<PAGE>
BB&T
Mutual Funds
Letter From the Chairman
Dear Shareholders:
We are pleased to report that the six months ended March 31, 1996, were a period
of solid growth for the financial markets and the BB&T Mutual Funds Group.
During the period, stocks in particular continued to do well, and stock mutual
funds experienced record levels of new investments by shareholders. Total net
assets under management by the BB&T Mutual Funds Group also grew--by 27%, rising
from $540 million to $688 million for the six months ended March 31, 1996.
We urge you to read the following report closely. In it, you will find a
detailed discussion of the financial markets and the BB&T Mutual Funds for this
period, which is intended to help you follow the performance of your
investments.
As always, 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. 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,
/s/ J. David Huber
J. David Huber
Chairman
- --------------------------------------------------------------------------------
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.
<PAGE>
Letter From the Investment Adviser
The current economic expansion has just begun its sixth year, producing an
average 2.3% annual increase in inflation-adjusted gross domestic product (GDP)
over its first five years. In historical terms this has been both a long and a
mild expansion. Eight out of the last 19 quarters now reported have registered
less than 2% inflation-adjusted economic growth.
Fourth quarter 1995 inflation-adjusted GDP is currently being reported up just
.5%, while the economy grew 2% for all of 1995. In what has now become a common
occurrence, the economy is again reaccelerating. This is the fourth time in the
last five years that the economy has revived itself from less than 1% growth.
Consumers spur growth
The consumer appears to be at the core of the new year resurgence. Whether it is
faster refunds from the IRS, a strong stock market, or an improving employment
picture, consumers have ratcheted up their spending. Most of this buying has
been centered on cars and houses. Consumer spending appears to be running at
more than twice the fourth quarter's 1.2% pace, despite record levels of
consumer debt, rising debt delinquencies and nagging employment insecurity.
The manufacturing segment of the economy has worked through most of last year's
accumulated inventory. With inventories more in line with final sales, increases
in sales should directly translate into increased production, stimulating
economic growth.
Capital spending to slow
However, much of the manufacturing sector's recent activity has centered around
capital spending by businesses, which has witnessed a noticeable deceleration.
While accounting for only 10% of GDP, capital spending has accounted for 28% of
the current expansion's growth. Capital spending rose by only 3.1% in the fourth
quarter of 1995, less than half the rate registered earlier in the year. A
recent survey by the Commerce Department indicates that corporations plan even
less growth (1.5%) in capital spending in 1996.
Historically low inflation
This slow and unsteady economic growth has held inflation at bay. The consumer
price index was up a modest 2.8% over last year, despite relatively high
employment and factory operating rates. Worldwide, the average inflation rate of
the G-7 (the seven largest economies) was reported at 2.2%, the lowest level in
30 years.
The outlook for inflation is not clear: both grain and energy prices have been
rising sharply, while prices of other industrial raw materials have been
falling. This divergence is captured in the crude goods component of the
producer price index, which measures the price changes of raw materials at the
wholesale level. Over the last 12 months, this index is up 6.6%, but if food and
energy are excluded, it is actually down 11%. The uncertainty is compounded by
modestly rising unit labor costs.
-2-
<PAGE>
Corporate restructuring pays off
1996 might be the year that a decade of corporate restructuring finally
translates into an improving trade position for the U.S. Our export sector is
poised to benefit, if and when our major trading partners see improvement in
their economies.
The Federal Reserve Board has now cut interest rates three times since last
July, with the last cut in January. These rate cuts were made as the economy
showed signs of softening and inflation appeared under control. The Federal
Reserve met in March and left rates unchanged, comfortable with the economy's
current posture, viewing it as "running at a reasonably good clip."
The economy appears to be experiencing a modest reacceleration. The consumer has
stepped up activity, the manufacturing sector seems poised for a rebound and the
global economy appears solid and improving. As with all long-lived recoveries,
inflationary pressures are not very far from the surface. Whether by luck or
design, the Federal Reserve has been able to hold the economy on a low-growth,
disinflationary trajectory, despite a challenging environment.
The performance reports of the individual Funds follow this letter. These
reports contain a brief review of each Fund's respective market and recent
performance, as well as the strategic positioning for each Fund.
Sincerely,
/s/ David C. McMahon
David C. McMahon
Executive Vice President and Chief Investment Officer
Branch Banking and Trust Company
-3-
<PAGE>
Performance Report
The BB&T Growth & Income Stock Fund
The stock market continued upward during the six months ended March 31, 1996.
But as the bull market continued, its advance narrowed and leadership changed.
Once at the forefront of the market's rise, technology stocks slipped back, and
consumer cyclical stocks moved into the lead. Large- to mid-sized-capitalization
companies were also among the strongest performers of the period.
As a result, because the Fund is value-oriented and invested in such companies
across a wide spectrum of industries, we are pleased to report that it did very
well during the period. With a total return of 11.72% (Class A Shares),+ the
Fund matched its industry benchmark, the S&P 500 Stock Index, a commonly used
measure of stock market performance, which also returned 11.72% for the six
months ended March 31, 1996.
Defensive diversification
Over the past several years, cheered by virtually continuous good economic news,
the stock market has moved higher and higher with very few dips along the way.
Historically, however, the market has been far more volatile. Consequently, in
the months ahead, as the economy makes the transition to slower, lower levels of
growth, we would not be surprised to see the market return to a more
traditional--and more volatile--pattern.
As a result, in recent months, we have moved to position the portfolio more
defensively, while continuing to diversify its assets across a broad spectrum of
industries. Within each sector, we look for companies that offer value,
focussing on large- to mid-sized companies. Most recently, we have seen more
relative value in the mid-sized companies. In the past, such stocks have tended
to be less volatile than larger- or smaller-company stocks while offering
investors solid potential for growth.
At the period's end, the Fund was widely diversified with holdings in over 70
companies. As of March 31, 1996, the Fund's top five holdings were: Aon Corp.
(2.54%), Anheuser-Busch (2.31%), Pitney Bowes (2.27%), Royal Dutch Petroleum
(2.24%) and Bristol Myers-Squibb (2.20%).++
- --------------------------------------------------------------------------------
+With the maximum sales charge of 4.50%, the Fund's total return for the six-
month period was 6.71% (Class A Shares). Some of the fees of the Fund are
currently being waived, resulting in higher total returns than would occur if
the full fees were charged.
++The composition of the Fund's holdings is subject to change.
-4-
<PAGE>
The BB&T Small Company Growth Fund /1/
The Fund's exceptional performance during the six months ended March 31, 1996,
was due primarily to strong sector allocation and stock selection. While the
Fund had a material position in the technology sector, it was underweighted in
semi-conductor and semi-conductor-related stocks--the two industries that took
the brunt of the tech stock sell-off during the period.
Despite the volatile environment, very few of the Fund's technology holdings
experienced a dramatic decline or even a temporary setback. In addition, our
holdings in health care, particularly those in medical device and physician
practice-management companies, made substantial contributions to performance.
As a result, we are extremely pleased to report that for the six months ended
March 31, 1996, the Fund posted a total return of 19.68% (Class A Shares),+ more
than twice the return of 7.41% of its benchmark, the Russell 2000 Index, which
is commonly used to represent the performance of small-company stocks.
What's next?
We expect the markets to be relatively volatile until investors get a better
sense of where the economy and interest rates are going. Earnings, too, will
play a critical role in determining what happens in the market. While we expect
earnings to be positive and strong for the foreseeable future, they could still
disappoint investors who have grown used to record-breaking numbers over the
past two years.
As a result, we expect to approach the markets cautiously in the next several
months. We will continue to seek out those companies with solid balance sheets
and the potential to be leaders in their industries. Should the economy's growth
prove to be slowing, we will look to add to our holdings in specialty finance
and interest-rate sensitive stocks. If, however, the economy turns out to be
expanding, we will seek to increase the Fund's positions in consumer-oriented
stocks.
As of March 31, 1996, the Fund's top five holdings were: Accustaff (3.00%), APAC
Teleservices (2.28%), Jones Medical Industries (1.72%), Medisense (1.65%) and
USA Detergents (1.61%).++
- --------------------------------------------------------------------------------
/1/Small-capitalization funds typically carry additional risks, since smaller
companies generally have a higher risk of failure and, historically, their
stocks have experienced a greater degree of market volatility than stocks on
average.
+With the maximum sales charge of 4.50%, the Fund's total return for the six-
month period was 14.33% (Class A Shares). Some of the fees of the Fund are
currently being waived, resulting in higher total returns than would occur if
the full fees were charged.
++The composition of the Fund's holdings is subject to change.
-5-
<PAGE>
The BB&T Balanced Fund
During the six months ended March 31, 1996, the Fund's stock holdings were
increased from a slightly underweighted to a slightly overweighted position in
the portfolio. The stock market continued to climb, and while the advance was
not as broadly based as it was early in 1995, our holdings in value-oriented
companies posted impressive gains.
Given the volatile environment of the fixed-income markets, we reduced the
Fund's bond holdings. In addition, the average maturity of the portfolio was
shortened to help maintain value, since longer-term securities are more
vulnerable to changes in interest rates. As a result, the Fund was well
positioned for the rapid increase in interest rates in the first quarter of
1996. For the six months ended March 31, 1996, the Fund returned 7.05% (Class A
Shares),+ halfway between the 11.72% and 2.64% returns for its two benchmarks,
the S&P 500 Stock Index and the Lehman Brothers Intermediate Government Bond
Index, respectively. The latter index is widely used to represent the
performance of government bonds with maturities of less than 10 years.
Short-term volatility, long-term positioning
As the period drew to an end, both the stock and bond markets grew more volatile
as investors worried about the direction of the economy and interest rates. In
an effort to minimize the impact, the Fund's allocation to equities was reduced
to 51%. Approximately 40% of the Fund's assets were invested in bonds. The
remainder was held in cash and cash equivalents--positioning the Fund to
capitalize on opportunities that may arise in the coming months.
Looking ahead, we believe that high-quality companies just slightly smaller than
the very largest blue-chip companies offer investors very real potential for
growth. Nevertheless, in the near term, we will be monitoring trends in interest
rates and corporate profits closely before we make any substantial changes in
the Fund's composition.
As of March 31, 1996, the equity portion of the portfolio was broadly
diversified, with holdings in over 90 different companies. The top five equity
holdings were: Phillips Petroleum (1.45%), Bristol Myers-Squibb (1.34%) Hewlett
Packard (1.23%), Monsanto (1.22%) and Sprint (1.09%).++ The fixed-income portion
was invested primarily in U.S. Government securities--giving the portfolio an
average credit quality of AAA; the average maturity was 5.9 years.
- --------------------------------------------------------------------------------
+With the maximum sales charge of 4.50%, the Fund's total return for the six-
month period was 2.24% (Class A Shares). Some of the fees of the Fund are
currently being waived, resulting in higher total returns than would occur if
the full fees were charged.
++The composition of the Fund's holdings is subject to change.
-6-
<PAGE>
The BB&T Intermediate U.S. Government Bond Fund
The BB&T Short-Intermediate U.S. Government Income Fund
While 1995 was characterized by dramatically declining interest rates and above-
average returns on bonds, the first quarter of 1996 was a more difficult period
for fixed-income investors. As the year began, investors' overly optimistic
expectations were dashed--as interest rates rose rapidly in reaction to signs of
economic strength and a renewed fear of inflation.
Given the challenging market environment and the current uncertainty surrounding
the level of economic growth and inflation, we turned cautious early in 1996.
Maturities were shortened, positioning the Funds defensively to minimize the
effects of rising interest rates. In addition, exposure to pass-through mortgage
securities and corporate bonds was increased modestly in an effort to improve
yields and total return potential.
The Intermediate U.S. Government Bond Fund had a total return of 1.61% (Class A
Shares)+ for the period, compared to 2.64% for its benchmark, the Lehman
Brothers Intermediate Government Bond Index. The Short-Intermediate U.S.
Government Income Fund returned 2.12% (Class A Shares)+ compared to 2.85% for
its index, the Lehman Brothers 1-3 Year Government Bond Index, an index which is
generally used to represent the performance of U.S. Government bonds in that
maturity range.
Looking ahead
Without a clearer picture of the direction of economic activity, the market bias
has been toward higher interest rates. Therefore, we intend to remain cautious
until we can see market conditions improving. As always, we will continue to
search other sectors of the fixed-income market for value to enhance total
return to our shareholders.
As of March 31, 1996, the average maturity of the Intermediate U.S. Government
Bond Fund was 5.7 years and of the Short-Intermediate U.S. Government Income
Fund, 2.6 years. As is characteristic of our investment process, the fixed-
income portfolios remain fully invested and are heavily concentrated in debt
obligations of the U.S. Government and its agencies.
- --------------------------------------------------------------------------------
+With the maximum sales charge of 4.50%, the Intermediate U.S. Government Bond
Fund had a total return of -0.41% (Class A Shares) for the six-month period;
and, with a maximum sales charge of 2.00%, the Short-Intermediate U.S.
Government Income Fund returned 0.09% (Class A Shares). 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.
-7-
<PAGE>
The BB&T North Carolina Intermediate Tax-Free Fund/2/
While the municipal sector suffered along with the taxable sector as interest
rates rose in the first quarter of 1996, investors in tax-free bonds did not
experience the losses that taxable investors did for several reasons. Supply
problems, a major concern over the past year, eased somewhat, and discussion of
a flat tax moved to the back burner as the primary election season ended.
As a result, the environment in the municipal markets was comparatively more
positive and less volatile than the taxable markets during the six months ended
March 31, 1996. Given the uncertain direction of interest rates, we approached
the marketplace cautiously throughout the period and continued to stress quality
in the selection of all investments. For the six-month period, the Fund had a
total return of 1.47% (Class A Shares),+ compared to 2.16% for its benchmark,
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.
Flat tax fears fade
While the topic of a flat tax may arise again during the Presidential election
period, any such extensive reform may be several years away at best. In
addition, while supply is not overwhelming, demand for municipal issues is being
met. Moreover, due to taxpayers' reluctance to authorize new borrowings, the
quality of new issues is improving. As a result, in the months ahead, we expect
the municipal markets to be relatively more stable and more positive than the
taxable markets.
The Fund continues to hold laddered maturities of high-quality North Carolina
municipal bonds. These holdings are widely diversified--and no issue accounts
for more than 6% of the portfolio. In addition, the credit quality of the
Fund's holdings is AA, with 90% of its assets invested in general obligations
bonds and 10% in high-quality revenue bonds. As of March 31, 1996, the average
maturity of the Fund was 5.8 years. No major changes in the allocation, credit
or maturity structure of the portfolio are anticipated in the near future.
- --------------------------------------------------------------------------------
+With the maximum sales charge of 2.00%, North Carolina Intermediate Tax-Free
Fund's total return was -0.58% (Class A Shares) for the six-month period. Some
of the fees of the Fund are currently being waived, resulting in higher total
returns than would occur if the full fees were charged.
/2/The Fund's income may be subject to certain state and local taxes and,
depending on your tax status, to the federal alternative minimum tax.
-8-
<PAGE>
The U.S. Treasury Money Market Fund
The six months ended March 31, 1996, were challenging ones for money-market
investors. Throughout the fourth quarter of 1995, short-term interest rates
slipped lower as the economy slowed. Then, as the new year began, a variety of
indicators suggested that the economy had perhaps not cooled off as much as
expected, causing the marketplace to react quickly and dramatically--and short-
term interest rates jumped.
