 2,617,619 34,407,365
Dividends reinvested............ 3,097,037 378,623 2,718,414 2,300,354 228,419 2,071,935
Cost of shares redeemed......... (19,347,795) (1,270,600) (18,077,195) (30,271,987) (879,115) (29,392,872)
------------ ----------- ------------ ------------ ---------- ------------
Change in net assets from share
transactions.................... 41,437,596 1,572,827 39,864,769 9,053,351 1,966,923 7,086,428
------------ ----------- ------------ ------------ ---------- ------------
Change in net assets.............. 59,116,500 2,868,857 56,247,643 8,960,679 1,963,926 6,996,753
NET ASSETS:
Beginning of period............. 97,328,485 7,973,289 89,355,196 88,367,806 6,009,363 82,358,443
------------ ----------- ------------ ------------ ---------- ------------
End of period................... $156,444,985 $10,842,146 $145,602,839 $ 97,328,485 $7,973,289 $ 89,355,196
============ =========== ============ =========== ========= ===========
SHARE TRANSACTIONS:
Issued.......................... 4,774,121 205,305 4,568,816 3,275,381 231,882 3,043,499
Reinvested...................... 275,871 33,975 241,896 204,044 20,295 183,749
Redeemed........................ (1,633,604) (111,033) (1,522,571) (2,685,789) (77,733) (2,608,056)
------------ ----------- ------------ ------------ ---------- ------------
Change in shares.................. 3,416,388 128,247 3,288,141 793,636 174,444 619,192
=========== ========== =========== =========== ========= ===========
</TABLE>
See notes to financial statements.
-22-
<PAGE> 23
BB&T MUTUAL FUNDS GROUP
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
BALANCED FUND
--------------------------------------------------------------------------------------------
TOTAL INVESTOR TRUST TOTAL INVESTOR TRUST
--------------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
--------------------------------------------- ------------------------------------------
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income........... $ 2,228,732 $ 358,163 $ 1,870,569 $ 1,524,569 $ 269,076 $ 1,255,493
Net realized losses on
investment transactions....... (361,045) (61,792) (299,253) (30,364) (3,195) (27,169)
Net change in unrealized
appreciation (depreciation) on
investments................... 6,451,498 1,087,109 5,364,389 (1,731,930) (349,069) (1,382,861)
------------ ----------- ------------ ----------- ---------- -----------
Change in net assets resulting
from operations................. 8,319,185 1,383,480 6,935,705 (237,725) (83,188) (154,537)
------------ ----------- ------------ ----------- ---------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income...... (2,228,732) (355,479) (1,873,253) (1,524,569) (270,511) (1,254,058)
------------ ----------- ------------ ----------- ---------- -----------
Change in net assets from
shareholder distributions....... (2,228,732) (355,479) (1,873,253) (1,524,569) (270,511) (1,254,058)
------------ ----------- ------------ ----------- ---------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..... 18,039,983 1,398,339 16,641,644 32,900,987 6,905,011 25,995,976
Dividends reinvested............ 1,590,880 350,315 1,240,565 975,003 231,677 743,326
Cost of shares redeemed......... (14,945,721) (2,079,598) (12,866,123) (6,781,693) (792,707) (5,988,986)
------------ ----------- ------------ ----------- ---------- -----------
Change in net assets from share
transactions.................... 4,685,142 (330,944) 5,016,086 27,094,297 6,343,981 20,750,316
------------ ----------- ------------ ----------- ---------- -----------
Change in net assets.............. 10,775,595 697,057 10,078,538 25,332,003 5,990,282 19,341,721
NET ASSETS:
Beginning of period............. 48,275,166 8,559,738 39,715,428 22,943,163 2,569,456 20,373,707
------------ ----------- ------------ ----------- ---------- -----------
End of period................... $ 59,050,761 $ 9,256,795 $ 49,793,966 $48,275,166 $8,559,738 $39,715,428
============ =========== ============ =========== ========== ===========
SHARE TRANSACTIONS:
Issued.......................... 1,719,005 133,311 1,585,694 3,281,982 681,340 2,600,642
Reinvested...................... 156,859 34,562 122,297 97,912 23,275 74,637
Redeemed........................ (1,469,697) (206,078) (1,263,619) (680,663) (79,573) (601,090)
------------ ----------- ------------ ----------- ---------- -----------
Change in shares.................. 406,167 (38,205) 444,372 2,699,231 625,042 2,074,189
============ =========== ============ =========== ========== ===========
</TABLE>
See notes to financial statements.
-23-
<PAGE> 24
BB&T MUTUAL FUNDS GROUP
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH FUND
----------------------------------------
TOTAL INVESTOR TRUST
----------------------------------------
----------------------------------------
<S> <C> <C> <C>
DECEMBER 7, 1994 TO
SEPTEMBER 30, 1995(A)
----------------------------------------
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment loss....................................................... $ (92,263) $ (5,871) $ (86,392)
Net realized losses on investment transactions............................ (264,517) (13,458) (251,059)
Net change in unrealized appreciation on investments...................... 3,781,210 206,234 3,574,976
----------- ---------- -----------
Change in net assets resulting from operations.............................. 3,424,430 186,905 3,237,525
----------- ---------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................................... 15,189,335 938,909 14,250,426
Cost of shares redeemed................................................... (556,133) (30,211) (525,922)
----------- ---------- -----------
Change in net assets from share transactions................................ 14,633,202 908,698 13,724,504
----------- ---------- -----------
Change in net assets........................................................ 18,057,632 1,095,603 16,962,029
NET ASSETS:
Beginning of period
----------- ---------- -----------
End of period............................................................. $18,057,632 $1,095,603 $16,962,029
=========== ========== ===========
SHARE TRANSACTIONS:
Issued.................................................................... 1,280,823 77,577 1,203,246
Redeemed.................................................................. (41,013) (2,151) (38,862)
----------- ---------- -----------
Change in shares............................................................ 1,239,810 75,426 1,164,384
=========== ========== ===========
</TABLE>
- - ---------
(a) Period from commencement of operations.
See notes to financial statements.
-24-
<PAGE> 25
BB&T MUTUAL FUNDS GROUP
U.S. TREASURY MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- - ---------- ----------------------------- ------------
<S> <C> <C>
U.S. TREASURY BILLS (51.7%):
10,000,000 10/12/95..................... $ 9,982,843
5,000,000 10/19/95..................... 4,986,300
10,000,000 11/2/95...................... 9,952,000
10,000,000 11/24/95..................... 9,918,512
10,000,000 12/14/95..................... 9,889,000
10,000,000 1/11/96...................... 9,846,150
10,000,000 2/1/96....................... 9,819,942
5,000,000 2/22/96...................... 4,895,400
------------
Total U.S. Treasury Bills 69,290,147
------------
Total Investments 69,290,147
------------
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- - ---------- ----------------------------- ------------
<S> <C> <C>
REPURCHASE AGREEMENTS (48.7%):
22,000,000 H.S.B.C. Securities, 6.40%,
10/2/95 (Collateralized by
23,750,000 U.S. Treasury
Bills, 9/19/96, market
value-- $22,498,190)....... $ 22,000,000
20,000,000 Lehman Brothers, 6.38%,
10/2/95 (Collateralized by
13,590,000 U.S. Treasury
Bonds, 12.75%, 11/15/10,
market
value--$20,622,363)........ 20,000,000
23,333,196 NationsBank, 6.42%, 10/2/95
(Collateralized by
23,100,000 U.S. Treasury
Notes, 6.88%, 8/31/99,
market value--
$23,912,308)............... 23,333,196
------------
Total Repurchase Agreements 65,333,196
------------
Total (Cost--$134,623,343)(a) $134,623,343
============
</TABLE>
- - ---------
Percentages indicated are based on net assets of $134,030,938.
(a) Cost for federal income tax and financial reporting purposes are the same.
See notes to financial statements.
-25-
<PAGE> 26
BB&T MUTUAL FUNDS GROUP
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
U.S. GOVERNMENT AGENCIES (6.8%):
Federal Home Loan Bank:
2,500,000 6.17%, 3/8/01.................. $ 2,505,850
1,000,000 7.28%, 7/25/01................. 1,050,170
-----------
Total U.S. Government Agencies 3,556,020
-----------
U.S. TREASURY NOTES (91.1%):
1,000,000 9.50%, 11/15/95................ 1,004,490
1,000,000 9.38%, 4/15/96................. 1,019,450
2,500,000 7.63%, 4/30/96................. 2,527,200
3,000,000 7.88%, 7/15/96................. 3,048,780
6,000,000 6.88%, 3/31/97................. 6,091,980
1,000,000 6.75%, 5/31/97................. 1,013,950
1,500,000 8.88%, 11/15/97................ 1,587,810
4,500,000 5.63%, 1/31/98................. 4,476,780
5,000,000 8.25%, 7/15/98................. 5,294,400
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
U.S. TREASURY NOTES, CONTINUED:
3,000,000 5.88%, 3/31/99................. $ 2,992,020
3,000,000 8.00%, 8/15/99................. 3,205,140
1,500,000 6.36%, 1/15/00................. 1,520,415
2,500,000 6.75%, 4/30/00................. 2,570,300
4,000,000 6.38%, 8/15/02................. 4,060,360
7,000,000 6.25%, 2/15/03................. 7,039,970
-----------
Total U.S. Treasury Notes 47,453,045
-----------
INVESTMENT COMPANIES (0.9%):
446,125 Federated Cash Reserves U.S.
Treasury Fund................ 446,125
-----------
Total Investment Companies 446,125
-----------
Total (Cost--$51,314,059)(a) $51,455,190
===========
</TABLE>
- - ---------
Percentages indicated are based on net assets of $52,106,465.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $14,219.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............. $ 713,379
Unrealized depreciation.............. (586,467)
---------
Net unrealized appreciation.......... $ 126,912
=========
</TABLE>
See notes to financial statements.
