<PAGE>
BB&T Mutual Funds
SEMI-ANNUAL REPORT
To Shareholders
March 31, 1997
<PAGE>
TABLE OF CONTENTS
Letter From the Chairman and the Investment Adviser
Page 2
Performance Report
Page 4
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 38
Financial Highlights
Page 47
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<PAGE>
LETTER FROM THE CHAIRMAN AND THE INVESTMENT ADVISER
Dear Shareholders:
Despite the volatility of the markets during the six months ended March 31,
1997, we are pleased to report that the period was a good one for the BB&T
Mutual Funds. The stock market climbed higher as 1996 drew to a close, but in
the first quarter of the year, the market dropped and surrendered a portion of
the ground gained. The environment in the fixed-income market was also
challenging, as investors worried about the strength of the economy and the
direction of interest rates. Bonds, however, traded in a narrow range during
the period, and when all was said and done, the fixed-income markets posted
positive returns for the period.
In addition, during the period, investors continued to invest in mutual funds
overall, and in the BB&T Funds in particular. Total net assets under management
in our fund family rose 19%, rising from $826 million to $984 million over the
six-month period ended March 31, 1997.
INTERNATIONAL FUND LAUNCHES SUCCESSFULLY
Our newest fund, The BB&T International Equity Fund, made a sizable
contribution to our growth during the period. Introduced on January 2, 1997,
the Fund ended the period with more than $40 million under management. Intended
primarily for long-term growth investors, the portfolio was invested in
eighteen different markets around the world as of March 31, 1997. With the Fund
in operation just under a quarter, it is far too early to draw conclusions on
performance. Nevertheless, we are very pleased with the Fund's launch, and
initial results have been encouraging. If you would like more information on
this Fund, including a prospectus, please call us at 1-800-228-1872.
TURNING TO THE MARKETS . . .
Expansion has been the theme of the U.S. economy for six years, and indications
are that the economy continued to grow moderately during the fourth quarter of
1996. Pivotal to this growth is consumer spending. Benefiting from low
unemployment and low inflation, consumers' financial confidence continues to be
high. In addition, a surging stock market has given them added wealth, and
despite high consumer debt levels, the market's rise has aided spending as it
has climbed.
Manufacturing activity also has provided strong support for growth. During the
fourth quarter, the National Association of Purchasing Management's Index
maintained a level comfortably above 50%--a number indicating that a majority
of manufacturers have increased purchases.
INTERNATIONAL TRADE CONTRIBUTES HELP
Moreover, strong consumer spending and industrial production not only have
powered growth directly, but also have affected it indirectly by influencing
international trade. Consumer spending has fueled American demand for the
import of foreign goods and services, while efficient industrial production has
provided the goods and services exported to meet foreign demand. This trading
of goods and services also has stimulated and supported our economy's growth
over the past year.
Yet, the level of American exports in the future is questionable. While the
strong growth of the Mexican economy could provide a boost to our economy,
exports to other parts of the world may decline. The dollar's recent
appreciation against other major currencies--most notably that of Japan--may
cause foreign consumers to purchase goods and services from less expensive
sources.
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Overall, however, the outlook for continued growth is bright. Unemployment is
low, and inflation is tame. At the same time, the tight labor market is now
exerting some upward wage pressure--and generating inflationary uncertainty. In
general, however, the economy has provided a positive environment for
investors.
WHAT'S AHEAD FOR STOCKS AND BONDS?
As 1996 ended, the bond market was somewhat volatile but, because inflation
remained low, held its ground. Stocks, on the other hand, moved higher on the
strength of the economy, low inflation and solid earnings reports. But, as the
market has moved higher, its dependence on strong earnings reports has grown--
and its vulnerability to disappointment has increased.
Consequently, stocks appear to be at a level of full valuation, reflecting a
higher amount of risk, and bond yields are high relative to historical
inflation-adjusted levels. However, we are still optimistic about the stock
market's prospects in the months ahead, and bonds continue to appear attractive
on a risk-adjusted basis.
IN CLOSING . . .
We urge you to read the following report closely. In it, you will find a
detailed discussion of the performance for each of the BB&T Mutual Funds during
the six months ended March 31, 1997.
Finally, we thank you for your continued confidence in us. We look forward to
providing you with excellent investment management and to serving your needs
now and in the future. As always, if you would like a prospectus, have any
questions or require any assistance, please do not hesitate to call us at 1-
800-228-1872.
Sincerely,
/s/ Walter B. Grimm
Walter B. Grimm
Chairman
BB&T Mutual Funds Group
May 19, 1997
/s/ David C. McMahon
David C. McMahon
Executive Vice President and Chief Investment Officer
Branch Banking and Trust Company
- --------------------------------------------------------------------------------
This report is authorized for distribution only when preceded or accompanied by
a prospectus. Please read the prospectus carefully before investing or sending
money.
The BB&T Mutual Funds are distributed by BISYS Fund Services.
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 risk, including the possible
loss of principal.
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<PAGE>
PERFORMANCE REPORT
THE BB&T INTERNATIONAL EQUITY FUND /1/
Intended for shareholders looking to diversify their portfolios and pursue
long-term growth opportunities in markets abroad, The BB&T International Equity
Fund was introduced on January 2, 1997. The Fund invests primarily in stocks of
companies based in the developed markets of Europe and the Pacific Basin.
Investments may also be made in a limited number of emerging markets around the
world. For more information, or for a prospectus on this or any of the BB&T
Funds, please call us at 1-800-228-1872.
A SUCCESSFUL LAUNCH
We are pleased to report that the Fund opened with a very strong start in the
relatively volatile environment of the first quarter. During the first eleven
weeks of operation, investors contributed some $40 million to the Fund.
Consequently, at the end of the period, the Fund had holdings in approximately
ninety different companies in markets worldwide.
POSITIONED FOR GROWTH
As of March 31, 1997, approximately 16% of the funds were invested in the United
Kingdom, 35% in Continental Europe, 20% in Japan and 21% in other developed
markets. Approximately 11% of the portfolio was invested in the world's emerging
markets, and 7% in cash equivalents.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Aggregate Total Return+
As of 3/31/97
- --------------------------------------------------------------------------------
Inception Since
Class Date Inception
- --------------------------------------------------------------------------------
<S> <C> <C>
Class A Shares/*/ 1/2/97 -1.29%
Class B Shares/**/ 1/2/97 -1.74%
Trust Shares 1/2/97 3.48%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
/*/ Reflects 4.50% Maximum Sales Charge
/**/ Reflects CDSC of 5.00%.
+ Past performance is not predictive of future results. Investment return and
the principal value of shares in the BB&T Mutual Funds will fluctuate, so
that shares, when redeemed, may be worth more or less than their original
cost. A portion of the Fund's fees have been voluntarily waived. If the
fees had not been waived, the Fund's total return for the period would have
been lower. Past performance is no guarantee of future results.
The top five equity holdings in the Fund were IMS Group (1.7% of the
portfolio's assets), Murray & Roberts Holdings, LTD. (1.7%), Banco Santander,
SA (1.7%), AECI, LTD (1.7%) and Boewe Systec AG (1.6%)./2/
- --------------------------------------------------------------------------------
/1/ International investing involves increased risk and volatility.
/2/ The composition of the Fund's portfolio is subject to change.
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THE BB&T SMALL COMPANY GROWTH FUND /1/
The six-months ended March 31, 1997, were very tough ones indeed for small-cap
stocks overall, and small-cap growth stocks in particular. During the period,
investor sentiment favored big companies over small ones and value over growth.
Moreover, while money continued to flow into the equity market, most moved
directly into the "Nifty Fifty," the biggest and best known names.
As a result, during the first quarter of 1997, small-cap growth stocks wilted
from neglect despite, in many cases, strong fundamentals and greater
opportunity for growth than the niftiest of the Nifty Fifty. Consequently, the
period was a disappointing one for small-cap investors overall and for the Fund
in particular.
THE TIDE WILL TURN . . .
Clearly, after the astonishing growth of small-cap stocks in 1995 and 1996, the
last several months have been difficult and discouraging for small-cap
investors. Moreover, until the technology sector as a whole, not just the
bigger, better known names within it, stabilizes and rebounds, small-cap growth
stocks may continue to suffer from neglect.
Nonetheless, given small-cap valuations and the unrealistic levels of larger
stocks, we believe attractive opportunities now abound, particularly in the
retail and oil services sectors. In the months ahead, as the economy slows, we
believe that investors will again turn to small-cap stocks, seeking growth as
they have in the past. Consequently, rather than changing strategies, we are
standing strong and focusing our efforts on positioning the Fund to capitalize
when as expected the tide does turn.
<TABLE>
<CAPTION>
================================================================================
Average Annual Total Return+
As of 3/31/97
- --------------------------------------------------------------------------------
Inception Since
Class Date 6 Month 1 Year Inception
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares* 12/7/94 -27.13% -11.77% 20.29%
Class B Shares** 1/2/96 -27.85% -12.14% 0.20%
Trust Shares 12/7/94 -23.62% -7.29% 23.06%
================================================================================
</TABLE>
* Reflects 4.50% Maximum Sales Charge
** Reflects CDSC of 5.00%
+ Past performance is not predictive of future results.
Investment return ans the principal value of shares
in the BB&T Mutual Funds will fluctuate, so that
shares, when redeemed, may be worth more or
less than their original cost. A portion of the Fund's
fees have been voluntarily waived. If the fees had
not been waived, the Fund's total return would
have been lower. Past performance is no
guarantee of future results.
As of March 31, 1997, the top five equity holdings in the Fund were Tel-Save
Holdings, Inc. (2.3% of the portfolio's assets), Comverse Technology, Inc.
(2.0%), Dura Pharmaceuticals, Inc. (1.9%), CBT Group PLC, ADR (1.8%) and Jabil
Circuit (1.4%)./2/
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/1/Small-cap companies typically carry additional risks since smaller companies
generally have a higher risk of failure and, by definition, are not as well
established as "blue chip" companies. Historically, small-company stocks have
experienced a greater degree of market volatility than stocks on average.
/2/The composition of the Fund's portfolio is subject to change.
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<PAGE>
THE BB&T GROWTH AND INCOME STOCK FUND
The market continued to soar throughout the last quarter of 1996, but the
advance belonged almost exclusively to larger capitalization stocks. As the
first quarter opened, however, even the most favored stocks fell when investor
sentiment changed. The possibility of higher future inflation and rising
interest rates helped move the market down from its recent record levels.
When sentiment shifted, however, value stocks took center stage over growth
stocks. Consequently, while the general decline in the marketplace affected
performance, the Fund suffered far less than other portfolios, due to the
diversification of its holdings in the portfolio and our emphasis on value. In
addition, over the past several months, our search for value led us to increase
positions in the mid-cap sector, and while stocks here dropped in price in
March, they did not drop as dramatically as many of the market's highest fliers
of the past year.
MINING FOR OPPORTUNITY IN MID-CAPS
In recent months, we have moved to capture mid-cap values in a wide range of
industries, and in the months ahead, we expect to continue to do so.
Expectations for these stocks have not reached unrealistic levels and, so, are
less vulnerable to earnings disappointments. Very simply, we believe they offer
solid growth potential at a reasonable level of risk.
As of March 31, 1997, the top five equity holdings in the Fund were SAFECO Corp.
(2.8% of the portfolio's assets), Harris Corp. (2.7%), Bristol-Myers Squibb Co.
(2.4%), Phillips Petroleum Co. (2.3%) and SBC Communications, Inc. (2.0%)./1/
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Average Annual Total Return+
As of 3/31/97
- --------------------------------------------------------------------------------
Inception Since
Class Date 6 Month 1 Year Inception
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares/*/ 10/9/92 4.59% 13.26% 14.37%
Class B Shares/**/ 1/2/96 3.92% 13.57% 14.20%
Trust Shares 10/9/92 9.61% 18.81% 15.84%
- --------------------------------------------------------------------------------
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</TABLE>
/*/ Reflects 4.50% Maximum Sales Charge
/**/ Reflects CDSC of 5.00%.
+ Past Performance is not predictive of future results. Investment return and
the principal value of shares in the BB&T Mutual Funds will fluctuate, so
that the shares, when redeemed, may be worth more or less than their
original cost. A portion of the Fund's fees have been voluntarily waived.
If the fees had not been waived, the Fund's total return would have been
lower. Performance is no guarantee of future results.
- --------------------------------------------------------------------------------
/1/ The composition of the Fund's holdings is subject to change.
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<PAGE>
THE BB&T BALANCED FUND
The stock market continued to rumble upward throughout much of the six months
ended March 31, 1997, and investors had clear favorites. The market's advance
was led by, and almost exclusively enjoyed by, higher capitalization stocks.
Consequently, the equity portion of the portfolio performed very strongly.
Given investors' anxiety over possible rate increases, the environment in the
fixed-income markets was more challenging, and high-quality securities held up
well. In addition, throughout the period, we took advantage of opportunities to
enhance yields whenever they arose. As a result, despite the tough climate, the
bond portion of the portfolio also contributed positively to performance.
GOOD VALUES ARE HARD TO FIND . . .
However, they do exist in both the stock and bond markets. In the coming months,
convertible securities may also offer attractive possibilities. In the stock
market, many second-and third-tier companies, those just slightly smaller than
the largest but every bit as attractive, did not participate in the market's
rise during the period. Moreover, recent weakness in the market has hit these
sectors hard. As a result, in the months ahead, we expect these sectors to offer
investors attractive opportunities.
As always, wherever we find value we will attempt to capitalize on it for our
shareholders. As of March 31, 1997, approximately 48% of the portfolio was
invested in stocks, 49% in bonds and 3% in cash and cash equivalents. The Fund's
top five equity holdings were Bristol-Myers Squibb Co. (1.3% of the portfolio's
assets), Schering Plough Corp. (1.3%), Harris Corp. (1.3%), Phillips Petroleum
Co. (1.3%) and Abbott Laboratories (1.3%). The Fund's fixed income holdings
remained concentrated in U.S. Treasury securities. The average maturity of the
portfolio was approximately 6.0 years; the average credit quality was AAA./1/
<TABLE>
<CAPTION>
================================================================================
Average Annual Total Return+
As of 3/31/97
- --------------------------------------------------------------------------------
Inception Since Since
Class Date 6 Month 1 Year Inception
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares* 7/1/93 0.41% 5.40% 8.57%
Class B Shares** 1/2/96 -0.24% 5.65% 5.34%
Trust Shares 7/1/93 5.34% 10.78% 10.13%
================================================================================
</TABLE>
* Reflects 4.50% Maximum Sales Charge
** Reflects CDSC of 5.00%.
+ Past performance is not predictive of future results. Investment return and
the principal value of shares in the BB&T Mutual Funds will fluctuate, so
that shares, when redeemed, may be worth more or less than their original
cost. A portion of the Fund's fees have been voluntarily waived. If the
fees had not been waived, the Fund's total return for the period would have
been lower. Past performance is no guarantee of future results.
- --------------------------------------------------------------------------------
/1/The composition of the Fund's portfolio is subject to change.
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<PAGE>
THE BB&T INTERMEDIATE U.S. GOVERNMENT BOND FUND &
THE BB&T SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Renewed economic strength and the subsequent fear of inflation made bond
investors uneasy throughout much of the six months ended March 31, 1997. Rates
rose and fell in response to conflicting reports of economic growth and
inflation. Throughout this period we approached the fixed-income markets
cautiously and focused our efforts on yield enhancement.
Both funds' positions in mortgage pass-through securities, one of the best
performing sectors, were increased. Also, given the uncertainty regarding the
possibility of Federal Reserve action and the subsequent direction of interest
rates, the maturities in both portfolios remain at the short end of their
maturity ranges as specified by prospectus. As a result, both Funds performed
in line with industry averages.
<TABLE>
<CAPTION>
The BB&T Intermediate The BB&T Short-Intermediate
U.S. Government Bond Fund U.S. Government Income Fund
========================================================== ==========================================================
- ---------------------------------------------------------- ----------------------------------------------------------
Average Annual Total Return/+/ Average Annual Total Return/+/
As of 3/31/97 As of 3/31/97
- ---------------------------------------------------------- ----------------------------------------------------------
Inception Since Inception Since
Class Date 6 Month 1 Year Inception Class Date 6 Month 1 Year Inception
- ---------------------------------------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares/*/ 10/9/92 -3.23% -1.78% 3.91% Class A Shares/*/ 11/30/92 -0.39% -1.55% 4.16%
Class B Shares/**/ 1/2/96 -4.01% -1.57% -4.28% Trust Shares 11/30/92 1.78% 3.88% 4.89%
Trust Shares 10/9/92 1.53% 3.22% 5.25%
- ---------------------------------------------------------- ----------------------------------------------------------
========================================================== ==========================================================
</TABLE>
/*/ Reflects 4.50% Maximum Sales Charge
/**/ Reflects CDSC of 5.00%.
/+/ Past performance is not predictive of future results. Investment return
and the principal value of shares in the BB&T Mutual Funds will fluctuate,
so that shares, when redeemed, may be worth more or less than their
original cost. A portion of the Fund's fees have been voluntarily waived.
If the fees had not been waived, the Fund's total return for the period
would have been lower. Past performance is no guarantee of future results.
RATES RISE AND RILE MARKETS
As many in the marketplace had anticipated, the Federal Reserve moved to
increase short-term rates on March 25. Given the uncertainty over where
interest rates are headed, we will continue to approach the markets cautiously
and focus on yield enhancement in the months ahead. Mortgage pass-through
securities now represent nearly 20% of assets in both Funds, while investments
in other sectors of the market, such as corporate securities, are a much
smaller portion of assets. We continue to over-weight investments in U.S.
Treasury debt due to its high quality and increased liquidity. Currently, more
than 70% of the investments in the Funds are direct obligations of the U.S.
Treasury.
As of March 31, 1997, the average maturity of the Intermediate U.S. Government
Fund was 6.5 years. For the Short-Intermediate U.S. Government Fund, it was 2.8
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./1/
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/1/The composition of the Fund's portfolios is subject to change.
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<PAGE>
THE BB&T NORTH CAROLINA TAX-EXEMPT FUND /1/
Supply of municipal securities increased slightly in the North Carolina market
as voters approved and the state came to market with two major issues. These
new securities were snapped up immediately by mutual funds and individual
investors, so the effect on the marketplace was short lived. In fact,
throughout much of the period, short supply made it difficult to chase rates.
Nonetheless, performance over the six months ended March 31, 1997, was solid--
and with few clouds on the horizon, we anticipate the next six months to
produce much of the same.
QUALITY IS KEY LONG-TERM
With the recent increase in short-term interest rates and the uncertainty of the
direction of future rates, we are unlikely to see supply increase dramatically
any time soon. Demand, however, for securities from high-quality issuers like
North Carolina is very strong and anticipated to increase as baby boomers move
closer to retirement. Consequently, long-term prospects for the North Carolina
market, and for the Fund, are bright.
As of March 31, 1997, the Fund's portfolio held laddered maturities of high-
quality North Carolina bonds. Approximately 87% of the Fund's assets are
invested in general obligation bonds; 9% are in health care; and slightly more
than 3% are held in cash or cash equivalents. No one bond accounted for more
than 8% of the portfolio. The average maturity of our holdings was 6.2 years;
the average credit quality was AA./2/
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Average Annual Total Return+
As of 3/31/97
- --------------------------------------------------------------------------------
Inception Since
Class Date 6 Month 1 Year Inception
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares/*/ 10/16/92 -0.46% 0.66% 3.32%
Trust Shares 10/16/92 1.68% 2.90% 3.91%
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</TABLE>
/*/ Reflects 2.00% Maximum Sales Charge
+ Past performance is not predictive of future results. Investment return and
the principal value of shares in the BB&T Mutual Funds will fluctuate, so
that shares, when redeemed, may be worth more or less than their original
cost. A portion of the Fund's fees have been voluntarily waived. If the fees
had not been waived, the Fund's total return for the period would have been
lower. Past performance no guarantee of future results.
- --------------------------------------------------------------------------------
/1/ 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.
/2/ The composition of the Fund's portfolio is subject to change.