Due to the mixed signals the economy is sending, it is extremely difficult to
predict where short-term interest rates are headed in the coming months. As a
result, we have focused our efforts on maintaining the Fund's flexibility by
investing approximately 50% of the Fund's assets in overnight repurchase
agreements. Whether interest rates continue to climb or level off, we believe
the Fund is well positioned to capitalize on opportunities that may arise. As
of March 31, 1996, the average maturity of the Fund's holdings was 34 days;
average credit quality was AAA.
Although the BB&T U.S. Treasury Money Market Fund seeks to maintain a stable net
asset value of $1.00, there is no assurance that it will be able to do so. Some
of the fees of the Fund are currently being waived, resulting in higher total
returns than would occur if the full fees were charged. An investment in the
Fund is neither insured nor guaranteed by the U.S. Government.
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.
-9-
<PAGE>
Table Of Contents
Statements of Assets and Liabilities
PAGE 11
Statements of Operations
PAGE 15
Statements of Changes in Net Assets
PAGE 17
Schedules of Portfolio Investments
PAGE 21
Notes to Financial Statements
PAGE 35
Financial Highlights
PAGE 44
-10-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Statements of Assets and Liabilities
March 31, 1996
(Unaudited)
<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..................... $ 83,220,689 $53,563,457 $110,515,601
Repurchase agreements..................... 85,483,939 -- --
------------ ----------- ------------
Total Investments (Cost
$168,704,628; $53,904,676; and
$111,258,085, respectively).............. 168,704,628 53,563,457 110,515,601
Interest receivable....................... 45,686 1,062,342 1,684,500
Prepaid expenses.......................... 8,062 4,938 3,185
Other assets.............................. 14,277 572 1,750
------------ ----------- ------------
Total Assets........................... 168,772,653 54,631,309 112,205,036
------------ ----------- ------------
LIABILITIES:
Dividends payable......................... 629,008 274,615 551,802
Payable for capital shares redeemed....... 29,761 -- --
Accrued expenses and other
payables:
Investment advisory fees................ 56,105 23,751 46,885
Administration fees..................... 28,052 9,500 18,754
Distribution fees--Class A.............. 4,869 1,424 1,042
Distribution fees--Class B.............. 441 -- 103
Accounting and transfer agent fees...... 15,814 9,322 16,317
Other................................... 9,822 10,033 14,140
------------ ----------- ------------
Total Liabilities...................... 773,872 328,645 649,043
------------ ----------- ------------
NET ASSETS:
Capital................................... 167,998,781 55,858,950 113,650,772
Undistributed net investment income....... -- -- 5,718
Net unrealized depreciation on
investments.............................. -- (341,219) (742,484)
Accumulated undistributed net
realized losses on investment
transactions............................. -- (1,215,067) (1,358,013)
------------ ----------- ------------
Net Assets............................. $167,998,781 $54,302,664 $111,555,993
============ =========== ============
</TABLE>
Continued
-11-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Statements of Assets and Liabilities
March 31, 1996
(Unaudited)
<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>
Net Assets
Class A................................... $ 22,865,813 $ 6,617,357 $ 4,810,416
Class B................................... 569,297 -- 143,043
Trust Class............................... 144,563,671 47,685,307 106,602,534
------------ ----------- ------------
Total................................... $167,998,781 $54,302,664 $111,555,993
============ =========== ============
Outstanding units of beneficial
interest (shares)
Class A................................... 22,865,813 673,626 493,091
Class B................................... 569,297 -- 14,729
Trust Class............................... 144,563,671 4,852,066 10,915,576
------------ ----------- ------------
Total................................... 167,998,781 5,525,692 11,423,396
============ =========== ============
Net asset value
Class A--redemption price per share....... $ 1.00 $ 9.82 $ 9.76
Class B--offering price per share*........ 1.00 -- 9.71
Trust Class--offering and
redemption price per share............... 1.00 9.83 9.77
============ =========== ============
Maximum Sales Charge (Class A).............. 2.00% 4.50%
============ =========== ============
Maximum Offering Price (100%/
(100%-Maximum Sales Charge) of net asset
value adjusted to nearest cent) per
share--Class A............................. $ 1.00(a) $ 10.02 $ 10.22
============ =========== ============
</TABLE>
- ------------
* Redemption price per share (Class B) varies by length of time shares are
held.
(a) Offering price and redemption price are the same for the U.S. Treasury
Money Market Fund.
See notes to financial statements
-12-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Statements of Assets and Liabilities
March 31, 1996
(Unaudited)
<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 (Cost $34,846,705; $172,035,724;
$68,178,623; and $21,478,163, respectively).................. $35,134,125 $211,455,456 $76,116,435 $30,533,076
Cash.......................................................... -- -- -- 4,299
Interest receivable........................................... 468,999 389,698 634,479 931
Receivable for capital shares issued.......................... -- -- -- 1,910
Receivable from brokers for investments sold.................. -- -- -- 28,484
Unamortized organization costs................................ -- -- -- 7,634
Prepaid expenses.............................................. 4,653 17,918 6,595 22,874
Other assets.................................................. 2,743 7,892 1,760 124
----------- ------------ ----------- -----------
Total Assets.............................................. 35,610,520 211,870,964 76,759,269 30,599,332
----------- ------------ ----------- -----------
LIABILITIES:
Dividends payable............................................. 112,368 240,019 225,218 --
Payable for capital shares redeemed........................... -- -- 665 --
Payable to brokers for investments purchased.................. -- -- -- 280,054
Accrued expenses and other payables:
Investment advisory fees.................................... 15,107 89,370 32,127 24,176
Administration fees......................................... 4,532 35,748 12,851 4,835
Distribution fees--Class A.................................. 1,120 3,047 2,441 638
Distribution fees--Class B.................................. -- 846 1,045 473
Accounting and transfer agent fees.......................... 7,264 17,694 15,809 13,784
Other....................................................... 4,527 22,436 8,252 5,882
----------- ------------ ----------- -----------
Total Liabilities......................................... 144,918 409,160 298,408 329,842
----------- ------------ ----------- -----------
NET ASSETS:
Capital....................................................... 35,246,593 170,407,027 68,542,080 22,176,463
Undistributed net investment income (loss).................... -- 10 9 (209,813)
Net unrealized appreciation on investments.................... 287,420 39,419,732 7,937,812 9,054,913
Accumulated undistributed net realized gains (losses) on
investment transactions...................................... (68,411) 1,635,035 (19,040) (752,073)
----------- ------------ ----------- -----------
Net Assets................................................. $35,465,602 $211,461,804 $76,460,861 $30,269,490
=========== ============ =========== ===========
</TABLE>
Continued
-13-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Statements of Assets and Liabilities
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
North Carolina Growth and Small Company
Intermediate Income Stock Balanced Growth
Tax-Free Fund Fund Fund Fund
------------- ------------ -------- -------------
<S> <C> <C> <C> <C>
Net Assets
Class A.................................................. $ 8,808,628 $ 14,821,271 $11,792,963 $ 3,465,401
Class B.................................................. -- 1,223,314 1,366,808 736,316
Trust Class.............................................. 26,656,974 195,417,219 63,301,090 26,067,773
----------- ------------ ----------- -----------
Total.................................................. $35,465,602 $211,461,804 $76,460,861 $30,269,490
=========== ============ =========== ===========
Outstanding units of beneficial interest (shares)
Class A.................................................. 870,741 1,038,469 1,016,061 199,334
Class B.................................................. -- 85,836 118,178 42,412
Trust Class.............................................. 2,634,648 13,668,999 5,464,385 1,493,974
----------- ------------ ----------- -----------
Total.................................................. 3,505,389 14,793,304 6,598,624 1,735,720
=========== ============ =========== ===========
Net asset value
Class A--redemption price per share...................... $ 10.12 $ 14.27 $ 11.61 $ 17.38
Class B--offering price per share*....................... -- 14.25 11.56 17.36
Trust Class--offering and redemption price per share..... 10.12 14.30 11.58 17.45
=========== ============ =========== ===========
Maximum Sales Charge (Class A)............................. 2.00% 4.50% 4.50% 4.50%
=========== ============ =========== ===========
Maximum Offering Price (100%/ (100%-Maximum Sales
Charge) of net asset value adjusted to nearest cent)
per share--Class A........................................ $ 10.33 $ 14.94 $ 12.16 $ 18.20
=========== ============ =========== ===========
</TABLE>
- ------------
* Redemption price per share (Class B) varies by length of time shares are held.
See notes to financial statements
-14-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Statements of Operations
For the six months ended March 31, 1996
(Unaudited)
<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................................ $4,326,705 $1,770,987 $ 3,227,129
---------- ---------- -----------
Total Income............................ 4,326,705 1,770,987 3,227,129
---------- ---------- -----------
EXPENSES:
Investment advisory fees....................... 313,875 160,485 286,624
Administration fees............................ 156,938 53,337 95,126
Distribution fees--Class A..................... 46,832 17,241 12,968
Distribution fees--Class B..................... 765 -- 126
Custodian and accounting fees.................. 39,396 25,732 30,482
Legal and audit fees........................... 22,491 9,939 15,639
Trustees' fees and expenses.................... 4,275 1,533 2,484
Transfer agent fees............................ 30,951 23,208 28,923
Registration and filing fees................... 9,042 2,553 2,052
Printing costs................................. 18,807 5,460 8,130
Other.......................................... 2,849 1,551 2,156
Expenses voluntarily reduced................... (23,480) (35,784) (55,307)
---------- ---------- -----------
Total Expenses.......................... 622,741 265,255 429,403
---------- ---------- -----------
Net Investment Income.......................... 3,703,964 1,505,732 2,797,726
========== ========== ===========
REALIZED/UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gains (losses) on
investment transactions....................... -- 102,657 (141,390)
Change in unrealized depreciation on
investments................................... -- (482,350) (1,965,337)
---------- ---------- -----------
Net realized/unrealized losses on investments.. -- (379,693) (2,106,727)
---------- ---------- -----------
Change in net assets resulting from
operations.................................... $3,703,964 $1,126,039 $ 690,999
========== ========== ===========
</TABLE>
See notes to financial statements
-15-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Statements of Operations
For the six months ended March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
North Carolina Growth and Small Company
Intermediate Income Stock Balanced Growth
Tax-Free Fund Fund Fund Fund
------------- ------------ -------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income............................................ $ 838,122 $ 227,867 $ 1,196,309 $ 99,476
Dividend income............................................ -- 2,424,408 464,319 3,580
---------- ------------ ----------- -----------
Total Income....................................... 838,122 2,652,275 1,660,628 103,056
---------- ------------ ----------- -----------
EXPENSES:
Investment advisory fees................................... 108,819 677,558 254,306 113,562
Administration fees........................................ 36,273 182,311 68,454 22,579
Distribution fees--Class A................................. 22,114 31,244 25,881 4,757
Distribution fees--Class B................................. -- 1,169 1,690 613
Custodian and accounting fees.............................. 18,241 44,483 31,099 39,550
Legal and audit fees....................................... 7,443 25,839 10,923 3,981
Organization costs......................................... -- -- -- 5,595
Trustees' fees and expenses................................ 1,098 4,914 1,899 567
Transfer agent fees........................................ 21,456 41,850 30,267 27,903
Registration and filing fees............................... 2,160 10,434 4,164 2,757
Printing costs............................................. 4,386 11,307 4,341 1,472
Other...................................................... 970 3,495 1,309 339
Expenses voluntarily reduced............................... (43,000) (237,472 ) (96,164) (3,069)
---------- ------------ ----------- -----------
Total expenses...................................... 179,960 797,132 338,169 220,606
---------- ------------ ----------- -----------
Net Investment Income (Loss)............................... 658,162 1,855,143 1,322,459 (117,550)
---------- ------------ ----------- -----------
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gains (losses) on
investment transactions................................... 9,539 1,845,888 372,851 (487,556)
Change in unrealized appreciation
(depreciation) on investments............................. (120,930) 16,395,683 2,892,623 5,273,703
---------- ------------ ----------- -----------
Net realized/unrealized gains
(losses) on investments................................... (111,391) 18,241,571 3,265,474 4,786,147
---------- ------------ ----------- -----------
Change in net assets resulting
from operations........................................... $ 546,771 $ 20,096,714 $ 4,587,933 $ 4,668,597
========== ============ =========== ===========
</TABLE>
See notes to financial statements
-16-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
U.S. Treasury Short-Intermediate
Money Market U.S. Government
Fund Income Fund
--------------------------- --------------------------
For the For the For the For the
Six months Year six months year
ended ended ended ended
March 31, September 30, March 31, September 30,
1996 1995 1996 1995
---------- ------------ ---------- -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income............................................ $ 3,703,964 $ 5,085,963 $ 1,505,732 $ 2,904,229
Net realized gains (losses) on investment transactions........... -- -- 102,657 (1,125,416)
Net change in unrealized appreciation (depreciation)
on investments.................................................. -- -- (482,350) 2,643,412
------------- ------------- ------------ ------------
Change in net assets resulting from operations..................... 3,703,964 5,085,963 1,126,039 4,422,225
------------- ------------- ------------ ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income....................................... (418,771) (285,363) (186,539) (421,136)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS(a):
From net investment income....................................... (2,704) -- -- --
DISTRIBUTIONS TO TRUST CLASS SHAREHOLDERS:
From net investment income....................................... (3,282,489) (4,800,600) (1,319,193) (2,483,093)
------------- ------------- ------------ ------------
Change in net assets from shareholder distributions................ (3,703,964) (5,085,963) (1,505,732) (2,904,229)
------------- ------------- ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued...................................... 166,891,516 413,983,846 11,963,960 16,642,791
Dividends reinvested............................................. 730,290 507,038 684,176 778,260
Cost of shares redeemed.......................................... (133,653,963) (359,409,516) (10,072,244) (15,385,757)
------------- ------------- ------------ ------------
Change in net assets from share transactions....................... 33,967,843 55,081,368 2,575,892 2,035,294
------------- ------------- ------------ ------------
Change in net assets............................................... 33,967,843 55,081,368 2,196,199 3,553,290
NET ASSETS:
Beginning of period.............................................. 134,030,938 78,949,570 52,106,465 48,553,175
------------- ------------- ------------ ------------
End of period.................................................... $ 167,998,781 $ 134,030,938 $ 54,302,664 $ 52,106,465
============= ============= ============ ============
SHARE TRANSACTIONS:
Issued........................................................... 166,891,516 413,983,846 1,203,982 1,718,480
Reinvested....................................................... 730,290 507,038 68,563 80,130
Redeemed......................................................... (133,653,963) (359,409,516) (1,016,853) (1,581,451)
------------- ------------- ------------ ------------
Change in shares................................................... 33,967,843 55,081,368 255,692 217,159
============= ============= ============ ============
</TABLE>
- --------------------
(a) From January 1, 1996 (commencement of operations) through March 31, 1996.