-26-
<PAGE> 27
BB&T MUTUAL FUNDS GROUP
INTERMEDIATE U.S. GOVERNMENT BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - ---------- ------------------------------ -----------
<S> <C> <C>
U.S. GOVERNMENT AGENCIES (15.3%):
Federal Home Loan Bank:
2,000,000 8.38%, 10/25/99............... $ 2,154,480
3,000,000 7.36%, 7/1/04................. 3,176,100
Federal Home Loan Mortgage Corp.:
3,271,847 7.50%, 7/1/07, Pool #E00108... 3,327,828
Government National Mortgage Assoc.:
4,086,580 7.50%, 3/15/23, Pool
#342553....................... 4,127,936
-----------
Total U.S. Government Agencies 12,786,344
-----------
U.S. TREASURY BONDS (17.1%):
1,000,000 8.00%, 8/15/01................ 1,017,670
3,000,000 12.00%, 5/15/05............... 4,227,990
5,000,000 9.38%, 2/15/06................ 6,175,550
1,000,000 8.38%, 8/15/08................ 1,128,420
1,500,000 9.13%, 5/15/09................ 1,774,095
-----------
Total U.S. Treasury Bonds 14,323,725
-----------
U.S. TREASURY NOTES (59.1%):
1,000,000 9.38%, 4/15/96................ 1,019,450
2,000,000 7.88%, 7/15/96................ 2,032,520
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - ---------- ------------------------------ -----------
<S> <C> <C>
U.S. TREASURY NOTES, CONTINUED:
7,000,000 6.50%, 5/15/97................ $ 7,070,840
4,500,000 7.00%, 4/15/99................ 4,644,135
3,000,000 8.50%, 11/15/00............... 3,322,830
6,000,000 7.88%, 8/15/01................ 6,523,560
7,500,000 6.38%, 8/15/02................ 7,613,175
7,000,000 6.25%, 2/15/03................ 7,039,970
5,000,000 5.88%, 2/15/04................ 4,891,450
5,000,000 7.25%, 8/15/04................ 5,343,300
-----------
Total U.S. Treasury Notes 49,501,230
-----------
U.S. TREASURY STRIPS (6.3%):
10,000,000 11/15/05...................... 5,291,200
-----------
Total U.S. Treasury Strips 5,291,200
-----------
INVESTMENT COMPANIES (1.4%):
1,144,294 Federated Cash Reserves U.S.
Treasury Fund................. 1,144,294
-----------
Total Investment Companies 1,144,294
-----------
Total (Cost--$81,823,940)(a) $83,046,793
===========
</TABLE>
- - ---------
Percentages indicated are based on net assets of $83,751,821.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $55,219.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............. $ 1,837,231
Unrealized depreciation.............. (669,597)
-----------
Net unrealized appreciation.......... $ 1,167,634
===========
</TABLE>
See notes to financial statements.
-27-
<PAGE> 28
BB&T MUTUAL FUNDS GROUP
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------------------------------------------------------------------ -----------
<S> <C> <C>
BONDS (96.0%):
Education Bonds (1.1%):
400,000 Educational Facilities, Bowman Gray Medical School, 4.40%*, 9/1/20, LOC: Wachovia Bank,
NC...................................................................................... $ 400,000
-----------
Health Care Bonds (6.0%):
650,000 Charlotte Mecklenburg Hospital, Revenue Bonds, 5.70%, 1/1/01.............................. 676,813
500,000 Charlotte Mecklenburg Hospital, Revenue Bonds, 5.90%, 1/1/02.............................. 526,875
600,000 Medical Care Commission Hospital, Rex Hospital, 4.70%, 6/1/98............................. 603,750
400,000 Medical Care Commission, Presbyterian Health Services Corp., 5.70%, 10/1/04, Callable
10/1/02 @ 102........................................................................... 417,500
-----------
2,224,938
-----------
Housing Bonds (1.8%):
205,000 Housing Finance Authority, Revenue Bond, 3.95%*, 3/1/14................................... 205,000
445,000 Housing Finance Authority, Revenue Bond, 3.95%*, 9/1/16................................... 445,000
-----------
650,000
-----------
North Carolina General Obligation Bonds (82.9%):
500,000 Asheville, General Obligations, 4.80%, 6/1/06............................................. 486,250
470,000 Buncombe County, General Obligations, 5.00%, 3/1/00....................................... 479,400
500,000 Buncombe County, General Obligations, 5.00%, 3/1/03....................................... 510,625
1,000,000 Cary, General Obligations, 5.50%, 2/1/01.................................................. 1,047,500
545,000 Charlotte, General Obligations, 6.80%, 10/1/97............................................ 572,250
395,000 Charlotte, General Obligations, 5.20%, 7/1/01............................................. 411,788
1,000,000 Charlotte, General Obligations, 7.00%, 7/1/01, Pre-Refunded 7/1/96 @ 102.................. 1,042,500
1,000,000 City Of Durham, General Obligations, 4.90%, 2/1/04........................................ 1,010,000
500,000 City Of Durham, General Obligations, 5.00%, 2/1/05........................................ 505,625
275,000 Cleveland County, General Obligations, 7.10%, 6/1/99...................................... 300,438
600,000 Cleveland County, General Obligations, 5.10%, 6/1/03...................................... 606,750
650,000 Cumberland County, General Obligations, 5.60%, 2/1/97..................................... 663,000
400,000 Durham County, General Obligations, 5.20%, 3/1/01......................................... 415,500
340,000 Durham County, General Obligations, 5.20%, 3/1/05......................................... 348,925
500,000 Durham & Wake Counties, General Obligations, 5.75%, 4/1/02................................ 533,125
700,000 Forsyth County, General Obligations, 4.70%, 2/1/99........................................ 708,750
265,000 Forsyth County, General Obligations, 5.40%, 6/1/04, Callable 6/1/02 @ 101................. 275,931
450,000 Goldsboro, General Obligations, 4.90%, 6/1/99............................................. 455,625
550,000 Greensboro, General Obligations, 6.00%, 3/1/98............................................ 573,375
500,000 Greenville, General Obligations, 4.80%, 3/1/02............................................ 504,375
1,000,000 Guilford County, General Obligations, 4.80%, 4/1/99....................................... 1,016,250
300,000 Hickory, General Obligations, 6.50%, 5/1/99............................................... 320,625
680,000 High Point, General Obligations, 4.40%, 4/1/02............................................ 662,150
500,000 Lee County, General Obligations, 5.50%, 2/1/00............................................ 519,375
1,000,000 Lincoln County, General Obligations, 4.70%, 6/1/01........................................ 1,011,250
1,000,000 Lincoln County, General Obligations, 4.80%, 6/1/04........................................ 993,750
700,000 Mecklenburg County, General Obligations, 5.75%, 3/1/03, Callable 3/1/02 @ 100.5........... 747,250
500,000 Moore County, General Obligations, 4.75%, 6/1/03.......................................... 495,000
500,000 New Hanover County, General Obligations, 4.30%, 1/1/02.................................... 489,375
</TABLE>
Continued
-28-
<PAGE> 29
BB&T MUTUAL FUNDS GROUP
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------------------------------------------------------------------ -----------
<S> <C> <C>
BONDS, CONTINUED:
North Carolina General Obligation Bonds, continued:
1,000,000 New Hanover County, General Obligations, 4.50%, 9/1/03.................................... $ 981,250
1,500,000 North Carolina State, General Obligations, 5.75%, 3/1/98.................................. 1,558,125
500,000 North Carolina State, General Obligations, 4.70%, 2/1/01.................................. 505,625
670,000 Orange County, General Obligations, 5.10%, 6/1/00......................................... 687,588
500,000 Orange County, General Obligations, 5.10%, 6/1/06......................................... 503,750
500,000 Orange County, General Obligations, 5.10%, 6/1/07......................................... 502,500
500,000 Pitt County, General Obligations, 6.60%, 2/1/96........................................... 504,375
1,000,000 Pitt County, General Obligations, 4.80%, 2/1/00........................................... 1,017,500
985,000 Raleigh, General Obligations, 4.70%, 2/1/00............................................... 1,007,163
400,000 Rocky Mount, General Obligations, 5.50%, 5/1/97........................................... 407,500
700,000 Rowan County, General Obligations, 5.50%, 4/1/05.......................................... 730,625
165,000 Union County, General Obligations, 5.80%, 3/1/97.......................................... 168,505
200,000 Union County, General Obligations, 5.80%, 3/1/05, Callable 3/1/02 @ 101.5................. 209,500
500,000 Wilkes County, General Obligations, 5.00%, 6/1/01......................................... 503,125
1,000,000 Wake County, General Obligations, 4.50%, 4/1/03........................................... 986,250
1,000,000 Wake County, General Obligations, 4.80%, 4/1/03........................................... 987,500
1,000,000 Wilmington, General Obligations, 4.60%, 3/1/02............................................ 992,500
505,000 Winston Salem, General Obligations, 6.50%, 6/1/99......................................... 543,505
-----------
30,503,643
-----------
Utility Bonds (4.2%):
1,500,000 Municipal Power Catawba Project, Revenue Bonds, 9.00%, 1/1/14, Pre-Refunded 1/1/96 @
102..................................................................................... 1,548,750
-----------
Total Bonds 35,327,331
-----------
INVESTMENT COMPANIES (3.1%):
748,248 North Carolina Municipal Cash Trust....................................................... 748,248
390,507 PNC North Carolina Municipal Money Market Portfolio....................................... 390,507
-----------
Total Investment Companies 1,138,755
-----------
Total (Cost--$36,057,736)(a) $36,466,086
===========
</TABLE>
- - ---------
Percentages indicated are based on net assets of $36,807,931.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............. $470,780
Unrealized depreciation.............. (62,430)
--------
Net unrealized appreciation.......... $408,350
========
</TABLE>
* Variable rate investments. The rate reflected on the Schedule of Investments
is the rate in effect at September 30, 1995.