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<PAGE>
THE BB&T U.S. TREASURY MONEY MARKET FUND /1/
Money market instruments were relatively stable over the six months ended March
31, 1997. Yet, in the closing week of the period, the Federal Reserve moved to
raise short-term interest rates. While the increase was slight, and widely
anticipated, it caused market volatility to increase, nevertheless.
In the months ahead, until the direction of the economy grows clearer, we
expect to see this pattern continue. Approximately 56% of the Fund's assets,
however, are invested in a laddered portfolio of Treasury bills. Consequently,
the Fund is well positioned to capitalize on any further increases in short-
term rates. As lower yielding securities mature or are sold, we expect to find
and capitalize on opportunities to invest in higher yielding securities.
As of March 31, 1997, the average maturity of the Fund's holdings was 36 days;
the average credit quality was AAA./2/
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/1/An investment in the Fund is neither insured nor guaranteed by the U.S.
Government. There can be no assurance that the Fund will be able to maintain a
stable net asset value of $1.00 per share.
/2/The composition of the BB&T Mutual Funds' portfolios is subject to change.
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. 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.
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, the Branch Banking and Trust Company or its
affiliates, nor are they insured by the FDIC or any other agency.
This literature is authorized for distribution only when preceded or
accompanied by a prospectus.
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<PAGE>
Statements of Assets and Liabilities
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
U.S. Treasury Short-Intermediate Intermediate North Carolina
Money Market U.S. Government U.S. Government Intermediate
Fund Income Fund Bond Fund Tax-Free Fund
------------- ------------------ --------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value ................................... $ 126,872,282 $ 100,617,426 $ 130,604,369 $ 72,387,046
Repurchase agreements, at cost .......................... 99,365,617 -- -- --
------------- ------------- ------------- -------------
Total Investments (Amortized cost $226,237,899;
cost $102,434,473; $134,149,391; and
$71,656,694, respectively)............................ 226,237,899 100,617,426 130,604,369 72,387,046
Cash .................................................... 500 -- -- --
Interest receivable ..................................... 36,481 1,572,273 1,940,902 1,027,341
Receivable for capital shares issued .................... 9,857 -- 3,457 --
Prepaid expenses and other .............................. 42,647 5,794 13,940 3,977
------------- ------------- ------------- -------------
Total Assets ................................. 226,327,384 102,195,493 132,562,668 73,418,364
------------- ------------- ------------- -------------
LIABILITIES:
Dividends payable ....................................... 846,380 514,133 652,395 258,350
Payable for capital shares redeemed ..................... 58,733 1,102 269 1,018
Payable for investments purchased ....................... -- -- -- 966,650
Accrued expenses and other payables:
Investment advisory fees .......................... 75,933 43,314 56,506 30,703
Administration fees ............................... 7,384 3,341 4,344 1,772
Distribution fees--Class A ........................ 4,793 1,206 951 1,154
Distribution fees--Class B ........................ 1,275 -- 409 --
Accounting and transfer agent fees ................ 9,588 9,652 12,811 9,015
Other ............................................. 24,618 7,537 14,310 19,536
------------- ------------- ------------- -------------
Total Liabilities ............................ 1,028,704 580,285 741,995 1,288,198
------------- ------------- ------------- -------------
NET ASSETS:
Capital ................................................. 225,298,431 104,683,152 137,238,927 71,518,210
Undistributed net investment income ..................... -- -- 5,718 --
Net unrealized appreciation (depreciation) on
investments .......................................... -- (1,817,047) (3,545,022) 730,352
Accumulated undistributed net realized gains
(losses) on investment transactions .................. 249 (1,250,897) (1,878,950) (118,396)
============= ============= ============= =============
Net Assets ................................... $ 225,298,680 $ 101,615,208 $ 131,820,673 $ 72,130,166
============= ============= ============= =============
</TABLE>
Continued
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<PAGE>
Statements of Assets and Liabilities, Continued
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
U.S. Treasury Short-Intermediate Intermediate North Carolina
Money Market U.S. Government U.S. Government Intermediate
Fund Income Fund Bond Fund Tax-Free Fund
------------ ----------------- --------------- --------------
<S> <C> <C> <C> <C>
Net Assets
Class A ........................................... $ 27,959,484 $ 5,595,207 $ 4,455,686 $ 9,084,646
Class B ........................................... 1,450,043 -- 493,631 --
Trust Class ....................................... 195,889,153 96,020,001 126,871,356 63,045,520
------------ ------------ ------------ ------------
Total ........................................ $225,298,680 $101,615,208 $131,820,673 $ 72,130,166
============ ============ ============ ============
Outstanding units of beneficial interest (shares)
Class A ........................................... 27,959,539 581,477 469,300 906,759
Class B ........................................... 1,450,042 -- 52,155 --
Trust Class ....................................... 195,888,937 9,972,312 13,345,503 6,290,619
------------ ------------ ------------ ------------
Total ........................................ 225,298,518 10,553,789 13,866,958 7,197,378
============ ============ ============ ============
Net asset value
Class A--redemption price per share ............... $ 1.00 $ 9.62 $ 9.49 $ 10.02
Class B--offering price per share* ................ $ 1.00 -- $ 9.46 --
Trust Class--offering and redemption price
per share ....................................... $ 1.00 $ 9.63 $ 9.51 $ 10.02
============ ============ ============ ============
Maximum Sales Charge (Class A) .......................... 2.00% 4.50% 2.00%
============ ============ ============
Maximum Offering Price (100%/ (100%-Maximum
Sales Charge) of net asset value adjusted to
nearest cent) per share--Class A $ 1.00(a) $ 9.82 $ 9.94 $ 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-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Statements of Assets and Liabilities,
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Growth and Small Company International
Income Stock Balanced Growth Equity
Fund Fund Fund Fund
--------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value ..................................... $ 277,846,665 $ 88,350,047 $ 48,128,276 $ 39,791,496
--------------- -------------- -------------- --------------
Total Investments (Cost $211,195,679; $78,066,246;
$45,120,976; and $39,199,981, respectively) ............ 277,846,665 88,350,047 48,128,276 39,791,496
Cash ...................................................... -- -- 3,739 499,866
Interest and dividends receivable ......................... 495,177 777,383 1,769 70,055
Receivable for capital shares issued ...................... 5,894 -- 7,368 --
Receivable for investments sold ........................... -- -- 204,761 --
Foreign currency (Cost $1,396,665) ........................ -- -- -- 1,409,541
Prepaid expense and other ................................. 21,092 9,356 5,793 2,119
--------------- -------------- -------------- --------------
Total Assets ................................... 278,368,828 89,136,786 48,351,706 41,773,077
--------------- -------------- -------------- --------------
LIABILITIES:
Dividends payable ......................................... 324,055 290,748 -- 109,170
Payable for capital shares redeemed ....................... 3,197 5,991 21,961 --
Payable for investments purchased ......................... 149,040 -- 2,073,326 1,486,735
Accrued expenses and other payables:
Investment advisory fees ............................ 122,963 38,890 40,832 32,130
Administration fees ................................. 9,376 2,975 1,555 1,303
Distribution fees--Class A .......................... 5,496 3,023 1,711 34
Distribution fees--Class B .......................... 6,976 3,351 3,996 169
Accounting and transfer agent fees .................. 19,849 22,889 20,273 17,621
Other ............................................... 17,493 8,939 11,615 34,195
--------------- -------------- -------------- --------------
Total Liabilities .............................. 658,445 376,806 2,175,269 1,681,357
--------------- -------------- -------------- --------------
NET ASSETS:
Capital ................................................... 199,775,237 78,323,316 44,365,327 39,262,712
Undistributed net investment loss ......................... -- -- (685,092) (117,516)
Net unrealized appreciation (depreciation) on investments . 66,650,986 10,283,801 3,007,300 587,997
Accumulated undistributed net realized gains (losses)
on investment transactions and from foreign currency
transactions ........................................... 11,284,160 152,863 (511,098) 358,527
--------------- -------------- -------------- --------------
Net Assets ..................................... $ 277,710,383 $ 88,759,980 $ 46,176,437 $ 40,091,720
=============== ============== ============== ==============
</TABLE>
Continued
-13-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Statements of Assets and Liabilities
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Growth and Small Company International
Income Stock Balanced Growth Equity
Fund Fund Fund Fund
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Net Assets
Class A .................................................. $ 25,289,683 $ 13,920,771 $ 7,672,591 $ 184,071
Class B .................................................. 8,355,832 4,006,670 4,630,952 237,329
Trust Class .............................................. 244,064,868 70,832,539 33,872,894 39,670,320
------------ ------------ ------------ ------------
Total ............................................... $277,710,383 $ 88,759,980 $ 46,176,437 $ 40,091,720
============ ============ ============ ============
Outstanding units of beneficial interest (shares)
Class A .................................................. 1,582,072 1,162,856 478,084 17,851
Class B .................................................. 524,090 336,073 291,756 23,023
Trust Class .............................................. 15,239,246 5,928,831 2,096,294 3,844,622
------------ ------------ ------------ ------------
Total ............................................... 17,345,408 7,427,760 2,866,134 3,885,496
============ ============ ============ ============
Net asset value
Class A--redemption price per share ...................... $ 15.99 $ 11.97 $ 16.05 $ 10.31
Class B--offering price per share* ....................... $ 15.94 $ 11.92 $ 15.87 $ 10.31
Trust Class--offering and redemption price per share ..... $ 16.02 $ 11.95 $ 16.16 $ 10.32
============ ============ ============ ============
Maximum Sales Charge (Class A) ................................. 4.50% 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 .......................................... $ 16.74 $ 12.53 $ 16.81 $ 10.80
============ ============ ============ ============
</TABLE>
- -------------
* Redemption price per share (Class B) varies by length of time shares are held.
See notes to financial statements
-14-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Statements of Operations
For the six months ended March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
U.S. Treasury Short-Intermediate Intermediate North Carolina
Money Market U.S. Government U.S. Government Intermediate
Fund Income Fund Bond Fund Tax-Free Fund
------------- ------------------ --------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income ............................................. $ 6,067,466 $ 2,757,726 $ 4,290,735 $ 1,225,419
----------- ----------- ----------- -----------
Total Income ..................................... 6,067,466 2,757,726 4,290,735 1,225,419
----------- ----------- ----------- -----------
EXPENSES:
Investment advisory fees .................................... 460,072 246,765 387,994 149,605
Administration fees ......................................... 230,036 82,074 129,354 49,868
Distribution fees--Class A .................................. 71,063 15,226 10,546 22,829
Distribution fees--Class B .................................. 7,226 -- 2,092 --
Custodian and accounting fees ............................... 51,797 24,961 37,806 18,430
Legal and audit fees ........................................ 18,663 7,830 9,439 10,512
Trustees' fees and expenses ................................. 4,310 1,268 2,340 932
Transfer agent fees ......................................... 43,148 25,068 37,104 23,208
Registration and filing fees ................................ 18,561 5,580 8,910 2,599
Printing costs .............................................. 19,614 2,547 4,607 1,372
Other ....................................................... 5,312 1,611 2,953 968
----------- ----------- ----------- -----------
Gross Expenses ................................... 929,802 412,930 633,145 280,323
Expenses voluntarily reduced ................................ (42,638) (49,187) (69,801) (53,997)
----------- ----------- ----------- -----------
Total Expenses ................................... 887,164 363,743 563,344 226,326
----------- ----------- ----------- -----------
Net Investment Income ....................................... 5,180,302 2,393,983 3,727,391 999,093
----------- ----------- ----------- -----------
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gains on investment transactions ............... 249 229,586 63,142 6,626
Net change in unrealized appreciation (depreciation) on
investments .............................................. -- (1,271,909) (2,010,742) 624,529
----------- ----------- ----------- -----------
Net realized/unrealized gains (losses) on investments ....... 249 (1,042,323) (1,947,600) 631,155
----------- ----------- ----------- -----------
Change in net assets resulting from operations .............. $ 5,180,551 $ 1,351,660 $ 1,779,791 $ 1,630,248
=========== =========== =========== ===========
</TABLE>
See notes to financial statements
-15-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Growth and Small Company International
Income Stock Balanced Growth Equity
Fund Fund Fund Fund
--------------- ------------ -------------- ----------------
For the For the For the For the period
six months six months six months January 2, 1997
ended ended ended to
March 31, March 31, March 31, March 31,
1997 1997 1997 1997 (a)
--------------- ------------ -------------- ----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income ............................................ $ 59,466 $ 1,632,990 $ 185,300 $ --
Dividend income ............................................ 3,447,818 623,996 5,923 161,066
Foreign tax withholding .................................... -- -- -- (14,437)
------------ ------------ ------------ ------------
Total Income .................................... 3,507,284 2,256,986 191,223 146,629
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory fees ................................... 961,066 334,689 249,960 77,218
Administration fees ........................................ 259,479 90,429 49,992 15,443
Distribution fees--Class A ................................. 58,143 33,642 20,416 117
Distribution fees--Class B ................................. 29,763 15,829 21,235 291
Custodian and accounting fees .............................. 56,319 31,218 36,980 37,952
Legal and audit fees ....................................... 20,153 9,388 4,957 3,366
Organization costs ......................................... -- -- 5,402 2,846
Trustees' fees and expenses ................................ 4,322 1,653 986 299
Transfer agent fees ........................................ 73,992 58,074 67,252 17,637
Registration and filing fees ............................... 14,585 5,162 5,302 3,700
Printing costs ............................................. 9,592 3,457 1,776 468
Other ...................................................... 5,226 1,902 1,185 173
------------ ------------ ------------ ------------
Gross expenses .................................. 1,492,640 585,443 465,443 159,510
Expenses voluntarily reduced ............................... (341,488) (125,447) (10,210) (4,535)
------------ ------------ ------------ ------------
Total expenses .................................. 1,151,152 459,996 455,233 154,975
------------ ------------ ------------ ------------
Net Investment Income (Loss) ............................... 2,356,132 1,796,990 (264,010) (8,346)
------------ ------------ ------------ ------------
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gains (losses) on investment transactions ..... 11,763,826 1,038,908 (283,379) 244,479
Net realized gains from foreign currency transactions ...... -- -- -- 114,048
Net change in unrealized appreciation (depreciation)
on investments........................................... 19,084,547 1,734,681 (12,922,647) 591,515
Net change in unrealized (depreciation) from foreign
currency transactions ................................... -- -- -- (3,518)
------------ ------------ ------------ ------------
Net realized/unrealized gains (losses) on investments ...... 30,848,373 2,773,589 (13,206,026) 946,524
------------ ------------ ------------ ------------
Change in net assets resulting from operations ............. $ 33,204,505 $ 4,570,579 $(13,470,036) $ 938,178
============ ============ ============ ============
</TABLE>
- -------------
(a) Period from commencement of operations.
See notes to financial statements
-16-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
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,
1997 1996 1997 1996
--------------- ---------------- --------------- ---------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ............................. $ 5,180,302 $ 8,394,161 $ 2,393,983 $ 3,335,263
Net realized gains (losses) on investment
transactions ...................................... 249 -- 229,586 (162,759)
Net change in unrealized depreciation
on investments .................................... -- -- (1,271,909) (686,269)
--------------- ---------------- --------------- ---------------
Change in net assets resulting from operations ....... 5,180,551 8,394,161 1,351,660 2,486,235
--------------- ---------------- --------------- ---------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income ........................ (616,018) (948,869) (169,839) (371,250)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income ........................ (25,531) (19,543)(a) -- --
DISTRIBUTIONS TO TRUST CLASS SHAREHOLDERS:
From net investment income ........................ (4,538,753) (7,425,749) (2,224,144) (2,964,013)
--------------- ---------------- --------------- ---------------
Change in net assets from shareholder distributions .. (5,180,302) (8,394,161) (2,393,983) (3,335,263)
--------------- ---------------- --------------- ---------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued ....................... 170,221,410 449,946,776 40,514,247 32,001,311
Dividends reinvested .............................. 1,273,602 1,721,604 747,221 1,448,084
Cost of shares redeemed ........................... (181,407,176) (350,488,723) (7,581,423) (15,729,346)
--------------- ---------------- --------------- ---------------
Change in net assets from share transactions ......... (9,912,164) 101,179,657 33,680,045 17,720,049
--------------- ---------------- --------------- ---------------
Change in net assets ................................. (9,911,915) 101,179,657 32,637,722 16,871,021
NET ASSETS:
Beginning of period ............................... 235,210,595 134,030,938 68,977,486 52,106,465
--------------- ---------------- --------------- ---------------
End of period ..................................... $ 225,298,680 $ 235,210,595 $ 101,615,208 $ 68,977,486
=============== ================ =============== ===============
SHARE TRANSACTIONS:
Issued ............................................ 170,221,410 449,946,776 4,158,711 3,264,121
Reinvested ........................................ 1,273,602 1,721,604 76,343 146,965
Redeemed .......................................... (181,407,089) (350,488,723) (764,883) (1,597,468)
--------------- ---------------- --------------- ---------------
Change in shares ..................................... (9,912,077) 101,179,657 3,470,171 1,813,618
=============== ================ =============== ===============
</TABLE>
- -------------
(a) From January 1, 1996 (commencement of operations) through September 30,
1996.
See notes to financial statements
-17-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
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,
1997 1996 1997 1996
--------------- --------------- ------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income .................................. $ 3,727,391 $ 6,313,924 $ 999,093 $ 1,322,554
Net realized gains (losses) on investment transactions.. 63,142 (725,469) 6,626 (47,072)
Net change in unrealized appreciation (depreciation)
on investments ....................................... (2,010,742) (2,757,133) 624,529 (302,527)
--------------- --------------- ------------- -------------
Change in net assets resulting from operations ............ 1,779,791 2,831,322 1,630,248 972,955
--------------- --------------- ------------- -------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income ............................. (118,362) (247,352) (174,273) (322,468)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income ............................. (10,002) (6,966)(a) -- --
DISTRIBUTIONS TO TRUST CLASS SHAREHOLDERS:
From net investment income ............................. (3,599,027) (6,059,606) (824,820) (1,000,086)
--------------- --------------- ------------- -------------
Change in net assets from shareholder distributions ....... (3,727,391) (6,313,924) (999,093) (1,322,554)
--------------- --------------- ------------- -------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued ............................ 20,868,198 66,845,451 39,948,023 11,820,669
Dividends reinvested ................................... 2,355,848 4,689,472 140,304 268,478
Cost of shares redeemed ................................ (13,100,884) (28,159,031) (6,293,570) (10,843,225)
--------------- --------------- ------------- -------------
Change in net assets from share transactions .............. 10,123,162 43,375,892 33,794,757 1,245,922
--------------- --------------- ------------- -------------
Change in net assets ...................................... 8,175,562 39,893,290 34,425,912 896,323
NET ASSETS:
Beginning of period .................................... 123,645,111 83,751,821 37,704,254 36,807,931
--------------- --------------- ------------- -------------
End of period .......................................... $ 131,820,673 $ 123,645,111 $ 72,130,166 $ 37,704,254
=============== =============== ============= =============
SHARE TRANSACTIONS:
Issued ................................................. 2,143,529 6,757,431 3,950,741 1,171,335
Reinvested ............................................. 241,390 478,491 13,842 26,506
Redeemed ............................................... (1,346,047) (2,876,321) (519,896) (1,071,579)
--------------- --------------- ------------- -------------
Change in shares .......................................... 1,038,872 4,359,601 3,444,687 126,262
=============== =============== ============= =============
</TABLE>
- -------------
(a) From January 1, 1996 (commencement of operations) through September 30,
1996.