See notes to financial statements
-17-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Intermediate U.S. North Carolina
Government Bond Intermediate Tax-Free
Fund Fund
--------------------------- --------------------------
For the For the For the For the
Six months Year six months year
ended ended ended ended
March 31, September 30, March 31, September 30,
1996 1995 1996 1995
---------- ------------ ---------- -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income............................................... $ 2,797,726 $ 5,024,624 $ 658,162 $ 1,416,162
Net realized gains (losses) on investment transactions.............. (141,390) (1,194,343) 9,539 (77,950)
Net change in unrealized appreciation (depreciation) on investments. (1,965,337) 5,832,579 (120,930) 1,483,907
------------ ------------ ----------- ------------
Change in net assets resulting from operations........................ 690,999 9,662,860 546,771 2,822,119
------------ ------------ ----------- ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income.......................................... (145,903) (377,937) (155,508) (330,842)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS(a):
From net investment income.......................................... (637) -- -- --
DISTRIBUTIONS TO TRUST CLASS SHAREHOLDERS:
From net investment income.......................................... (2,651,186) (4,646,687) (502,654) (1,085,320)
------------ ------------ ----------- ------------
Change in net assets from shareholder distributions................... (2,797,726) (5,024,624) (658,162) (1,416,162)
------------ ------------ ----------- ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued......................................... 39,570,391 23,171,044 3,825,133 10,916,979
Dividends reinvested................................................ 2,047,358 3,929,840 127,999 278,161
Cost of shares redeemed............................................. (11,706,850) (23,210,413) (5,184,070) (14,646,808)
------------ ------------ ----------- ------------
Change in net assets from share transactions.......................... 29,910,899 3,890,471 (1,230,938) (3,451,668)
------------ ------------ ----------- ------------
Change in net assets.................................................. 27,804,172 8,528,707 (1,342,329) (2,045,711)
NET ASSETS:
Beginning of period................................................. 83,751,821 75,223,114 36,807,931 38,853,642
------------ ------------ ----------- ------------
End of period....................................................... $111,555,993 $ 83,751,821 $35,465,602 $ 36,807,931
============ ============ =========== ============
SHARE TRANSACTIONS:
Issued.............................................................. 3,919,195 2,419,901 373,940 1,107,634
Reinvested.......................................................... 204,060 414,007 12,513 28,266
Redeemed............................................................ (1,168,343) (2,420,431) (507,492) (1,480,683)
------------ ------------ ----------- ------------
Change in shares...................................................... 2,954,912 413,477 (121,039) (344,783)
============ ============ =========== ============
</TABLE>
- --------------------
(a) From January 1, 1996 (commencement of operations) through March 31, 1996.
See notes to financial statements
-18-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Growth and Income Stock Balanced
Fund Fund
--------------------------- ---------------------------
For the For the For the For the
six months year six months year
ended ended ended ended
March 31, September 30, March 31, September 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.......................................... $ 1,855,143 $ 2,757,443 $ 1,322,459 $ 2,228,732
Net realized gains (losses) on investment transactions......... 1,845,888 1,084,821 372,851 (361,045)
Net change in unrealized appreciation on investments........... 16,395,683 18,939,826 2,892,623 6,451,498
------------ ------------ ------------ ------------
Change in net assets resulting from operations................... 20,096,714 22,782,090 4,587,933 8,319,185
------------ ------------ ------------ ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income..................................... (112,049) (187,792) (186,963) (355,479)
In excess of net investment income............................. (736) -- -- --
From net realized gains from investment transactions........... (76,748) (83,203) -- --
In excess of net realized gains from investment transactions... -- (108,268) -- --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS(a):
From net investment income..................................... (1,411) -- (5,013) --
In excess of net investment income............................. (962) -- (2,192) --
DISTRIBUTIONS TO TRUST CLASS SHAREHOLDERS:
From net investment income..................................... (1,739,975) (2,569,651) (1,128,282) (1,873,253)
From net realized gains from investment transactions........... (1,044,981) (1,001,618) -- --
In excess of net realized gains from investment transactions... -- (1,152,654) -- --
------------ ------------ ------------ ------------
Change in net assets from shareholder distributions.............. (2,976,862) (5,103,186) (1,322,450) (2,228,732)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued.................................... 48,513,445 57,688,354 19,465,991 18,039,983
Dividends reinvested........................................... 2,018,970 3,097,037 1,098,785 1,590,880
Cost of shares redeemed........................................ (12,635,448) (19,347,795) (6,420,159) (14,945,721)
------------ ------------ ------------ ------------
Change in net assets from share transactions..................... 37,896,967 41,437,596 14,144,617 4,685,142
------------ ------------ ------------ ------------
Change in net assets............................................. 55,016,819 59,116,500 17,410,100 10,775,595
NET ASSETS:
Beginning of period............................................ 156,444,985 97,328,485 59,050,761 48,275,166
------------ ------------ ------------ ------------
End of period.................................................. $211,461,804 $156,444,985 $ 76,460,861 $ 59,050,761
============ ============ ============ ============
SHARE TRANSACTIONS:
Issued......................................................... 3,513,902 4,774,121 1,705,149 1,719,005
Reinvested..................................................... 147,939 275,871 96,790 156,859
Redeemed....................................................... (915,018) (1,633,604) (562,756) (1,469,697)
------------ ------------ ------------ ------------
Change in shares................................................. 2,746,823 3,416,388 1,239,183 406,167
============ ============ ============ ============
</TABLE>
- -----------
(a) From January 1, 1996 (commencement of operations) through March 31, 1996.
See notes to financial statements
-19-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Small Company
Growth Fund
-------------------------------
For the For the period
six months December 7, 1994
ended to
March 31, September 30,
1996 1995(a)
----------- ----------------
(Unaudited)
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment loss............................. $ (117,550) $ (92,263)
Net realized losses on investment transactions.. (487,556) (264,517)
Net change in unrealized appreciation on
investments.................................... 5,273,703 3,781,210
----------- -----------
Change in net assets resulting from operations.... 4,668,597 3,424,430
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued..................... 8,209,427 15,189,335
Cost of shares redeemed......................... (666,166) (556,133)
----------- -----------
Change in net assets from share transactions...... 7,543,261 14,633,202
----------- -----------
Change in net assets.............................. 12,211,858 18,057,632
NET ASSETS:
Beginning of period............................. 18,057,632 --
----------- -----------
End of period................................... $30,269,490 $18,057,632
=========== ===========
SHARE TRANSACTIONS:
Issued.......................................... 538,052 1,280,823
Redeemed........................................ (42,142) (41,013)
----------- -----------
Change in shares.................................. 495,910 1,239,810
=========== ===========
</TABLE>
- ----------
(a) Period from commencement of operations.
See notes to financial statements
-20-
<PAGE>
BB&T MUTUAL FUNDS GROUP
U.S. TREASURY MONEY MARKET FUND
Schedule of Portfolio Investments
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
- ---------- -------------------------------------------------- -----------
<S> <C> <C>
U.S. Treasury Bills (49.5%):
10,000,000 4/4/96............................................ $ 9,995,588
10,000,000 4/25/96........................................... 9,965,067
2,000,000 5/2/96............................................ 1,990,993
12,000,000 5/16/96........................................... 11,920,737
2,000,000 5/30/96........................................... 1,982,857
12,000,000 6/6/96............................................ 11,889,119
12,000,000 6/27/96........................................... 11,860,800
12,000,000 7/18/96........................................... 11,826,120
12,000,000 8/8/96............................................ 11,789,408
-----------
Total U.S. Treasury Bills 83,220,689
-----------
Total Investments 83,220,689
-----------
Repurchase Agreements (50.9%):
7,000,000 H.S.B.C. Securities, 5.25%, 4/1/96
(Collateralized by 6,820,000 U.S.
Treasury Notes, 6.88%, 3/31/97, market
value-$7,003,063)............................... 7,000,000
Repurchase Agreements, continued:
25,000,000 Lehman Brothers, 5.35%, 4/2/96
(Collateralized by 19,350,000 U.S.
Treasury Notes, 10.75%, 8/15/05,
market value-$25,417,873)....................... $25,000,000
20,000,000 Merrill Lynch, 5.25%, 4/1/96
(Collateralized by 20,075,000 U.S.
Treasury Notes, 6.00%, 6/30/96,
market value-$20,410,801)....................... 20,000,000
33,483,939 NationsBank, 5.40%, 4/1/96
(Collateralized by 25,325,000 U.S.
Treasury Notes, 8.75%, 5/15/17,
market value-$34,324,507)..................... 33,483,939
------------
Total Repurchase Agreements 85,483,939
------------
Total (Cost--$168,704,628) (a) $168,704,628
============
</TABLE>
Percentages indicated are based on net assets of $167,998,781.
(a) Cost for federal income tax and financial reporting purposes are the same.
See notes to financial statements
-21-
<PAGE>
BB&T MUTUAL FUNDS GROUP
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Schedule of Portfolio Investments
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- ---------- -------------------------------------------------- -----------
<S> <C> <C>
Corporate Bonds (3.7%):
Automotive (3.7%):
2,000,000 Ford Motor Credit, 6.38%, 10/6/00............... $ 1,982,500
------------
Total Corporate Bonds 1,982,500
------------
U.S. Government Agencies (7.4%):
Federal Home Loan Bank:
3,000,000 6.17%, 3/8/01................................... 2,987,250
1,000,000 7.28%, 7/25/01.................................. 1,045,060
------------
Total U.S. Government Agencies 4,032,310
------------
U.S. Treasury Notes (86.5%):
1,000,000 9.38%, 4/15/96.................................. 1,001,570
2,500,000 7.63%, 4/30/96.................................. 2,504,675
3,000,000 7.88%, 7/15/96.................................. 3,022,050
5,250,000 6.88%, 3/31/97.................................. 5,320,245
2,250,000 8.88%, 11/15/97................................. 2,356,785
5,000,000 5.63%, 1/31/98.................................. 4,987,900
U.S. Treasury Notes, continued:
4,500,000 7.25%, 2/15/98.................................. $ 4,612,950
7,000,000 8.25%, 7/15/98.................................. 7,353,990
3,000,000 5.88%, 3/31/99.................................. 2,994,690
3,000,000 6.50%, 4/30/99.................................. 3,044,760
3,000,000 8.00%, 8/15/99.................................. 3,178,500
3,500,000 6.75%, 4/30/00.................................. 3,581,130
1,000,000 6.38%, 8/15/02.................................. 1,005,750
2,000,000 6.25%, 2/15/03.................................. 1,994,120
------------
Total U.S. Treasury Notes 46,959,115
------------
Investment Companies (1.1%):
589,532 Federated Cash Reserves U.S
Treasury Fund................................ 589,532
------------
Total Investment Companies................................ 589,532
------------
Total (Cost--$53,904,676)(a) $ 53,563,457
============
</TABLE>
- ----------
Percentages indicated are based on net assets of $54,302,664.
(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
approximately $6,000. Cost for federal income tax purposes differs from
value by net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................. $ 400,332
Unrealized depreciation................. (747,957)
------------
Net unrealized depreciation............. $ (347,625)
============
</TABLE>
See notes to financial statements
-22-
<PAGE>
BB&T MUTUAL FUNDS GROUP
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Schedule of Portfolio Investments
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- ---------- -------------------------------------------------- -----------
<S> <C> <C>
Corporate Bonds (3.6%):
Automotive (3.6%):
4,000,000 Ford Motor Credit, 6.38%, 10/6/00.............. $ 3,965,000
------------
Total Corporate Bonds..................................... 3,965,000
U.S. Government Agencies (21.5%):
Federal Home Loan Bank:
2,000,000 8.38%, 10/25/99................................ 2,139,100
2,000,000 5.90%, 6/9/00.................................. 1,975,420
3,000,000 7.36%, 7/1/04.................................. 3,131,310
Federal Home Loan Mortgage Corp.:
3,009,410 7.50%, 7/1/07, Pool #E00108.................... 3,054,521
Federal National Mortgage Association:
5,625,667 6.00%, 6/1/08, Pool #124885.................... 5,425,506
Government National Mortgage Assoc.:
3,893,051 7.50%, 3/15/23, Pool #342553................... 3,890,949
4,486,897 7.00%, 8/15/23, Pool #354627................... 4,381,051
------------
Total U.S. Government Agencies 23,997,857
------------
U.S. Treasury Bonds (15.5%):
1,000,000 8.00%, 8/15/01................................. 1,009,790
3,000,000 12.00%, 5/15/05................................ 4,139,940
4,500,000 5.88%, 11/15/05................................ 4,335,165
U.S. Treasury Bonds, continued:
5,000,000 9.38%, 2/15/06................................. $ 6,076,500
1,500,000 9.13%, 5/15/09................................. 1,744,290
------------
Total U.S. Treasury Bonds 17,305,685
------------
U.S. Treasury Notes (55.7%):
2,000,000 7.88%, 7/15/96................................. 2,014,700
6,750,000 6.50%, 5/15/97................................. 6,816,758
11,500,000 7.00%, 4/15/99................................. 11,824,184
5,000,000 6.88%, 7/31/99................................. 5,128,300
8,500,000 7.88%, 8/15/01................................. 9,151,780
8,000,000 6.38%, 8/15/02................................. 8,046,000
8,000,000 6.25%, 2/15/03................................. 7,976,480
4,500,000 5.88%, 2/15/04................................. 4,363,155
6,500,000 7.25%, 8/15/04................................. 6,857,565
------------
Total U.S. Treasury Notes 62,178,922
------------
Investment Companies (2.8%):
3,068,137 Federated Cash Reserves U.S. Treasury Fund..... 3,068,137
------------
Total Investment Companies 3,068,137
------------
Total (Cost--$111,258,085)(a) $110,515,601
============
</TABLE>
- ----------
Percentages indicated are based on net assets of $111,555,993.