See notes to financial statements.
-29-
<PAGE> 30
BB&T MUTUAL FUNDS GROUP
GROWTH AND INCOME STOCK FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- - ---------- ------------------------------ -------------
<S> <C> <C>
COMMON STOCKS (95.1%):
Apparel (0.8%):
23,500 V.F. Corp. ................... $ 1,198,500
-------------
Banks (4.7%):
64,300 Boatmens Bancshares, Inc. .... 2,379,100
31,000 J. P. Morgan & Co. ........... 2,398,625
60,400 Wachovia Corp. ............... 2,604,750
-------------
7,382,475
-------------
Beverages (2.5%):
63,600 Anheuser-Busch Co. ........... 3,967,050
-------------
Broadcasting (0.7%):
13,745 CBS, Inc. .................... 1,097,882
-------------
Business Equipment & Services (3.2%):
25,400 Dun & Bradstreet Corp. ....... 1,470,025
82,000 Pitney Bowes, Inc. ........... 3,444,000
-------------
4,914,025
-------------
Capital Equipment (1.5%):
39,300 Illinois Tool Works........... 2,313,787
-------------
Chemicals--Specialty (3.9%):
28,500 Air Products & Chemicals,
Inc. ....................... 1,485,562
26,200 Monsanto Corp. ............... 2,639,650
36,600 Vulcan Materials Co. ......... 1,939,800
-------------
6,065,012
-------------
Coal (0.8%):
24,300 Mapco, Inc. .................. 1,251,450
-------------
Communication Equipment (2.0%):
57,300 Harris Corp. ................. 3,144,337
-------------
Computers (5.2%):
37,900 Apple Computer, Inc. ......... 1,411,775
36,800 Hewlett Packard Co. .......... 3,068,200
63,500 Honeywell, Inc. .............. 2,722,562
9,600 International Business
Machines.................... 906,000
-------------
8,108,537
-------------
Construction Materials (0.7%):
22,800 PPG Industries................ 1,060,200
-------------
Containers (1.1%):
57,100 Ball Corp. ................... 1,691,587
-------------
Defense (2.3%):
53,600 Lockheed Martin Corp. ........ 3,597,900
-------------
Electrical Equipment (1.9%):
29,200 Emerson Electric.............. 2,087,800
13,200 General Electric Co. ......... 841,500
-------------
2,929,300
-------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- - ---------- ------------------------------ -------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Electronic Components (1.2%):
36,200 Avnet, Inc. .................. $ 1,868,825
-------------
Food & Related Products (3.2%):
35,000 Hershey Foods................. 2,253,125
96,200 Supervalu, Inc. .............. 2,825,875
-------------
5,079,000
-------------
Forest & Paper Products (2.6%):
16,300 Kimberly Clark Corp. ......... 1,094,137
64,300 Weyerhaeuser Co. ............. 2,933,687
-------------
4,027,824
-------------
Health Care (3.8%):
50,100 Glaxo Holdings................ 1,208,662
28,600 Humana, Inc.(b)............... 575,575
37,500 Johnson & Johnson............. 2,779,687
39,600 U.S. Healthcare, Inc. ........ 1,400,850
-------------
5,964,774
-------------
Household-General Products (3.1%):
26,400 Premark International,
Inc. ....................... 1,343,100
19,450 Unilever New York Shares...... 2,528,500
17,200 Whirlpool Corp. .............. 993,300
-------------
4,864,900
-------------
Insurance (6.3%):
98,600 Aon Corp. .................... 4,030,275
17,164 First Colony Corp. ........... 463,428
56,600 Lincoln National Corp. ....... 2,667,275
40,700 SAFECO Corp. ................. 2,670,938
-------------
9,831,916
-------------
Leisure Time Industry (1.4%):
68,100 Hasbro, Inc. ................. 2,119,613
-------------
Metals (2.4%):
27,100 Phelps Dodge Corp. ........... 1,697,138
64,900 Trinity Industries............ 2,011,900
-------------
3,709,038
-------------
Motor Vehicles (1.5%):
77,200 Ford Motor Co. ............... 2,402,850
-------------
Multiple Industry (2.7%):
86,900 Corning Glass................. 2,487,513
30,200 Minnesota Mining &
Manufacturing............... 1,706,300
-------------
4,193,813
-------------
Petroleum (7.8%):
54,500 Ashland Oil, Inc. ............ 1,818,938
62,700 Chevron Corp., Inc. .......... 3,048,788
</TABLE>
Continued
-30-
<PAGE> 31
BB&T MUTUAL FUNDS GROUP
GROWTH AND INCOME STOCK FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- - ---------- ------------------------------ -------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Petroleum, continued:
25,500 Mobil Corp. .................. $ 2,540,437
45,100 Phillips Petroleum Co. ....... 1,465,750
28,600 Royal Dutch Petroleum Co. .... 3,510,650
-------------
12,384,563
-------------
Pharmaceuticals (5.4%):
44,300 Bristol Myers Squibb Co. ..... 3,228,363
60,500 Rhone-Poulenc Rorer........... 2,752,750
47,600 Schering Plough Corp. ........ 2,451,400
-------------
8,432,513
-------------
Photographic Equipment (0.3%):
8,900 Eastman Kodak Co. ............ 527,325
-------------
Publishing (1.7%):
21,700 Gannett Co., Inc. ............ 1,185,363
31,700 Houghton Mifflin Co. ......... 1,474,050
-------------
2,659,413
-------------
Railroad (0.3%):
5,500 CSX Corp. .................... 462,688
-------------
Retail (5.1%):
110,500 K-Mart Corp. ................. 1,602,250
64,700 Limited, Inc. ................ 1,229,300
63,400 May Department Stores Co. .... 2,773,750
67,800 Melville Corp. ............... 2,339,100
-------------
7,944,400
-------------
Security Brokers & Dealers (1.1%):
64,425 AG Edwards.................... 1,715,316
-------------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- - ---------- ------------------------------ -------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Tobacco (0.9%):
16,500 Phillip Morris Cos., Inc. .... $ 1,377,750
-------------
Trucking & Shipping (1.0%):
68,000 Alexander & Baldwin........... 1,632,000
-------------
Utilities-Electric (2.2%):
61,200 FPL Group, Inc. .............. 2,501,550
27,200 Texas Utilities Co. .......... 948,600
-------------
3,450,150
-------------
Utilities-Gas (2.8%):
45,900 Consolidated Natural Gas
Co. ........................ 1,853,213
94,400 NICOR, Inc. .................. 2,572,400
-------------
4,425,613
-------------
Utilities-Telephone (7.0%):
45,600 Ameritech Corp. .............. 2,376,900
23,400 A T & T Corp. ................ 1,538,550
57,200 SBC Communications, Inc. ..... 3,146,000
113,000 Sprint Corp. ................. 3,955,000
-------------
11,016,450
-------------
Total Common Stocks 148,812,776
-------------
INVESTMENT COMPANIES (5.3%):
2,223,178 Federated Cash Reserves U.S.
Treasury Fund............... 2,223,178
5,995,248 Federated Short-Term U.S.