See notes to financial statements
-18-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
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,
1997 1996 1997 1996
-------------- --------------- ------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income ................................. $ 2,356,132 $ 4,118,150 $ 1,796,990 $ 2,956,768
Net realized gains on investment transactions ......... 11,763,826 9,428,482 1,038,908 2,206,261
Net change in unrealized appreciation on investments .. 19,084,547 24,542,390 1,734,681 3,503,931
-------------- -------------- ------------- --------------
Change in net assets resulting from operations ........... 33,204,505 38,089,022 4,570,579 8,666,960
-------------- -------------- ------------- --------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income ............................ (186,237) (270,458) (257,440) (421,901)
From net realized gains from investment transactions .. (886,255) (76,748) (398,078) --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income ............................ (28,175) (19,098)(a) (51,419) (39,026)(a)
From net realized gains from investment transactions .. (206,225) -- (88,738) --
DISTRIBUTIONS TO TRUST CLASS SHAREHOLDERS:
From net investment income ............................ (2,141,720) (3,828,594) (1,488,131) (2,495,841)
From net realized gains from investment transactions .. (8,604,815) (1,044,981) (2,213,599) --
-------------- -------------- ------------- --------------
Change in net assets from shareholder distributions ...... (12,053,427) (5,239,879) (4,497,405) (2,956,768)
-------------- -------------- ------------- --------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued ........................... 72,866,830 78,886,812 17,370,756 30,350,061
Dividends reinvested .................................. 7,948,401 3,546,244 3,943,255 2,471,085
Cost of shares redeemed ............................... (53,743,915) (42,239,195) (16,795,800) (13,413,504)
-------------- -------------- ------------- --------------
Change in net assets from share transactions ............. 27,071,316 40,193,861 4,518,211 19,407,642
-------------- -------------- ------------- --------------
Change in net assets ..................................... 48,222,394 73,043,004 4,591,385 25,117,834
NET ASSETS:
Beginning of period ................................... 229,487,989 156,444,985 84,168,595 59,050,761
-------------- -------------- ------------- --------------
End of period ......................................... $ 277,710,383 $ 229,487,989 $ 88,759,980 $ 84,168,595
============== ============== ============= ==============
SHARE TRANSACTIONS:
Issued ................................................ 4,527,570 5,587,933 1,426,573 2,636,434
Reinvested ............................................ 502,752 252,319 326,131 214,800
Redeemed .............................................. (2,644,838) (2,926,808) (1,375,704) (1,159,914)
-------------- -------------- ------------- --------------
Change in shares ......................................... 2,385,484 2,913,444 377,000 1,691,320
============== ============== ============= ==============
</TABLE>
- -------------
(a) From January 1, 1996 (commencement of operations) through September 30,
1996.
See notes to financial statements
-19-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Small Company International
Growth Fund Equity Fund
------------------------------ ----------------
For the For the For the period
six months year January 2, 1997
ended ended to
March 31, September 30, March 31,
1997 1996 1997(a)
------------ ------------- ----------------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment loss ....................................................... $ (264,010) $ (328,819) $ (8,346)
Net realized gains (losses) on investment transactions .................... (283,379) 90,971 244,479
Net realized gains from foreign currency transactions ..................... -- -- 114,048
Net change in unrealized appreciation (depreciation) on investments ....... (12,922,647) 12,148,737 591,515
Net change in unrealized appreciation from foreign currency transactions... -- -- (3,518)
------------ ------------ ------------
Change in net assets resulting from operations ............................... (13,470,036) 11,910,889 938,178
------------ ------------ ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income ................................................ -- -- (449)
From net realized gains from investment transactions ...................... (8,888) -- --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income ................................................ -- -- (381)
From net realized gains from investment transactions ...................... (40,857) -- --
DISTRIBUTIONS TO TRUST CLASS SHAREHOLDERS:
From net investment income ................................................ -- -- (108,340)
From net realized gains from investment transactions ...................... (4,428) -- --
------------ ------------ ------------
Change in net assets from shareholder distributions .......................... (54,173) -- (109,170)
------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued ............................................... 25,350,764 22,938,972 39,669,549
Dividends reinvested ...................................................... 40,219 -- --
Cost of shares redeemed ................................................... (12,675,737) (5,922,093) (406,837)
------------ ------------ ------------
Change in net assets from share transactions ................................. 12,715,246 17,016,879 39,262,712
------------ ------------ ------------
Change in net assets ......................................................... (808,963) 28,927,768 40,091,720
NET ASSETS:
Beginning of period ....................................................... 46,985,400 18,057,632 --
------------ ------------ ------------
End of period ............................................................. $ 46,176,437 $ 46,985,400 $ 40,091,720
============ ============ ============
SHARE TRANSACTIONS:
Issued .................................................................... 1,296,974 1,298,090 3,924,919
Reinvested ................................................................ 2,037 -- --
Redeemed .................................................................. (655,209) (315,568) (39,423)
------------ ------------ ------------
Change in shares ............................................................. 643,802 982,522 3,885,496
============ ============ ============
</TABLE>
- ------------
(a) Period from commencement of operations.
See notes to financial statements
-20-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Schedule of Portfolio Investments
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
- --------------- -------------------------------------- ---------------
<S> <C> <C>
U.S. Treasury Bills (56.3%):
$ 8,000,000 4/3/97............................... $ 7,997,756
8,000,000 4/10/97.............................. 7,989,940
8,000,000 4/17/97.............................. 7,982,044
8,000,000 5/1/97............................... 7,966,800
8,000,000 5/8/97............................... 7,959,053
8,000,000 5/15/97.............................. 7,951,013
8,000,000 5/22/97.............................. 7,942,823
16,000,000 5/29/97.............................. 15,869,629
8,000,000 6/5/97............................... 7,927,128
8,000,000 6/12/97.............................. 7,919,040
8,000,000 6/26/97.............................. 7,903,011
8,000,000 7/3/97............................... 7,896,048
8,000,000 7/24/97.............................. 7,872,193
8,000,000 8/7/97............................... 7,858,631
8,000,000 8/21/97.............................. 7,837,173
---------------
Total U.S. Treasury Bills 126,872,282
---------------
Repurchase Agreements (44.1%):
$ 40,000,000 FirstBoston, 6.40%, 4/1/97
(Collateralized by 40,000,000
U.S. Treasury Bills, 5.36%,
4/1/97, market value --
$40,803,189)...................... $ 40,000,000
25,000,000 Lehman Brothers, 5.45%, 4/1/97
(Collateralized by 24,910,000
U.S. Treasury Bonds, 7.25%,
8/15/22, market value --
$25,510,945)...................... 25,000,000
34,365,617 NationsBank, 6.38%, 4/1/97
(Collateralized by 24,750,000
U.S. Treasury Bonds, 11.25%,
2/15/15, market value --
$35,158,589)...................... 34,365,617
---------------
Total Repurchase Agreements 99,365,617
---------------
Total (Cost--$226,237,899)(a) $ 226,237,899
===============
</TABLE>
- -----------------
Percentages indicated are based on net assets of $225,298,680.
(a) Cost for federal income tax and financial reporting purposes are the same.
See notes to financial statements
-21-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Schedule of Portfolio Investments
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- ------------- -------------------------------- --------------
<S> <C> <C>
Corporate Bonds (4.9%):
Automotive (1.9%):
$ 2,000,000 Ford Motor Credit, 6.38%,
10/6/00..................... $ 1,960,000
Banking (3.0%):
3,000,000 Suntrust Banks, 7.33%, 7/1/02.. 3,022,500
--------------
Total Corporate Bonds 4,982,500
--------------
Pass-through Mortgage Securities (17.7%):
Federal Home Loan Mortgage Corp.:
2,806,310 5.50%, 8/1/00, Pool # M80285... 2,697,566
2,909,695 6.00%, 10/1/00, Pool # G40018.. 2,824,209
3,156,260 6.00%, 11/1/00, Pool # G40168.. 3,026,065
Federal National Mortgage Assoc.:
2,002,666 7.00%, 6/1/08, Pool # 50751.... 1,976,371
2,871,612 7.50%, 12/1/08, Pool # 190611.. 2,891,340
2,510,765 6.00%, 4/1/09, Pool # 190759... 2,373,452
2,295,874 6.50%, 4/1/09, Pool # 250009... 2,220,523
--------------
Total Pass-through Mortgage Securities 18,009,526
--------------
U.S. Government Agencies (2.9%):
Federal Home Loan Bank:
$ 3,000,000 6.17%, 3/8/01 ................. $ 2,922,390
--------------
Total U.S. Government Agencies 2,922,390
--------------
U.S. Treasury Notes (72.3%):
7,250,000 8.88%, 11/15/97................ 7,378,035
10,000,000 7.25%, 2/15/98................. 10,098,500
8,000,000 8.25%, 7/15/98................. 8,196,880
10,500,000 5.75%, 12/31/98................ 10,394,160
10,500,000 6.50%, 4/30/99................. 10,511,339
8,000,000 8.00%, 8/15/99................. 8,251,760
7,000,000 6.75%, 4/30/00................. 7,020,580
8,000,000 6.38%, 8/15/02................. 7,857,200
4,000,000 5.88%, 11/15/05................ 3,726,520
--------------
Total U.S. Treasury Notes 73,434,974
--------------
Investment Companies (1.2%):
1,268,036 Provident Federal Fund......... 1,268,036
--------------
Total Investment Companies 1,268,036
--------------
Total (Cost--$102,434,473)(a) $ 100,617,426
==============
</TABLE>
- ------------
Percentages indicated are based on net assets of $101,615,208.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
Unrealized appreciation .............. $ 119,831
Unrealized depreciation .............. (1,936,878)
------------
Net unrealized depreciation .......... $(1,817,047)
============
See notes to financial statements
-22-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Schedule of Portfolio Investments
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- ------------- -------------------------------- --------------
<S> <C> <C>
Corporate Bonds (6.8%):
Automotive (3.0%):
$ 4,000,000 Ford Motor Credit, 6.38%,
10/6/00..................... $ 3,920,000
Banking (3.8%):
5,000,000 Suntrust Banks, 7.33%, 7/1/02.. 5,037,500
--------------
Total Corporate Bonds 8,957,500
--------------
Pass-through Mortgage Securities (16.5%):
Federal Home Loan Mortgage Corp.:
2,520,418 7.50%, 7/1/07, Pool # E00108... 2,534,583
Federal National Mortgage Assoc.:
5,008,972 6.00%, 6/1/08, Pool # 124885... 4,763,182
3,719,237 7.00%, 6/1/08, Pool # 50751.... 3,670,403
3,511,465 7.00%, 4/1/24, Pool # 250005... 3,369,883
Government National Mortgage Assoc.:
3,546,187 7.50%, 3/15/23, Pool # 342553.. 3,491,859
4,161,452 7.00%, 8/15/23, Pool # 354627.. 3,989,792
--------------
Total Pass-through Mortgage Securities 21,819,702
--------------
U.S. Government Agencies (3.9%):
Federal Home Loan Bank:
2,000,000 8.38%, 10/25/99 ............... 2,084,780
3,000,000 7.36%, 7/1/04 ................. 3,051,210
--------------
Total U.S. Government Agencies 5,135,990
--------------
U.S. Treasury Bonds (7.7%):
$ 3,000,000 12.00%, 5/15/05................ $ 3,932,430
6,000,000 7.50%, 11/15/16................ 6,176,580
--------------
Total U.S. Treasury Bonds 10,109,010
--------------
U.S. Treasury Notes (63.1%):
11,000,000 5.00%, 1/31/99................. 10,740,180
10,000,000 6.88%, 7/31/99................. 10,074,300
7,000,000 7.88%, 8/15/01................. 7,293,860
8,000,000 6.38%, 8/15/02................. 7,857,200
12,000,000 6.25%, 2/15/03................. 11,681,520
12,500,000 7.25%, 8/15/04................. 12,754,500
14,000,000 5.88%, 11/15/05................ 13,042,820
10,000,000 6.50%, 10/15/06................ 9,690,100
--------------
Total U.S. Treasury Notes 83,134,480
--------------
Investment Companies (1.1%):
1,447,687 Provident Federal Fund......... 1,447,687
--------------
Total Investment Companies 1,447,687
--------------
Total (Cost--$134,149,391)(a) $ 130,604,369
==============
</TABLE>
- ------------
Percentages indicated are based on net assets of $131,820,673.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation ................ $ 312,958
Unrealized depreciation ................ (3,857,980)
============
Net unrealized depreciation ............ $(3,545,022)
============
</TABLE>
See notes to financial statements
-23-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- ------------ ---------------------------------------------------------------------------------------------------- -------------
<S> <C> <C>
Municipal Bonds (97.4%):
General Obligation Bonds (87.1%):
$ 1,200,000 Asheville, North Carolina, 6.00%, 3/1/01 .......................................................... $ 1,256,999
500,000 Asheville, North Carolina, 4.80%, 6/1/06 .......................................................... 481,875
470,000 Buncombe County, North Carolina, 5.00%, 3/1/00 .................................................... 477,050
500,000 Buncombe County, North Carolina, 5.00%, 3/1/01 .................................................... 506,875
300,000 Buncombe County, North Carolina, 5.00%, 3/1/02 .................................................... 304,125
500,000 Buncombe County, North Carolina, 5.00%, 3/1/03 .................................................... 504,375
850,000 Buncombe County, North Carolina, 5.10%, 3/1/04 .................................................... 860,625
500,000 Buncombe County, North Carolina, 5.80%, 2/1/05, Callable 2/1/04 @ 100.5*........................... 524,375
1,000,000 Buncombe County, North Carolina, 5.10%, 3/1/07 .................................................... 1,002,500
750,000 Burke County, North Carolina, 6.25%, 3/1/99 ....................................................... 775,313
500,000 Burke County, North Carolina, 6.30%, 3/1/01 ....................................................... 525,625
1,500,000 Cabarus County, North Carolina, 5.30%, 2/1/13, Callable 2/1/07 @ 102*.............................. 1,454,999
500,000 Cary, North Carolina, 5.50%, 2/1/99 ............................................................... 510,625
1,000,000 Cary, North Carolina, 5.50%, 2/1/01 ............................................................... 1,027,500
500,000 Catawba County, North Carolina, 5.70%, 6/1/06, Callable 6/1/04 @ 101*.............................. 521,875
825,000 Charlotte, North Carolina, 6.40%, 2/1/99 .......................................................... 853,875
1,000,000 Charlotte, North Carolina, 6.20%, 6/1/01 .......................................................... 1,054,999
395,000 Charlotte, North Carolina, 5.20%, 7/1/01 .......................................................... 403,888
250,000 Charlotte, North Carolina, 5.25%, 7/1/03, Callable 7/1/02 @ 100.5*................................. 256,875
600,000 Charlotte, North Carolina, 5.70%, 2/1/06, Callable 2/1/04 @ 101*................................... 629,250
1,000,000 Charlotte, North Carolina, 5.30%, 4/1/10, Callable 4/1/05 @ 102*................................... 998,750
500,000 Chatham County, North Carolina, 5.40%, 4/1/11, Callable 4/1/06 @ 102*.............................. 490,000
275,000 Cleveland County, North Carolina, 7.10%, 6/1/99 ................................................... 289,781
600,000 Cleveland County, North Carolina, 5.10%, 6/1/03 ................................................... 602,250
400,000 Concord, North Carolina, 5.10%, 12/1/01 ........................................................... 406,000
1,000,000 Craven County, North Carolina, 5.50%, 6/1/07, Callable 6/1/06 @ 100.5*............................. 1,025,000
500,000 Craven County, North Carolina, 5.50%, 6/1/09, Callable 6/1/06 @ 102................................ 505,625
500,000 Durham & Wake Counties, 5.75%, 4/1/02 ............................................................. 523,750
400,000 Durham County, North Carolina, 5.20%, 3/1/01 ...................................................... 408,000
500,000 Durham County, North Carolina, 5.40%, 2/1/02 ...................................................... 514,375
250,000 Durham County, North Carolina, 5.20%, 3/1/03, Callable 3/1/02 @ 100.5*............................. 255,313
340,000 Durham County, North Carolina, 5.20%, 3/1/05, Callable 3/1/02 @101.50*............................. 345,100
1,000,000 Durham, North Carolina, 4.90%, 2/1/04 ............................................................. 993,750
500,000 Durham, North Carolina, 5.00%, 2/1/05 ............................................................. 496,875
1,000,000 Fayetteville, North Carolina, 4.80%, 5/1/05, Callable 5/1/03 @ 101................................. 972,500
500,000 Fayetteville, North Carolina, 6.50%, 3/1/14, Callable 3/1/00 @ 102*................................ 533,750
1,000,000 Forsyth County, North Carolina, 5.20%, 6/1/02 ..................................................... 1,022,500
500,000 Forsyth County, North Carolina, 5.60%, 8/1/03, Callable 8/1/02 @ 100.5*............................ 521,875
500,000 Forsyth County, North Carolina, 6.20%, 3/1/04, Callable 3/1/01 @ 101.5*............................ 531,875
265,000 Forsyth County, North Carolina, 5.40%, 6/1/04, Callable 6/1/02 @ 101*.............................. 271,956
500,000 Gaston County, North Carolina, 5.00%, 3/1/08, Callable 3/1/06 @ 101................................ 486,250
450,000 Goldsboro, North Carolina, 4.90%, 6/1/99 .......................................................... 453,938
500,000 Goldsboro, North Carolina, 4.90%, 6/1/01 .......................................................... 500,000
</TABLE>
Continued
-24-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- ------------ ---------------------------------------------------------------------------------------------------- -------------
<S> <C> <C>
Municipal Bonds, continued:
General Obligation Bonds, continued:
$ 550,000 Greensboro, North Carolina, 6.00%, 3/1/98 ......................................................... $ 560,313
500,000 Greensboro, North Carolina, 5.40%, 4/1/02 ......................................................... 512,500
1,000,000 Guilford County, North Carolina, 4.80%, 4/1/99 .................................................... 1,007,500
890,000 Henderson County, North Carolina, 6.50%, 6/1/01 ................................................... 942,288
555,000 Hickory, North Carolina, 6.50%, 5/1/99 ............................................................ 577,894
600,000 Hickory, North Carolina, 6.50%, 5/1/01 ............................................................ 635,250
680,000 High Point, North Carolina, 4.40%, 4/1/02 ......................................................... 661,300
500,000 Lee County, North Carolina, 5.50%, 2/1/00 ......................................................... 512,500
250,000 Lee County, North Carolina, 5.60%, 2/1/03, Callable 2/1/01 @ 100.5*................................ 256,875
1,000,000 Lincoln County, North Carolina, 4.70%, 6/1/01 ..................................................... 1,001,250
1,000,000 Lincoln County, North Carolina, 4.80%, 6/1/04 ..................................................... 988,750
700,000 Mecklenburg County, North Carolina, 5.75%, 3/1/03, Callable 3/1/02 @ 100.50*....................... 733,250
1,000,000 Mecklenburg County, North Carolina, 5.40%, 4/1/03 ................................................. 1,034,999
800,000 Mecklenburg County, North Carolina, 4.80%, 3/1/07, Callable 3/1/06 @ 100.5*........................ 784,000
1,000,000 Mecklenburg County, North Carolina, 5.00%, 4/1/08 ................................................. 991,250
1,500,000 Mecklenburg County, North Carolina, 5.50%, 4/1/11, Callable 4/1/04 @ 102*.......................... 1,520,624
500,000 Moore County, North Carolina, 4.75%, 6/1/03 ....................................................... 493,750
500,000 New Hanover County, North Carolina, 4.30%, 1/1/02 ................................................. 488,125
1,000,000 New Hanover County, North Carolina, 4.50%, 9/1/03 ................................................. 972,500
625,000 New Hanover County, North Carolina, 5.30%, 5/1/09, Callable 5/1/06 @ 101.5*........................ 620,313
1,500,000 North Carolina State, 5.75%, 3/1/98 ............................................................... 1,526,969
815,000 North Carolina State, 5.60%, 4/1/00 ............................................................... 840,469
1,000,000 North Carolina State, 4.70%, 2/1/01 ............................................................... 1,001,250
250,000 North Carolina State, 6.10%, 3/1/03, Callable 3/1/02 @ 100.5*...................................... 264,688
1,000,000 North Carolina State, 4.70%, 2/1/06, Callable 2/1/04 @ 101*........................................ 965,000
1,000,000 North Carolina State, 5.10%, 6/1/09, Callable 6/1/06 @ 101.50...................................... 983,750
670,000 Orange County, North Carolina, 5.10%, 6/1/00 ...................................................... 681,725
500,000 Orange County, North Carolina, 5.10%, 6/1/06, Callable 6/1/03 @ 101.5*............................. 498,125
500,000 Orange County, North Carolina, 5.10%, 6/1/07, Callable 6/1/03 @ 102*............................... 496,250
1,000,000 Pitt County, North Carolina, 4.80%, 2/1/00 ........................................................ 1,005,000
965,000 Raleigh, North Carolina, 6.30%, 3/1/99 ............................................................ 1,001,188
500,000 Raleigh, North Carolina, 5.00%, 2/1/08, Callable 2/1/00 @ 102*..................................... 492,500
250,000 Robeson County, North Carolina, 6.25%, 3/1/01, Callable 3/1/98 @ 101.5*............................ 256,703
500,000 Rocky Mount, North Carolina, 6.10%, 5/1/03, Callable 5/1/02 @ 100.5*............................... 525,000
625,000 Rowan County, North Carolina, 5.50%, 4/1/04 ....................................................... 645,313
700,000 Rowan County, North Carolina, 5.50%, 4/1/05 ....................................................... 721,000
225,000 Rowan County, North Carolina, 5.50%, 2/1/07, Callable 2/1/06 @ 100.5*.............................. 231,188
1,000,000 Surry County, North Carolina, 6.25%, 4/1/00 ....................................................... 1,042,499
500,000 Surry County, North Carolina, 6.25%, 4/1/01 ....................................................... 525,000
200,000 Union County, North Carolina, 5.80%, 3/1/05, Callable 3/1/02 @ 101.5*.............................. 207,500
200,000 Wake County, North Carolina, 6.50%, 2/1/00, Callable 2/1/99 @ 100.5*............................... 208,250
500,000 Wake County, North Carolina, 4.40%, 4/1/01 ........................................................ 496,875
1,000,000 Wake County, North Carolina, 4.50%, 4/1/03 ........................................................ 987,500
</TABLE>
Continued
-25-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- ------------ --------------------------------------------------------------------------------------------------------- ------------
<S> <C> <C>
Municipal Bonds, continued:
General Obligation Bonds, continued:
$ 510,000 Wayne County, North Carolina, 4.80%, 4/1/02 ............................................................ $ 504,263
1,000,000 Wayne County, North Carolina, 4.80%, 4/1/03 ............................................................ 991,250
500,000 Wilkes County, North Carolina, 5.00%, 6/1/01 ........................................................... 501,875
500,000 Wilkes County, North Carolina, 5.00%, 6/1/02 ........................................................... 500,000
1,000,000 Wilmington, North Carolina, 4.60%, 3/1/02 .............................................................. 985,000
250,000 Winston Salem, North Carolina, 6.50%, 6/1/98 ........................................................... 256,875
505,000 Winston Salem, North Carolina, 6.50%, 6/1/99 ........................................................... 527,725
200,000 Winston Salem, North Carolina, 6.40%, 6/1/02, Callable 6/1/01 @ 102*.................................... 215,250
350,000 Winston Salem, North Carolina, 6.25%, 4/1/07 , Callable 4/1/02 @ 102*................................... 372,313
------------
62,836,360
------------
Health Care Bonds (9.0%):
650,000 Charlotte Mecklenburg Hospital Revenue, 5.70%, 1/1/01 .................................................. 674,375
500,000 Charlotte Mecklenburg Hospital Revenue, 5.90%, 1/1/02 .................................................. 523,125
300,000 Charlotte-Mecklenburg Hospital Revenue, 6.00%, 1/1/03, Callable 1/1/02 @ 102*........................... 315,750
550,000 North Carolina Medical Care Commission, Presbyterian Health Service Project, 4.90%, 10/1/01 ............ 550,000
250,000 North Carolina Medical Care Commission, Presbyterian Hospital Project, 6.80%, 10/1/99 .................. 263,438
400,000 North Carolina Medical Care Commission, Presbyterian Hospital Services, 5.70%, 10/1/04, Callable
10/01/02 @ 102*...................................................................................... 414,000
600,000 North Carolina Medical Care Commission, Rex Hospital, 4.70%, 6/1/98 .................................... 601,500
1,000,000 North Carolina Medical Care Community Hospital, Wake County Hospital System, 5.00%, 10/1/10 , Callable
10/1/07 @ 102*....................................................................................... 943,750
250,000 North Carolina Medical Care, Carolina Medicorp Project, 5.10%, 5/1/01 .................................. 252,188
1,000,000 Pitt County North Carolina Revenue, Memorial Hospital, 5.50%, 12/1/15 , Callable @ 12/1/05*............. 956,250
1,000,000 University of North Carolina, University Hospital Revenue, 4.75%, 2/15/06 .............................. 966,250
------------
6,460,626
------------
Housing Bonds (0.6%):
280,000 North Carolina Finance Agency, 5.65%, 9/1/02 ........................................................... 289,450
160,000 North Carolina Housing Finance Agency, 6.35%, 9/1/04 , Callable 9/1/02 @ 102*........................... 166,000
------------
455,450
------------
Utility Bonds (0.7%):
500,000 Asheville, North Carolina Water and Sewer Revenue, 5.30%, 8/1/09, Callable 8/1/06 @ 102*................ 500,000
------------
Total Municipal Bonds 70,252,436
------------
Investment Companies (3.0%):
2,134,611 Compass Capital Funds North Carolina Municipal Money Market Portfolio................................... 2,134,610
------------
Total Investment Companies 2,134,610
------------
Total (Cost--$71,656,694)(a) $ 72,387,046
============
</TABLE>
- ------------
Percentages indicated are based on net assets of $72,130,166.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation ................. $ 1,128,214
Unrealized depreciation ................. (397,862)
------------
Net unrealized appreciation ............. $ 730,352
============
</TABLE>
* Additional put and demand features exist allowing the Fund to require the
purchase of the instrument within variable time periods including daily,
weekly, monthly, or semiannually.