(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
approximately $55,000. Cost for federal income tax purposes differs from
value by net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............. $ 1,186,266
Unrealized depreciation.............. (1,983,969)
------------
Net unrealized depreciation $ (797,703)
============
</TABLE>
See notes to financial statements
-23-
<PAGE>
BB&T MUTUAL FUNDS GROUP
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- ---------- -------------------------------------------------- -----------
<S> <C> <C>
Municipal Bonds (97.1%):
Health Care Bonds (6.3%):
650,000 Charlotte Mecklenburg Hospital Revenue Bond,
5.70%, 1/1/01...................................... $ 676,000
500,000 Charlotte Mecklenburg Hospital Revenue Bond,
5.90%, 1/1/02...................................... 526,250
400,000 Medical Care Commission, Presbyterian Hospital
Services, 5.70%, 10/1/04, Callable 10/1/02 @
102............................................... 413,000
600,000 Medical Care Commission, Rex Hospital, 4.70%,
6/1/98............................................. 602,250
-----------
2,217,500
-----------
Housing Bonds (1.4%):
115,000 Housing Finance Authority, Revenue Bond,
3.35%*, 3/1/14..................................... 115,000
400,000 Housing Finance Authority, Revenue Bond,
3.35%*, 9/1/16..................................... 400,000
-----------
515,000
-----------
North Carolina General Obligation Bonds (89.4%):
500,000 Asheville, General Obligations, 4.80%, 6/1/06....... 487,500
470,000 Buncombe County, General Obligations, 5.00%,
3/1/00............................................. 480,575
500,000 Buncombe County, General Obligations, 5.00%,
3/1/03............................................. 511,250
375,000 Buncombe County, General Obligations, 4.60%,
4/1/06............................................. 366,094
500,000 Buncombe County, General Obligations, 4.90%,
4/1/09............................................. 486,250
545,000 Charlotte, General Obligations, 6.80%, 10/1/97...... 568,163
395,000 Charlotte, General Obligations, 5.20%, 7/1/01....... 406,356
1,000,000 City of Durham, General Obligations, 4.90%, 2/1/04.. 1,007,500
500,000 City of Durham, General Obligations, 5.00%, 2/1/05.. 504,375
275,000 Cleveland County, General Obligations, 7.10%,
6/1/99............................................. 297,344
600,000 Cleveland County, General Obligations, 5.10%,
6/1/03............................................. 607,500
500,000 Durham & Wake Counties, General Obligations,
5.75%, 4/1/02...................................... 533,125
400,000 Durham County, General Obligations, 5.20%,
3/1/01............................................. 413,000
340,000 Durham County, General Obligations, 5.20%,
3/1/05, Callable 3/1/02 @ 101.50................... 349,775
1,000,000 Fayetteville, 4.80%, 5/1/05......................... 985,000
265,000 Forsyth County, General Obligations, 5.40%,
6/1/04, Callable 6/1/02 @ 101..................... 275,931
500,000 Gaston County, General Obligations, 5.00%,
3/1/08, Callable 3/1/06 @ 101, 3/1/07 @ 100.5...... 490,625
450,000 Goldsboro, General Obligations, 4.90%, 6/1/99....... 457,313
550,000 Greensboro, General Obligations, 6.00%, 3/1/98...... 569,250
500,000 Greenville, General Obligations, 4.80%, 3/1/02...... 505,000
1,000,000 Guilford County, General Obligations, 4.80%,
4/1/99............................................. 1,015,000
300,000 Hickory, General Obligations, 6.50%, 5/1/99......... 318,750
680,000 High Point, General Obligations, 4.40%, 4/1/02...... 664,700
500,000 Lee County, General Obligations, 5.50%, 2/1/00...... 518,125
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............................................. 996,250
700,000 Mecklenburg County, General Obligations,
5.75%, 3/1/03, Callable 3/1/02 @ 100.50............ 742,875
1,000,000 Mecklenburg County, General Obligations,
5.00%, 4/1/08...................................... 993,750
500,000 Moore County, General Obligations, 4.75%, 6/1/03.... 496,875
</TABLE>
Continued
-24-
<PAGE>
BB&T MUTUAL FUNDS GROUP
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- -------------------------------------------------------------------------------------------------- ------------
Municipal Bonds, continued:
North Carolina General Obligation Bonds, continued:
<C> <S> <C>
500,000 New Hanover County, General Obligations, 4.30%, 1/1/02............................................ $ 491,250
1,000,000 New Hanover County, General Obligations, 4.50%, 9/1/03............................................ 983,750
1,500,000 North Carolina State, General Obligations, 5.75%, 3/1/98.......................................... 1,546,875
670,000 Orange County, General Obligations, 5.10%, 6/1/00................................................. 688,425
500,000 Orange County, General Obligations, 5.10%, 6/1/06................................................. 504,375
500,000 Orange County, General Obligations, 5.10%, 6/1/07................................................. 503,125
1,000,000 Pitt County, General Obligations, 4.80%, 2/1/00................................................... 1,011,250
985,000 Raleigh, General Obligations, 4.70%, 2/1/00....................................................... 1,001,006
400,000 Rocky Mount, General Obligations, 5.50%, 5/1/97................................................... 406,504
700,000 Rowan County, General Obligations, 5.50%, 4/1/05.................................................. 731,500
500,000 State of North Carolina, General Obligations, 4.70%, 2/1/01....................................... 505,000
1,000,000 State of North Carolina, General Obligations, 4.70%, 2/1/06....................................... 977,500
1,000,000 Town of Cary, General Obligations, 5.50%, 2/1/01.................................................. 1,042,500
200,000 Union City Water, Series B, General Obligations, 5.80%, 3/1/05, Callable 03/01/02 @ 101.5......... 210,000
1,000,000 Wake County, General Obligations, 4.50%, 4/1/03................................................... 993,750
1,000,000 Wayne County, General Obligations, 4.80%, 4/1/03.................................................. 998,750
500,000 Wilkes County, General Obligations, 5.00%, 6/1/01................................................. 503,750
1,000,000 Wilmington, General Obligations, 4.60%, 3/1/02.................................................... 996,250
505,000 Winston Salem, General Obligations, 6.50%, 6/1/99................................................. 538,456
-----------
31,693,517
-----------
Total Municipal Bonds 34,426,017
<CAPTION> -----------
Investment Companies (2.0%):
<C> <S> <C>
580,101 North Carolina Municipal Cash Trust............................................................... 580,101
128,007 PNC North Carolina Municipal Money Market Portfolio............................................... 128,007
-----------
Total Investment Companies 708,108
-----------
Total (Cost--$34,846,705)(a) $35,134,125
===========
</TABLE>
-----------
Percentages indicated are based on net assets of $35,465,602.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C> <C>
Unrealized appreciation.............. $ 437,485
Unrealized depreciation.............. (150,065)
----------
Net unrealized appreciation.......... $ 287,420
==========
</TABLE>
*Variable rate investments. The rate reflected on the Schedule of Investments
is the rate in effect at March 31, 1996.
See notes to financial statements
-25-
<PAGE>
BB&T MUTUAL FUNDS GROUP
GROWTH AND INCOME STOCK FUND
Schedule of Portfolio Investments
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Security Market
Shares Description Value
- -------- ------------------------------------- ----------
Common Stocks (95.4%):
<C> <S> <C>
Apparel (1.0%):
38,500 V.F. Corp............................ $2,127,125
----------
Banks (5.1%):
24,400 Barnett Banks, Inc................... 1,518,900
78,400 Boatmens Bancshares, Inc............. 3,077,200
39,500 J. P. Morgan & Co.................... 3,278,500
67,400 Wachovia Corp........................ 3,016,150
----------
10,890,750
----------
Beverages (2.3%):
72,600 Anheuser-Busch Co.................... 4,891,424
----------
Business Equipment & Services (3.3%):
95,400 John H. Harland Co................... 2,098,800
98,100 Pitney Bowes, Inc.................... 4,806,899
----------
6,905,699
----------
Capital Equipment (1.1%):
36,300 Illinois Tool Works.................. 2,345,888
----------
Chemicals--Specialty (4.3%):
69,300 Air Products & Chemicals, Inc........ 3,785,513
15,700 Monsanto Corp........................ 2,409,950
51,300 Vulcan Materials Co.................. 2,904,863
----------
9,100,326
----------
Communications Equipment (2.1%):
72,600 Harris Corp........................... 4,492,125
---------
Computers--Main & Mini (4.3%):
39,800 Hewlett Packard Co.................... 3,741,200
77,000 Honeywell, Inc........................ 4,254,250
9,600 International Business Machines....... 1,066,800
----------
9,062,250
----------
Computers--Micro (0.5%):
40,900 Apple Computer, Inc.(a)............... 1,004,606
----------
Construction Materials (0.8%):
34,400 PPG Industries........................ 1,681,300
---------
Containers (1.2%):
85,100 Ball Corp............................. 2,638,100
---------
Defense (2.0%):
56,600 Lockheed Martin Corp.................. 4,294,525
---------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
- -------- ------------------------------------- ----------
Common Stocks, continued:
<S> <C> <C>
Electrical Equipment (2.0%):
38,200 Emerson Electric..................... $3,084,650
14,200 General Electric Co.................. 1,105,825
----------
4,190,475
----------
Electronic Components (1.1%):
49,400 Avnet, Inc........................... 2,383,550
----------
Food & Related (3.4%):
26,400 Dean Foods Co........................ 660,000
2,904 Earthgrains Co.(a)................... 86,757
32,000 Hershey Foods........................ 2,384,000
129,600 Supervalu, Inc....................... 4,001,400
----------
7,132,157
----------
Forest & Paper Products (2.6%):
16,300 Kimberly Clark Corp.................. 1,214,350
90,900 Weyerhaeuser Co...................... 4,192,763
----------
5,407,113
----------
Health Care (0.3%):
28,600 Humana, Inc.(a)...................... 718,575
----------
Health Care--Drugs (4.6%):
50,100 Glaxo Holdings....................... 1,258,763
72,700 Rhone-Poulenc Rorer.................. 4,434,700
68,100 Schering Plough Corp................. 3,958,313
----------
9,651,776
----------
Health Care--General (3.9%):
54,300 Bristol Myers Squibb Co.............. 4,649,438
39,500 Johnson & Johnson.................... 3,643,875
----------
8,293,313
----------
Hospital Supply & Management (0.9%):
42,600 U.S. Healthcare, Inc................. 1,954,275
----------
Household--General Products (1.6%):
24,650 Unilever New York Shares............. 3,346,238
----------
Household--Major Appliances (0.8%):
30,700 Whirlpool Corp....................... 1,696,175
----------
Insurance--Property & Casualty (6.3%):
103,600 Aon Corp............................. 5,361,299
</TABLE>
Continued
-26-
<PAGE>
BB&T MUTUAL FUNDS GROUP
GROWTH AND INCOME STOCK FUND
<TABLE>
<CAPTION>
Schedule of Portfolio Investments, Continued
March 31, 1996
(Unaudited)
Security Market
Shares Description Value
- -------- ------------------------------------- ----------
<S> <C> <C>
Common Stocks, continued:
Insurance--Property & Casualty, continued:
75,300 Lincoln National Corp................ $3,821,475
126,400 SAFECO Corp.......................... 4,234,400
----------
13,417,174
----------
Leisure Time Industry (1.3%):
75,400 Hasbro, Inc.......................... 2,789,800
----------
Metal Fabrication (1.5%):
88,200 Trinity Industries................... 3,075,975
----------
Metals & Mining (0.9%):
28,600 Phelps Dodge Corp.................... 1,962,675
----------
Motor Vehicles (1.5%):
91,200 Ford Motor Co........................ 3,135,000
----------
Multiple Industry (2.5%):
91,900 Corning Glass........................ 3,216,500
31,200 Minnesota Mining & Manufacturing..... 2,024,100
----------
5,240,600
----------
Petroleum--Domestic (3.1%):
62,000 Ashland, Inc......................... 2,379,250
105,200 Phillips Petroleum Co................ 4,155,400
----------
6,534,650
----------
Petroleum--Internationals (5.6%):
68,200 Chevron Corp., Inc................... 3,827,725
27,600 Mobil Corp........................... 3,198,150
33,600 Royal Dutch Petroleum Co............. 4,745,999
----------
11,771,874
----------
Photographic Equipment (0.6%):
16,900 Eastman Kodak Co..................... 1,199,900
----------
Publishing (2.5%):
22,700 Gannett Co., Inc..................... 1,526,575
48,800 Houghton Mifflin Co.................. 2,153,300
78,400 Lee Enterprises...................... 1,656,200
----------
5,336,075
----------
Railroad (0.2%):
11,000 CSX Corp............................. 501,875
----------
Retail--Food Stores (1.6%):
101,100 American Stores Co................... 3,336,300
----------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
- -------- ------------------------------------- ----------
Common Stocks, continued:
<S> <C> <C>
Retail--General Merchandise (2.4%):
110,500 K-Mart Corp.(a)..................... $1,035,938
85,500 May Department Stores Co............ 4,125,375
----------
5,161,313
----------
Retail--Specialty Stores (0.6%):
61,569 Limited, Inc........................ 1,169,811
----------
Security & Commodity Brokers (1.2%):
100,925 AG Edwards.......................... 2,510,509
----------
Telecommunications (0.3%):
27,666 360 Communications Co.(a)........... 660,526
----------
Tobacco (0.9%):
20,700 Philip Morris Cos., Inc............. 1,816,425
----------
Trucking & Shipping (0.8%):
75,000 Alexander & Baldwin................. 1,800,000
----------
Utilities--Electric (3.9%):
65,900 FPL Group, Inc...................... 2,981,975
28,900 Texas Utilities Co.................. 1,195,738
130,200 Western Resources, Inc.............. 3,971,100
----------
8,148,813
----------
Utilities--Gas & Pipeline (3.0%):
61,400 Consolidated Natural Gas Co......... 2,670,900
134,400 NICOR, Inc.......................... 3,595,200
----------
6,266,100
----------
Utilities--Telephone (5.5%):
25,400 A T & T Corp........................ 1,555,750
45,600 Ameritech Corp...................... 2,485,200
62,200 SBC Communications Inc.............. 3,273,275
113,000 Sprint Corp......................... 4,294,000
----------
11,608,225
----------
Total Common Stocks................. 201,651,385
-----------
U.S. Treasury Bills (3.3%):
2,000,000 4/25/96............................. 1,992,240
5,000,000 6/6/96.............................. 4,951,749
----------
Total U.S. Treasury Bills........... 6,943,989
----------
</TABLE>
Continued
-27-
<PAGE>
BB&T MUTUAL FUNDS GROUP
GROWTH AND INCOME STOCK FUND
Schedule of Portfolio Investments, Continued
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Security Market
Shares Description Value
- -------- ------------------------------------- ----------
<S> <C> <C>
Investment Companies (1.4%):
2,860,082 Federated Short-Term U.S.
Government Trust................ $ 2,860,082
------------
Total Investment
Companies 2,860,082
------------
Total (Cost--$172,035,724)(b) $211,455,456
============
</TABLE>
- ------------
Percentages indicated are based on net assets of $211,461,804.
(a) Represents non-income producing security.