Government Trust............ 5,995,248
-------------
Total Investment Companies 8,218,426
-------------
Total (Cost--$134,007,153)(a) $ 157,031,202
=============
</TABLE>
- - ---------
Percentages indicated are based on net assets of $156,444,985.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............. $26,105,088
Unrealized depreciation.............. (3,081,039)
-----------
Net unrealized appreciation.......... $23,024,049
===========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
-31-
<PAGE> 32
BB&T MUTUAL FUNDS GROUP
BALANCED FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
COMMON STOCKS (45.9%):
Apparel (0.4%):
5,000 V. F. Corp. ................... $ 255,000
-----------
Banks (2.2%):
5,000 Banc One Corp. ................ 182,500
9,700 Boatmens Bancshares, Inc. ..... 358,900
2,500 J. P. Morgan & Co. ............ 193,437
2,800 PNC Financial Corp. ........... 78,050
11,000 Wachovia Corp. ................ 474,375
-----------
1,287,262
-----------
Beverages (1.5%):
7,500 Anheuser-Busch Co. ............ 467,812
8,500 PepsiCo, Inc. ................. 433,500
-----------
901,312
-----------
Business Equipment & Services (2.1%):
3,000 Dun & Bradstreet Corp. ........ 173,625
5,000 Harris Corp. .................. 274,375
10,600 Pitney Bowes, Inc. ............ 445,200
2,500 Xerox Corp. ................... 335,937
-----------
1,229,137
-----------
Capital Equipment (0.4%):
4,000 Illinois Tool Works............ 235,500
-----------
Chemicals (2.2%):
4,700 Air Products & Chemicals,
Inc. ........................ 244,987
5,500 E. I. Dupont De Nemours Co. ... 378,125
8,000 Ethyl Corporation.............. 89,000
6,100 Monsanto Corp. ................ 614,575
-----------
1,326,687
-----------
Computers (2.8%):
4,100 Apple Computer Incorporated.... 152,725
10,000 Hewlett Packard Co. ........... 833,750
11,500 Honeywell, Inc. ............... 493,062
1,800 International Business
Machines..................... 169,875
-----------
1,649,412
-----------
Construction Materials (0.6%):
8,200 PPG Industries................. 381,300
-----------
Defense (0.9%):
4,000 Lockheed Martin Corp. ......... 268,500
3,000 Raytheon Co. .................. 255,000
-----------
523,500
-----------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Electrical Equipment (1.4%):
4,500 Emerson Electric............... $ 321,750
8,000 General Electric Co. .......... 510,000
-----------
831,750
-----------
Electronic Components (0.4%):
5,000 Avnet, Inc. ................... 258,125
-----------
Financial Services (0.8%):
3,200 American Express Co. .......... 142,000
10,000 American General Corp. ........ 373,750
-----------
515,750
-----------
Food & Related (2.4%):
3,000 Fleming Companies, Inc. ....... 72,000
3,000 General Mills, Inc. ........... 167,250
7,200 H. J. Heinz Co. ............... 329,400
7,000 Hershey Foods.................. 450,625
13,000 Supervalu, Inc. ............... 381,875
-----------
1,401,150
-----------
Forest & Paper Products (1.1%):
6,000 International Paper Co. ....... 252,000
200 Kimberly Clark Corp. .......... 13,425
8,000 Weyerhaeuser Co. .............. 365,000
-----------
630,425
-----------
Health Care (2.6%):
4,700 Abbott Laboratories............ 200,338
2,000 Bausch & Lomb.................. 82,750
7,400 Glaxo Holdings................. 178,525
7,500 Johnson & Johnson.............. 555,938
5,000 Merck & Company, Inc. ......... 280,000
6,500 U.S. Healthcare, Inc. ......... 229,937
-----------
1,527,488
-----------
Household-Appliances (0.7%):
6,800 Whirlpool Corp. ............... 392,700
-----------
Household Products (0.9%):
1,000 Procter & Gamble Co. .......... 77,000
3,500 Unilever New York Shares....... 455,000
600 U.S. Industries, Inc.(b)....... 9,300
-----------
541,300
-----------
Insurance (2.3%):
2,000 Aetna Life & Casualty Co. ..... 146,750
3,300 American International Group,
Inc. ........................ 280,500
3,500 Lincoln National Corp. ........ 164,938
</TABLE>
Continued
-32-
<PAGE> 33
BB&T MUTUAL FUNDS GROUP
BALANCED FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Insurance, continued:
8,500 SAFECO Corp. .................. $ 557,813
7,500 USLIFE Corp. .................. 219,374
-----------
1,369,375
-----------
Leisure Time Industry (0.9%):
2,800 Hasbro, Inc. .................. 87,150
7,500 The Walt Disney Co. ........... 430,313
-----------
517,463
-----------
Metal Fabrication (0.3%):
6,000 Trinity Industries............. 186,000
-----------
Motor Vehicles (0.6%):
7,300 Ford Motor Co. ................ 227,213
2,500 General Motors Corp. .......... 117,187
-----------
344,400
-----------
Multiple Industry (1.3%):
10,000 Corning Glass.................. 286,250
12,000 Hanson Trust American
Depository Receipts.......... 195,000
5,200 Minnesota Mining &
Manufacturing................ 293,800
-----------
775,050
-----------
Petroleum (4.0%):
6,000 Ashland, Inc. ................. 200,250
4,400 Atlantic Richfield Co. ........ 472,450
10,500 Chevron Corp., Inc. ........... 510,563
5,500 Mobil Corp. ................... 547,937
5,100 Royal Dutch Petroleum Co. ..... 626,025
-----------
2,357,225
-----------
Pharmaceuticals (1.8%):
6,700 Bristol Myers Squibb Co. ...... 488,263
11,000 Schering Plough Corp. ......... 566,500
-----------
1,054,763
-----------
Photographic Equipment (0.2%):
2,200 Eastman Kodak Co. ............. 130,350
-----------
Publishing (0.8%):
3,800 Gannett Co., Inc. ............. 207,575
2,000 McGraw Hill, Inc. ............. 163,500
2,000 Tribune Co. ................... 132,750
-----------
503,825
-----------
Railroad (0.4%):
3,600 Norfolk Southern Corp. ........ 269,100
-----------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Restaurants (0.1%):
3,000 Darden Restaurants, Inc.(b).... $ 34,500
-----------
Retail (2.7%):
3,000 Dayton Hudson Corp. ........... 227,625
2,500 J.C. Penney, Inc. ............. 124,063
13,000 K-Mart Corp. .................. 188,500
9,000 May Department Stores Co. ..... 393,750
10,000 Melville Corporation........... 345,000
11,300 Rite-Aid....................... 316,400
-----------
1,595,338
-----------
Security Brokers & Dealers (0.2%):
4,000 AG Edwards..................... 106,500
-----------
Tobacco (0.5%):
3,500 Philip Morris Cos., Inc. ...... 292,250
-----------
Trucking & Shipping (0.3%):
6,200 Alexander & Baldwin............ 148,800
-----------
Utilities-Electric (2.0%):
2,800 American Electric Power,
Inc. ........................ 101,850
5,000 Duke Power Co. ................ 216,875
11,000 FPL Group, Inc. ............... 449,625
12,000 Scana Corp. ................... 288,000
3,500 Texas Utilities Co. ........... 122,063
-----------
1,178,413
-----------
Utilities-Gas (1.4%):
14,500 NICOR, Inc. ................... 395,125
10,400 Williams Cos., Inc. ........... 405,600
-----------
800,725
-----------
Utilities-Telephone (2.4%):
6,600 Ameritech Corp. ............... 344,025
5,900 A T & T Corp. ................. 387,925
4,900 Pacific Telesis Group.......... 150,675
14,800 Sprint Corp. .................. 518,000
-----------
1,400,625
-----------
Telecommunications (0.3%):
4,900 Airtouch(b).................... 150,063
-----------
Total Common Stocks 27,102,563
-----------
U.S. TREASURY BONDS (6.4%):
1,500,000 11.13%, 8/15/03................ 1,955,580
1,500,000 9.38%, 2/15/06................. 1,852,665
-----------
Total U.S. Treasury Bonds 3,808,245
-----------
U.S. TREASURY NOTES (41.4%):
3,000,000 7.13%, 10/15/98................ 3,098,970
</TABLE>
Continued
-33-
<PAGE> 34
BB&T MUTUAL FUNDS GROUP
BALANCED FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
U.S. TREASURY NOTES, CONTINUED:
3,000,000 8.00%, 8/15/99................. $ 3,205,140
3,000,000 8.50%, 11/15/00................ 3,322,830
3,500,000 7.75%, 2/15/01................. 3,770,025
2,500,000 7.50%, 5/15/02................. 2,689,250
2,500,000 6.38%, 8/15/02................. 2,537,725
2,500,000 6.25%, 2/15/03................. 2,514,275
3,000,000 7.88%, 11/15/04................ 3,337,170
-----------
Total U.S. Treasury Notes 24,475,385
-----------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
INVESTMENT COMPANIES (5.6%):
2,346,110 Federated Cash Reserves
U.S. Treasury Fund......... $ 2,346,110
971,781 Federated Short-Term U.S.
Government Trust............. 971,781
-----------
Total Investment Companies 3,317,891
-----------
Total (Cost--$53,658,895)(a) $58,704,084
===========
</TABLE>
- - ---------
Percentages indicated are based on net assets of $59,050,761.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................ $5,695,075
Unrealized depreciation................ (649,886)
----------
Net unrealized appreciation............ $5,045,189
==========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
-34-
<PAGE> 35
BB&T MUTUAL FUNDS GROUP
SMALL COMPANY COMPANY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
COMMON STOCKS (82.2%):
Business Services (2.2%):
6,600 ABR Information Services,
Inc.(b)...................... $ 166,650
8,400 Acxiom Corp.(b)................ 237,300
-----------
403,950
-----------
Commercial Goods & Services (4.8%):
6,000 Accustaff, Inc.(b)............. 220,500
4,700 Norrell Corp. ................. 152,750
4,000 Robert Half International,
Inc.(b)...................... 136,500
6,100 Sitel Corp.(b)................. 149,450
7,100 U.S. Delivery Systems,
Inc.(b)...................... 204,125
-----------
863,325
-----------
Computer Hardware (3.8%):
4,500 Cognex Corp.(b)................ 217,125
10,000 Cybex Corp.(b)................. 250,000
2,000 Electronics for Imaging,
Inc.(b)...................... 143,250
5,100 Integrated Measurement
System(b).................... 67,575
-----------
677,950
-----------
Computer Software (14.4%):
5,100 American Management Systems,
Inc. ........................ 136,425
200 Arcsys, Inc.(b)................ 8,250
7,600 Aspen Technologies, Inc.(b).... 228,000
1,500 Baan Co.(b).................... 67,500
2,700 CBT Group(b)................... 128,925
5,400 CyCare Systems, Inc.(b)........ 179,550
800 Datalogix(b)................... 11,400
3,400 Davidson & Associates,
Inc.(b)...................... 118,150
1,000 Dendrite International,
Inc.(b)...................... 15,250
2,400 Discreet Logic, Inc.(b)........ 132,000
5,100 Epic Design Technology,
Inc.(b)...................... 247,350
5,300 HCIA, Inc.(b).................. 136,475
2,900 Hummingbird Communications(b).. 108,025
3,500 Imnet Systems, Inc.(b)......... 90,125
100 Legato Systems, Inc.(b)........ 2,650
5,500 Macromedia, Inc.(b)............ 314,187