See notes to financial statements
-26-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
GROWTH AND INCOME STOCK FUND
Schedule of Portfolio Investments
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- ------------ ---------------------------------- -------------
<S> <C> <C>
Common Stocks (96.2%):
Apparel (1.1%):
46,600 V.F. Corp........................ $ 3,116,375
-------------
Banks (5.8%):
91,800 Barnett Banks, Inc............... 4,268,700
48,350 J. P. Morgan & Co................ 4,750,388
59,500 Old Kent Financial Corp.......... 2,803,938
79,400 Wachovia Corp.................... 4,327,300
-------------
16,150,326
-------------
Beverages (2.0%):
133,400 Anheuser-Busch Co................ 5,619,474
-------------
Business Equipment & Services (2.7%):
86,400 John H. Harland Co............... 2,052,000
91,800 Pitney Bowes, Inc................ 5,393,250
-------------
7,445,250
-------------
Chemicals (3.9%):
77,700 Air Products & Chemicals, Inc.... 5,273,888
22,100 Great Lakes Chemical Corp........ 1,016,600
72,100 Vulcan Materials Co.............. 4,677,488
-------------
10,967,976
-------------
Communications Equipment (2.9%):
96,200 Harris Corp...................... 7,395,374
2,430 Lucent Technologies, Inc......... 562,368
-------------
7,957,742
-------------
Computers (3.4%):
103,000 Hewlett Packard Co............... 5,484,750
17,100 Honeywell, Inc................... 1,160,663
20,700 IBM Corp......................... 2,843,663
-------------
9,489,076
-------------
Construction Materials (0.7%):
38,400 PPG Industries................... 2,073,600
-------------
Containers (1.6%):
123,100 Ball Corp........................ 3,262,150
40,750 Sonoco Products Co............... 1,100,250
-------------
4,362,400
-------------
Defense (1.9%):
62,800 Lockheed Martin Corp............. 5,275,200
-------------
Electrical Equipment (1.7%):
106,800 Emerson Electric................. 4,806,000
-------------
Electronic Components (1.5%):
72,500 Avnet, Inc....................... 4,087,188
-------------
Electronic Instruments (1.1%):
59,300 Tektronix, Inc.(b)............... $ 2,994,650
-------------
Food & Related (3.7%):
138,400 Dean Foods Co.................... 4,792,100
188,700 SUPERVALU, Inc................... 5,613,824
-------------
10,405,924
-------------
Forest & Paper Products (1.8%):
110,900 Weyerhaeuser Co.................. 4,948,913
-------------
Health Care (2.8%):
62,000 Abbott Laboratories.............. 3,479,750
47,900 Glaxo Holdings ADR............... 1,694,463
47,000 Johnson & Johnson................ 2,485,125
-------------
7,659,338
-------------
Household Products (1.8%):
27,250 Unilever NV, New York Shares..... 5,075,313
-------------
Household--Major Appliances (0.8%):
49,200 Whirlpool Corp................... 2,343,150
-------------
Insurance (2.9%):
55,650 Aon Corp......................... 3,408,563
88,300 Lincoln National Corp............ 4,724,050
-------------
8,132,613
-------------
Insurance--Property & Casualty (3.4%):
192,200 SAFECO Corp...................... 7,687,999
27,000 Saint Paul Companies, Inc........ 1,751,625
-------------
9,439,624
-------------
Leisure Time Industry (1.3%):
136,350 Hasbro, Inc...................... 3,732,581
-------------
Manufacturing (1.1%):
69,000 Parker Hannifin Corp............. 2,949,750
-------------
Medical Equipment & Supplies (1.3%):
87,400 Mallinckrodt Inc................. 3,594,325
-------------
Metal Fabrication (1.4%):
123,500 Trinity Industries............... 3,751,313
-------------
Metals (0.9%):
33,500 Phelps Dodge Corp................ 2,449,688
-------------
Motor Vehicles (1.2%):
108,900 Ford Motor Co.................... 3,416,738
-------------
Multiple Industry (1.4%):
84,900 Corning Glass.................... 3,767,438
-------------
</TABLE>
Continued
-27-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
GROWTH AND INCOME STOCK FUND
Schedule of Portfolio Investments, Continued
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- ------------ ---------------------------------- --------------
<S> <C> <C>
Common Stocks, continued:
Petroleum (8.7%):
74,200 Ashland, Inc..................... $ 2,986,550
78,200 Chevron Corp., Inc............... 5,444,675
30,600 Mobil Corp....................... 3,997,125
155,200 Phillips Petroleum Co............ 6,343,799
30,650 Royal Dutch Petroleum Co......... 5,363,750
--------------
24,135,899
--------------
Pharmaceuticals (6.2%):
111,600 Bristol Myers Squibb Co.......... 6,584,399
74,100 Rhone-Poulenc Rorer.............. 5,483,400
70,100 Schering Plough Corp............. 5,099,775
--------------
17,167,574
--------------
Photographic Equipment (0.4%):
14,000 Eastman Kodak Co................. 1,062,250
--------------
Publishing (3.6%):
68,000 American Greetings............... 2,171,750
55,000 Houghton Mifflin Co.............. 2,970,000
88,400 Lee Enterprises.................. 2,143,700
93,700 Media General, Inc............... 2,658,738
--------------
9,944,188
--------------
Railroad (0.6%):
33,000 CSX Corp......................... 1,534,500
--------------
Restaurants (0.6%):
130,000 Bob Evans Farms.................. 1,787,500
--------------
Retail (3.7%):
124,000 American Stores Co............... 5,518,000
106,281 Limited, Inc..................... 1,952,913
59,500 May Department Stores Co......... 2,707,250
--------------
10,178,163
--------------
Securities Brokers & Dealers (1.6%):
140,175 AG Edwards....................... 4,310,381
--------------
Tobacco (2.1%):
25,200 Philip Morris Cos., Inc.......... $ 2,875,950
110,600 U.S.T. Inc....................... 3,082,975
--------------
5,958,925
--------------
Trucking & Shipping (0.9%):
91,500 Alexander & Baldwin.............. 2,367,563
--------------
Utilities--Electric (4.4%):
92,700 FPL Group, Inc................... 4,090,388
68,000 Public Service Co. of Colorado... 2,635,000
186,000 Western Resources, Inc........... 5,580,000
--------------
12,305,388
--------------
Utilities--Gas (2.5%):
52,400 Consolidated Natural Gas Co...... 2,639,650
136,800 NICOR, Inc....................... 4,377,600
--------------
7,017,250
--------------
Utilities--Telephone (4.8%):
62,500 AT&T Corp........................ 2,171,875
107,200 SBC Communications Inc........... 5,641,399
123,200 Sprint Corp...................... 5,605,600
--------------
13,418,874
--------------
Total Common Stocks 267,200,420
--------------
U.S. Government Agencies (1.8%):
Federal Home Loan Banks:
$ 5,000,000 0.00%, 4/14/97................... 4,989,450
--------------
Total U.S. Government Agencies 4,989,450
--------------
Investment Companies (2.0%):
5,656,796 Provident Federal Fund........... 5,656,795
--------------
Total Investment Companies 5,656,795
--------------
Total (Cost--$211,195,679)(a) $ 277,846,665
==============
</TABLE>
- ------------
Percentages indicated are based on net assets of $277,710,383.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation ................ $ 69,489,357
Unrealized depreciation ................ (2,838,371)
=============
Net unrealized appreciation ............ $ 66,650,986
=============
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements
-28-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- -------------- ---------------------------------------- --------------
<S> <C> <C>
Common Stocks (47.5%):
Apparel (0.8%):
10,000 V.F. Corp. ............................ $ 668,750
--------------
Banks (2.7%):
19,000 Banc One Corp. ........................ 755,250
8,000 J. P. Morgan & Co. .................... 786,000
15,400 Wachovia Corp. ........................ 839,300
--------------
2,380,550
--------------
Beverages (1.7%):
20,000 Anheuser-Busch Co. .................... 842,500
20,000 Grand Metropolitan..................... 637,500
--------------
1,480,000
--------------
Business Equipment & Services (1.1%):
10,000 John H. Harland Co. ................... 237,500
13,000 Pitney Bowes, Inc. .................... 763,750
--------------
1,001,250
--------------
Chemicals (1.9%):
8,000 Air Products & Chemicals, Inc. ........ 543,000
7,500 E. I. Dupont de Nemours Co. ........... 795,000
10,000 Monsanto Co. .......................... 382,500
--------------
1,720,500
--------------
Chemicals--Specialty (0.5%):
6,500 Vulcan Materials Co. .................. 421,688
--------------
Communications Equipment (1.3%):
15,000 Harris Corp. .......................... 1,153,125
--------------
Computers (1.9%):
15,000 Hewlett Packard Co. ................... 798,750
15,000 Xerox Corp. ........................... 853,125
--------------
1,651,875
--------------
Construction Materials (0.7%):
12,000 PPG Industries......................... 648,000
--------------
Construction--Engineering (0.5%):
10,000 Ingersol-Rand Co. ..................... 436,250
--------------
Containers (0.3%):
9,000 Sonoco Products Co. ................... 243,000
--------------
Defense (0.9%):
6,700 Lockheed Martin Corp. ................. 562,800
6,000 Raytheon Co. .......................... 270,750
--------------
833,550
--------------
Electrical Equipment (0.5%):
9,000 Emerson Electric....................... 405,000
--------------
Common Stocks, continued:
Electronic Components (0.9%):
14,200 Avnet, Inc. ........................... $ 800,525
--------------
Electronic Instruments (0.6%):
10,000 Tektronix, Inc.(b)..................... 505,000
--------------
Food & Related (2.5%):
25,000 Dean Foods Co. ........................ 865,625
22,500 Sara Lee Corp. ........................ 911,250
15,000 SUPERVALU, Inc. ....................... 446,250
--------------
2,223,125
--------------
Forest & Paper Products (0.7%):
13,000 Weyerhaeuser Co. ...................... 580,125
--------------
Health Care (2.0%):
20,000 Abbott Laboratories.................... 1,122,500
13,000 Johnson & Johnson...................... 687,375
--------------
1,809,875
--------------
Household Products (0.5%):
2,500 Unilever New York Shares............... 465,625
--------------
Household--Major Appliances (0.5%):
9,000 Whirlpool Corp. ....................... 428,625
--------------
Insurance (3.4%):
14,000 American General Corp. ................ 570,500
18,500 Lincoln National Corp. ................ 989,750
28,000 SAFECO Corp. .......................... 1,120,000
7,500 USLIFE Corp. .......................... 350,625
--------------
3,030,875
--------------
Insurance--Multiline (0.5%):
3,000 Cigna Corp. ........................... 438,375
--------------
Manufacturing (0.5%):
11,000 Parker-Hannifin Corp. ................. 470,250
--------------
Medical Equipment & Supplies (0.6%):
13,000 Mallinckrodt Inc. ..................... 534,625
--------------
Metal Fabrication (0.5%):
15,000 Trinity Industries..................... 455,625
--------------
Motor Vehicles (0.4%):
11,000 Ford Motor Co. ........................ 345,125
--------------
Multiple Industry (0.6%):
12,500 Corning Glass.......................... 554,688
--------------
Petroleum (4.2%):
6,000 Ashland, Inc. ......................... 241,500
4,400 Atlantic Richfield Co. ................ 594,000
</TABLE>
Continued
-29-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments, Continued
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- -------------- ---------------------------------------- --------------
<S> <C> <C>
Common Stocks, continued:
Petroleum, continued:
8,000 Chevron Corp. ......................... $ 557,000
5,500 Mobil Corp. ........................... 718,438
28,000 Phillips Petroleum Co. ................ 1,144,500
2,500 Royal Dutch Petroleum Co. ............. 437,500
--------------
3,692,938
--------------
Pharmaceuticals (2.6%):
20,000 Bristol-Myers Squibb Co. .............. 1,180,000
16,000 Schering Plough Corp. ................. 1,164,000
--------------
2,344,000
--------------
Publishing (1.4%):
4,000 Gannett Co., Inc. ..................... 343,500
10,000 Media General, Inc. ................... 283,750
16,000 Tribune Co. ........................... 648,000
--------------
1,275,250
--------------
Railroad (0.5%):
5,500 Norfolk Southern Corp. ................ 468,875
--------------
Retail (2.0%):
15,000 Dayton Hudson Corp. ................... 626,250
7,500 J.C. Penney, Inc. ..................... 357,188
7,000 May Department Stores Co. ............. 318,500
11,300 Rite-Aid(b)............................ 474,600
--------------
1,776,538
--------------
Retail--Apparel (0.6%):
11,000 CVS Corp. ............................. 507,375
--------------
Securities Brokers & Dealers (0.4%):
11,000 AG Edwards............................. 338,250
--------------
Tobacco (0.9%):
7,000 Philip Morris Cos., Inc. .............. 798,875
--------------
Trucking & Shipping (0.2%):
5,500 Alexander & Baldwin.................... 142,313
--------------
Utilities--Electric (1.8%):
11,000 FPL Group, Inc. ....................... 485,375
16,000 Scana Corp. ........................... 406,000
25,000 Western Resources, Inc. ............... 750,000
--------------
1,641,375
--------------
Utilities--Gas (2.2%):
25,000 NICOR, Inc. ........................... 800,000
25,000 Williams Cos., Inc. ................... 1,112,500
--------------
1,912,500
--------------
Common Stocks, continued:
Utilities--Telephone (1.7%):
6,600 Ameritech Corp. ....................... $ 405,900
4,000 AT&T Corp. ............................ 139,000
22,000 Sprint Corp. .......................... 1,001,000
--------------
1,545,900
--------------
Total Common Stocks 42,130,190
--------------
Pass-through Mortgage Securities (6.8%):
Federal Home Loan Mortgage Corp.:
$ 889,177 7.50%, 7/1/07, Pool # E00108 894,174
Federal National Mortgage Assoc.:
1,339,515 6.50%, 1/1/09, Pool # 50974 .......... 1,295,552
1,530,582 6.50%, 4/1/09, Pool # 250009 .......... 1,480,349
1,414,505 7.00%, 5/1/09, Pool # 250055 .......... 1,395,933
1,019,146 7.00%, 4/1/24, Pool # 250005 .......... 978,054
--------------
Total Pass-through Mortgage Securities 6,044,062
--------------
U.S. Government Agencies (2.4%):
Federal National Mortgage Assoc.:
2,221,287 7.50%, 8/1/24, Pool # 250126 .......... 2,183,792
--------------
Total U.S. Government Agencies 2,183,792
--------------
U.S. Treasury Bonds (6.0%):
1,500,000 11.13%, 8/15/03 ....................... 1,827,180
3,000,000 9.38%, 2/15/06 ....................... 3,484,230
--------------
Total U.S. Treasury Bonds 5,311,410
--------------
U.S. Treasury Notes (33.6%):
1,500,000 8.50%, 11/15/00 ....................... 1,586,355
3,500,000 7.75%, 2/15/01 ....................... 3,623,094
2,500,000 7.50%, 11/15/01 ....................... 2,571,550
2,500,000 7.50%, 5/15/02 ....................... 2,578,175
2,500,000 6.38%, 8/15/02 ....................... 2,455,375
2,500,000 6.25%, 2/15/03 ....................... 2,433,650
4,500,000 7.25%, 5/15/04 ....................... 4,594,274
3,000,000 7.88%, 11/15/04 ....................... 3,168,840
4,000,000 7.50%, 2/15/05 ....................... 4,138,399
1,000,000 6.50%, 8/15/05 ....................... 972,280
1,750,000 6.50%, 10/15/06 ....................... 1,695,768
--------------
Total U.S. Treasury Notes 29,817,760
--------------
Investment Companies (3.2%):
2,862,833 Provident Federal Fund ................ 2,862,833
--------------
Total Investment Companies 2,862,833
--------------
Total (Cost--$78,066,246)(a) $ 88,350,047
==============
</TABLE>
Continued
-30-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments, Continued
March 31, 1997
(Unaudited)
- -------------
Percentages indicated are based on net assets of $88,759,980.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation ............... $ 11,435,481
Unrealized depreciation ............... (1,151,680)
--------------
Net unrealized appreciation ........... $ 10,283,801
==============
(b) Represents non-income producing securities.