(b) 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
approximately $42,000. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
Unrealized appreciation......... $42,995,793
Unrealized depreciation......... (3,617,577)
-----------
Net unrealized appreciation..... $39,378,216
===========
See notes to financial statements
-28-
<PAGE>
BB&T MUTUAL FUNDS GROUP
BALANCED FUND
Schedule of Portfolio Investments
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- -------- ------------------------------------- ----------
<S> <C> <C>
Common Stocks (50.7%):
Apparel (0.8%):
11,000 V.F. Corp............................ $ 607,750
----------
Banks (2.3%):
11,000 Banc One Corp........................ 391,875
12,000 Boatmens Bancshares, Inc............. 471,000
2,500 J. P. Morgan & Co.................... 207,500
2,800 PNC Financial Corp................... 86,100
12,700 Wachovia Corp........................ 568,325
----------
1,724,800
----------
Beverages (1.0%):
11,000 Anheuser-Busch Co.................... 741,125
----------
Business Equipment & Services (1.3%):
3,000 Dun & Bradstreet Corp................ 181,875
3,400 John H. Harland Co................... 74,800
15,300 Pitney Bowes, Inc.................... 749,700
----------
1,006,375
----------
Chemicals--Petroleum & Inorganic (2.0%):
7,500 E. I. Dupont De Nemours Co........... 622,500
6,100 Monsanto Corp........................ 936,350
----------
1,558,850
----------
Chemicals--Specialty (0.6%):
8,000 Air Products & Chemicals, Inc........ 437,000
----------
Communications Equipment (0.5%):
6,700 Harris Corp.......................... 414,563
----------
Computers (0.6%):
3,500 Xerox Corp........................... 439,250
----------
Computers--Main & Mini (2.3%):
10,000 Hewlett Packard Co................... 940,000
11,500 Honeywell, Inc....................... 635,375
1,800 International Business Machines...... 200,025
----------
1,775,400
----------
Computers--Micro (0.2%):
6,500 Apple Computer, Inc.(a).............. 159,656
----------
Construction Materials (1.1%):
17,000 PPG Industries....................... 830,875
----------
Containers (0.5%):
12,300 Ball Corp............................ 381,300
----------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- -------- ------------------------------------- ----------
<S> <C> <C>
Common Stocks, continued:
Defense (0.8%):
4,000 Lockheed Martin Corp................ $ 303,500
6,000 Raytheon Co......................... 307,500
----------
611,000
----------
Electrical Equipment (1.2%):
4,500 Emerson Electric.................... 363,375
7,000 General Electric Co................. 545,125
----------
908,500
----------
Electronic Components (0.9%):
14,000 Avnet, Inc.......................... 675,500
----------
Financial Services (0.2%):
3,200 American Express Co................. 158,000
----------
Food & Related (2.3%):
5,000 Dean Foods Co....................... 125,000
440 Earthgrains Co.(a).................. 13,145
3,000 Fleming Companies, Inc.............. 42,750
3,000 General Mills, Inc.................. 175,125
14,500 H. J. Heinz Co...................... 480,313
7,000 Hershey Foods....................... 521,500
13,000 Supervalu, Inc...................... 401,375
----------
1,759,208
----------
Forest & Paper Products (1.1%):
6,000 International Paper Co.............. 236,250
200 Kimberly Clark Corp................. 14,900
13,000 Weyerhaeuser Co..................... 599,625
----------
850,775
----------
Health Care--Drugs (1.9%):
4,700 Abbott Laboratories................. 191,525
7,400 Glaxo Holdings...................... 185,925
5,000 Merck & Co., Inc.................... 311,250
13,500 Schering Plough Corp................ 784,688
----------
1,473,388
----------
Health Care--General (2.3%):
2,000 Bausch & Lomb....................... 74,000
12,000 Bristol Myers Squibb Co............. 1,027,500
7,500 Johnson & Johnson................... 691,875
----------
1,793,375
----------
</TABLE>
Continued
-29-
<PAGE>
BB&T MUTUAL FUNDS GROUP
BALANCED FUND
Schedule of Portfolio Investments, Continued
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- -------- ------------------------------------- ----------
<S> <C> <C>
Common Stocks, continued:
Hospital Supply & Management (0.8%):
13,000 U.S. Healthcare, Inc................. $ 596,375
----------
Household--General Products (0.7%):
4,150 Unilever New York Shares............. 563,363
----------
Household--Major Appliances (0.7%):
9,000 Whirlpool Corp....................... 497,250
----------
Insurance--Life (0.9%):
14,000 American General Corp................ 483,000
7,500 USLIFE Corp.......................... 220,313
----------
703,313
----------
Insurance--Property & Casualty (2.4%):
2,000 Aetna Life & Casualty Co............. 151,000
3,300 American International Group, Inc.... 308,963
13,500 Lincoln National Corp................ 685,125
20,000 SAFECO Corp.......................... 670,000
----------
1,815,088
Leisure Time Industry (0.6%):
2,800 Hasbro, Inc.......................... 103,600
5,000 The Walt Disney Co................... 319,375
----------
422,975
----------
Metal Fabrication (0.7%):
15,000 Trinity Industries................... 523,125
----------
Motor Vehicles (0.7%):
11,000 Ford Motor Co........................ 378,125
2,500 General Motors Corp.................. 133,125
----------
511,250
Multiple Industry (1.2%):
12,500 Corning Glass........................ 437,500
12,000 Hanson Trust American Depository
Receipts........................... 180,000
5,200 Minnesota Mining & Manufacturing..... 337,350
----------
954,850
----------
Petroleum--Domestic (2.4%):
6,000 Ashland, Inc......................... 230,250
4,400 Atlantic Richfield Co................ 523,600
28,000 Phillips Petroleum Co................ 1,106,000
----------
1,859,850
----------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- -------- ------------------------------------- ----------
<S> <C> <C>
Common Stocks, continued:
Petroleum--Internationals (2.5%):
10,500 Chevron Corp......................... $ 589,313
5,500 Mobil Corp........................... 637,313
5,100 Royal Dutch Petroleum Co............. 720,375
----------
1,947,001
----------
Photographic Equipment (0.2%):
2,200 Eastman Kodak Co..................... 156,200
----------
Publishing (1.1%):
3,800 Gannett Co., Inc..................... 255,550
2,000 McGraw Hill, Inc..................... 173,500
6,000 Tribune Co........................... 395,250
----------
824,300
----------
Railroad (0.7%):
6,500 Norfolk Southern Corp................ 552,500
----------
Retail--Food Stores (0.5%):
11,300 Rite-Aid............................. 348,888
----------
Retail--General Merchandise (2.0%):
5,000 Dayton Hudson Corp................... 424,375
7,500 J.C. Penney, Inc..................... 373,125
13,000 K-Mart Corp.(a)...................... 121,875
13,000 May Department Stores Co............. 627,250
----------
1,546,625
----------
Retail--Specialty Stores (0.7%):
14,500 Melville Corp........................ 520,188
----------
Security & Commodity Brokers (0.4%):
11,000 AG Edwards........................... 273,625
----------
Telecommunications (0.4%):
7,333 360 Communications Co.(a)............ 175,075
4,900 Airtouch(a).......................... 152,513
----------
327,588
----------
Tobacco (0.9%):
8,000 Philip Morris Cos., Inc.............. 702,000
----------
Trucking & Shipping (0.2%):
6,200 Alexander & Baldwin.................. 148,800
----------
Utilities--Electric (2.1%):
6,000 American Electric Power, Inc......... 250,500
5,000 Duke Power Co........................ 252,500
11,000 FPL Group, Inc....................... 497,750
</TABLE>
Continued
-30-
<PAGE>
BB&T MUTUAL FUNDS GROUP
BALANCED FUND
Schedule of Portfolio Investments, Continued
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- --------- ------------------------------------- ----------
<S> <C> <C>
Common Stocks, continued:
Utilities--Electric, continued:
16,000 Scana Corp........................... $ 440,000
3,500 Texas Utilities Co................... 144,813
----------
1,585,563
----------
Utilities--Gas & Pipeline (1.8%):
22,000 NICOR, Inc........................... 588,500
16,000 Williams Cos., Inc................... 806,000
----------
1,394,500
----------
Utilities--Telephone (2.2%):
5,900 A T & T Corp......................... 361,375
6,600 Ameritech Corp....................... 359,700
4,900 Pacific Telesis Group................ 135,363
22,000 Sprint Corp.......................... 836,000
----------
1,692,438
----------
Total Common Stocks......................... 38,774,345
----------
U.S. Treasury Bonds (5.7%):
1,500,000 11.13%, 8/15/03...................... 1,916,310
2,000,000 9.38%, 2/15/06....................... 2,430,600
----------
Total U.S. Treasury Bonds................... 4,346,910
----------
U.S. Treasury Notes (34.4%):
4,000,000 7.12%, 10/15/98...................... $ 4,114,719
3,000,000 8.00%, 8/15/99....................... 3,178,499
3,000,000 8.50%, 11/15/00...................... 3,283,949
3,500,000 7.75%, 2/15/01....................... 3,736,179
2,500,000 7.50%, 5/15/02....................... 2,661,625
2,500,000 6.38%, 8/15/02....................... 2,514,375
2,500,000 6.25%, 2/15/03....................... 2,492,650
3,000,000 7.88%, 11/15/04...................... 3,287,489
1,000,000 6.50%, 8/15/05....................... 1,006,250
----------
Total U.S. Treasury Notes................... 26,275,735
----------
Investment Companies (8.8%):
2,983,542 Federated Cash Reserves U.S.
Treasury Fund...................... 2,983,542
3,735,904 Federated Short-Term U.S.
Government Trust................... 3,735,903
----------
Total Investment Companies.................. 6,719,445
----------
Total (Cost--$68,178,623)(b)................ $76,116,435
===========
</TABLE>
- ----------
Percentages indicated are based on net assets of $76,460,861.
(a) Represents non-income producing security.
(b) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.................... $8,804,376
Unrealized depreciation.................... (866,564)
Net unrealized appreciation................ $7,937,812
==========
</TABLE>
See notes to financial statements
-31-
<PAGE>
BB&T MUTUAL FUNDS GROUP
SMALL COMPANY GROWTH FUND
Schedule of Portfolio Investments
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- -------- ------------------------------------- ----------
<S> <C> <C>
Common Stocks (92.0%):
Automotive (0.8%):
10,000 Copart, Inc.(a)...................... $ 247,500
----------
Beverages (0.6%):
9,000 Boston Beer Co., Inc.(a)............. 181,125
----------
Broadcasting (0.3%):
2,900 Bet Holdings, Inc.(a)................ 80,838
----------
Business Services (10.9%):
9,900 ABR Information Services, Inc.(a).... 460,349
36,000 Accustaff, Inc.(a)................... 908,999
8,400 Acxiom Corp.(a)...................... 200,550
9,700 Apac Teleservices, Inc.(a)........... 691,124
8,300 Norrell Corp......................... 274,938
6,500 Robert Half International, Inc.(a)... 316,063
9,800 Sitel Corp.(a)....................... 443,450
----------
3,295,473
----------
Commercial Goods & Services (5.1%):
9,000 Access Health, Inc.(a)............... 348,750
10,500 Apollo Group, Inc.(a)................ 409,500
7,000 Cambridge Technology Partners,
Inc.(a)............................ 399,875
3,000 Pharmaceutical Product
Development(a)..................... 105,750
6,900 Wackenhut Corrections Corp.(a)....... 269,100
----------
1,532,975
----------
Commercial Services (1.1%):
2,500 Data Processing Resources(a)......... 68,750
6,500 Healthplan Services Corp.(a)......... 148,688
3,200 May & Speh, Inc.(a).................. 36,000
4,800 Profit Recovery Group
International(a)................... 74,400
----------
327,838
----------
Computer Hardware (0.5%):
5,000 Network Appliance, Inc.(a)........... 158,750
----------
Computer Software (14.0%):
15,000 American Management Systems, Inc..... 382,500
7,600 Aspen Technologies, Inc.(a).......... 326,800
1,500 Baan Co. NV(a)....................... 86,438
6,100 CBT Group PLC(a)..................... 448,350
6,000 Electronics for Imaging, Inc.(a)..... 261,000
10,200 Epic Design Technology, Inc.(a)...... $ 311,738
6,300 HCIA, Inc.(a)........................ 296,100
10,600 HPR, Inc.(a)......................... 409,425
2,800 Hummingbird Communications(a)........ 105,700
9,000 Imnet Systems, Inc.(a)............... 272,250
3,000 Indus Group, Inc.(a)................. 58,500
7,200 Macromedia, Inc.(a).................. 307,800
4,700 Madge NV(a).......................... 188,588
3,400 Medic Computer Systems, Inc.(a)...... 257,550
3,400 Powercerv Corp.(a)................... 50,628
1,100 Raptor Systems, Inc.(a).............. 32,863
4,500 Rational Software Corp.(a)........... 177,750
3,500 Security Dynamics Technology,
Inc.(a)............................ 185,500
4,600 Xeikon NV(a)......................... 89,125
----------
4,248,605
----------
Computers (0.9%):
6,200 Comverse Technology, Inc.(a)......... 149,575
2,400 Filenet Corp.(a)..................... 138,600
----------
288,175
----------
Computers--Main & Mini (0.7%):
11,000 Auspex Systems, Inc.(a).............. 196,625
700 IDX Systems Corp.(a)................. 20,300
----------
216,925
----------
Consumer Goods & Services (2.1%):
5,600 Gemstar International Group
Limited(a)......................... 140,000
15,000 USA Detergents, Inc.(a).............. 487,499
----------
627,499
----------
Electrical Equipment (0.4%):
3,000 Cable Design Technologies(a)......... 110,250
----------
Electronic Components (0.5%):
8,400 International Rectifier Corp.(a)..... 151,200
----------
Entertainment (1.9%):
11,150 Regal Cinemas, Inc.(a)............... 412,550
6,000 Speedway Motorsports, Inc.(a)........ 169,500
----------
582,050
----------
</TABLE>
Continued
-32-
<PAGE>
BB&T MUTUAL FUNDS GROUP
SMALL COMPANY GROWTH FUND
Schedule of Portfolio Investments, Continued
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- -------- ------------------------------------- ----------
<S> <C> <C>
Common Stocks, continued:
Environmental Services (3.0%):
16,666 Continental Waste Industries, Inc.(a) $ 181,243
7,700 Sanifill, Inc.(a).................... 295,488
8,400 United Waste Systems, Inc.(a)........ 420,000
----------
896,731
----------
Financial Services (3.4%):
8,000 Aames Financial Corp.(a)............. 288,000
7,000 Envoy Corp.(a)....................... 164,500
9,250 Money Store, Inc..................... 257,844
11,000 Oxford Resources Corp.- Class A(a)... 308,000
----------
1,018,344
----------
Homebuilders, Mobile Homes (1.5%):
7,000 Oakwood Homes........................ 347,375
7,600 Southern Energy Homes, Inc.(a)....... 112,100
----------
459,475
----------
Hospital Supply & Management (1.4%):
4,400 Orthologic Corp.(a).................. 111,650
12,800 Physician Sales & Service(a)......... 316,800
----------
428,450
----------
Hotel Management & Related Services (0.3%):
3,200 Studio Plus Hotels, Inc.(a).......... 88,800
----------
Hotels & Gaming (0.9%):
10,000 Doubletree Corp.(a).................. 273,750
----------
Insurance--Multiline (1.0%):
7,600 United Dental Care, Inc.(a).......... 294,500
----------
Insurance--Property & Casualty (1.1%):
6,000 HCC Insurance Holdings, Inc.(a)...... 329,250
----------
Medical Equipment & Supplies (4.8%):
4,100 Arrow International, Inc............. 170,663
12,000 Gulf South Medical Supply, Inc.(a)... 453,000
3,400 IDEXX Laboratories, Inc.(a).......... 142,800
11,200 Medisense, Inc.(a)................... 499,099
2,900 Respironics, Inc.(a)................. 60,900
2,000 Target Therapeutics, Inc.(a)......... 121,250
----------
1,447,712
----------
Medical--Biotechnology (3.7%):
8,800 Clintrials Research(a)............... 304,700
11,000 Integra Lifesciences Corp.(a)........ 129,250
6,400 Quintiles Transnational Corp.(a)..... $ 416,000
10,000 Serologicals Corp.(a)................ 275,000
----------
1,124,950
----------
Medical--Hospital Management & Services (7.4%):
6,900 American Oncology Resources(a)....... 293,250
6,000 Community Health Systems, Inc.(a).... 246,000
1,600 NCS Healthcare, Inc.-Class A(a)...... 39,200
11,300 Occusystems, Inc.(a)................. 257,075
2,600 Omnicare, Inc........................ 140,075
8,400 Orthodontic Centers of America,
Inc.(a)............................ 252,000
10,700 Pediatrix Medical Group, Inc.(a)..... 379,850
5,350 Phycor, Inc.(a)...................... 235,400
6,800 Physician Reliance Network(a)........ 269,450
5,800 Renal Treatment Centers, Inc.(a)..... 137,750
----------
2,250,050
----------
Oil & Gas (0.3%):
5,000 Reading & Bates Corp.(a)............. 98,750
----------
Pharmaceuticals (3.7%):
2,900 Chronimed, Inc.(a)................... 58,363
3,000 Curative Technologies, Inc.(a)....... 55,500
9,100 Dura Pharmaceuticals, Inc.(a)........ 451,588
13,500 Jones Medical Industries, Inc........ 519,749
3,000 Noven Pharmaceuticals(a)............. 43,125
----------
1,128,325
----------
Publishing (0.7%):
300 Desktop Data, Inc.(a)................ 11,025
3,500 Gartner Group, Inc.(a)............... 213,500
----------
224,525
----------
Restaurants (2.4%):
10,000 Logan Roadhouse, Inc.(a)................ 261,250
6,150 Papa John's International, Inc.(a)...... 274,444
6,600 Quality Dining, Inc.(a)................. 194,700
----------
730,394
----------
Retail--Apparel (0.6%):
10,000 Ann Taylor Stores Corp.(a).............. 180,000
----------
Retail--General Merchandise (1.6%):
9,200 Dollar Tree Stores, Inc.(a)............. 404,800
</TABLE>
Continued
-33-
<PAGE>
Schedule of Portfolio Investments, Continued
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- --------- --------------------------------------------------- -----------
<S> <C> <C>
Common Stocks, continued:
Retail--General Merchandise, continued:
2,000 Oakley, Inc.(a).................................... $ 75,500
-----------
480,300
-----------
Retail--Specialty Stores (4.7%):
2,100 Bed Bath & Beyond, Inc.(a)......................... 110,775
3,600 Gadzooks, Inc.(a).................................. 125,100
3,000 Global Directmail Corp.(a)......................... 104,625
5,100 Just For Feet, Inc.(a)............................. 212,288
10,600 Men's Warehouse, Inc.(a)........................... 333,900
6,000 Petco Animal Supplies, Inc.(a)..................... 268,500
6,000 Rexall Sundown, Inc.(a)............................ 180,750
3,000 Sunglass Hut International, Inc.(a)................ 99,375
-----------
1,435,313
-----------
Telecommunications (1.6%):
8,600 Gilat Satellite Networks Ltd.(a)................... 208,550
3,000 Shiva Corp.(a)..................................... 272,250
-----------
480,800
-----------
Telecommunications--Equipment (4.0%):
6,000 DSP Communications, Inc.(a)........................ 150,000
11,400 EIS International, Inc.(a)......................... 183,825
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- --------- --------------------------------------------------- -----------
<S> <C> <C>
Common Stocks, continued:
Telecommunications--Equipment, continued:
11,200 Microcom, Inc.(a).................................. $ 334,600
4,700 TCSI Corp.(a)...................................... 143,350
3,100 U.S. Robotics Corp.(a)............................. 400,675
-----------
1,212,450
-----------
Textile (3.6%):
10,000 Authentic Fitness Corp............................. 258,750
10,000 Donnkenny, Inc.(a)................................. 161,250
4,500 Nautica Enterprises, Inc.(a)....................... 214,875
6,100 Quiksilver, Inc.(a)................................ 193,675
3,800 St. John Knits, Inc.(a)............................ 256,025
-----------
1,084,575
-----------
Wholesale (0.5%):
4,600 U.S. Office Products Co.(a)........................ 142,600
-----------
Total Common Stocks 27,859,247
-----------
U.S. Government Agencies (8.8%):
Federal Home Loan Banks:
2,675,000 Discount Note, 4/1/96 2,673,829
-----------
Total U.S. Government Agencies 2,673,829
-----------
Total (Cost--$21,478,163)(b) $30,533,076
===========
</TABLE>
Percentages indicated are based on net assets of $30,269,490.