2,300 Medic Computer Systems,
Inc.(b)...................... 116,725
7,200 NetManage, Inc.(b)............. 171,000
1,000 Novadigm, Inc.(b).............. 16,875
800 Premenos Technology Corp.(b)... 26,000
6,000 Softkey International,
Inc.(b)...................... 265,500
400 Spyglass, Inc.(b).............. 18,300
1,200 Touchstone Software Corp.(b)... 12,900
1,200 Videoserver, Inc.(b)........... 42,300
-----------
2,593,862
-----------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Consumer Goods & Services (0.7%):
6,500 USA Detergents, Inc.(b)........ $ 134,875
-----------
Electrical Equipment (1.3%):
200 C. P. Clarke Corp.(b).......... 5,100
8,100 Micrel, Inc.(b)................ 226,800
-----------
231,900
-----------
Electronic Components (3.5%):
900 Act Manufacturing, Inc.(b)..... 12,712
4,200 International Rectifier
Corp.(b)..................... 169,050
2,400 MEMC Electronic Materials(b)... 65,100
3,150 Phototronics, Inc.(b).......... 105,525
2,700 Recoton Corp.(b)............... 74,250
6,400 Tower Semiconductor Ltd.(b).... 208,000
-----------
634,637
-----------
Electronic Instruments (0.2%):
3,600 Telcom Semiconductor,
Inc.(b)...................... 41,400
-----------
Entertainment (1.5%):
6,100 Regal Cinemas, Inc.(b)......... 250,862
1,000 Speedway Motorsports,
Inc.(b)...................... 26,000
-----------
276,862
-----------
Environmental Services (1.9%):
2,700 Sanifill, Inc.(b).............. 88,425
6,100 United Waste Systems,
Inc.(b)...................... 254,675
-----------
343,100
-----------
Financial Services (1.3%):
5,800 Jayhawk Acceptance Corp.(b).... 84,825
6,300 WFS Financial, Inc.(b)......... 143,325
-----------
228,150
-----------
Homebuilders-Mobile Homes (0.2%):
2,500 Southern Energy Homes,
Inc(b)....................... 39,688
-----------
Hospital Supply & Management (1.0%):
3,600 Physician Sales & Service(b)... 172,800
-----------
Hotels & Gaming (0.9%):
7,500 Doubletree Corp.(b)............ 166,875
-----------
Insurance (0.1%):
600 United Dental Care, Inc.(b).... 18,000
-----------
Leisure Time Industry (2.6%):
5,000 Hollywood Entertainment
Corp.(b)..................... 107,188
4,500 Movie Gallery, Inc.(b)......... 192,375
4,350 Scientific Games Holdings
Corp.(b)..................... 162,581
-----------
462,144
-----------
</TABLE>
Continued
-35-
<PAGE> 36
BB&T MUTUAL FUNDS GROUP
SMALL COMPANY COMPANY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Machinery & Equipment (2.9%):
1,200 ASM Lithography Holding(b)..... $ 52,650
6,000 Electro Scientific Industries,
Inc.(b)...................... 209,250
6,300 FSI International, Inc.(b)..... 209,475
700 Ontrak Systems, Inc.(b)........ 19,337
1,000 Silicon Valley Group,
Inc.(b)...................... 38,625
-----------
529,337
-----------
Medical (1.2%):
2,400 Clintrials Research(b)......... 48,600
2,800 Quintiles Transnational
Corp.(b)..................... 165,200
-----------
213,800
-----------
Medical Equipment & Supplies (5.5%):
1,700 Arrow International, Inc. ..... 73,525
6,300 Gulf South Medical Supply,
Inc.(b)...................... 155,138
3,400 IDEXX Laboratories, Inc.(b).... 126,650
1,400 Isolyser Co., Inc.(b).......... 47,775
5,400 Medisense, Inc.(b)............. 130,275
4,400 Orthofix International
N.V.(b)...................... 68,200
6,000 Steris Corp.(b)................ 252,750
2,000 Target Therapeutics, Inc.(b)... 140,000
-----------
994,313
-----------
Medical--Hospital Management & Services (6.0%):
4,500 American Homepatient,
Inc.(b)...................... 114,750
4,900 American Oncology
Resources(b)................. 210,700
7,000 Medpartners, Inc.(b)........... 220,500
3,100 Occusystems, Inc.(b)........... 64,325
2,600 Omnicare, Inc. ................ 101,400
6,700 Orthodontic Centers of America,
Inc. (b)..................... 216,075
1,800 Pediatrix Medical Group(b)..... 36,900
3,150 Phycor, Inc.(b)................ 107,888
-----------
1,072,538
-----------
Motor Vehicles (1.1%):
9,000 Copart, Inc.(b)................ 204,750
-----------
Pharmaceuticals (1.5%):
9,100 Dura Pharmaceuticals,
Inc.(b)...................... 270,725
-----------
Publishing (0.5%):
300 Desktop Data, Inc.(b).......... 10,425
2,500 Gartner Group, Inc.(b)......... 81,875
-----------
92,300
-----------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Restaurants (2.3%):
5,000 Applebee's International,
Inc.(b)...................... $ 136,250
6,700 Landry's Seafood Restaurants,
Inc.(b)...................... 120,600
1,500 Logan Roadhouse, Inc.(b)....... 26,250
3,100 Papa John's International,
Inc.(b)...................... 139,500
-----------
422,600
-----------
Retail (9.2%):
2,100 Bed Bath & Beyond, Inc.(b)..... 64,050
10,000 Books-A-Million, Inc.(b)....... 176,250
2,000 Dollar Tree Stores, Inc.(b).... 68,000
9,000 Friedman's, Inc., Class A(b)... 195,750
2,000 Global Directmail Corp.(b)..... 49,250
5,100 Just For Feet, Inc.(b)......... 156,825
5,500 Kenneth Cole Productions(b).... 193,188
5,300 Men's Warehouse, Inc.(b)....... 190,800
1,800 Micro Warehouse, Inc.(b)....... 82,350
1,000 Oakley, Inc.(b)................ 29,625
5,000 Petco Animal Supplies,
Inc.(b)...................... 130,000
3,000 Piercing Pagoda, Inc.(b)....... 42,000
4,500 Sunglass Hut International,
Inc.(b)...................... 225,000
3,750 Trend-Lines, Inc.(b)........... 49,687
-----------
1,652,775
-----------
Telecommunications (7.6%):
3,000 Adtran, Inc.(b)................ 104,250
800 Coherent Communications Systems
Corp. (b).................... 22,000
9,400 EIS International, Inc.(b)..... 168,025
6,600 Gilat Satellite Networks
Ltd.(b)...................... 181,500
2,800 Madge Networks N.V.(b)......... 89,600
9,200 Microcom, Inc.(b).............. 173,650
3,000 Shiva Corp.(b)................. 183,750
6,500 Tekelec(b)..................... 146,250
3,600 U.S. Robotics Corp.(b)......... 306,900
-----------
1,375,925
-----------
Textile (3.1%):
2,400 Authentic Fitness Corp.(b)..... 54,000
4,500 Nautica Enterprises, Inc.(b)... 154,125
6,100 Quiksilver, Inc.(b)............ 165,463
3,800 St. John Knits, Inc. .......... 185,250
-----------
558,838
-----------
</TABLE>
Continued
-36-
<PAGE> 37
BB&T MUTUAL FUNDS GROUP
SMALL COMPANY COMPANY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Wholesale (0.9%):
6,000 Peak Technologies Group,
Inc.(b)...................... $ 159,000
-----------
Total Common Stocks 14,836,419
-----------
U.S. GOVERNMENT AGENCIES (11.6%):
Federal Home Loan Mortgage Corp.:
2,106,000 9/29/95........................ 2,104,894
-----------
Total U.S. Government Agencies 2,104,894
-----------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- - --------- ------------------------------- -----------
<S> <C> <C>
U.S. TREASURY NOTES (6.1%):
1,100,000 5.88%, 6/30/00................. $ 1,094,016
-----------
Total U.S. Treasury Notes 1,094,016
-----------
Total (Cost--$14,254,119)(a) $18,035,329
-----------
</TABLE>
- - ---------
Percentages indicated are based on net assets of $18,057,632.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................ $3,943,162
Unrealized depreciation................ (161,952)
----------
Net unrealized appreciation............ $3,781,210
==========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
-37-
<PAGE> 38
BB&T MUTUAL FUNDS GROUP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
1. ORGANIZATION:
The BB&T Mutual Funds Group ("The Group") was organized on October 1, 1987
and is registered under the Investment Company Act of 1940, as amended ("the
1940 Act"), as a diversified, open-end investment company established as a
Massachusetts business trust. Between the date of organization and the date
of commencement of operations, the Group had no operations other than
incurring organizational expenses and the sale of initial units of beneficial
interest ("shares").
The Group is authorized to issue an unlimited number of shares without par
value. The BB&T Mutual Funds Group offers shares of the U.S. Treasury Money
Market Fund, the Short-Intermediate U.S. Government Income Fund, the
Intermediate U.S. Government Bond Fund, the North Carolina Intermediate
Tax-Free Fund, the Growth and Income Stock Fund, the Balanced Fund and the
Small Company Growth Fund (referred to individually as a "Fund" and
collectively, the "Group"). The Group has issued two classes of shares in
each Fund: Investor Shares and Trust Shares. Investor Shares are sold with a
front-end sales charge on the Short-Intermediate U.S. Government Income Fund,
the Intermediate U.S. Government Bond Fund, the North Carolina Intermediate
Tax-Free Fund, the Growth and Income Stock Fund, the Balanced Fund and the
Small Company Growth Fund (collectively, "the variable net asset funds").
Both classes of shares in a Fund have identical rights and privileges except
with respect to the distribution fees borne by the Investor Shares, expenses
allocable exclusively to each class of shares, voting rights on matters
affecting a single class of shares and the exchange privilege of each class
of shares. Sales of shares of the Group may be made to customers of Branch
Banking & Trust Company (BB&T) and its affiliates, to all accounts of
correspondent banks of BB&T and to the general public. BB&T serves as
investment adviser to the Group.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by the
Group in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
SECURITIES VALUATION:
Investments of the U.S. Treasury Money Market Fund are valued at either
amortized cost, which approximates market value, or at original cost, which
combined with accrued interest, approximates market value. Under the
amortized cost method, discount or premium is amortized on a constant basis
to the maturity of the security. In addition, the U.S. Treasury Money Market
Fund may not (a) purchase any instrument with a remaining maturity greater
than thirteen months unless such instrument is subject to a demand feature,
or (b) maintain a dollar-weighted average portfolio maturity which exceeds 90
days.
Investments in common stocks, commercial paper, corporate bonds, municipal
securities, U.S. Government securities, and U.S. Government agency securities
of the variable net asset value funds are valued at their market values
determined on the latest available bid prices in the principal market
(closing sales prices if the principal market is an exchange) in which such
securities are normally traded. Investments in investment companies are
valued at their respective net asset values as reported by such companies.