See notes to financial statements
-31-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
Schedule of Portfolio Investments
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- --------------- --------------------------------------- --------------
<S> <C> <C>
Common Stocks (74.4%):
Advertising (0.1%):
7,400 Leap Group, Inc....................... $ 31,450
--------------
Air Transportation (0.8%):
6,900 Eagle USA Airfreight, Inc............. 212,175
5,900 Expeditor International Washington,
Inc................................ 141,600
--------------
353,775
--------------
Automotive Distribution Services (0.7%):
20,000 Keystone Automotive Industries, Inc... 310,000
--------------
Business Services (3.1%):
10,000 Accustaff, Inc........................ 167,500
16,600 Norrell Corp.......................... 408,775
13,000 Robert Half International, Inc........ 453,375
30,600 Sitel Corp............................ 409,275
--------------
1,438,925
--------------
Commercial Goods & Services (1.6%):
11,450 Apollo Group, Inc..................... 280,525
19,800 Cambridge Technology Partners, Inc.... 457,875
--------------
738,400
--------------
Computer Hardware (2.2%):
14,000 Advanced Digital...................... 178,500
8,400 Apex PC Solutions, Inc................ 71,400
12,700 BTG Inc............................... 222,250
17,280 Network Appliance, Inc................ 561,600
--------------
1,033,750
--------------
Computer Software (11.3%):
20,800 Aspen Technologies, Inc............... 566,800
3,000 Baan Co. NV........................... 133,875
17,000 CBT Group PLC ADR..................... 847,874
9,000 Ciber, Inc............................ 227,250
12,000 Electronics for Imaging, Inc.......... 478,500
8,500 Imnet Systems, Inc.................... 127,500
17,100 Infinity Financial Technology, Inc.... 294,975
13,900 JDA Software Group, Inc............... 283,213
7,900 Manugistics Group, Inc................ 288,350
11,500 National Techteam, Inc.(b)............ 178,250
12,500 Pegasystems, Inc...................... 251,563
18,100 Saville Systems ADR................... 520,375
12,100 Scopus Technology, Inc................ 363,000
Common Stocks, continued:
Computer Software, continued:
7,800 Smallworldwide PLC-ADR................ $ 126,750
6,700 Template Software, Inc................ 61,138
9,900 Vantive Corp.......................... 202,950
3,100 Veritas Software Corp................. 91,838
13,500 Xionics Document Technologies, Inc.... 170,438
--------------
5,214,639
--------------
Computers (2.5%):
24,400 Comverse Technology, Inc.............. 963,799
7,800 Daou Systems, Inc..................... 52,650
8,000 Ontrack Data International............ 120,000
--------------
1,136,449
--------------
Electrical Equipment (0.2%):
3,900 Kent Electronics Corp................. 89,700
--------------
Electronic Components (2.9%):
15,000 Cyrix Corp............................ 285,000
15,400 Jabil Circuit......................... 693,962
12,300 Sipex Corp............................ 359,775
--------------
1,338,737
--------------
Electronic Instruments (0.1%):
2,100 CFM Technologies, Inc................. 62,213
--------------
Electronics (2.9%):
12,200 Sawtek, Inc........................... 350,750
17,200 Ultrak, Inc........................... 309,600
24,900 Vitesse Semiconductor Corp............ 687,862
--------------
1,348,212
--------------
Entertainment (2.4%):
16,725 Regal Cinemas, Inc.................... 451,575
20,000 Speedway Motorsports, Inc............. 475,000
17,500 Vistana Inc........................... 196,875
--------------
1,123,450
--------------
Environmental Services (3.2%):
16,600 Superior Services, Inc................ 369,350
16,800 United Waste Systems, Inc............. 625,800
13,090 USA Waste Services, Inc............... 464,695
--------------
1,459,845
--------------
Financial Services (4.6%):
11,250 Aames Financial Corp.................. 227,813
18,500 Amresco, Inc.......................... 309,875
</TABLE>
Continued
-32-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
Schedule of Portfolio Investments, Continued
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- --------------- --------------------------------------- --------------
<S> <C> <C>
Common Stocks, continued:
Financial Services, continued:
6,300 E*trade Group, Inc.................... $ 113,400
7,900 Firstplus Financial Group............. 237,988
26,400 IMC Mortgage Co....................... 389,400
15,000 Oxford Resources Corp., Class A....... 628,125
9,250 The Money Store, Inc.................. 194,250
--------------
2,100,851
--------------
Health Care--General (0.6%):
7,300 CRA Managed Care, Inc................. 273,750
--------------
Homebuilders--Mobile Homes (1.0%):
14,000 Oakwood Homes......................... 246,750
22,500 Southern Energy Homes, Inc............ 233,438
--------------
480,188
--------------
Hospital Supply & Management (0.9%):
22,000 FPA Medical Management, Inc........... 423,500
--------------
Hotel Management & Related Services (0.2%):
4,000 Capstar Hotel Co...................... 112,000
--------------
Hotels & Gaming (1.5%):
15,000 Doubletree Corp....................... 532,500
7,000 Signature Resorts, Inc................ 164,500
--------------
697,000
--------------
Insurance (0.8%):
15,000 HCC Insurance Holdings, Inc........... 367,500
--------------
Medical (1.0%):
19,400 Parexel International Corp............ 446,200
--------------
Medical Equipment & Supplies (2.6%):
11,200 Biopsys Medical, Inc.................. 277,200
11,600 National Surgery Centers, Inc......... 336,400
4,200 Premier Research Worldwide............ 69,300
8,800 Sabratek Corp......................... 176,000
11,000 Safeskin Corp......................... 199,375
11,500 Ventana Medical Systems............... 161,000
--------------
1,219,275
--------------
Medical--Biotechnology (1.7%):
9,700 Clintrials Research................... 82,450
3,900 Qiagen N.V............................ 129,675
6,400 Quintiles Transnational Corp.......... 344,800
15,000 Serologicals Corp..................... 225,000
--------------
781,925
--------------
Common Stocks, continued:
Medical--Hospital Management & Services (3.0%):
16,000 NCS Healthcare, Inc., Class A......... $ 362,000
11,300 Occusystems, Inc...................... 254,250
5,200 Omnicare, Inc......................... 122,200
12,700 Pediatrix Medical Group, Inc.......... 417,513
8,025 Phycor, Inc........................... 218,681
--------------
1,374,644
--------------
Oil & Gas (4.1%):
7,800 Core Laboratories N.V................. 138,450
8,600 Global Industries Limited............. 183,825
33,300 Marine Drilling Co., Inc.............. 591,075
5,600 Patterson Energy, Inc................. 154,700
9,200 Petroleum Geo-svcs-spon American
Depository Receipts................ 395,600
5,000 Reading & Bates Corp.................. 113,125
6,800 Trico Marine Services, Inc............ 323,000
--------------
1,899,775
--------------
Pharmaceuticals (4.3%):
26,000 Dura Pharmaceuticals, Inc............. 929,499
23,250 Jones Medical Industries, Inc......... 558,000
16,875 Medicis Pharmaceutical Corp........... 502,031
--------------
1,989,530
--------------
Restaurants (3.5%):
8,100 CKE Restaurants, Inc.................. 179,213
16,000 Einstein/Noah Bagel Corp.............. 402,000
17,000 Landry's Seafood Restaurants(b)....... 269,875
16,050 Logan Roadhouse, Inc.................. 337,050
16,425 Papa John's International, Inc........ 433,209
--------------
1,621,347
--------------
Retail (3.1%):
8,000 Gadzooks, Inc......................... 252,000
13,600 Pacific Sunwear of California......... 445,400
8,200 Rexall Sundown, Inc................... 210,125
23,000 The Finish Line, Inc.................. 511,750
--------------
1,419,275
--------------
Retail--Apparel (0.5%):
1,400 Coldwater Creek, Inc.................. 19,425
7,700 Stein Mart Inc........................ 219,450
--------------
238,875
--------------
Retail--General Merchandise (0.3%):
1,400 Burlington Coat Factory Wholesale..... 25,200
</TABLE>
Continued
-33-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
Schedule of Portfolio Investments, Continued
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- --------------- --------------------------------------- --------------
<S> <C> <C>
Common Stocks, continued:
Retail--General Merchandise, continued:
10,500 Maxim Group Inc. (The)................ $ 139,125
--------------
164,325
--------------
Retail--Specialty Stores (0.2%):
3,800 Insight Enterprises................... 94,050
---------------
Technology--Software (1.1%):
7,900 Radiant Systems, Inc.................. 71,100
11,100 Visio Corp............................ 432,900
--------------
504,000
--------------
Telecommunications (3.2%):
19,100 Natural Microsystems Corp............. 379,613
75,000 Tel-Save Holdings, Inc................ 1,087,499
--------------
1,467,112
--------------
Telecommunications--Equipment (0.6%):
14,700 Boston Technology, Inc................ 277,463
--------------
Common Stocks, continued:
Textile (1.0%):
4,500 Nautica Enterprises, Inc.............. $ 113,063
7,600 St. John Knits, Inc................... 328,700
--------------
441,763
--------------
Transportation (0.6%):
9,200 Rural/Metro Corp...................... 280,600
--------------
Total Common Stocks 34,354,493
--------------
Preferred Stocks (0.5%):
12,200 Qlogic Corp........................... 240,950
--------------
Total Preferred Stocks 240,950
--------------
U.S. Government Agencies (29.3%):
Federal Home Loan Bank:
$13,535,000 0.00%, 4/1/97......................... 13,532,833
--------------
Total U.S. Government Agencies 13,532,833
--------------
Total (Cost--$45,120,976)(a) $ 48,128,276
==============
</TABLE>
- -------------
Percentages indicated are based on net assets of $46,176,437.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation ....................... $ 3,007,300
Unrealized depreciation ....................... --
------------
Net unrealized appreciation ................... $ 3,007,300
============
(b) Represents non-income producing securities.
See notes to financial statements
-34-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- -------------- ----------------------------------------- ---------------
<S> <C> <C>
Common Stocks (92.5%):
Australia (2.9%):
Broadcasting (0.6%):
50,000 News Corp. Limited..................... $ 233,194
---------------
Insurance--Multiline (0.8%):
210,000 National Mutual Holdings, Ltd.......... 319,339
---------------
Metals--Diversified (1.5%):
200,000 M.I.M. Holdings, Ltd................... 268,075
175,000 QNI Limited............................ 333,330
---------------
601,405
---------------
Total Australia 1,153,938
---------------
Chile (1.4%):
Metals--Diversified (1.4%):
26,300 Cristalerias De Chile (ADR)............ 555,588
---------------
Total Chile 555,588
---------------
Finland (1.9%):
Food & Related (0.9%):
4,000 Raison Tehtaat OY...................... 371,507
---------------
Machinery & Equipment (1.0%):
10,000 KCI Konecranes International........... 393,717
---------------
Total Finland 765,224
---------------
France (8.8%):
Consumer Goods & Services (0.7%):
8,000 Guy Degrenne SA........................ 273,607
---------------
Diversified Products (1.3%):
4,000 Generale Des Eaux...................... 543,662
---------------
Electronic Components (0.8%):
4,500 Thompson Microelectronics.............. 315,803
---------------
Household Products (1.4%):
24,000 Moulinex............................... 550,058
---------------
Insurance--Multiline (1.3%):
8,000 AXA.................................... 529,164
---------------
Multiple Industry (0.7%):
95,000 Chemunex SA............................ 295,372
---------------
Photographic Equipment (0.4%):
1,000 Grand Optical-Photoservice............. 155,281
---------------
Retail--General Merchandise (0.7%):
625 Pinault-Printemps-Redoute SA........... 268,722
---------------
Tires & Rubber Products (1.5%):
10,000 Michelin (CGDE)-B...................... 594,297
---------------
Total France 3,525,966
---------------
Common Stocks, continued:
Germany (9.6%):
Automobiles & Trucks (1.4%):
2,000 MAN AG................................. $ 571,808
---------------
Banks (1.5%):
20,000 Commerzbank AG......................... 579,001
---------------
Diversified Products (1.2%):
8,500 Veba AG................................ 488,075
---------------
Machine - Diversified (1.6%):
20,000 Boewe Systec AG........................ 641,336
---------------
Machinery & Equipment (2.6%):
800 GEA AG................................. 306,882
800 GEA AG -prf............................ 304,485
1,130 Mannesmann AG.......................... 431,778
---------------
1,043,145
---------------
Medical--Biotechnology (1.3%):
13,600 Biotest AG-Vorzugsaktien............... 521,700
---------------
Total Germany 3,845,065
---------------
Great Britain (16.3%):
Auto Parts (1.2%):
200,000 Mayflower Corp. PLC.................... 500,810
---------------
Coal (0.5%):
35,000 RJB Mining PLC......................... 208,329
---------------
Computer Hardware (1.5%):
30,000 Micro Focus Group PLC.................. 616,982
---------------
Diversified Products (1.8%):
25,000 Bodycote International PLC............. 297,613
65,000 Cowie Group PLC........................ 418,916
---------------
716,529
---------------
Food & Related (0.9%):
125,000 Somerfield PLC......................... 365,345
---------------
Hotel Management & Related Services (1.3%):
175,000 Jarvis Hotels PLC...................... 505,736
---------------
Household Products (0.6%):
175,000 Limelight Group PLC.................... 222,696
---------------
Manufacturing (1.1%):
65,000 Blue Circle Industries PLC............. 443,997
---------------
Oil--Field Services (1.0%):
100,000 KBC Advanced Technologies.............. 394,080
---------------
</TABLE>
Continued
-35-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments, Continued
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- -------------- ----------------------------------------- ---------------
<S> <C> <C>
Common Stocks, continued:
Great Britain, continued:
Paper & Related Products (0.7%):
50,000 Waddington PLC......................... $ 265,594
---------------
Professional Sports (0.5%):
100,000 Newcastle United....................... 221,670
---------------
Retail--Specialty Stores (0.9%):
80,000 Allied Carpets Group PLC............... 371,749
---------------
Telecom Equipment (3.2%):
80,000 British Telecom PLC.................... 585,209
240,000 IMS Group.............................. 695,551
---------------
1,280,760
---------------
Transportation--Misc. (1.1%):
160,000 NFC PLC................................ 434,802
---------------
Total Great Britain 6,549,079
---------------
Hong Kong (3.9%):
Banks (0.9%):
16,000 HSBC Holdings PLC...................... 371,660
---------------
Diversified Products (0.8%):
54,000 Jardine Matheson Holdings (ADR)........ 313,200
---------------
Real Estate (1.3%):
32,000 Cheung Kong............................ 281,842
48,000 New World Developement................. 258,923
---------------
540,765
---------------
Utilities--Electric (0.9%):
100,000 HongKong Electric Holdings............. 352,948
---------------
Total Hong Kong 1,578,573
---------------
India (1.1%):
Banks (1.1%):
20,000 State Bank of India (ADR).............. 449,000
---------------
Total India 449,000
---------------
Indonesia (1.1%):
Retail--General Merchandise (0.8%):
140,000 Part Ramayana Lestari Sent-frg......... 326,531
---------------
Unclassified (0.3%):
125,000 Putra Surya Multidana.................. 113,050
---------------
Total Indonesia 439,581
---------------
Italy (2.6%):
Electronics (1.3%):
120,000 Stet ORD............................... 524,382
---------------
Oil--Field Services (1.3%):
100,000 Eni SPA................................ 508,017
---------------
Total Italy 1,032,399
---------------
Japan (20.0%):
Automobiles & Trucks (2.9%):
12,000 Honda Motor Co., Ltd................... 357,645
48,000 Ricoh Company Limited.................. 546,644
27,000 Suzuki Motor Co., Ltd.................. 261,691
---------------
1,165,980
---------------
Banks (2.1%):
58,000 Eighteenth Bank........................ 348,534
45,000 Sanwa Bank, Ltd........................ 483,402
---------------
831,936
---------------
Chemicals--Petroleum & Inorganic (2.4%):
43,000 Sekisui Chemical Co.................... 423,714
28,000 Shin-Etsu Chemical Co.................. 531,459
---------------
955,173
---------------
Chemicals--Specialty (1.2%):
105,000 Mitsui Petrochemical IND............... 491,883
---------------
Defense (1.2%):
72,000 Mitsubishi Heavy Industries, Ltd....... 468,136
---------------
Electronic Components (1.3%):
60,000 Hitachi, Limited....................... 533,075
---------------
Electronics (1.3%):
34,000 Matsushita Electric Industrial Co.,
Ltd................................. 530,005
---------------
Financial Services (0.9%):
52,000 Daiwa Securities Co., Ltd.............. 374,638
---------------
Leisure Time Industry (1.1%):
70,000 Sumitomo Marine & Fire................. 424,037
---------------
Photographic Equipment (1.2%):
14,000 Fuji Photo Film-Ord.................... 460,221
---------------
Retail--Food Stores (1.4%):
13,000 ITO-Yokado Co., Ltd.................... 577,498
---------------
Steel (1.2%):
230,000 NKK Corporation........................ 482,998
---------------
Telecom Equipment (0.7%):
50,000 C-Cube Coporation...................... 283,903
---------------
</TABLE>
Continued
-36-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments, Continued
March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
- -------------- ----------------------------------------- ---------------
<S> <C> <C>
Common Stocks, continued:
Japan, continued:
Tires & Rubber Products (1.1%):
24,000 Bridgestone Corp....................... $ 449,721
---------------
Total Japan 8,029,204
---------------
Malaysia (0.6%):
Real Estate (0.6%):
160,000 Hong Leong Properties BHD.............. 252,975
---------------
Total Malaysia 252,975
---------------
Mexico (1.6%):
Building & Construction (1.6%):
170,000 CEMEX, S.A. DE C.V..................... 621,612
---------------
Total Mexico 621,612
---------------
Netherlands (4.4%):
Banks (0.7%):
7,000 ING Grouep N.V......................... 275,781
---------------
Electronic Components (1.1%):
9,000 Philips Electronics.................... 419,830
---------------
Retail--General Merchandise (1.4%):
12,000 Vendex International N.V............... 568,089
---------------
Transportation--Misc. (1.2%):
11,000 Koninklijke Van Ommeren NV............. 480,872
---------------
Total Netherlands 1,744,572
---------------
Peru (1.5%):
Telecom Equipment (1.5%):
26,200 Telefonica del Peru-ADR................ 582,950
---------------
Total Peru 582,950
---------------
Philippines (1.1%):
Banks (1.1%):
30,000 Equitable Banking Corp................. 128,921
25,000 Philippine National Bank............... 298,691
---------------
Total Philippines 427,612
---------------
Singapore (2.6%):
Banks (0.7%):
27,000 United Overseas Bank, Ltd.............. 276,480
---------------
Electrical Equipment (0.7%):
100,000 GP Batteries International (ADR)....... 273,000
---------------
Common Stocks, continued:
Singapore, continued:
Publishing (0.7%):
15,000 Singapore Press Holdings............... $ 272,952
---------------
Real Estate (0.5%):
67,000 DBS Land, Ltd.......................... 229,003
---------------
Total Singapore 1,051,435
---------------
South Africa (3.3%):
Building & Construction (1.7%):
280,000 Murray & Roberts Holdings, Ltd......... 677,747
---------------
Manufacturing (1.6%):
115,000 AECI, Ltd.............................. 663,382
---------------
Total South Africa 1,341,129
---------------
Spain (2.9%):
Banks (1.7%):
9,700 Banco Santander SA..................... 667,100
---------------
Telecom Equipment (1.2%):
20,200 Telefonica De Espana................... 486,584
---------------
Total Spain 1,153,684
---------------
Switzerland (4.9%):
Banks (1.5%):
5,000 Credit Suisse Group-Reg................ 599,568
---------------
Chemicals--Specialty (0.0%):
250 CIBA Specialty Chemicals............... 20,651
---------------
Medical Equipment & Supplies (0.8%):
250 Novartis AG-REG Shs.................... 309,936
---------------
Pharmaceuticals (1.5%):
70 RocheAG-Genussshein.................... 604,705
---------------
Transportation--Misc. (1.1%):
450 Danzas Holdings AG-REG................. 440,747
---------------
Total Switzerland 1,975,607
---------------
Total Common Stocks 37,075,193
---------------
Short Term Investment Funds (6.8%):
$2,716,303 Bank Of New York, 4.7%, 1/1/80......... 2,716,303
---------------
Total Short Term Investment Funds 2,716,303
---------------
Total (Cost--$39,199,981)(a) $ 39,791,496
===============
</TABLE>
- ---------------
Percentages indicated are based on net assets of $40,091,720.