(a) Represents non-income producing security.
(b) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................ $9,346,917
Unrealized depreciation................ (292,004)
----------
Net unrealized appreciation............ $9,054,913
==========
</TABLE>
See notes to financial statement
-34-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Notes to Financial Statements
March 31, 1996
(Unaudited)
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 three classes of shares: Class A Shares,
Class B Shares and Trust Shares. Class A 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"). Certain
redemptions of Class B Shares are subject to contingent deferred sales
charges. Class B Shares are offered for the U.S. Treasury Money Market Fund,
the Intermediate U.S. Government Income Fund, the Growth and Income Stock
Fund, the Balanced Fund and the Small Company Growth Fund. Each class of
shares in a Fund has identical rights and privileges except with respect to
the distribution fees borne by the Class A and Class B 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. The preparation
of financial statements requires management to make estimates and assumption
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses for
the period. Actual results could differ from those estimates.
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.
Continued
-35-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Notes to Financial Statements, Continued
March 31, 1996
(Unaudited)
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 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 and paid
quarterly and distributable net realized capital gains, if any, are declared
and distributable at least annually for the Small Company Growth Fund.
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.
Continued
-36-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Notes to Financial Statements, Continued
March 31, 1996
(Unaudited)
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 six months ended March 31, 1996 are as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------- -----
<S> <C> <C>
Short-Intermediate U.S. Government Income Fund... $20,401,897 $18,057,344
Intermediate U.S. Government Bond Fund........... $72,753,428 $45,242,594
North Carolina Intermediate Tax-Free Fund........ $ 4,417,944 $ 4,744,945
Growth and Income Stock Fund..................... $47,016,038 $12,422,153
Balanced Fund.................................... $13,223,013 $ 2,477,990
Small Company Growth Fund........................ $15,423,736 $ 8,278,035
</TABLE>
4. Related Party Transactions:
Investment advisory services are provided to the Group by BB&T. PNC Bank
serves as sub-investment adviser 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, which may vary according to the level of Fund assets:
<TABLE>
<CAPTION>
Fund Assets Annual Fee
----------- ----------
<S> <C>
Up to $50 million................. .50%
Next $50 million.................. .45%
Over $100 million................. .40%
</TABLE>
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS")
is an Ohio limited partnership. BISYS Fund Services Ohio, Inc. (the "BISYS
Ohio"), and BISYS are subsidiaries of The BISYS
Continued
-37-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Notes to Financial Statements, Continued
March 31, 1996
(Unaudited)
Group, Inc. BISYS, 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, BISYS' fees are
computed daily as a percentage of the average net assets of each of the
Funds. BISYS 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 six months ended March 31, 1996, BISYS received $191,713 from
commissions earned on sales of shares of the Group's variable net asset
value funds of which $181,628 was reallowed to BB&T, an investment dealer of
the Group's shares. BISYS receives no fees from the Funds for providing
distribution services to the U.S. Treasury Money Market Fund. BISYS Ohio
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 Class A Shares and
Class B Shares, pursuant to which each Fund is authorized to pay or
reimburse BISYS, as distributor, a periodic amount, calculated at an annual
rate not to exceed .50% for Class A Shares and 1.00% for Class B Shares of
the average daily net asset value of the Fund. These fees are used by BISYS
to pay banks, including the investment adviser, broker dealers and other
institutions, or to reimburse BISYS 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 six months
ended March 31, 1996:
<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........................... $27,143 $48,808
Administration Fees:
Annual fee (percentage of average net assets)...... .20% .20% .20%
Distribution Fees:
Class A Shares
Annual fee before voluntary fee reductions
(percentage of average net assets)............... .50% .50% .50%
Voluntary fee reductions........................... $23,480 $ 8,641 $ 6,499
Class B Shares
Annual fee (percentage of average net assets)...... 1.00% 1.00%
Transfer Agent and Mutual Fund Accountant Fees..... $63,150 $44,308 $54,317
</TABLE>
Continued
-38-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Notes to Financial Statements, Continued
March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
North Carolina Growth and Small Company
Intermediate Income Stock Balanced Growth
Tax-Free Fund Fund Fund Fund
-------------- ------------ ---------- -------------
<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........................... $18,365 $221,779 $83,171 $ 667
Administration Fees:
Annual fee before voluntary fee reductions
(percentage of average net assets)............... .20% .20% .20% .20%
Voluntary fee reductions........................... $ 9,137
Distribution Fees:
Class A Shares
Annual fee before voluntary fee reductions
(percentage of average net assets)............... .50% .50% .50% .50%
Voluntary fee reductions........................... $15,498 $ 15,693 $12,993 $ 2,402
Class B Shares
Annual fee (percentage of average net assets)...... 1.00% 1.00% 1.00%
Transfer Agent and Mutual Fund Accountant Fees..... $35,596 $ 78,959 $56,233 $53,479
</TABLE>
Continued
-39-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Notes to Financial Statements, Continued
March 31, 1996
5. Capital Shares Transaction
Transactions in capital shares for the Fund were as follows:
<TABLE>
<CAPTION>
U.S. Treasury Short Intermediate U.S.
Money Market Fund Government Income Fund
------------------------------ --------------------------
For the For the For the For the
six months year six months year
ended ended ended ended
March 31, September 30, March 31, September 30,
1996 1995 1996 1995
------------- ------------- ----------- ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued................................ $ 24,145,791 $ 39,015,125 $ 288,147 $ 238,092
Dividends reinvested....................................... 380,689 235,433 145,843 335,908
Shares redeemed............................................ (15,608,559) (26,788,169) (879,476) (4,008,351)
------------- ------------- ----------- ------------
Change in net assets from Class A share transactions....... $ 8,917,921 $ 12,462,389 $ (445,486) $ (3,434,351)
============= ============= =========== ============
Class B Shares(a):
Proceeds from shares issued................................ $ 629,233
Dividends reinvested....................................... 1,155
Shares redeemed............................................ (61,091)
-------------
Change in net assets from Class B share transactions....... $ 569,297
=============
Trust Shares:
Proceeds from shares issued................................ $ 142,116,492 $ 374,968,721 $11,675,813 $ 16,404,699
Dividends reinvested....................................... 348,447 271,605 538,333 442,352
Shares redeemed............................................ (117,984,314) (332,621,347) (9,192,768) (11,377,406)
------------- ------------- ----------- ------------
Change in net assets from Trust share transactions......... $ 24,480,625 $ 42,618,979 $ 3,021,378 $ 5,469,645
============= ============= =========== ============
SHARE TRANSACTIONS:
Class A Shares:
Issued..................................................... 24,145,791 39,015,125 28,946 24,465
Reinvested................................................. 380,689 235,433 14,619 34,730
Redeemed................................................... (15,608,559) (26,788,169) (88,518) (417,677)
------------- ------------- ----------- ------------
Change in Class A Shares................................... 8,917,921 12,462,389 (44,953) (358,482)
============= ============= =========== ============
Class B Shares(a):
Issued..................................................... 629,233
Reinvested................................................. 1,155
Redeemed................................................... (61,091)
-------------
Change in Class B Shares................................... 569,297
=============
Trust Shares:
Issued..................................................... 142,116,492 374,968,721 1,175,036 1,694,015
Reinvested................................................. 348,447 271,605 53,944 45,400
Redeemed................................................... (117,984,314) (332,621,347) (928,335) (1,163,774)
------------- ------------- ----------- ------------
Change in Trust Shares..................................... 24,480,625 42,618,979 300,645 575,641
============= ============= =========== ============
</TABLE>
(a) For the period from January 1, 1996 (commencement of operations) to March
31, 1996.
Continued
-40-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Notes to Financial Statements, Continued
March 31, 1996
<TABLE>
<CAPTION>
Intermediate U.S. North Carolina
Government Bond Fund Intermediate Tax-Free Fund
------------------------------ --------------------------
For the For the For the For the
six months year six months year
ended ended ended ended
March 31, September 30, March 31, September 30,
1996 1995 1996 1995
------------- ------------- ----------- ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued................................ $ 503,681 $ 322,927 $ 612,411 $ 560,783
Dividends reinvested....................................... 123,149 320,094 127,999 278,140
Shares redeemed............................................ (929,248) (2,597,921) (620,634) (3,505,541)
------------ ------------ ----------- ------------
Change in net assets from Class A share transactions....... $ (302,418) $ (1,954,900) $ 119,776 $ (2,666,618)
============ ============ =========== ============
Class B Shares(a):
Proceeds from shares issued................................ $ 145,800
Dividends reinvested....................................... 173
Shares redeemed............................................ --
------------
Change in net assets from Class B share transactions....... $ 145,973
============
Trust Shares:
Proceeds from shares issued................................ $ 38,920,910 $ 22,848,117 $ 3,212,722 $ 10,356,196
Dividends reinvested....................................... 1,924,036 3,609,746 -- 21
Shares redeemed............................................ (10,777,602) (20,612,492) (4,563,436) (11,141,267)
------------ ------------ ----------- ------------
Change in net assets from Trust share transactions......... $ 30,067,344 $ 5,845,371 $(1,350,714) $ (785,050)
============ ============ =========== ============
SHARE TRANSACTIONS:
Class A Shares:
Issued..................................................... 50,233 34,521 59,904 56,493
Reinvested................................................. 12,280 33,838 12,513 28,264
Redeemed................................................... (93,034) (270,549) (60,607) (358,791)
------------ ------------ ----------- ------------
Change in Class A Shares................................... (30,521) (202,190) 11,810 (274,034)
============ ============ =========== ============
Class B Shares(a):
Issued..................................................... 14,712
Reinvested................................................. 17
Redeemed................................................... --
------------
Change in Class B Shares..................................... 14,729
============
Trust Shares:
Issued..................................................... 3,854,250 2,385,380 314,037 1,051,141
Reinvested................................................. 191,763 380,169 -- 2
Redeemed................................................... (1,075,309) (2,149,882) (446,886) (1,121,892)
------------ ------------ ----------- ------------
Change in Trust Shares..................................... 2,970,704 615,667 (132,849) (70,749)
============ ============ =========== ============
</TABLE>
(a) For the period from January 1, 1996 (commencement of operations) to March
31, 1996.
Continued
-41-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Notes to Financial Statements, Continued
March 31, 1996
<TABLE>
<CAPTION>
Growth and Income
Stock Fund Balanced Fund
------------------------------ --------------------------
For the For the For the For the
six months year six months year
ended ended ended ended
March 31, September 30, March 31, September 30,
1996 1995 1996 1995
------------- ------------- ----------- ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued................................ $ 3,347,599 $ 2,464,804 $ 2,393,827 $ 1,398,339
Dividends reinvested....................................... 186,341 378,623 177,856 350,315
Shares redeemed............................................ (721,877) (1,270,600) (525,710) (2,079,598)
------------ ------------ ----------- ------------
Change in net assets from Class A share transactions....... $ 2,812,063 $ 1,572,827 $ 2,045,973 $ (330,944)
============ ============ =========== ============
Class B Shares(a):
Proceeds from shares issued................................ $ 1,220,830 $ 1,372,790
Dividends reinvested....................................... 1,795 4,150
Shares redeemed............................................ (2,575) (1,445)
------------ -----------
Change in net assets from Class B share transactions....... $ 1,220,050 $ 1,375,495
============ ===========
Trust Shares:
Proceeds from shares issued................................ $ 43,945,016 $ 55,223,550 $15,699,374 $ 16,641,644
Dividends reinvested....................................... 1,830,834 2,718,414 916,779 1,240,565
Shares redeemed............................................ (11,910,996) (18,077,195) (5,893,004) (12,866,123)
------------ ------------ ----------- ------------
Change in net assets from Trust share transactions......... $ 33,864,854 $ 39,864,769 $10,723,149 $ 5,016,086
============ ============ =========== ============
SHARE TRANSACTIONS:
Class A Shares:
Issued..................................................... 241,566 205,305 208,025 133,311
Reinvested................................................. 13,670 33,975 15,631 34,562
Redeemed................................................... (52,919) (111,033) (46,392) (206,078)
------------ ------------ ----------- ------------
Change in Class A Shares................................... 202,317 128,247 177,264 (38,205)
============ ============ =========== ============
Class B Shares(a):
Issued..................................................... 85,899 117,954
Reinvested................................................. 127 358
Redeemed................................................... (190) (134)
------------ -----------
Change in Class B Shares................................... 85,836 118,178
============ ===========
Trust Shares:
Issued..................................................... 3,186,438 4,568,816 1,379,170 1,585,694
Reinvested................................................. 134,141 241,896 80,801 122,297
Redeemed................................................... (861,909) (1,522,571) (516,230) (1,263,619)
------------ ------------ ----------- ------------
Change in Trust Shares..................................... 2,458,670 3,288,141 943,741 444,372
============ ============ =========== ============
</TABLE>
(a) For the period from January 1, 1996 (commencement of operations) to March
31, 1996.