The
Continued
-38-
<PAGE> 39
BB&T MUTUAL FUNDS GROUP
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1995
differences between cost and market values of such investments are reflected
as unrealized appreciation or depreciation.
SECURITIES TRANSACTIONS AND RELATED INCOME:
Securities transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the accrual
basis and includes, where applicable, the pro rata amortization of premium or
discount. Dividend income is recorded on the ex-dividend date. Gains or
losses realized on sales of securities are determined by comparing the
identified cost of the security lot sold with the net sales proceeds.
REPURCHASE AGREEMENTS:
Each Fund of the Group may acquire repurchase agreements from member banks of
the Federal Deposit Insurance Corporation and from registered broker/dealers
who BB&T deems creditworthy under guidelines approved by the Board of
Trustees, subject to the seller's agreement to repurchase such securities at
a mutually agreed-upon date and price. The repurchase price generally equals
the price paid by the Fund plus interest negotiated on the basis of current
short-term rates, which may be more or less than the rate on the underlying
portfolio securities. The seller, under a repurchase agreement, is required
to maintain the value of collateral held pursuant to the agreement at not
less than the repurchase price (including accrued interest). Securities
subject to repurchase agreements are held by the Fund's custodian or another
qualified custodian or in the Federal Reserve/Treasury book-entry system.
Repurchase agreements are considered to be loans by a Fund under the 1940
Act.
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income are declared daily and paid monthly and
distributable net realized capital gains, if any, are declared and
distributed at least annually for the U.S. Treasury Money Market Fund, the
Short-Intermediate U.S. Government Income Fund, the Intermediate U.S.
Government Bond Fund and the North Carolina Intermediate Tax-Free Fund.
Dividends from net investment income are declared and paid monthly and
distributable net realized capital gains, if any, are declared and
distributed at least annually for the Growth and Income Stock Fund and the
Balanced Fund. Dividends from net investment income are declared monthly and
paid quarterly and distributable net realized capital gains, if any, are
declared and distributable at least annually for the Small Company Growth
Fund.
During the year ended September 30, 1994, the Group adopted Statement of
Position 93-2, Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distributions by
Investment Companies. Accordingly, timing differences relating to shareholder
distributions are reflected in the components of net assets and permanent
book and tax basis differences relating to shareholder distributions have
been reclassified to additional paid-in capital. Net investment income, net
realized gains and net assets were not affected by this change.
Continued
-39-
<PAGE> 40
BB&T MUTUAL FUNDS GROUP
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1995
Dividends from net investment income and from net realized capital gains are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily due
to differing treatments for mortgage-backed securities and deferrals of
certain losses.
FEDERAL INCOME TAXES:
It is the policy of each Fund of the Group to qualify or continue to qualify
as a regulated investment company by complying with the provisions available
to certain investment companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of net investment income and
net realized capital gains sufficient to relieve it from all, or
substantially all, federal income taxes.
OTHER:
Expenses that are directly related to one of the Funds are charged directly
to that Fund. Other operating expenses for the Group are prorated to the
Funds on the basis of relative net assets. All expenses incurred in
connection with the Group's organization and registration under the 1940 Act
and the Securities Act of 1933 were paid by the Group. Such expenses are
being amortized over a period of two years commencing with the initial public
offering.
3. PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities (excluding short-term securities) for the
year ended September 30, 1995 are as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ------------
<S> <C> <C>
Short-Intermediate U.S. Government Income Fund................ $ 53,437,746 $ 51,764,922
Intermediate U.S. Government Bond Fund........................ $ 58,195,273 $ 51,876,267
North Carolina Intermediate Tax-Free Fund..................... $ 3,266,907 $ 4,861,937
Growth and Income Stock Fund.................................. $ 45,400,182 $ 9,701,887
Balanced Fund................................................. $ 15,692,148 $ 11,159,823
Small Company Growth Fund(a).................................. $ 16,206,145 $ 3,793,717
</TABLE>
---------------
(a) For the period from December 7, 1994 (commencement of operations) through
September 30, 1995.
4. RELATED PARTY TRANSACTIONS:
Investment advisory services are provided to the Group by BB&T. PNC Bank
serves as sub-investment advisor to the Small Company Growth Fund. Under the
terms of the investment advisory agreement, BB&T is entitled to receive fees
based on a percentage of the average net assets of each of the Funds. Under
the terms of the sub-investment advisory agreement, PNC Bank is entitled to
receive fees based on a percentage of the average net assets of the Small
Company Growth Fund.
Continued
-40-
<PAGE> 41
BB&T MUTUAL FUNDS GROUP
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1995
The Winsbury Company Limited Partnership d/b/a The Winsbury Company
("Winsbury") is an Ohio limited partnership. The sole general partner of
Winsbury is BISYS Fund Services, Inc. The sole limited partner of Winsbury is
WC Subsidiary Corporation. BISYS Fund Services, Inc., BISYS Fund Services
Ohio, Inc. and WC Subsidiary Corporation are all subsidiaries of The BISYS
Group, Inc. On October 10, 1995, Winsbury changed its name to BISYS Fund
Services Limited Partnership d/b/a BISYS Fund Services.
Winsbury, with whom certain officers and trustees of the Group are
affiliated, serves the Fund as administrator. Such officers and trustees are
paid no fees directly by the Funds for serving as officers and trustees of
the Group. Under the terms of the administration agreement, Winsbury's fees
are computed daily as a percentage of the average net assets of each of the
Funds. Winsbury also serves as the Group's distributor and is entitled to
receive commissions on sales of shares of the variable net asset value funds.
For the year ended September 30, 1995, Winsbury received $86,071 from
commissions earned on sales of shares of the Group's variable net asset value
funds of which $55,923 was reallowed to BB&T, an investment dealer of the
Group's shares. Winsbury receives no fees from the Funds for providing
distribution services to the money market funds. BISYS Fund Services, Ohio,
Inc., (the Company), an affiliate of Winsbury, serves the Group as Transfer
Agent and Mutual Fund Accountant. Under the terms of the Transfer Agent and
Accounting Agreement, the Company's fee is based on the number of
shareholders and as a percentage of average net assets, respectively.
The Group has adopted a Distribution and Shareholder Service Plan in
accordance with Rule 12b-1 under the 1940 Act for the Investor shares,
pursuant to which each Fund is authorized to pay or reimburse Winsbury, as
distributor, a periodic amount, calculated at an annual rate not to exceed
.50% of the average daily net asset value of the Fund. These fees are used by
Winsbury to pay banks, including the investment adviser, broker dealers and
other institutions, or to reimburse Winsbury or its affiliates, for
administration, distribution and shareholder services in connection with the
distribution of Fund shares.
Fees may be voluntarily reduced or reimbursed to assist the Funds in
maintaining competitive expense ratios.
Information regarding these transactions is as follows for the year ended
September 30, 1995.
<TABLE>
<CAPTION>
U.S.
TREASURY SHORT-INTERMEDIATE INTERMEDIATE
MONEY MARKET U.S. GOVERNMENT U.S. GOVERNMENT
FUND INCOME FUND BOND FUND
------------ ------------------ ---------------
<S> <C> <C> <C>
INVESTMENT ADVISORY FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets).......... .40% .60% .60%
Voluntary fee reductions...................... $ 21,654 $ 74,712 $ 116,052
ADMINISTRATION FEES:
Annual fee (percentage of average net
assets)..................................... .20% .20% .20%
DISTRIBUTION FEES (INVESTOR SHARES):
Annual fee before voluntary fee reductions
(percentage of average net assets).......... .50% .50% .50%
Voluntary fee reductions...................... $ 14,832 $ 19,117 $ 15,187
TRANSFER AGENT AND MUTUAL FUND ACCOUNTANT
FEES........................................ $ 78,908 $ 88,370 $ 87,144
</TABLE>
Continued
-41-
<PAGE> 42
BB&T MUTUAL FUNDS GROUP
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
NORTH CAROLINA GROWTH AND SMALL COMPANY
INTERMEDIATE INCOME STOCK BALANCED GROWTH
TAX-FREE FUND FUND FUND FUND(A)
-------------- ------------ -------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ADVISORY FEES:
Annual fee before voluntary fee
reductions (percentage of average net
assets)................................ .60% .74% .74% 1.00%
Voluntary fee reductions................. $ 56,780 $328,103 $144,035 $ 497
ADMINISTRATION FEES:
Annual fee before voluntary fee
reductions (percentage of average net
assets)................................ .20% .20% .20% .20%
Voluntary fee reductions................. $ 18,917 $ 282 $ 95
DISTRIBUTION FEES (INVESTOR SHARES):
Annual fee before voluntary fee
reductions (percentage of average net
assets)................................ .50% .50% .50% .50%
Voluntary fee reductions................. $ 31,865 $ 21,955 $ 20,993 $ 950
TRANSFER AGENT AND MUTUAL FUND ACCOUNTANT
FEES................................... $ 81,128 $107,884 $ 90,269 $66,301
Voluntary fee reductions................. $ 10,002 $ 5,590
EXPENSES REIMBURSED...................... $20,079
</TABLE>
- - ---------
(a) For the period from December 7, 1994 (commencement of operations) through
September 30, 1995.