(a) Represents cost for federal income tax purposes differs from value
by net unrealized appreciation of securities as follows:
Unrealized appreciation ..................... $ 1,919,064
Unrealized depreciation ..................... (1,327,549)
--------------
Net unrealized appreciation ................... $ 591,515
==============
See notes to financial statements
-37-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Notes to Financial Statements
March 31, 1997
(Unaudited)
1. Organization:
The BB&T Mutual Funds Group ("The Group") commenced operations on October
5, 1992 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.
The Group is authorized to issue an unlimited number of shares without par
value. The 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, the Small Company Growth
Fund and the International Equity Fund (January 2, 1997) (referred to
individually as a "Fund" and collectively as the "Funds"). The Group offers
three classes of shares: Class A Shares, Class B Shares, and Trust Shares.
Class A Shares are offered 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, the Small Company Growth
Fund and the International Equity Fund (collectively, "the variable net
asset funds"). Class B Shares are offered subject to a contingent deferred
sales charge which varies based on the length of time Class B Shares are
held in accordance with the Prospectus. Each class of shares has identical
rights and privileges except with respect to the distribution fees borne by
the Class A Shares 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.
The U.S. Treasury Money Market Fund (the "money market fund") seeks current
income with liquidity and stability of principle. The Short-Intermediate
U.S. Government Income Fund and the Intermediate U.S. Government Bond Fund
seek current income consistent with preservation of capital. The North
Carolina Intermediate Tax-Free Fund seeks to produce a high level of
current interest income that is exempt from both federal income tax and
North Carolina personal income tax. The Growth and Income Stock Fund seeks
capital growth, current income or both. The Balanced Fund seeks long-term
capital growth and current income. The Small Company Growth Fund seeks
long-term capital appreciation. The International Equity Fund Series
long-term capital appreciation through investments primarily in equity
securities of foreign issuers.
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 assumptions 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.
Continued
-38-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Notes to Financial Statements, Continued
March 31, 1997
(Unaudited)
Securities Valuation:
Investments of the 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
397 days unless such instrument is subject to a demand feature, or (b)
maintain a dollar-weighted-average portfolio maturity which exceeds 90
days.
Investments in common stocks, commercial paper, corporate bonds, municipal
securities, U.S. Government securities, and U.S. Government agency
securities of the variable net asset 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
investments are reflected as unrealized appreciation or depreciation.
Foreign Currency Translation:
Investment valuations, other assets and liabilities initially expressed in
foreign currencies are converted each business day into U.S. dollars based
upon current exchange rates. Purchases and sales of foreign investments and
income and expenses are converted into U.S. dollars based upon exchange
rates prevailing on the respective dates of such transactions. That portion
of realized gains or losses and unrealized appreciation or depreciation
from investments due to fluctuations in foreign currency exchange rates is
not separately disclosed. Such fluctuations are included with the net
realized and unrealized gain or loss from investments.
Forward Foreign Currency Contracts:
Forward foreign currency contracts are valued at the daily exchange rate of
the underlying currency. Purchases and sales of forward foreign currency
contracts having the same settlement date and broker are presented net on
the Statement of Assets and Liabilities. The forward foreign currency
exchange contracts are adjusted by the daily exchange rate of the
underlying currency and any gains or losses are recorded for financial
statement purposes as unrealized appreciation or depreciation until the
contract settlement date. Gains or losses from the purchase or sale of
forward foreign currency contracts having the same settlement date and
broker are recorded as realized on the date of offset; otherwise gains or
losses are recorded as realized on settlement date.
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 from sales of securities are determined by
comparing the identified cost of the security lot sold with the net sales
proceeds.
Continued
-39-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Notes to Financial Statements, Continued
March 31, 1997
(Unaudited)
When-Issued and Forward Commitments:
The Funds may purchase securities on a "when-issued" basis and may also
purchase or sell securities on a forward commitment. The Funds record
when-issued securities on the trade date and maintain security positions
such that sufficient liquid assets will be available to make payment for
the securities purchased. The value of the securities underlying
when-issued or forward commitments to purchase securities, and any
subsequent fluctuation in their value, is taken into account when
determining the net asset value of the Funds commencing with the date the
funds agree to purchase the securities. The Funds do not accrue interest or
dividends on when-issued securities until the underlying securities are
received.
Repurchase Agreements:
Each Fund may enter into repurchase agreements with member banks of the
Federal Deposit Insurance Corporation and with registered broker/dealers
that 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.
Dividends to Shareholders:
Dividends from net investment income are declared daily and paid monthly
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 for the Growth and Income Stock Fund
and the Balanced Fund. Dividends from net investment income are declared
and paid quarterly for the Small Company Growth Fund and the International
Equity Fund. Distributable net realized capital gains, if any, are declared
and distributed at least annually.
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. Permanent book and tax basis differences have
been reclassified among the components of net assets.
Federal Income Taxes:
It is the policy of each Fund of the Group to 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.
Continued
-40-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Notes to Financial Statements, Continued
March 31, 1997
(Unaudited)
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 in connection with
the Small Company Growth Fund's organization and registration under the
1940 Act and the Securities Act of 1933 were paid by the Fund. 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, 1997 are as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------- -----
<S> <C> <C>
Short-Intermediate U.S. Government Income Fund............ $80,499,170 $57,124,877
Intermediate U.S. Government Bond Fund.................... $56,987,877 $47,165,727
North Carolina Intermediate Tax-Free Fund................. $35,092,857 $ 956,281
Growth and Income Stock Fund.............................. $48,702,444 $33,929,139
Balanced Fund............................................. $16,931,652 $13,327,330
Small Company Growth Fund................................. $24,380,066 $20,486,831
International Equity Fund (a).............................. $38,013,907 $ 1,774,708
</TABLE>
(a) For the period from January 2, 1997 (commencement of operations) to
March 31, 1997.
4. Related Party Transactions:
Investment advisory services are provided to the Group by BB&T. 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.
Pursuant to a Sub-Advisory Agreement with BB&T, PNC Bank manages the Small
Company Growth Fund subject to the general supervision of the Group's Board
of Trustees and BB&T. For its services, PNC Bank is entitled to a fee,
payable by BB&T, at the following annual rates as a percentage of the
average daily net assets: (1) 0.50% of net assets up to $50 million, (2)
0.45% of net assets in excess of $50 million and less than or equal to $100
million, and (3) 0.40% of net assets in excess of $100 million.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services
("BISYS"), an Ohio Limited Partnership, and BISYS Fund Services Ohio, Inc.
("BISYS Ohio") are subsidiaries of the BISYS Group, Inc. BISYS, whom
certain officers of the Funds are affiliated, serves the Funds as
administrator. Such officers and trustees are paid no fees directly by the
Funds for serving as officers of the Funds. Fees payable to BISYS for
administration services are established under terms of the administration
contract at the annual rate of 0.20% as a percentage of the average daily
net assets of each Fund. BISYS Ohio, serves the Funds as transfer agent and
mutual fund accountant.
Continued
-41-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Notes to Financial Statements, Continued
March 31, 1997
(Unaudited)
The Funds have adopted a Distribution and Shareholder Services Plan in
accordance with Rule 12b-1 under the 1940 Act, pursuant to which the Funds
are authorized to pay or reimburse BISYS, as distributor, a periodic
amount, calculated at an annual rate not to exceed 0.50% and 1.00% of the
average daily net assets of the Class A Shares and Class B Shares,
respectively. The fees may be used by BISYS to pay banks, including the
adviser, broker dealers and other institutions. As distributor, BISYS is
entitled to receive commissions on sales of shares of the variable net
asset funds. For the six months ended March 31, 1997, BISYS received
$730,054 from commissions earned on sales of shares of the Funds' variable
net asset value funds, of which $693,683 was allowed to affiliated
broker/dealers of the Funds.
BB&T and BISYS may voluntarily reduce or reimburse fees to assist the Funds
in maintaining competitive expense ratios.
Information regarding these transactions is as follows for the six months
ended March 31, 1997.
<TABLE>
<CAPTION>
Administration Distribution
Investment Advisory Fees Fees Fees
----------------------------------- --------------- ---------------
(As a Transfer Agent
Percentage Voluntary Voluntary Voluntary and
of Average Fee Fee Fee Mutual Fund
Net Assets) Reductions Reductions Reductions Accounting Fees
------------------- -------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
U.S. Treasury Money Market Fund ............... 0.40% -- -- $ 42,638 $ 86,446
Short-Intermediate U.S. Government
Income Fund ................................ 0.60% $ 41,579 -- $ 7,608 $ 45,758
Intermediate U.S. Government
Bond Fund .................................. 0.60% $ 64,610 -- $ 5,191 $ 70,549
North Carolina Intermediate Tax-
Free Fund .................................. 0.60% $ 25,409 $ 12,609 $ 15,979 $ 37,618
Growth and Income Stock Fund .................. 0.74% $312,372 -- $ 29,116 $123,699
Balanced Fund ................................. 0.74% $108,616 -- $ 16,831 $ 84,484
Small Company Growth Fund ..................... 1.00% $ 796 -- $ 10,210 $ 93,633
International Equity Fund ..................... 1.00% $ 3,713 $ 743 $ 79 $ 31,600
</TABLE>
Continued
-42-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Notes to Financial Statements, Continued
March 31, 1997
5. Capital Share Transactions:
Transactions in capital shares for the Group were as follows:
<TABLE>
<CAPTION>
U.S. Treasury
Money Market Fund
---------------------------------------
For the For the
six months year
ended ended
March 31, September 30,
1997 1996
----------------- -----------------
(Unaudited)
<S> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued ................................ $ 24,436,501 $ 61,519,685
Dividends reinvested ....................................... 602,702 893,083
Shares redeemed ............................................ (25,011,105) (48,429,306)
---------------- ----------------
Change in net assets from Investor A share transactions .... $ 28,098 $ 13,983,462
================ ================
Class B Shares:
Proceeds from shares issued ................................ $ 1,319,918 $ 1,957,034 (a)
Dividends reinvested ....................................... 23,813 16,070 (a)
Shares redeemed ............................................ (1,198,474) (668,319)(a)
---------------- ----------------
Change in net assets from Investor B share transactions .... $ 145,257 $ 1,304,785 (a)
================ ================
Trust Shares:
Proceeds from shares issued ................................ $ 144,464,991 $ 386,470,057
Dividends reinvested ....................................... 647,087 812,451
Shares redeemed ............................................ (155,197,597) (301,391,098)
---------------- ----------------
Change in net assets from Trust share transactions ......... $ (10,085,519) $ 85,891,410
================ ================
SHARE TRANSACTIONS:
Class A Shares:
Issued ..................................................... 24,436,501 61,519,685
Reinvested ................................................. 602,702 893,083
Redeemed ................................................... (25,011,018) (48,429,306)
---------------- ----------------
Change in Investor A Shares ................................ 28,185 13,983,462
================ ================
Class B Shares:
Issued ..................................................... 1,319,918 1,957,034 (a)
Reinvested ................................................. 23,813 16,070 (a)
Redeemed ................................................... (1,198,474) (668,319)(a)
---------------- ----------------
Change in Investor B Shares ................................ 145,257 1,304,785 (a)
================ ================
Trust Shares:
Issued ..................................................... 144,464,991 386,470,057
Reinvested ................................................. 647,087 812,451
Redeemed ................................................... (155,197,597) (301,391,098)
---------------- ----------------
Change in Trust Shares ..................................... (10,085,519) 85,891,410
================ ================
<CAPTION>
Short Intermediate U.S.
Government Income Fund
-------------------------------------
For the For the
six months year
ended ended
March 31, September 30,
1997 1996
--------------- -----------------
(Unaudited)
<S> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued ................................ $ 368,889 $ 780,331
Dividends reinvested ....................................... 135,366 292,456
Shares redeemed ............................................ (1,202,762) (1,717,615)
-------------- ---------------
Change in net assets from Investor A share transactions .... $ (698,507) $ (644,828)
============== ===============
Class B Shares:
Proceeds from shares issued ................................
Dividends reinvested .......................................
Shares redeemed ............................................
Change in net assets from Investor B share transactions ....
Trust Shares:
Proceeds from shares issued ................................ $ 40,145,358 $ 31,220,980
Dividends reinvested ....................................... 611,855 1,155,628
Shares redeemed ............................................ (6,378,661) (14,011,731)
-------------- ---------------
Change in net assets from Trust share transactions ......... $ 34,378,552 $ 18,364,877
============== ===============
SHARE TRANSACTIONS:
Class A Shares:
Issued ..................................................... 37,863 79,521
Reinvested ................................................. 13,849 29,675
Redeemed ................................................... (123,274) (174,736)
-------------- ---------------
Change in Investor A Shares ................................ (71,562) (65,540)
============== ===============
Class B Shares:
Issued .....................................................
Reinvested .................................................
Redeemed ...................................................
Change in Investor B Shares ................................
Trust Shares:
Issued ..................................................... 4,120,848 3,184,600
Reinvested ................................................. 62,494 117,290
Redeemed ................................................... (641,609) (1,422,732)
-------------- ---------------
Change in Trust Shares ..................................... 3,541,733 1,879,158
============== ===============
</TABLE>
- -------------
(a) The fund commenced offering Class B Shares January 1, 1996.
Continued
-43-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Notes to Financial Statements, Continued
March 31, 1997
<TABLE>
<CAPTION>
Intermediate U.S. North Carolina Intermediate
Government Bond Fund 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,
1997 1996 1997 1996
---------------- ----------------- ---------------- ------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued ................. $ 1,147,087 $ 923,832 $ 612,307 $ 1,510,448
Dividends reinvested ........................ 88,262 207,800 140,304 268,478
Shares redeemed ............................. (365,476) (2,521,905) (905,493) (1,143,115)
-------------- ---------------- --------------- ---------------
Change in net assets from
Investor A share transactions ............... $ 869,873 $ (1,390,273) $ (152,882) $ 635,811
=============== ================ =============== ===============
Class B Shares:
Proceeds from shares issued ................. $ 144,879 $ 359,519 (a)
Dividends reinvested ........................ 8,848 5,665 (a)
Shares redeemed ............................. (5,556) (8,010)(a)
-------------- ----------------
Change in net assets from
Investor B share transactions ............... $ 148,171 $ 357,174 (a)
=============== ================
Trust Shares:
Proceeds from shares issued ................. $ 19,576,232 $ 65,562,100 $ 39,335,716 $ 10,310,221
Dividends reinvested ........................ 2,258,738 4,476,007 -- --
Shares redeemed ............................. (12,729,852) (25,629,116) (5,388,077) (9,700,110)
-------------- ---------------- --------------- ---------------
Change in net assets from Trust
share transactions .......................... $ 9,105,118 $ 44,408,991 $ 33,947,639 $ 610,111
=============== ================ =============== ===============
SHARE TRANSACTIONS:
Class A Shares:
Issued ...................................... 117,682 93,847 60,420 149,219
Reinvested .................................. 9,058 21,069 13,842 26,506
Redeemed .................................... (37,511) (258,458) (89,401) (112,758)
-------------- ---------------- --------------- ---------------
Change in Investor A Shares ................. 89,229 (143,542) (15,139) 62,967
=============== ================ =============== ===============
Class B Shares:
Issued ...................................... 15,028 37,041 (a)
Reinvested .................................. 911 591 (a)
Redeemed .................................... (575) (841)(a)
-------------- ----------------
Change in Investor B Shares ................. 15,364 36,791 (a)
=============== ================
Trust Shares:
Issued ...................................... 2,010,819 6,626,543 3,890,321 1,022,116
Reinvested .................................. 231,421 456,831 -- --
Redeemed .................................... (1,307,961) (2,617,022) (430,495) (958,821)
--------------- ---------------- --------------- ---------------
Change in Trust Shares ...................... 934,279 4,466,352 3,459,826 63,295
================ =============== ================ ===============
</TABLE>
- -------------
(a) The fund commenced offering Class B Shares January 1, 1996.
Continued
-44-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Notes to Financial Statements, Continued
March 31, 1997
<TABLE>
<CAPTION>
Growth and Income
Stock Fund
-----------------------------------
For the For the
six months year
ended ended
March 31, September 30,
1997 1996
-------------- ---------------
(Unaudited)
<S> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued ................................... $ 5,741,406 $ 6,811,567
Dividends reinvested .......................................... 1,062,574 338,523
Shares redeemed ............................................... (1,324,622) (1,427,065)
-------------- ---------------
Change in net assets from Investor A share transactions ....... $ 5,479,358 $ 5,723,025
============== ===============
Class B Shares:
Proceeds from shares issued ................................... $ 4,308,241 $ 3,738,136 (a)
Dividends reinvested .......................................... 229,771 17,476 (a)
Shares redeemed ............................................... (173,802) (82,260)(a)
-------------- ---------------
Change in net assets from Investor B share transactions ....... $ 4,364,210 $ 3,673,352 (a)
============== ===============
Trust Shares:
Proceeds from shares issued ................................... $ 62,817,183 $ 68,337,109
Dividends reinvested .......................................... 6,656,056 3,190,245
Shares redeemed ............................................... (52,245,491) (40,729,870)
-------------- ---------------
Change in net assets from Trust share transactions ............ $ 17,227,748 $ 30,797,484
============== ===============
SHARE TRANSACTIONS:
Class A Shares:
Issued ........................................................ 359,194 477,889
Reinvested .................................................... 67,301 24,085
Redeemed ...................................................... (81,701) (100,847)
-------------- ---------------
Change in Investor A Shares ................................... 344,794 401,127
============== ===============
Class B Shares:
Issued ........................................................ 266,507 258,055 (a)
Reinvested .................................................... 14,590 1,200 (a)
Redeemed ...................................................... (10,694) (5,567)(a)
-------------- ---------------
Change in Investor B Shares ................................... 270,403 253,688 (a)
============== ===============
Trust Shares:
Issued ........................................................ 3,901,869 4,851,989
Reinvested .................................................... 420,861 227,034
Redeemed ...................................................... (2,552,443) (2,820,394)
-------------- ---------------
Change in Trust Shares ........................................ 1,770,287 2,258,629
============== ===============
<CAPTION>
Balanced Fund
-----------------------------------
For the For the
six months year
ended ended
March 31, September 30,
1997 1996
-------------- ---------------
(Unaudited)
<S> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued ................................... $ 1,771,296 $ 3,871,025
Dividends reinvested .......................................... 642,661 402,738
Shares redeemed ............................................... (936,482) (1,928,670)
-------------- ---------------
Change in net assets from Investor A share transactions ....... $ 1,477,475 $ 2,345,093
============== ===============
Class B Shares:
Proceeds from shares issued ................................... $ 1,657,767 $ 2,332,596 (a)
Dividends reinvested .......................................... 135,505 33,079 (a)
Shares redeemed ............................................... (92,309) (77,715)(a)
-------------- ---------------
Change in net assets from Investor B share transactions ....... 1,700,963 2,287,960 (a)
============== ===============
Trust Shares:
Proceeds from shares issued ................................... $ 13,941,693 $ 24,146,440
Dividends reinvested .......................................... 3,165,089 2,035,268
Shares redeemed ............................................... (15,767,009) (11,407,119)
-------------- ---------------
Change in net assets from Trust share transactions ............ $ 1,339,773 $ 14,774,589
============== ===============
SHARE TRANSACTIONS:
Class A Shares:
Issued ........................................................ 144,437 334,248
Reinvested .................................................... 53,051 34,933
Redeemed ...................................................... (76,280) (166,329)
-------------- ---------------
Change in Investor A Shares ................................... 121,208 202,852
============== ===============
Class B Shares:
Issued ........................................................ 136,088 200,160 (a)
Reinvested .................................................... 11,234 2,850 (a)
Redeemed ...................................................... (7,547) (6,712)(a)
-------------- ---------------
Change in Investor B Shares ................................... 139,775 196,298 (a)
============== ===============
Trust Shares:
Issued ........................................................ 1,146,048 2,102,026
Reinvested .................................................... 261,846 177,017
Redeemed ...................................................... (1,291,877) (986,873)
-------------- ---------------
Change in Trust Shares ........................................ 116,017 1,292,170
============== ===============
</TABLE>
- -------------
(a) The fund commenced offering Class B Shares January 1, 1996.