Continued
-42-
<PAGE>
BB&T MUTUAL FUNDS GROUP
Notes to Financial Statements, Continued
March 31, 1996
<TABLE>
<CAPTION>
Small Company Growth Fund
------------------------------
For the For the period
six months December 7, 1994
ended to
March 31, September 30,
1996 1995(a)
----------- ----------------
(Unaudited)
<S> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued................................ $ 2,002,226 $ 938,909
Shares redeemed............................................ (77,137) (30,211)
----------- -----------
Change in net assets from Class A share transactions....... $ 1,925,089 $ 908,698
=========== ===========
Class B Shares(b):
Proceeds from shares issued................................ $ 688,489
Shares redeemed............................................ (250)
-----------
Change in net assets from Class B share transactions....... $ 688,239
===========
Trust Shares:
Proceeds from shares issued................................ $ 5,518,712 $14,250,426
Shares redeemed............................................ (588,779) (525,922)
----------- -----------
Change in net assets from Trust share transactions......... $ 4,929,933 $13,724,504
=========== ===========
SHARE TRANSACTIONS:
Class A Shares:
Issued..................................................... 128,953 77,577
Redeemed................................................... (5,045) (2,151)
----------- -----------
Change in Class A Shares................................... 123,908 75,426
=========== ===========
Class B Shares(b):
Issued..................................................... 42,428
Redeemed................................................... (16)
-----------
Change in Class B Shares................................... 42,412
===========
Trust Shares:
Issued..................................................... 366,672 1,203,246
Redeemed................................................... (37,082) (38,862)
----------- -----------
Change in Trust Shares..................................... 329,590 1,164,384
=========== ===========
</TABLE>
(a) Period from commencement of operations.
(b) For the period from January 1, 1996 (commencement of operations) to March
31, 1996.
See notes to financial statements
-43-
<PAGE>
BB&T MUTUAL FUNDS GROUP
U.S. TREASURY MONEY MARKET FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six For the year ended September 30,
months ended -------------------------------- October 5, 1992 to
March 31, 1996 1995 1994 September 30, 1993 (a)
-------------- -------- -------- ----------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------
Investment Activities
Net investment income............................ 0.023 0.047 0.027 0.026
------- ------- ------- -------
Total from Investment Activities............... 0.023 0.047 0.027 0.026
------- ------- ------- -------
Distributions
Net investment income............................ (0.023) (0.047) (0.027) (0.026)
------- ------- ------- -------
Total Distributions............................ (0.023) (0.047) (0.027) (0.026)
------- ------- ------- -------
Net Asset Value, End of Period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======
Total Return....................................... 2.28%(b) 4.81% 2.76% 2.60%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).................. $22,866 $13,948 $ 1,486 $ 279
Ratio of expenses to average net assets.......... 1.01%(c) 0.98% 0.94% 0.51%(c)
Ratio of net investment income to average net
assets......................................... 4.47%(c) 4.81% 2.89% 2.58%(c)
Ratio of expenses to average net assets*......... 1.26%(c) 1.24% 1.32% 1.32%(c)
Ratio of net investment income to average net
assets*........................................ 4.22%(c) 4.55% 2.51% 1.77%(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>
BB&T MUTUAL FUNDS GROUP
U.S. TREASURY MONEY MARKET FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
January 1, 1996 to
March 31, 1996 (a)
------------------
(Unaudited)
<S> <C>
Net Asset Value, Beginning of Period......................... $ 1.00
-------
Investment Activities
Net investment income...................................... 0.007
-------
Total from Investment Activities......................... 0.007
-------
Distributions
Net investment income...................................... (0.007)
-------
Total Distributions...................................... (0.007)
-------
Net Asset Value, End of Period............................... $ 1.00
=======
Total Return (excludes redemption charge).................... 1.03%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)............................ $ 569
Ratio of expenses to average net assets.................... 1.81%(c)
Ratio of net investment income to average net assets....... 3.62%(c)
Ratio of expenses to average net assets*................... 1.81%(c)
Ratio of net investment income to average net assets*...... 3.62%(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
-45-
<PAGE>
BB&T MUTUAL FUNDS GROUP
U.S. TREASURY MONEY MARKET FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six For the year ended September 30,
months ended -------------------------------- October 5, 1992 to
March 31, 1996 1995 1994 September 30, 1993 (a)
-------------- -------- -------- ----------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ------- -------
Investment Activities
Net investment income............................... 0.024 0.050 0.030 0.027
-------- -------- ------- -------
Total from Investment Activities.................. 0.024 0.050 0.030 0.027
-------- -------- ------- -------
Distributions
Net investment income............................... (0.024) (0.050) (0.030) (0.027)
-------- -------- ------- -------
Total Distributions............................... (0.024) (0.050) (0.030) (0.027)
-------- -------- ------- -------
Net Asset Value, End of Period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======= =======
Total Return.......................................... 2.40%(b) 5.07% 3.01% 2.70%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)..................... $144,564 $120,083 $77,464 $74,962
Ratio of expenses to average net assets............. 0.76%(c) 0.72% 0.67% 0.38%(c)
Ratio of net investment income to average net
assets............................................ 4.74%(c) 4.97% 2.97% 2.71%(c)
Ratio of expenses to average net assets*............ 0.76%(c) 0.75% 0.83% 0.81%(c)
Ratio of net investment income to average net
assets*........................................... 4.74%(c) 4.95% 2.82% 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
-46-
<PAGE>
BB&T MUTUAL FUNDS GROUP
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six For the year ended September 30,
months ended -------------------------------- November 30, 1992 to
March 31, 1996 1995 1994 September 30, 1993 (a)
-------------- -------- -------- ----------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 9.88 $ 9.60 $ 10.29 $ 10.00
------ ------- ------- -------
Investment Activities
Net investment income................................ 0.27 0.53 0.50 0.47
Net realized and unrealized gains (losses) on
investments........................................ (0.06) 0.29 (0.68) 0.30
------ ------- ------- -------
Total from Investment Activities................. 0.21 0.82 (0.18) 0.77
------ ------- ------- -------
Distributions
Net investment income................................ (0.27) (0.54) (0.50) (0.48)
Net realized gains................................... -- -- (0.01) --
------ ------- ------- -------
Total Distributions.............................. (0.27) (0.54) (0.51) (0.48)
------ ------- ------- -------
Net Asset Value, End of Period......................... $ 9.82 $ 9.88 $ 9.60 $ 10.29
====== ======= ======= =======
Total Return (excludes sales charge)................... 2.12%(b) 8.74% (1.86)% 7.80%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)...................... $6,617 $ 7,102 $10,345 $14,915
Ratio of expenses to average net assets.............. 1.21%(c) 1.17% 0.89% 0.56%(c)
Ratio of net investment income to average net
assets............................................. 5.41%(c) 5.50% 5.01% 5.43%(c)
Ratio of expenses to average net assets*............. 1.56%(c) 1.58% 1.58% 1.56%(c)
Ratio of net investment income to average net
assets*............................................ 5.06%(c) 5.09% 4.32% 4.42%(c)
Portfolio turnover(d)................................ 34.85% 106.81% 7.06% 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
-47-
<PAGE>
BB&T MUTUAL FUNDS GROUP
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six For the year ended September 30,
months ended -------------------------------- November 30, 1992 to
March 31, 1996 1995 1994 September 30, 1993 (a)
-------------- ---- ---- ----------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 9.89 $ 9.61 $ 10.30 $ 10.00
------- ------- ------- -------
Investment Activities
Net investment income................................ 0.28 0.56 0.52 0.49
Net realized and unrealized gains (losses)
on investments..................................... (0.06) 0.28 (0.68) 0.30
------- ------- ------- -------
Total from Investment Activities................. 0.22 0.84 (0.16) 0.79
------- ------- ------- -------
Distributions
Net investment income................................ (0.28) (0.56) (0.52) (0.49)
Net realized gains................................... -- -- (0.01) --
------- ------- ------- -------
Total Distributions.............................. (0.28) (0.56) (0.53) (0.49)
------- ------- ------- -------
Net Asset Value, End of Period......................... $ 9.83 $ 9.89 $ 9.61 $ 10.30
======= ======= ======= =======
Total Return........................................... 2.25%(b) 9.01% (1.66)% 8.01%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)...................... $47,685 $45,005 $38,208 $34,646
Ratio of expenses to average net assets.............. 0.96%(c) 0.93% 0.71% 0.39%(c)
Ratio of net investment income to average
net assets......................................... 5.66%(c) 5.78% 5.20% 5.60%(c)
Ratio of expenses to average net assets*............. 1.06%(c) 1.08% 1.08% 1.05%(c)
Ratio of net investment income to average
net assets*........................................ 5.56%(c) 5.64% 4.83% 4.94%(c)
Portfolio turnover(d).................................. 34.85% 106.81% 7.06% 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
-48-
<PAGE>
BB&T MUTUAL FUNDS GROUP
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six For the year ended September 30,
months ended -------------------------------- October 9, 1992 to
March 31, 1996 1995 1994 September 30, 1993 (a)
--------------- ------------ ------------ ---------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period ................. $ 9.88 $ 9.33 $ 10.39 $10.00
------ ------ ------- ------
Investment Activities
Net investment income .... 0.28 0.59 0.59 0.63
Net realized and
unrealized gains (losses)
on investments .......... (0.12) 0.55 (1.04) 0.39
------ ------ ------ ------
Total from Investment
Activities .......... 0.16 1.14 (0.45) 1.02
------ ------ ------ ------
Distributions
Net investment income .... (0.28) (0.59) (0.59) (0.63)
Net realized gains ....... -- -- (0.02) --
------ ------ ------ ------
Total Distributions .. (0.28) (0.59) (0.61) (0.63)
------ ------ ------ ------
Net Asset Value, End of
Period .................... $ 9.76 $ 9.88 $ 9.33 $10.39
====== ====== ====== ======
Total Return (excludes
sales charge) ............. 1.61%(b) 12.63% (4.48)% 10.53%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000) ................... $4,810 $5,173 $ 6,772 $5,238
Ratio of expenses to
average net assets ...... 1.14%(c) 1.09% 0.96% 0.59%(c)
Ratio of net investment
income to average net
assets .................. 5.63%(c) 6.22% 6.03% 6.26%(c)
Ratio of expenses to
average net assets* ..... 1.49%(c) 1.50% 1.56% 1.55%(c)
Ratio of net investment
income to average net
assets* ................. 5.28%(c) 5.81% 5.43% 5.30%(c)
Portfolio turnover(d) .... 47.88% 68.91% 0.38% 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
-49-
<PAGE>
BB&T MUTUAL FUNDS GROUP
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
January 1, 1996 to
March 31, 1996 (a)
------------------
(Unaudited)
<S> <C>
Net Asset Value, Beginning of Period ..................... $10.17
------
Investment Activities
Net investment income .................................. 0.07
Net realized and unrealized losses on investments ...... (0.46)
------
Total from Investment Activities ................... (0.39)
------
Distributions
Net investment income .................................. (0.07)
------
Total Distributions ................................ (0.07)
------
Net Asset Value, End of Period ........................... $ 9.71
======
Total Return (excludes redemption charge) ................ (3.80)%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ........................ $ 143
Ratio of expenses to average net assets ................ 1.89%(c)
Ratio of net investment income to average net assets ... 5.08%(c)
Ratio of expenses to average net assets* ............... 1.97%(c)
Ratio of net investment income to average net assets* .. 5.01%(c)
Portfolio turnover(d) .................................. 47.88%
</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
-50-
<PAGE>
BB&T MUTUAL FUNDS GROUP
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six For the year ended September 30,
months ended -------------------------------- October 9, 1992 to
March 31, 1996 1995 1994 September 30, 1993 (a)
--------------- ------------ ------------ ---------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period ................ $ 9.89 $ 9.34 $ 10.40 $ 10.00
Investment Activities -------- ------- ------- -------
Net investment income ... 0.30 0.61 0.62 0.64
Net realized and
unrealized gains (losses)
on investments .......... (0.12) 0.55 (1.04) 0.40
-------- ------- -------- -------
Total from Investment
Activities .......... 0.18 1.16 (0.42) 1.04
Distributions -------- ------- -------- -------
Net investment income .... (0.30) (0.61) (0.62) (0.64)
Net realized gains ....... -- -- (0.02) --
-------- ------- -------- -------
Total Distributions ... (0.30) (0.61) (0.64) (0.64)
-------- ------- -------- -------
Net Asset Value, End of
Period .................... $ 9.77 $ 9.89 $ 9.34 $ 10.40
======== ======= ======== =======
Total Return ............... 1.73%(b) 12.91% (4.23)% 10.76%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000) ................... $106,603 $78,578 $68,451 $59,816
Ratio of expenses to
average net assets ...... 0.88%(c) 0.85% 0.70% 0.39%(c)
Ratio of net investment
income to average net
assets .................. 5.87%(c) 6.43% 6.27% 6.45%(c)
Ratio of expenses to
average net assets* ..... 0.99%(c) 1.00% 1.06% 1.03%(c)
Ratio of net investment
income to average net
assets* ................. 5.77%(c) 6.28% 5.91% 5.82%(c)
Portfolio turnover(d) .... 47.88% 68.91% 0.38% 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
-51-
<PAGE>
BB&T MUTUAL FUNDS GROUP
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six For the year ended September 30,
months ended -------------------------------- October 16, 1992 to
March 31, 1996 1995 1994 September 30, 1993 (a)
--------------- ------------ ------------ ---------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period ................. $10.15 $ 9.78 $ 10.29 $ 10.00
Investment Activities ------ ------ ------- -------
Net investment income .... 0.18 0.36 0.36 0.36
Net realized and
unrealized gains (losses)
on investments .......... (0.03) 0.37 (0.50) 0.29
------- ------ ------- -------
Total from Investment
Activities .......... 0.15 0.73 (0.14) 0.65
Distributions ------ ------ ------- -------
Net investment income .... (0.18) (0.36) (0.36) (0.36)
Net realized gains -- -- (0.01) --
------ ------ ------- -------
Total Distributions .. (0.18) (0.36) (0.37) (0.36)
------ ------ ------- -------