5. ELIGIBLE DISTRIBUTIONS (UNAUDITED):
The BB&T Mutual Funds Group designates the following eligible distributions
for the dividends received deductions for corporations:
<TABLE>
<CAPTION>
GROWTH AND
INCOME STOCK BALANCED
FUND FUND
------------ --------
<S> <C> <C>
Dividend Income............................................... $3,405,070 $653,671
Dividend Income Per Share--Investor........................... $ 0.229 $ 0.105
Dividend Income Per Share--Trust.............................. $ 0.256 $ 0.111
</TABLE>
6. EXEMPT-INTEREST INCOME DESIGNATIONS (UNAUDITED):
The BB&T Mutual Funds Group designates the following exempt-interest
dividends for the North Carolina Intermediate Tax-Free Fund's taxable year
ended September 30, 1995:
<TABLE>
<S> <C>
Exempt-Interest Dividends............................................... $ 1,372,894
Exempt-Interest Dividends Per Share--Investor........................... $ 0.347
Exempt-Interest Dividends Per Share--Trust.............................. $ 0.361
</TABLE>
100% of the exempt-interest income for the North Carolina Intermediate
Tax-Free Fund's taxable year ended September 30, 1995 was from North Carolina
securities.
7. FEDERAL INCOME TAXES (UNAUDITED):
For federal income tax purposes, the Balanced Fund has capital loss
carryforwards as of September 30, 1995, which are available to offset future
capital gains, if any:
<TABLE>
<CAPTION>
AMOUNT EXPIRES
------- -------
<S> <C> <C>
Balanced Fund...................................................... $ 482 2001
30,364 2002
</TABLE>
-42-
<PAGE> 43
BB&T MUTUAL FUNDS GROUP
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1995
8. SPECIAL SHAREHOLDER MEETING (UNAUDITED):
On February 14, 1995, a special meeting of the shareholders of the BB&T
Mutual Funds Group was held to consider various proposals, including, among
other things, the approval of a new Investment Advisory Agreement between the
Group and BB&T, to be effective upon consummation of a planned merger between
Southern National Corporation and BB&T Financial Corporation. In addition,
the meeting was held to consider the approval of a new Sub-Advisory Agreement
between BB&T and PNC Bank and to approve the election of the Board of
Trustees of the BB&T Mutual Funds Group.
ELECTION OF TRUSTEES -- The shareholders of the BB&T Mutual Funds Group, as a
group, were requested to direct the proxies to vote for or withhold authority
to vote for the election of certain individuals to serve as Trustees of the
BB&T Mutual Funds Group. The shareholders of the BB&T Mutual Funds approved
each nominee. The results of such solicitation are as follows:
<TABLE>
<CAPTION>
VOTES
NOMINEE VOTES FOR WITHHELD
- - ------------------------------------- ------------ ------------
<S> <C> <C>
J. David Huber....................... 126,043,297 93,919
William E. Graham, Jr................ 126,043,298 93,919
Thomas W. Lambeth.................... 126,036,469 94,651
W. Ray Long.......................... 125,787,993 94,477
Robert W. Stewart.................... 126,040,868 94,477
</TABLE>
INVESTMENT ADVISORY AGREEMENT -- The shareholders of each Fund approved a new
Investment Advisory Agreement with respect to each Fund as follows:
<TABLE>
<CAPTION>
FUND IN FAVOR OPPOSED ABSTAIN
- - ------------------------------------- ---------- ------- ---------
<S> <C> <C> <C>
U.S. Treasury Money Market Fund...... 94,274,256 165,806 4,342,384
Short-Intermediate U.S. Government
Income Fund........................ 3,996,834 0 278,790
Intermediate U.S. Government Bond
Fund............................... 7,157,009 153,605 16,569
North Carolina Intermediate Tax-Free
Fund............................... 3,109,520 0 100,418
Growth and Income Stock Fund......... 7,753,941 0 517,270
Balanced Fund........................ 3,998,490 8,106 15,243
Small Company Growth Fund............ 250,221 0 0
</TABLE>
SUB-INVESTMENT ADVISORY AGREEMENT -- The shareholders of the Small Company
Growth Fund approved a new Sub-Investment Advisory Agreement with respect to
the Fund as follows:
<TABLE>
<CAPTION>
FUND IN FAVOR OPPOSED ABSTAIN
- - ------------------------------------- ---------- ------- ---------
<S> <C> <C> <C>
Small Company Growth Fund............ 250,221 0 0
</TABLE>
-43-
<PAGE> 44
BB&T MUTUAL FUNDS GROUP
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET FUND
--------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED OCTOBER 5, 1992 TO
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 SEPTEMBER 30, 1993(A)
--------------------- -------------------- -----------------------
INVESTOR TRUST INVESTOR TRUST INVESTOR TRUST
--------------------- -------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- ------- -------- --------
INVESTMENT ACTIVITIES
Net investment income.................... 0.047 0.050 0.027 0.030 0.026 0.027
-------- -------- -------- ------- -------- --------
Total from Investment Activities..... 0.047 0.050 0.027 0.030 0.026 0.027
-------- -------- -------- ------- -------- --------
DISTRIBUTIONS
Net investment income.................... (0.047) (0.050) (0.027) (0.030) (0.026) (0.027)
-------- -------- -------- ------- -------- --------
Total Distributions.................. (0.047) (0.050) (0.027) (0.030) (0.026) (0.027)
-------- -------- -------- ------- -------- --------
NET ASSET VALUE, END OF PERIOD............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======= ======== ========
Total Return............................... 4.81% 5.07% 2.76% 3.01% 2.60%(b) 2.70%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000).......... $13,948 $120,083 $ 1,486 $77,464 $ 279 $74,962
Ratio of expenses to average net
assets................................. 0.98% 0.72% 0.94% 0.67% 0.51%(c) 0.38%(c)
Ratio of net investment income to average
net assets............................. 4.81% 4.97% 2.89% 2.97% 2.58%(c) 2.71%(c)
Ratio of expenses to average net
assets*................................ 1.24% 0.75% 1.32% 0.83% 1.32%(c) 0.81%(c)
Ratio of net investment income to average
net assets*............................ 4.55% 4.95% 2.51% 2.82% 1.77%(c) 2.27%(c)
</TABLE>
- - ---------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
See notes to financial statements.
-44-
<PAGE> 45
BB&T MUTUAL FUNDS GROUP
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
-------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED NOVEMBER 30, 1992 TO
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 SEPTEMBER 30, 1993(A)
-------------------- -------------------- -----------------------
INVESTOR TRUST INVESTOR TRUST INVESTOR TRUST
-------------------- -------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........ $ 9.60 $ 9.61 $ 10.29 $ 10.30 $ 10.00 $ 10.00
-------- ------- -------- ------- -------- --------
INVESTMENT ACTIVITIES
Net investment income..................... 0.53 0.56 0.50 0.52 0.47 0.49
Net realized and unrealized gains (losses)
on investments.......................... 0.29 0.28 (0.68) (0.68) 0.30 0.30
-------- ------- -------- ------- -------- --------
Total from Investment Activities...... 0.82 0.84 (0.18) (0.16) 0.77 0.79
-------- ------- -------- ------- -------- --------
DISTRIBUTIONS
Net investment income..................... (0.54) (0.56) (0.50) (0.52) (0.48) (0.49)
Net realized gains........................ (0.01) (0.01)
-------- ------- -------- ------- -------- --------
Total Distributions................... (0.54) (0.56) (0.51) (0.53) (0.48) (0.49)
-------- ------- -------- ------- -------- --------
NET ASSET VALUE, END OF PERIOD.............. $ 9.88 $ 9.89 $ 9.60 $ 9.61 $ 10.29 $ 10.30
======= ======= ======= ======= ======= =======
Total Return (excludes sales charge)........ 8.74% 9.01% (1.86%) (1.66%) 7.80%(b) 8.01%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)........... $7,102 $45,005 $10,345 $38,208 $14,915 $34,646
Ratio of expenses to average net assets... 1.17% 0.93% 0.89% 0.71% 0.56%(c) 0.39%(c)
Ratio of net investment income to average
net assets.............................. 5.50% 5.78% 5.01% 5.20% 5.43%(c) 5.60%(c)
Ratio of expenses to average net
assets*................................. 1.58% 1.08% 1.58% 1.08% 1.56%(c) 1.05%(c)
Ratio of net investment income to average
net assets*............................. 5.09% 5.64% 4.32% 4.83% 4.42%(c) 4.94%(c)
Portfolio turnover(d)..................... 106.81% 106.81% 7.06% 7.06% 14.06% 14.06%
</TABLE>
- - ---------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
See notes to financial statements.
-45-
<PAGE> 46
BB&T MUTUAL FUNDS GROUP
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
-------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED OCTOBER 9, 1992 TO
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 SEPTEMBER 30, 1993(A)
-------------------- -------------------- -----------------------
INVESTOR TRUST INVESTOR TRUST INVESTOR TRUST
-------------------- -------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........ $ 9.33 $ 9.34 $10.39 $ 10.40 $10.00 $ 10.00
-------- ------- -------- ------- -------- --------
INVESTMENT ACTIVITIES
Net investment income..................... 0.59 0.61 0.59 0.62 0.63 0.64
Net realized and unrealized gains (losses)
on investments.......................... 0.55 0.55 (1.04) (1.04) 0.39 0.40
-------- ------- -------- ------- -------- --------
Total from Investment Activities...... 1.14 1.16 (0.45) (0.42) 1.02 1.04
-------- ------- -------- ------- -------- --------
DISTRIBUTIONS
Net investment income..................... (0.59) (0.61) (0.59) (0.62) (0.63) (0.64)
Net realized gains........................ (0.02) (0.02)
-------- ------- -------- ------- -------- --------
Total Distributions................... (0.59) (0.61) (0.61) (0.64) (0.63) (0.64)
-------- ------- -------- ------- -------- --------
NET ASSET VALUE, END OF PERIOD.............. $ 9.88 $ 9.89 $ 9.33 $ 9.34 $10.39 $ 10.40
======= ======= ======= ======= ======= =======
Total Return (excludes sales charge)........ 12.63% 12.91% (4.48%) (4.23%) 10.53%(b) 10.76%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)........... $5,173 $78,578 $6,772 $68,451 $5,238 $59,816
Ratio of expenses to average net assets... 1.09% 0.85% 0.96% 0.70% 0.59%(c) 0.39%(c)
Ratio of net investment income to average
net assets.............................. 6.22% 6.43% 6.03% 6.27% 6.26%(c) 6.45%(c)
Ratio of expenses to average net
assets*................................. 1.50% 1.00% 1.56% 1.06% 1.55%(c) 1.03%(c)
Ratio of net investment income to average
net assets*............................. 5.81% 6.28% 5.43% 5.91% 5.30%(c) 5.82%(c)
Portfolio turnover(d)..................... 68.91% 68.91% 0.38% 0.38% 15.27% 15.27%
</TABLE>
- - ---------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
See notes to financial statements.