Continued
-45-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
Notes to Financial Statements, Continued
March 31, 1997
<TABLE>
<CAPTION>
Small Company International
Growth Fund Equity Fund
------------------------------------- --------------------
For the For the For the period
six months year January 2, 1997
ended ended to
March 31, September 30, March 31,
1997 1996 1997(b)
---------------- ------------------ --------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued .................................... $ 6,303,743 $ 5,198,893 $ 192,720
Dividends reinvested ........................................... 8,876 -- --
Shares redeemed ................................................ (3,839,977) (321,183) (10,336)
--------------- ------------- ---------------
Change in net assets from Investor A
share transactions ............................................. $ 2,472,642 $ 4,877,710 $ 182,384
=============== ============= ===============
Class B Shares:
Proceeds from shares issued .................................... $ 2,924,176 $ 2,870,037 (a) $ 235,358
Dividends reinvested ........................................... 4,427 -- (a) --
Shares redeemed ................................................ (250,418) (41,375)(a) --
--------------- ------------- ---------------
Change in net assets from Investor B
share transactions ............................................. $ 2,678,185 $ 2,828,662 (a) $ 235,358
=============== ============= ===============
Trust Shares:
Proceeds from shares issued .................................... $ 16,122,845 $ 14,870,042 $ 39,241,471
Dividends reinvested ........................................... 26,916 -- --
Shares redeemed ................................................ (8,585,342) (5,559,535) (396,501)
--------------- ------------- ---------------
Change in net assets from Trust share transactions ............. $ 7,564,419 $ 9,310,507 $ 38,844,970
=============== ============= ===============
SHARE TRANSACTIONS:
Class A Shares:
Issued ......................................................... 322,347 294,124 18,851
Reinvested ..................................................... 451 -- --
Redeemed ....................................................... (196,685) (17,579) (1,000)
--------------- ------------- ---------------
Change in Investor A Shares .................................... 126,113 276,545 17,851
=============== ============= ===============
Class B Shares:
Issued ......................................................... 152,373 155,105 (a) 23,023
Reinvested ..................................................... 227 -- (a) --
Redeemed ....................................................... (13,807) (2,142)(a) --
--------------- ------------- ---------------
Change in Investor B Shares .................................... 138,793 152,963 (a) 23,023
=============== ============= ===============
Trust Shares:
Issued ......................................................... 822,254 848,861 3,883,045
Reinvested ..................................................... 1,359 -- --
Redeemed ....................................................... (444,717) (295,847) (38,423)
--------------- ------------- ---------------
Change in Trust Shares ......................................... 378,896 553,014 3,844,622
=============== ============= ===============
</TABLE>
- -------------
(a) The fund commenced offering Class B Shares January 1, 1996.
(b) Period from commencement of operations.
Continued
-46-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended September 30,
For the six months ----------------------------------
ended October 5, 1992 to
March 31, 1997 1996 1995 1994 September 30, 1993 (a)
-------------------- ---------- ---------- ---------- ----------------------
<S> <C> <C> <C> <C> <C>
(Unaudited)
Net Asset Value, Beginning of Period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------
Investment Activities
Net investment income ........................ 0.022 0.044 0.047 0.027 0.026
---------- ---------- ---------- ---------- ---------
Total from Investment Activities ........ 0.022 0.044 0.047 0.027 0.026
---------- ---------- ---------- ---------- ---------
Distributions
Net investment income ........................ (0.022) (0.044) (0.047) (0.027) (0.026)
---------- ---------- ---------- ---------- ---------
Total Distributions ..................... (0.022) (0.044) (0.047) (0.027) (0.026)
---------- ---------- ---------- ---------- ---------
Net Asset Value, End of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== =========
Total Return .................................... 2.18%(b) 4.49% 4.81% 2.76% 2.60%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) .............. $ 27,959 $ 27,931 $ 13,948 $ 1,486 $ 279
Ratio of expenses to average net assets ...... 0.94%(c) 0.99% 0.98% 0.94% 0.51%(c)
Ratio of net investment income to average net
assets ..................................... 4.33%(c) 4.37% 4.81% 2.89% 2.58%(c)
Ratio of expenses to average net assets* ..... 1.24%(c) 1.25% 1.24% 1.32% 1.32%(c)
Ratio of net investment income to average net
assets* .................................... 4.03%(c) 4.11% 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
-47-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months
ended January 1, 1996 to
March 31, 1997 September 30, 1996 (a)
---------------------- ---------------------------
(Unaudited)
<S> <C> <C>
Net Asset Value, Beginning of Period ........................... $ 1.00 $ 1.00
---------- ----------
Investment Activities
Net investment income ....................................... 0.018 0.025
---------- ----------
Total from Investment Activities ....................... 0.018 0.025
---------- ----------
Distributions
Net investment income ....................................... (0.018) (0.025)
---------- ----------
Total Distributions .................................... (0.018) (0.025)
---------- ----------
Net Asset Value, End of Period ................................. $ 1.00 $ 1.00
========== ==========
Total Return (excludes redemption charge) ...................... 1.78%(b) 2.53%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ............................. $ 1,450 $ 1,305
Ratio of expenses to average net assets ..................... 1.74%(c) 1.75%(c)
Ratio of net investment income to average net assets ........ 3.53%(c) 3.55%(c)
</TABLE>
- -------------
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
-48-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months For the year ended September 30,
ended ----------------------------------------- October 5, 1992 to
March 31, 1997 1996 1995 1994 September 30, 1993 (a)
---------------------- ----------- ----------- ---------- ----------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- --------- ---------
Investment Activities
Net investment income .............. 0.023 0.046 0.050 0.030 0.027
---------- ---------- ---------- --------- ---------
Total from Investment Activities . 0.023 0.046 0.050 0.030 0.027
---------- ---------- ---------- --------- ---------
Distributions
Net investment income .............. (0.023) (0.046) (0.050) (0.030) (0.027)
---------- ---------- ---------- --------- ---------
Total Distributions .............. (0.023) (0.046) (0.050) (0.030) (0.027)
---------- ---------- ---------- --------- ---------
Net Asset Value, End of Period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========= =========
Total Return .......................... 2.28%(b) 4.74% 5.07% 3.01% 2.70%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) .... $ 195,889 $ 205,974 $ 120,083 $ 77,464 $ 74,962
Ratio of expenses to average net
assets ........................... 0.74%(c) 0.75% 0.72% 0.67% 0.38%(c)
Ratio of net investment income to
average net assets ............... 4.53%(c) 4.63% 4.97% 2.97% 2.71%(c)
Ratio of expenses to average net
assets* .......................... 0.74%(c) 0.75% 0.75% 0.83% 0.81%(c)
Ratio of net investment income to
average net assets* .............. 4.53%(c) 4.63% 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
-49-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months For the year ended September 30,
ended -------------------------------- November 30, 1992 to
March 31, 1997 1996 1995 1994 September 30, 1993 (a)
------------------ -------- ---------- ---------- -------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ............. $ 9.73 $ 9.88 $ 9.60 $ 10.29 $ 10.00
--------- -------- ---------- ---------- ----------
Investment Activities
Net investment income ......................... 0.27 0.55 0.53 0.50 0.47
Net realized and unrealized gains (losses) on
investments ................................. (0.11) (0.15) 0.29 (0.68) 0.30
--------- -------- ---------- ---------- ----------
Total from Investment Activities ......... 0.16 0.40 0.82 (0.18) 0.77
--------- -------- ---------- ---------- ----------
Distributions
Net investment income ......................... (0.27) (0.55) (0.54) (0.50) (0.48)
Net realized gains ............................ -- -- -- (0.01) --
--------- -------- ---------- ---------- ----------
Total Distributions ...................... (0.27) (0.55) (0.54) (0.51) (0.48)
--------- -------- ---------- ---------- ----------
Net Asset Value, End of Period ................... $ 9.62 $ 9.73 $ 9.88 $ 9.60 $ 10.29
========= ======== ========== ========== ==========
Total Return (excludes sales charge) ............. 1.65%(b) 4.09% 8.74% (1.86)% 7.80%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ............... $ 5,595 $ 6,356 $ 7,102 $ 10,345 $ 14,915
Ratio of expenses to average net assets ....... 1.12%(c) 1.19% 1.17% 0.89% 0.56%(c)
Ratio of net investment income to average net
assets ...................................... 5.58%(c) 5.55% 5.50% 5.01% 5.43%(c)
Ratio of expenses to average net assets* ...... 1.47%(c) 1.54% 1.58% 1.58% 1.56%(c)
Ratio of net investment income to average net
assets* ..................................... 5.23%(c) 5.20% 5.09% 4.32% 4.42%(c)
Portfolio turnover(d) ......................... 71.02% 54.82% 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
-50-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Trust Shares
<TABLE>
<CAPTION>
Financial Highlights
For the six months For the year ended September 30,
ended ---------------------------------- November 30, 1992 to
March 31, 1997 1996 1995 1994 September 30, 1993 (a)
---------------------- ---------- ---------- ---------- ----------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ........... $ 9.74 $ 9.89 $ 9.61 $ 10.30 $ 10.00
---------- ---------- ---------- ---------- ----------
Investment Activities
Net investment income ....................... 0.28 0.57 0.56 0.52 0.49
Net realized and unrealized gains (losses)
on investments ............................ (0.11) (0.15) 0.28 (0.68) 0.30
---------- ---------- ---------- ---------- ----------
Total from Investment Activities ....... 0.17 0.42 0.84 (0.16) 0.79
---------- ---------- ---------- ---------- ----------
Distributions
Net investment income ....................... (0.28) (0.57) (0.56) (0.52) (0.49)
Net realized gains .......................... -- -- -- (0.01) --
---------- ---------- ---------- ---------- ----------
Total Distributions .................... (0.28) (0.57) (0.56) (0.53) (0.49)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ................. $ 9.63 $ 9.74 $ 9.89 $ 9.61 $ 10.30
========== ========== ========== ========== ==========
Total Return ................................... 1.78%(b) 4.36% 9.01% (1.66)% 8.01%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ............. $ 96,020 $ 62,621 $ 45,005 $ 38,208 $ 34,646
Ratio of expenses to average net assets ..... 0.87%(c) 0.93% 0.93% 0.71% 0.39%(c)
Ratio of net investment income to average
net assets ................................ 5.84%(c) 5.81% 5.78% 5.20% 5.60%(c)
Ratio of expenses to average net assets* .... 0.97%(c) 1.03% 1.08% 1.08% 1.05%(c)
Ratio of net investment income to average
net assets* ............................... 5.74%(c) 5.71% 5.64% 4.83% 4.94%(c)
Portfolio turnover(d) ....................... 71.02% 54.82% 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
-51-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended
For the six months September 30,
ended ----------------------------- October 9, 1992 to
March 31, 1997 1996 1995 1994 September 30, 1993 (a)
------------------- ------ ------- ------- ----------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ................. $ 9.63 $ 9.88 $ 9.33 $ 10.39 $ 10.00
--------- --------- --------- --------- --------
Investment Activities
Net investment income ............................. 0.27 0.56 0.59 0.59 0.63
Net realized and unrealized gains (losses) on
investments ..................................... (0.14) (0.25) 0.55 (1.04) 0.39
--------- -------- --------- --------- --------
Total from Investment Activities ............. 0.13 0.31 1.14 (0.45) 1.02
--------- -------- --------- --------- --------
Distributions
Net investment income ............................. (0.27) (0.56) (0.59) (0.59) (0.63)
Net realized gains ................................ -- -- -- (0.02) --
--------- -------- --------- --------- --------
Total Distributions .......................... (0.27) (0.56) (0.59) (0.61) (0.63)
--------- -------- --------- --------- --------
Net Asset Value, End of Period ....................... $ 9.49 $ 9.63 $ 9.88 $ 9.33 $ 10.39
========= ======== ========= ========= ========
Total Return (excludes sales charge) ................. 1.30%(b) 3.17% 12.63% (4.48)% 10.53%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ................... $ 4,456 $ 3,659 $ 5,173 $ 6,772 $ 5,238
Ratio of expenses to average net assets ........... 1.13%(c) 1.13% 1.09% 0.96% 0.59%(c)
Ratio of net investment income to average net
assets .......................................... 5.61%(c) 5.68% 6.22% 6.03% 6.26%(c)
Ratio of expenses to average net assets* .......... 1.47%(c) 1.48% 1.50% 1.56% 1.55%(c)
Ratio of net investment income to average net
assets* ......................................... 5.27%(c) 5.33% 5.81% 5.43% 5.30%(c)
Portfolio turnover(d) ............................. 37.25% 76.29% 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
-52-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months
ended January 1, 1996 to
March 31, 1997 September 30, 1996 (a)
----------------------- ---------------------------
(Unaudited)
<S> <C> <C>
Net Asset Value, Beginning of Period ................................... $ 9.60 $ 10.17
------- --------
Investment Activities
Net investment income ............................................... 0.23 0.31
Net realized and unrealized losses on investments ................... (0.14) (0.57)
------- --------
Total from Investment Activities ............................... 0.09 (0.26)
------- --------
Distributions
Net investment income ............................................... (0.23) (0.31)
------- --------
Total Distributions ............................................ (0.23) (0.31)
------- --------
Net Asset Value, End of Period ......................................... $ 9.46 $ 9.60
======= ========
Total Return (excludes redemption charge) .............................. 0.92%(b) (2.48)%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ..................................... $ 494 $ 353
Ratio of expenses to average net assets ............................. 1.86%(c) 1.85%(c)
Ratio of net investment income to average net assets ................ 4.77%(c) 5.01%(c)
Ratio of expenses to average net assets* ............................ 1.96%(c) 1.95%(c)
Ratio of net investment income to average net assets* ............... 4.67%(c) 4.91%(c)
Portfolio turnover(d) ............................................... 37.25% 76.29%
</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-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months For the year ended September 30,
ended ------------------------------------ October 9, 1992 to
March 31, 1997 1996 1995 1994 September 30, 1993 (a)
-------------------- ----------- ---------- ---------- ----------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ......... $ 9.64 $ 9.89 $ 9.34 $ 10.40 $ 10.00
------------ --------- ---------- ---------- ----------
Investment Activities
Net investment income .................... 0.28 0.58 0.61 0.62 0.64
Net realized and unrealized gains
(losses) on investments ................ (0.13) (0.25) 0.55 (1.04) 0.40
----------- ----------- ---------- ---------- ----------
Total from Investment Activities .... 0.15 0.33 1.16 (0.42) 1.04
----------- ----------- ---------- ---------- ----------
Distributions
Net investment income .................... (0.28) (0.58) (0.61) (0.62) (0.64)
Net realized gains ....................... -- -- -- (0.02) --
----------- ----------- ---------- ---------- ----------
Total Distributions ................. (0.28) (0.58) (0.61) (0.64) (0.64)
----------- ----------- ---------- ---------- ----------
Net Asset Value, End of Period .............. $ 9.51 $ 9.64 $ 9.89 $ 9.34 $ 10.40
=========== =========== ========== ========== ==========
Total Return ................................ 1.53%(b) 3.43% 12.91% (4.23)% 10.76%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) .......... $ 126,871 $ 119,633 $ 78,578 $ 68,451 $ 59,816
Ratio of expenses to average net assets .. 0.86%(c) 0.87% 0.85% 0.70% 0.39%(c)
Ratio of net investment income to average
net assets ............................. 5.77%(c) 5.94% 6.43% 6.27% 6.45%(c)
Ratio of expenses to average net assets* . 0.96%(c) 0.97% 1.00% 1.06% 1.03%(c)
Ratio of net investment income to average
net assets* ............................ 5.67%(c) 5.84% 6.28% 5.91% 5.82%(c)
Portfolio turnover(d) .................... 37.25% 76.29% 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
-54-
[LOGO OF BB&T APPEARS]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months For the year ended September 30,
ended -------------------------------- October 16, 1992 to
March 31, 1997 1996 1995 1994 September 30, 1993 (a)
--------------------- --------- -------- ---------- ----------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ............... $ 10.05 $ 10.15 $ 9.78 $ 10.29 $ 10.00
-------- ------- ------- --------- ---------
Investment Activities
Net investment income ........................... 0.19 0.36 0.36 0.36 0.36
Net realized and unrealized gains (losses) on
investments ................................... (0.03) (0.10) 0.37 (0.50) 0.29
-------- ------- ------- --------- ---------
Total from Investment Activities ........... 0.16 0.26 0.73 (0.14) 0.65
-------- ------- ------- --------- ---------
Distributions
Net investment income ........................... (0.19) (0.36) (0.36) (0.36) (0.36)
Net realized gains .............................. -- -- -- (0.01) --
-------- ------- ------- --------- ---------
Total Distributions ........................ (0.19) (0.36) (0.36) (0.37) (0.36)
-------- ------- ------- --------- ---------
Net Asset Value, End of Period ..................... $ 10.02 $ 10.05 $ 10.15 $ 9.78 $ 10.29
======== ======= ======= ========= =========
Total Return (excludes sales charge) ............... 1.62%(b) 2.61% 7.61% (1.33)% 6.60%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ................. $ 9,085 $ 9,261 $ 8,717 $ 11,083 $ 13,695
Ratio of expenses to average net assets ......... 1.06%(c) 1.11% 1.05% 0.75% 0.43%(c)
Ratio of net investment income to average net
assets ........................................ 3.82%(c) 3.58% 3.63% 3.63% 3.80%(c)
Ratio of expenses to average net assets* ........ 1.56%(c) 1.61% 1.63% 1.66% 1.77%(c)
Ratio of net investment income to average net
assets* ....................................... 3.32%(c) 3.08% 3.05% 2.72% 2.45%(c)
Portfolio turnover(d) ........................... 1.89% 20.90% 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
-55-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months For the year ended September 30,
ended ---------------------------------- October 16, 1992 to
March 31, 1997 1996 1995 1994 September 30, 1993 (a)
--------------------- ---------- ---------- ---------- -----------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .......... $ 10.05 $ 10.15 $ 9.78 $ 10.29 $ 10.00
---------- ---------- ---------- ---------- ----------
Investment Activities
Net investment income ...................... 0.20 0.38 0.37 0.38 0.36
Net realized and unrealized gains (losses)
on investments ........................... (0.03) (0.10) 0.37 (0.50) 0.29
---------- ---------- ---------- ---------- ----------
Total from Investment Activities ...... 0.17 0.28 0.74 (0.12) 0.65
---------- ---------- ---------- ---------- ----------
Distributions
Net investment income ...................... (0.20) (0.38) (0.37) (0.38) (0.36)
Net realized gains ......................... -- -- -- (0.01) --
---------- ---------- ---------- ---------- ----------
Total Distributions ................... (0.20) (0.38) (0.37) (0.39) (0.36)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ................ $ 10.02 $ 10.05 $ 10.15 $ 9.78 $ 10.29
========== ========== ========== ========== ==========
Total Return .................................. 1.68%(b) 2.77% 7.77% (1.18)% 6.62%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ............ $ 63,046 $ 28,443 $ 28,091 $ 27,770 $ 20,128
Ratio of expenses to average net assets .... 0.87%(c) 0.96% 0.91% 0.63% 0.42%(c)
Ratio of net investment income to average
net assets ............................... 4.05%(c) 3.72% 3.78% 3.77% 3.80%(c)
Ratio of expenses to average net assets* ... 1.03%(c) 1.11% 1.13% 1.17% 1.30%(c)
Ratio of net investment income to average
net assets* .............................. 3.89%(c) 3.57% 3.55% 3.24% 2.92%(c)
Portfolio turnover(d) ...................... 1.89% 20.90% 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
-56-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
GROWTH AND INCOME STOCK FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months For the year ended September 30,
ended ---------------------------------- October 9, 1992 to
March 31, 1997 1996 1995 1994 September 30, 1993 (a)
------------------ ---------- ---------- --------- ----------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ............. $ 15.31 $ 12.97 $ 11.26 $ 11.26 $ 10.00
---------- ---------- ---------- --------- --------
Investment Activities
Net investment income ......................... 0.13 0.26 0.25 0.25 0.28
Net realized and unrealized gains on
investments ................................. 1.31 2.43 1.98 0.12 1.27
---------- ---------- ---------- --------- --------
Total from Investment Activities ......... 1.44 2.69 2.23 0.37 1.55
---------- ---------- ---------- --------- --------
Distributions
Net investment income ......................... (0.13) (0.26) (0.25) (0.26) (0.29)
Net realized gains ............................ (0.63) (0.09) (0.12) (0.11) --
In excess of net realized gains ............... -- -- (0.15) -- --
---------- ---------- ---------- --------- --------
Total Distributions ...................... (0.76) (0.35) (0.52) (0.37) (0.29)
---------- ---------- ---------- --------- --------
Net Asset Value, End of Period ................... $ 15.99 $ 15.31 $ 12.97 $ 11.26 $ 11.26
========== ========== ========== ========= ========
Total Return (excludes sales charge) ............. 9.49%(b) 20.97% 20.62% 3.33% 15.72%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ............... $ 25,290 $ 18,949 $ 10,842 $ 7,973 $ 6,009
Ratio of expenses to average net assets ....... 1.09%(c) 1.11% 1.07% 0.92% 0.63%(c)
Ratio of net investment income to average net
assets ...................................... 1.60%(c) 1.82% 2.15% 2.26% 2.85%(c)
Ratio of expenses to average net assets* ...... 1.58%(c) 1.60% 1.60% 1.65% 1.68%(c)
Ratio of net investment income to average net
assets* ..................................... 1.11%(c) 1.33% 1.62% 1.52% 1.81%(c)
Portfolio turnover(d) ......................... 13.58% 19.82% 8.73% 21.30% 27.17%
Average commission rate(e) .................... $ 0.0649 $ 0.0721 -- -- --
</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.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
for which commissions were charged.