Net Asset Value, End of
Period .................... $10.12 $10.15 $ 9.78 $ 10.29
Total Return (excludes ====== ====== ======= =======
sales charge) ............. 1.47%(b) 7.61% (1.33)% 6.60%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000) ................... $8,809 $8,717 $11,083 $13,695
Ratio of expenses to
average net assets ...... 1.11%(c) 1.05% 0.75% 0.43%(c)
Ratio of net investment
income to average net
assets .................. 3.52%(c) 3.63% 3.63% 3.80%(c)
Ratio of expenses to
average net assets* ..... 1.61%(c) 1.63% 1.66% 1.77%(c)
Ratio of net investment
income to average net
assets* ................. 3.02%(c) 3.05% 2.72% 2.45%(c)
Portfolio turnover(d) .... 12.98% 9.38% 0.56% 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
-52-
<PAGE>
BB&T MUTUAL FUNDS GROUP
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six For the year ended September 30,
months ended -------------------------------- October 16,1992 to
March 31, 1996 1995 1994 September 30,1993 (a)
--------------- ------------ ------------ ---------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period ................. $ 10.15 $ 9.78 $ 10.29 $ 10.00
Investment Activities ------- ------- ------- -------
Net investment income .... 0.19 0.37 0.38 0.36
Net realized and
unrealized gains (losses)
on investments .......... (0.03) 0.37 (0.50) 0.29
------- ------- ------- -------
Total from Investment
Activities .......... 0.16 0.74 (0.12) 0.65
Distributions ------- -------- -------- --------
Net investment income .... (0.19) (0.37) (0.38) (0.36)
Net realized gains ....... -- -- (0.01) --
------- -------- -------- --------
Total Distributions .. (0.19) (0.37) (0.39) (0.36)
------- -------- -------- --------
Net Asset Value, End of
Period .................... $ 10.12 $ 10.15 $ 9.78 $ 10.29
======= ======= ======= =======
Total Return ............... 1.55%(b) 7.77% (1.18)% 6.62%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000) ................... $26,657 $28,091 $27,770 $20,128
Ratio of expenses to
average net assets ...... 0.96%(c) 0.91% 0.63% 0.42%(c)
Ratio of net investment
income to average net
assets .................. 3.67%(c) 3.78% 3.77% 3.80%(c)
Ratio of expenses to
average net assets* ..... 1.11%(c) 1.13% 1.17% 1.30%(c)
Ratio of net investment
income to average net
assets* ................. 3.51%(c) 3.55% 3.24% 2.92%(c)
Portfolio turnover(d) .... 12.98% 9.38% 0.56% 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
-53-
<PAGE>
BB&T MUTUAL FUNDS GROUP
GROWTH AND INCOME STOCK FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six For the year ended September 30,
months endED -------------------------------- October 9, 1992 to
March 31, 1996 1995 1994 September 30, 1993 (a)
--------------- ------------ ------------ ---------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period .............. $ 12.97 $ 11.26 $ 11.26 $ 10.00
Investment Activities.............. -------- -------- -------- -------
Net investment income............ 0.12 0.25 0.25 0.28
Net realized and
unrealized gains on
investments .................... 1.39 1.98 0.12 1.27
Total from Investment......... -------- -------- -------- -------
Activities .................. 1.51 2.23 0.37 1.55
Distributions
Net investment income ........... (0.12) (0.25) (0.26) (0.29)
Net realized gains ............. (0.09) (0.12) (0.11) --
In excess of net realized
gains........................... -- (0.15) -- --
-------- -------- -------- -------
Total Distributions......... (0.21) (0.52) (0.37) (0.29)
-------- -------- -------- -------
Net Asset Value, End of
Period ........................... $ 14.27 $ 12.97 $11.26 $11.26
Total Return (excludes............. ======== ======== ======== =======
sales charge)..................... 11.72%(b) 20.62% 3.33% 15.72%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000)............................ $14,821 $10,842 $7,973 $6,009
Ratio of expenses to
average net assets............... 1.10%(c) 1.07% 0.92% 0.63%(c)
Ratio of net investment
income to average net
assets........................... 1.79%(c) 2.15% 2.26% 2.85%(c)
Ratio of expenses to
average net assets*.............. 1.59%(c) 1.60% 1.65% 1.68%(c)
Ratio of net investment
income to average net
assets*.......................... 1.30%(c) 1.62% 1.52% 1.81%(c)
Portfolio turnover(d)............. 7.11% 8.73% 21.30% 27.17%
</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
-54-
<PAGE>
BB&T MUTUAL FUNDS GROUP
GROWTH AND INCOME STOCK FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
January 1, 1996 to
March 31, 1996 (a)
------------------
(Unaudited)
<S> <C>
Net Asset Value, Beginning of Period .................. $13.78
Investment Activities ------
Net investment income ............................... 0.05
Net realized and unrealized gains on investments .... 0.48
------
Total from Investment Activities .................. 0.53
Distributions ------
Net investment income ............................... (0.05)
In excess of net investment income .................. (0.01)
------
Total Distributions ............................... (0.06)
------
Net Asset Value, End of Period ........................ $14.25
======
Total Return (excludes redemption charge) ............. 3.78%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ..................... $1,223
Ratio of expenses to average net assets ............. 1.83%(c)
Ratio of net investment income to average net assets 1.18%(c)
Ratio of expenses to average net assets* ............ 2.07%(c)
Ratio of net investment income to average net assets* 0.95%(c)
Portfolio turnover(d) ............................... 7.11%
</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
-55-
<PAGE>
BB&T MUTUAL FUNDS GROUP
GROWTH AND INCOME STOCK FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended
For the six September 30,
months ended -------------------- October 9, 1992 to
March 31, 1996 1995 1994 September 30, 1993 (a)
-------------- -------- --------- ----------------------
Unaudited
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period.................... $ 12.99 $ 11.28 $ 11.28 $ 10.00
-------- -------- ------- -------
Investment Activities
Net investment income....... 0.14 0.28 0.28 0.30
Net realized and
unrealized gains on
investments................. 1.40 1.98 0.11 1.28
-------- -------- ------- -------
Total from Investment
Activities.................. 1.54 2.26 0.39 1.58
-------- -------- ------- -------
Distributions
Net investment income ........ (0.14) (0.28) (0.28) (0.30)
Net realized gains............ (0.09) (0.12) (0.11) --
In excess of net realized
gains......................... -- (0.15) -- --
-------- -------- ------- -------
Total Distributions.......... (0.23) (0.55) (0.39) (0.30)
-------- -------- ------- -------
Net Asset Value, End of
Period....................... $ 14.30 $ 12.99 $ 11.28 $ 11.28
======== ======== ======= =======
Total Return.................. 11.92%(b) 20.88% 3.58% 16.06%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000)........................ $195,417 $145,603 $89,355 $82,358
Ratio of expenses to
average net assets........... 0.85%(c) 0.82% 0.66% 0.40%(c)
Ratio of net investment
income to average net
assets....................... 2.04%(c) 2.40% 2.51% 3.08%(c)
Ratio of expenses to
average net assets*.......... 1.09%(c) 1.10% 1.15% 1.17%(c)
Ratio of net investment
income to average net
assets*...................... 0.80%(c) 2.11% 2.02% 2.31%(c)
Portfolio turnover(d)......... 7.11% 8.73% 21.30% 27.17%
</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
-56-
<PAGE>
BB&T MUTUAL FUNDS GROUP
BALANCED FUND
Class A Shares
<TABLE>
<CAPTION>
Financial Highlights
For the year ended
For the six September 30,
months ended -------------------- July 1, 1993 to
March 31, 1996 1995 1994 September 30, 1993 (a)
-------------- -------- --------- ----------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period.................... $ 11.04 $ 9.76 $ 10.20 $10.00
------- ------- ------- -------
Investment Activities
Net investment income....... 0.21 0.44 0.38 0.08
Net realized and
unrealized gains (losses)
on investments............ 0.56 1.27 (0.44) 0.21
------- ------- ------- -------
Total from Investment
Activities............. 0.77 1.71 (0.06) 0.29
------- ------- ------- -------
Distributions
Net investment income....... (0.20) (0.43) (0.38) (0.09)
------- ------- ------- -------
Total Distributions.... (0.20) (0.43) (0.38) (0.09)
------- ------- ------- -------
Net Asset Value, End of
Period....................... $ 11.61 $11.04 $ 9.76 $10.20
======= ======= ======= =======
Total Return (excludes
sales charge) 7.05%(b) 18.00% (0.64)% 2.88%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000)...................... $11,793 $9,257 $8,560 $2,569
Ratio of expenses to
average net assets......... 1.19%(c) 1.17% 0.98% 0.50%(c)
Ratio of net investment
income to average net
assets..................... 3.64%(c) 4.27% 4.02% 4.39%(c)
Ratio of expenses to
average net assets*........ 1.68%(c) 1.71% 1.75% 2.00%(c)
Ratio of net investment
income to average net
assets*.................... 3.15%(c) 3.73% 3.25% 2.89%(c)
Portfolio turnover(d)....... 3.89% 23.68% 12.91% 8.32%
</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
-57-
<PAGE>
BB&T MUTUAL FUNDS GROUP
BALANCED FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
January 1, 1996 to
March 31, 1996 (a)
-------------------
Unaudited
<S> <C>
Net Asset Value, Beginning of Period...................... $11.54
------
Investment Activities
Net investment income .................................. 0.09
Net realized and unrealized gains on investments........ 0.04
------
Total from Investment Activities....................... 0.13
Distributions
Net investment income................................... (0.09)
In excess of net investment income...................... (0.02)
------
Total Distributions.................................... (0.11)
======
Net Asset Value, End of Period............................ $11.56
======
Total Return (excludes redemption charge)................. 0.95%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)......................... $1,367
Ratio of expenses to average net assets................. 1.94%(c)
Ratio of net investment income to average net assets.... 2.95%(c)
Ratio of expenses to average net assets*................ 2.17%(c)
Ratio of net investment income to average net assets*... 2.72%(c)
Portfolio turnover(d)................................... 3.89%
</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
-58-
<PAGE>
BB&T MUTUAL FUNDS GROUP
BALANCED FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended
For the six September 30,
months ended -------------------- July 1, 1993 to
March 31, 1996 1995 1994 September 30, 1993 (a)
-------------- -------- --------- ----------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................. $ 11.01 $ 9.74 $ 10.18 $ 10.00
------- ------- ------- -------
Investment Activities
Net investment income...... 0.22 0.46 0.40 0.09
Net realized and
unrealized gains (losses)
on investments............ 0.57 1.27 (0.44) 0.18
------- ------- ------- -------
Total from Investment
Activities.............. 0.79 1.73 (0.04) 0.27
------- ------- ------- -------
Distributions
Net investment income...... (0.22) (0.46) (0.40) (0.09)
------- ------- ------- -------
Total Distributions.... (0.22) (0.46) (0.40) (0.09)
------- ------- ------- -------
Net Asset Value, End of
Period...................... $ 11.58 $ 11.01 $ 9.74 $ 10.18
======= ======= ======= =======
Total Return................. 7.20%(b) 18.23% (0.42)% 2.74%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000)..................... $63,301 $49,794 $39,715 $20,374
Ratio of expenses to
average net assets........ 0.94%(c) 0.92% 0.73% 0.44%(c)
Ratio of net investment
income to average net
assets.................... 3.89%(c) 4.51% 4.22% 4.44%(c)
Ratio of expenses to
average net assets*....... 1.18%(c) 1.21% 1.25% 1.47%(c)
Ratio of net investment
income to average net
assets*................... 3.65%(c) 4.22% 3.70% 3.42%(c)
Portfolio turnover(d)...... 3.89% 23.68% 12.91% 8.32%
</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
-59-
<PAGE>
BB&T MUTUAL FUNDS GROUP
SMALL COMPANY GROWTH FUND
Class A Shares
<TABLE>
<CAPTION>
Financial Highlights
For the six
months ended December 7, 1994 to
March 31, 1996 September 30, 1995(a)
---------------- ---------------------
(Unaudited)
<S> <C> <C>
Net Asset Value, Beginning
of Period..................... $ 14.53 $ 10.00
------- -------
Investment Activities
Net investment loss........... (0.01) (0.08)
Net realized and
unrealized gains on
investments.................. 2.86 4.61
------- -------
Total from Investment
Activities................ 2.85 4.53
------- -------
Net Asset Value, End of
Period........................ $ 17.38 $ 14.53
======= =======
Total Return (excludes sales
charge)....................... 19.68%(b) 45.30%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000)........................ $3,465 $1,096
Ratio of expenses to
average net assets........... 2.15%(c) 2.50%(c)
Ratio of net investment
loss to average net assets... (1.27)%(c) (1.56)%(c)
Ratio of expenses to
average net assets*.......... 2.41%(c) 2.84%(c)
Ratio of net investment
loss to average net
assets*...................... (1.53)%(c) (1.90)%(c)
Portfolio turnover(d)......... 40.13% 46.97%
</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
-60-
<PAGE>
BB&T MUTUAL FUNDS GROUP
SMALL COMPANY GROWTH FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
January 1, 1996 to
March 31, 1996(a)
-------------------
(Unaudited)
<S> <C>
Net Asset Value, Beginning of Period.................... $15.24
------
Investment Activities
Net investment loss.................................. (0.03)
Net realized and unrealized gains on investments..... 2.15
------
Total from Investment Activities................. 2.12
------
Net Asset Value, End of Period.......................... $17.36
======
Total Return (excludes redemption charge)............... 19.77%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)........................ $ 736
Ratio of expenses to average net assets................ 2.79%(c)
Ratio of net investment loss to average net assets..... (2.15)%(c)
Ratio of expenses to average net assets*............... 2.79%(c)
Ratio of net investment loss to average net assets*.... (2.15)%(c)
Portfolio turnover(d).................................. 40.13%
</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
-61-
<PAGE>
BB&T MUTUAL FUNDS GROUP
SMALL COMPANY GROWTH FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six
months ended December 7, 1994 to
March 31, 1996 September 30, 1995(a)
---------------- ---------------------
(Unaudited)
<S> <C> <C>
Net Asset Value, Beginning
of Period..................... $ 14.57 $ 10.00
------- -------
Investment Activities
Net investment loss........... (0.05) (0.07)
Net realized and
unrealized gains on
investments.................. 2.93 4.64
------- -------
Total from Investment
Activities................ 2.88 4.57
------- -------
Net Asset Value, End of
Period........................ $ 17.45 $ 14.57
======= =======
Total Return................... 13.91%(b) 45.70%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000)........................ $26,068 $16,962
Ratio of expenses to
average net assets........... 1.92%(c) 2.33%(c)
Ratio of net investment
loss to average net assets... (1.01)%(c) (1.34)%(c)
Ratio of expenses to
average net assets*.......... 1.92%(c) 2.42%(c)
Ratio of net investment
loss to average net
assets*...................... (1.01)%(c) (1.43)%(c)
Portfolio turnover(d)......... 40.13% 46.97%
</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
-62-
<PAGE>
BLANK PAGE
-63-
<PAGE>
[BB&T MUTUAL FUNDS GROUP LOGO APPEARS HERE]
[BB&T MUTUAL FUNDS GROUP LOGO APPEARS HERE]
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
Semi-Annual Report
----------
to Shareholders
----------
March 31, 1996