-46-
<PAGE> 47
BB&T MUTUAL FUNDS GROUP
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
-------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED OCTOBER 16, 1992 TO
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 SEPTEMBER 30, 1993(A)
-------------------- -------------------- -----------------------
INVESTOR TRUST INVESTOR TRUST INVESTOR TRUST
-------------------- -------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........ $ 9.78 $ 9.78 $ 10.29 $ 10.29 $ 10.00 $ 10.00
-------- ------- -------- ------- -------- --------
INVESTMENT ACTIVITIES
Net investment income..................... 0.36 0.37 0.36 0.38 0.36 0.36
Net realized and unrealized gains (losses)
on investments.......................... 0.37 0.37 (0.50) (0.50) 0.29 0.29
-------- ------- -------- ------- -------- --------
Total from Investment Activities...... 0.73 0.74 (0.14) (0.12) 0.65 0.65
-------- ------- -------- ------- -------- --------
DISTRIBUTIONS
Net investment income..................... (0.36) (0.37) (0.36) (0.38) (0.36) (0.36)
Net realized gains........................ (0.01) (0.01)
-------- ------- -------- ------- -------- --------
Total Distributions................... (0.36) (0.37) (0.37) (0.39) (0.36) (0.36)
-------- ------- -------- ------- -------- --------
NET ASSET VALUE, END OF PERIOD.............. $10.15 $ 10.15 $ 9.78 $ 9.78 $ 10.29 $ 10.29
======= ======= ======= ======= ======= ========
Total Return (excludes sales charge)........ 7.61% 7.77% (1.33%) (1.18%) 6.60%(b) 6.62%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)........... $8,717 $28,091 $11,083 $27,770 $13,695 $20,128
Ratio of expenses to average net assets... 1.05% 0.91% 0.75% 0.63% 0.43%(c) 0.42%(c)
Ratio of net investment income to average
net assets.............................. 3.63% 3.78% 3.63% 3.77% 3.80%(c) 3.80%(c)
Ratio of expenses to average net
assets*................................. 1.63% 1.13% 1.66% 1.17% 1.77%(c) 1.30%(c)
Ratio of net investment income to average
net assets*............................. 3.05% 3.55% 2.72% 3.24% 2.45%(c) 2.92%(c)
Portfolio turnover(d)..................... 9.38% 9.38% 0.56% 0.56% 5.92% 5.92%
</TABLE>
- - ---------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
See notes to financial statements.
-47-
<PAGE> 48
BB&T MUTUAL FUNDS GROUP
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
-----------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED OCTOBER 9, 1992 TO
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 SEPTEMBER 30, 1993(A)
--------------------- --------------------- -------------------------
INVESTOR TRUST INVESTOR TRUST INVESTOR TRUST
--------------------- --------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD....... $ 11.26 $ 11.28 $ 11.26 $ 11.28 $ 10.00 $ 10.00
-------- -------- -------- ------- -------- --------
INVESTMENT ACTIVITIES
Net investment income.................... 0.25 0.28 0.25 0.28 0.28 0.30
Net realized and unrealized gains on
investments............................ 1.98 1.98 0.12 0.11 1.27 1.28
-------- -------- -------- ------- -------- --------
Total from Investment Activities..... 2.23 2.26 0.37 0.39 1.55 1.58
-------- -------- -------- ------- -------- --------
DISTRIBUTIONS
Net investment income.................... (0.25) (0.28) (0.26) (0.28) (0.29) (0.30)
Net realized gains....................... (0.12) (0.12) (0.11) (0.11)
In excess of net realized gains.......... (0.15) (0.15)
-------- -------- -------- ------- -------- --------
Total Distributions.................. (0.52) (0.55) (0.37) (0.39) (0.29) (0.30)
-------- -------- -------- ------- -------- --------
NET ASSET VALUE, END OF PERIOD............. $ 12.97 $ 12.99 $ 11.26 $ 11.28 $ 11.26 $ 11.28
======= ======== ====== ======= ====== =======
Total Return (excludes sales charge)....... 20.62% 20.88% 3.33% 3.58% 15.72%(b) 16.06%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000).......... $ 10,842 $145,603 $ 7,973 $89,355 $ 6,009 $ 82,358
Ratio of expenses to average net
assets................................. 1.07% 0.82% 0.92% 0.66% 0.63%(c) 0.40%(c)
Ratio of net investment income to average
net assets............................. 2.15% 2.40% 2.26% 2.51% 2.85%(c) 3.08%(c)
Ratio of expenses to average net
assets*................................ 1.60% 1.10% 1.65% 1.15% 1.68%(c) 1.17%(c)
Ratio of net investment income to average
net assets*............................ 1.62% 2.11% 1.52% 2.02% 1.81%(c) 2.31%(c)
Portfolio turnover(d).................... 8.73% 8.73% 21.30% 21.30% 27.17% 27.17%
</TABLE>
- - ---------
* During the period certain accounting fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been as
indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
See notes to financial statements.
-48-
<PAGE> 49
BB&T MUTUAL FUNDS GROUP
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
BALANCED FUND
-------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED JULY 1, 1993 TO
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 SEPTEMBER 30, 1993(A)
-------------------- -------------------- -----------------------
INVESTOR TRUST INVESTOR TRUST INVESTOR TRUST
-------------------- -------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........ $ 9.76 $ 9.74 $10.20 $ 10.18 $10.00 $ 10.00
-------- ------- -------- ------- -------- --------
INVESTMENT ACTIVITIES
Net investment income..................... 0.44 0.46 0.38 0.40 0.08 0.09
Net realized and unrealized gains (losses)
on investments.......................... 1.27 1.27 (0.44) (0.44) 0.21 0.18
-------- ------- -------- ------- -------- --------
Total from Investment Activities...... 1.71 1.73 (0.06) (0.04) 0.29 0.27
-------- ------- -------- ------- -------- --------
DISTRIBUTIONS
Net investment income..................... (0.43) (0.46) (0.38) (0.40) (0.09) (0.09)
-------- ------- -------- ------- -------- --------
Total Distributions................... (0.43) (0.46) (0.38) (0.40) (0.09) (0.09)
-------- ------- -------- ------- -------- --------
NET ASSET VALUE, END OF PERIOD.............. $11.04 $ 11.01 $ 9.76 $ 9.74 $10.20 $ 10.18
-------- ------- -------- ------- -------- --------
Total Return (excludes sales charge)........ 18.00% 18.23% (0.64%) (0.42%) 2.88%(b) 2.74%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)........... $9,257 $49,794 $8,560 $39,715 $2,569 $20,374
Ratio of expenses to average net assets... 1.17% 0.92% 0.98% 0.73% 0.50%(c) 0.44%(c)
Ratio of net investment income to average
net assets.............................. 4.27% 4.51% 4.02% 4.22% 4.39%(c) 4.44%(c)
Ratio of expenses to average net
assets*................................. 1.71% 1.21% 1.75% 1.25% 2.00%(c) 1.47%(c)
Ratio of net investment income to average
net assets*............................. 3.73% 4.22% 3.25% 3.70% 2.89%(c) 3.42%(c)
Portfolio turnover(d)..................... 23.68% 23.68% 12.91% 12.91% 8.32% 8.32%
</TABLE>
- - ---------
* During the period certain accounting fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been as
indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
See notes to financial statements.
-49-
<PAGE> 50
BB&T MUTUAL FUNDS GROUP
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SMALL COMPANY
GROWTH FUND
------------------------
DECEMBER 7, 1994 TO
SEPTEMBER 30, 1995(A)
------------------------
INVESTOR TRUST
------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................................................. $10.00 $ 10.00
-------- -------
INVESTMENT ACTIVITIES
Net investment income.............................................................. (0.08) (0.07)
Net realized and unrealized gains on investments................................... 4.61 4.64
-------- -------
Total from Investment Activities............................................... 4.53 4.57
-------- -------
NET ASSET VALUE, END OF PERIOD....................................................... $14.53 $ 14.57
======= =======
Total Return (excludes sales charge)................................................. 45.30%(b) 45.70%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000).................................................... $1,096 $16,962
Ratio of expenses to average net assets............................................ 2.50%(c) 2.33%(c)
Ratio of net investment income to average net assets............................... (1.56%)(c) (1.34%)(c)
Ratio of expenses to average net assets*........................................... 2.84%(c) 2.42%(c)
Ratio of net investment income to average net assets*.............................. (1.90%)(c) (1.43%)(c)
Portfolio turnover(d).............................................................. 46.97% 46.97%
</TABLE>
- - ---------
* During the period certain fees were voluntarily reduced. In addition,
certain expenses were reimbursed. If such voluntary fee reductions and
reimbursements had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
See notes to financial statements.
-50-
<PAGE> 51
(This page intentionally left blank)
<PAGE> 52
LOGO
INVESTMENT ADVISER
Branch Banking and Trust Company
434 Fayetteville Street Mall
Raleigh, NC 27601
DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219
LEGAL COUNSEL
Ropes & Gray
1301 K Street, N.W.
Suite 800 E.
Washington, DC 20005
TRANSFER AGENT
BISYS Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, OH 43219
AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza, Suite 1600
Columbus, OH 43215
LOGO
ANNUAL REPORT
------------------------
TO SHAREHOLDERS
------------------------
SEPTEMBER 30, 1995