See notes to financial statements
-57-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
GROWTH AND INCOME STOCK FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months
ended January 1, 1996 to
March 31, 1997 September 30, 1996 (a)
------------------ ----------------------
(Unaudited)
<S> <C> <C>
Net Asset Value, Beginning of Period ............................ $ 15.29 $ 13.78
------- -------
Investment Activities
Net investment income ........................................ 0.07 0.13
Net realized and unrealized gains on investments ............. 1.28 1.52
------- -------
Total from Investment Activities ........................ 1.35 1.65
------- -------
Distributions
Net investment income ........................................ (0.07) (0.14)
Net realized gains ........................................... (0.63) --
------- -------
Total Distributions ..................................... (0.70) (0.14)
------- -------
Net Asset Value, End of Period .................................. $ 15.94 $ 15.29
======= =======
Total Return (excludes redemption charge) ....................... 8.92%(b) 12.01%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) .............................. $ 8,356 $ 3,880
Ratio of expenses to average net assets ...................... 1.84%(c) 1.85%(c)
Ratio of net investment income to average net assets ......... 0.87%(c) 1.13%(c)
Ratio of expenses to average net assets* ..................... 2.08%(c) 2.09%(c)
Ratio of net investment income to average net assets* ........ 1.63%(c) 0.89%(c)
Portfolio turnover(d) ........................................ 13.58% 19.82%
Average commission rate(e) ................................... $0.0649 $0.0721
</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.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
for which commissions were charged.
See notes to financial statements
-58-
<PAGE>
GROWTH AND INCOME STOCK FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months For the year ended September 30,
ended -------------------------------------- October 9, 1992 to
March 31, 1997 1996 1995 1994 September 30, 1993 (a)
--------------------- ----------- ----------- ---------- ------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ....... $ 15.34 $ 12.99 $ 11.28 $ 11.28 $ 10.00
---------- ---------- ---------- --------- ---------
Investment Activities
Net investment income ................... 0.15 0.29 0.28 0.28 0.30
Net realized and unrealized gains on
investments ........................... 1.31 2.44 1.98 0.11 1.28
---------- ---------- ---------- --------- ---------
Total from Investment Activities ... 1.46 2.73 2.26 0.39 1.58
---------- ---------- ---------- --------- ---------
Distributions
Net investment income ................... (0.15) (0.29) (0.28) (0.28) (0.30)
Net realized gains ...................... (0.63) (0.09) (0.12) (0.11) --
In excess of net realized gains ......... -- -- (0.15) -- --
---------- ---------- ---------- --------- ---------
Total Distributions ................ (0.78) (0.38) (0.55) (0.39) (0.30)
---------- ---------- ---------- --------- ---------
Net Asset Value, End of Period ............. $ 16.02 $ 15.34 $ 12.99 $ 11.28 $ 11.28
========== ========== ========== ========= =========
Total Return ............................... 9.61%(b) 21.31% 20.88% 3.58% 16.06%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ......... $ 244,065 $ 206,659 $ 145,603 $ 89,355 $ 82,358
Ratio of expenses to average net assets . 0.84%(c) 0.86% 0.82% 0.66% 0.40%(c)
Ratio of net investment income to
average net assets .................... 1.86%(c) 2.07% 2.40% 2.51% 3.08%(c)
Ratio of expenses to average net assets* 1.08%(c) 1.10% 1.10% 1.15% 1.17%(c)
Ratio of net investment income to
average net assets* ................... 1.62 %(c) 1.83% 2.11% 2.02% 2.31%(c)
Portfolio turnover(d) ................... 13.58% 19.82% 8.73% 21.30% 27.17%
Average commission rate(e) .............. $ 0.0649 $ 0.0721 -- -- --
- -------------
</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. (e) Represents
the total dollar amount of commissions paid on portfolio transactions
divided by total number of portfolio shares purchased and sold for which
commissions were charged.
See notes to financial statements
-59-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
BALANCED FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended
For the six months September 30,
ended ---------------------------------- July 1, 1993 to
March 31, 1997 1996 1995 1994 September 30, 1993 (a)
-------------------- ---------- --------- --------- ----------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .............. $ 11.96 $ 11.04 $ 9.76 $ 10.20 $ 10.00
---------- ---------- --------- --------- --------
Investment Activities
Net investment income .......................... 0.23 0.43 0.44 0.38 0.08
Net realized and unrealized gains (losses) on
investments .................................. 0.38 0.92 1.27 (0.44) 0.21
---------- ---------- --------- --------- --------
Total from Investment Activities .......... 0.61 1.35 1.71 (0.06) 0.29
---------- ---------- --------- --------- --------
Distributions
Net investment income .......................... (0.23) (0.43) (0.43) (0.38) (0.09)
Net realized gains ............................. (0.37) -- -- -- --
---------- ---------- --------- --------- --------
Total Distributions ....................... (0.60) (0.43) (0.43) (0.38) (0.09)
---------- ---------- --------- --------- --------
Net Asset Value, End of Period .................... $ 11.97 $ 11.96 $ 11.04 $ 9.76 $ 10.20
========== ========== ========= ========= ========
Total Return (excludes sales charge) .............. 5.11%(b) 12.43% 18.00% (0.64)% 2.88%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ................ $ 13,921 $ 12,456 $ 9,257 $ 8,560 $ 2,569
Ratio of expenses to average net assets ........ 1.19%(c) 1.20% 1.17% 0.98% 0.50%(c)
Ratio of net investment income to average net
assets ....................................... 3.80%(c) 3.78% 4.27% 4.02% 4.39%(c)
Ratio of expenses to average net assets* ....... 1.68%(c) 1.69% 1.71% 1.75% 2.00%(c)
Ratio of net investment income to average net
assets* ...................................... 3.31%(c) 3.29% 3.73% 3.25% 2.89%(c)
Portfolio turnover(d) .......................... 15.68% 19.87% 23.68% 12.91% 8.32%
Average commission rate(e) ..................... $ 0.0626 $ 0.0749 -- -- --
</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.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and
sold for which commissions were charged.
See notes to financial statements
-60-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
BALANCED FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months
ended January 1, 1996 to
March 31, 1997 September 30, 1996 (a)
---------------------- ---------------------------
(Unaudited)
<S> <C> <C>
Net Asset Value, Beginning of Period ............................ $ 11.91 $ 11.54
-------- --------
Investment Activities
Net investment income ........................................ 0.18 0.27
Net realized and unrealized gains on investments ............. 0.39 0.37
-------- --------
Total from Investment Activities ........................ 0.57 0.64
-------- --------
Distributions
Net investment income ........................................ (0.19) (0.27)
Net realized gains ........................................... (0.37) --
-------- --------
Total Distributions ..................................... (0.56) (0.27)
-------- --------
Net Asset Value, End of Period .................................. $ 11.92 $ 11.91
======== ========
Total Return (excludes redemption charge) ....................... 4.76%(b) 5.67%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) .............................. $ 4,007 $ 2,339
Ratio of expenses to average net assets ...................... 1.94%(c) 1.95%(c)
Ratio of net investment income to average net assets ......... 3.05%(c) 3.13%(c)
Ratio of expenses to average net assets* ..................... 2.18%(c) 2.18%(c)
Ratio of net investment income to average net assets* ........ 2.81%(c) 2.90%(c)
Portfolio turnover(d) ........................................ 15.68% 19.87%
Average commission rate(e) ................................... $0.0626 $0.0749
</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.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
for which commissions were charged.
See notes to financial statements
-61-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
BALANCED FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months For the year ended September 30,
ended ------------------------------------ July 1, 1993 to
March 31, 1997 1996 1995 1994 September 30, 1993 (a)
-------------------- ---------- ---------- ---------- ------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ........... $ 11.93 $ 11.01 $ 9.74 $ 10.18 $ 10.00
---------- ---------- ---------- ---------- ----------
Investment Activities
Net investment income ....................... 0.25 0.46 0.46 0.40 0.09
Net realized and unrealized gains (losses)
on investments ............................ 0.39 0.92 1.27 (0.44) 0.18
---------- ---------- ---------- ---------- ----------
Total from Investment Activities ....... 0.64 1.38 1.73 (0.04) 0.27
---------- ---------- ---------- ---------- ----------
Distributions
Net investment income ....................... (0.25) (0.46) (0.46) (0.40) (0.09)
Net realized gains .......................... (0.37) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total Distributions .................... (0.62) (0.46) (0.46) (0.40) (0.09)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ................. $ 11.95 $ 11.93 $ 11.01 $ 9.74 $ 10.18
========== ========== ========== ========== ==========
Total Return ................................... 5.34%(b) 12.74% 18.23% (0.42)% 2.74%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ............. $ 70,833 $ 69,374 $ 49,794 $ 39,715 $ 20,374
Ratio of expenses to average net assets ..... 0.95%(c) 0.95% 0.92% 0.73% 0.44%(c)
Ratio of net investment income to average
net assets ................................ 4.04%(c) 4.03% 4.51% 4.22% 4.44%(c)
Ratio of expenses to average net assets* .... 1.19%(c) 1.19% 1.21% 1.25% 1.47%(c)
Ratio of net investment income to average
net assets* ............................... 3.80%(c) 3.79% 4.22% 3.70% 3.42%(c)
Portfolio turnover(d) ....................... 15.68% 19.87% 23.68% 12.91% 8.32%
Average commission rate(e) .................. $ 0.0626 $ 0.0749 -- -- --
</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.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
for which commissions were charged.
See notes to financial statements
-62-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months For the year
ended ended December 7, 1994 to
March 31, 1997 September 30, 1996 September 30, 1995 (a)
---------------- -------------------- -----------------------
(Unaudited)
<S> <C> <C> <C>
Net Asset Value, Beginning of Period ......................... $ 21.06 $ 14.53 $ 10.00
---------- ---------- ---------
Investment Activities
Net investment loss ....................................... (0.05) (0.20) (0.08)
Net realized and unrealized gains (losses) on investments . (4.94) 6.73 4.61
---------- ---------- ---------
Total from Investment Activities ..................... (4.99) 6.53 4.53
---------- ---------- ---------
Distributions
Net realized gains ........................................ (0.02) -- --
---------- ---------- ---------
Total Distributions .................................. (0.02) -- --
---------- ---------- ---------
Net Asset Value, End of Period ............................... $ 16.05 $ 21.06 $ 14.53
========== ========== =========
Total Return (excludes sales charge) ......................... (23.71)% (b) 44.94% 45.30% (b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ........................... $ 7,673 $ 7,413 $ 1,096
Ratio of expenses to average net assets ................... 1.94% (c) 2.01% 2.50% (c)
Ratio of net investment loss to average net assets ........ (1.18)%(c) (1.26)% (1.56)%(c)
Ratio of expenses to average net assets* .................. 2.19% (c) 2.26% 2.84% (c)
Ratio of net investment loss to average net assets* ....... (1.43)%(c) (1.51)% (1.90)%(c)
Portfolio turnover(d) ..................................... 48.44% 71.62% 46.97%
Average commission rate(e) ................................ $ 0.0538 $ 0.0562 --
</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.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
for which commissions were charged.
See notes to financial statements
-63-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months
ended January 1, 1996 to
March 31, 1997 September 30, 1996 (a)
--------------------- ---------------------------
(Unaudited)
<S> <C> <C>
Net Asset Value, Beginning of Period .............................. $ 20.92 $ 15.24
--------- ---------
Investment Activities
Net investment loss ............................................ (0.05) (0.21)
Net realized and unrealized gains (losses) on investments ...... (4.98) 5.89
--------- ---------
Total from Investment Activities .......................... (5.03) 5.68
Distributions
Net realized gains ............................................. (0.02) --
--------- ---------
Total Distributions ....................................... (0.02) --
--------- ---------
Net Asset Value, End of Period .................................... $ 15.87 $ 20.92
========= =========
Total Return (excludes redemption charge) ......................... (24.06)%(b) 37.27%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ................................ $ 4,631 $ 3,200
Ratio of expenses to average net assets ........................ 2.69%(c) 2.72%(c)
Ratio of net investment loss to average net assets ............. (1.90)%(c) (2.01)%(c)
Portfolio turnover(d) .......................................... 48.44% 71.62%
Average commission rate(e) ..................................... $ 0.0538 $ 0.0562
</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.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
for which commissions were charged.
See notes to financial statements
-64-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the six months For the year
ended ended December 7, 1994 to
March 31, 1997 September 30, 1996 September 30, 1995 (a)
------------------ ------------------ ----------------------
(Unaudited)
<S> <C> <C> <C>
Net Asset Value, Beginning of Period ............................ $ 21.18 $ 14.57 $ 10.00
------- ------- -------
Investment Activities
Net investment loss .......................................... (0.05) (0.17) (0.07)
Net realized and unrealized gains (losses) on investments .... (4.95) 6.78 4.64
------- ------- -------
Total from Investment Activities ........................ (5.00) 6.61 4.57
------- ------- -------
Distributions
Net realized gains ........................................... (0.02) -- --
------- ------- -------
Total Distributions ..................................... (0.02) -- --
------- ------- -------
Net Asset Value, End of Period .................................. $ 16.16 $ 21.18 $ 14.57
======= ======= =======
Total Return .................................................... (23.62)%(b) 45.37% 45.70% (b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) .............................. $33,873 $36,373 $16,962
Ratio of expenses to average net assets ...................... 1.70% (c) 1.79% 2.33% (c)
Ratio of net investment loss to average net assets ........... (0.93)%(c) (1.00)% (1.34)%(c)
Ratio of expenses to average net assets* ..................... 1.70% (c) 1.79% 2.42% (c)
Ratio of net investment loss to average net assets* .......... (0.93)%(c) (1.00)% (1.43)%(c)
Portfolio turnover(d) ........................................ 48.44% 71.62% 46.97%
Average commission rate(e) ................................... $0.0538 $0.0562 --
</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.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
for which commissions were charged.
See notes to financial statements
-65-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
INTERNATIONAL EQUITY FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
January 2, 1997
to
March 31, 1997(a)
-----------------
(Unaudited)
<S> <C>
Net Asset Value, Beginning of Period ........................................................ $ 10.00
---------
Investment Activities
Net realized and unrealized gains on investments ......................................... 0.34
---------
Total from Investment Activities .................................................... 0.34
---------
Distributions
Net investment income .................................................................... (0.03)
---------
Total Distributions ................................................................. (0.03)
---------
Net Asset Value, End of Period .............................................................. $ 10.31
=========
Total Return (excludes sales charge) ........................................................ 3.35% (b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) .......................................................... $ 184
Ratio of expenses to average net assets .................................................. 2.14% (c)
Ratio of net investment income to average net assets ..................................... 0.03% (c)
Ratio of expenses to average net assets* ................................................. 2.41% (c)
Ratio of net investment loss to average net assets* ...................................... (0.24)%(c)
Portfolio turnover(d) .................................................................... 5.61%
Average commission rate(e) ............................................................... $ 0.0555
</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.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
for which commissions were charged.
See notes to financial statements
-66-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
INTERNATIONAL EQUITY FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
January 2, 1997
to
March 31, 1997(a)
-----------------
(Unaudited)
<S> <C>
Net Asset Value, Beginning of Period ...................................... $ 10.00
-------
Investment Activities
Net investment loss .................................................... (0.01)
Net realized and unrealized gains on investments ....................... 0.34
-------
Total from Investment Activities .................................. 0.33
-------
Distributions
Net investment income .................................................. (0.02)
-------
Total Distributions ............................................... (0.02)
-------
Net Asset Value, End of Period ............................................ $ 10.31
=======
Total Return (excludes redemption charge) ................................. 3.27% (b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ........................................ $ 237
Ratio of expenses to average net assets ................................ 2.86% (c)
Ratio of net investment loss to average net assets ..................... (0.49)%(c)
Portfolio turnover(d) .................................................. 5.61%
Average commission rate(e) ............................................. $0.0555
</TABLE>
- -------------
(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.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
for which commissions were charged.
See notes to financial statements
-67-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
INTERNATIONAL EQUITY FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
January 2, 1997
to
March 31, 1997(a)
----------------------
(Unaudited)
<S> <C>
Net Asset Value, Beginning of Period ........................................... $ 10.00
----------
Investment Activities
Net realized and unrealized gains on investments ............................ 0.35
----------
Total from Investment Activities ....................................... 0.35
----------
Distributions
Net investment income ....................................................... (0.03)
----------
Total Distributions .................................................... (0.03)
----------
Net Asset Value, End of Period ................................................. $ 10.32
==========
Total Return ................................................................... 3.48%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000) ............................................. $ 39,670
Ratio of expenses to average net assets ..................................... 2.00%(c)
Ratio of net investment income to average net assets ........................ 0.08%(c)
Ratio of expenses to average net assets* .................................... 2.06%(c)
Ratio of net investment income to average net assets* ....................... 0.02%(c)
Portfolio turnover(d) ....................................................... 5.61%
Average commission rate(e) .................................................. $ 0.0555
</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.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
for which commissions were charged.
See notes to financial statements
-68-
[LOGO OF BB&T APPEARS HERE]
<PAGE>
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
SEMI-ANNUAL REPORT
To Shareholders
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, D.C. 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
March 31, 1997
=======================================
5/97
