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BB&T Mutual Funds
SEMI-ANNUAL REPORT
To Shareholders
March 31, 1998
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TABLE OF CONTENTS
Letter from the Chairman and the Investment Advisor
Page 2
Performance Report
Page 7
Statements of Assets and Liabilities
Page 14
Statements of Operations
Page 21
Statements of Changes in Net Assets
Page 25
Schedules of Portfolio Investments
Page 30
Notes to Financial Statements
Page 59
Financial Highlights
Page 72
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LETTER FROM THE CHAIRMAN AND THE INVESTMENT ADVISOR
Dear Shareholders:
We are pleased to send you this semiannual report for the six months ended
March 31, 1998, a period that was remarkable for both the treacherous turn of
events that took shape in Asia, and the seemingly unshakable resilience of U.S.
stock and bond markets.
The big news at the beginning of our fiscal year was the devastating wave of
currency devaluations, bankruptcies and equity losses that tore through the Far
East--destabilizing many countries in the region and even threatening the
financial well-being of Japan, one of the world's economic powers. The shock
waves emanating from the Asian crisis were felt around the world, and the U.S.
markets were not immune. On October 27, the Dow Jones Industrial Average
plunged a record 554 points, causing many observers to sound the death knell
for the stock market's incredible run.
But the party wasn't over. Despite continuing pressure from Asia and analysts'
warnings about slowing earnings growth, the market recovered much of its lost
ground. In fact, 1997 marked the first time in history that the Dow rose more
than 20% for each of three consecutive years. And as we write this letter in
early April, all of the market's major averages are flirting with new highs.
The news has been good for fixed-income investors, as well. If anything, the
problems in Asia spurred a "flight to quality," a stampede by bond investors
toward the relative safety and stability offered by U.S. Treasury securities.
As a result of this increased demand, long-term yields fell sharply and prices
rose significantly (yields and prices move inversely), generating handsome
gains.
AN ABUNDANCE OF GOOD NEWS FOR SHAREHOLDERS
With such dramatic movements in the world's markets over the last six months,
it's not surprising that the BB&T fund family experienced some dynamic events,
as well. Some highlights:
.The BB&T Growth and Income Fund's risk-adjusted performance earned an overall
4 star rating from Morningstar for its Trust and A Shares. The fund was rated
among 2,437 domestic equity funds for the period ending 3/31/98. Four other
funds in our family also outperformed their respective managed-fund index for
Trust and A Shares, as measured by Lipper Analytical Services.
.In October, we successfully launched six new funds, the BB&T Large Company
Growth Fund, the BB&T South Carolina Intermediate Tax-Free Fund, the BB&T Prime
Money Market Fund and three BB&T Capital Manager Funds--Growth Fund, Moderate
Growth Fund and Conservative Growth Fund. With a total of 14 separate funds
available to them, our shareholders can now take full advantage of the benefits
of a broadly diversified portfolio.
.In January, we made two key changes among our team of portfolio managers.
Steve Brennaman added the management of the North Carolina Intermediate Tax-
Free Fund to his duties, while Kevin McNair assumed responsibility for the U.S.
Treasury Money Market Fund. Steve and Kevin bring solid credentials and years
of experience to their new roles, which is good news for our shareholders.
.Throughout the period, assets continued to grow. We were gratified that our
shareholders continued to entrust substantial capital to our care. For the six
months ended March 31, 1998, BB&T's total assets under management grew to $1.68
billion from $1.23 billion. This growth continues a long-standing trend; in the
last 18 months, our fund family's assets have nearly doubled.
We also introduced our new quarterly newsletter, Sensible Investing, which was
sent to shareholders with their April statements. In this and future issues, we
will cover a wide range of investment topics and provide shareholders with
information that can help them reach their financial goals.
Finally, we ask that you consider the BB&T Mutual Fund "No-Fee IRA."+ Whether
you're considering a traditional, tax-deductible IRA, or the new Roth IRA--
which offers tax-free withdrawals--we can help you take positive steps toward
ensuring a secure retirement. And while IRAs normally get a lot of attention
during the first quarter of every year, we believe the best time to open a
retirement account is right now. For more information on how simple it is to
open and fund your IRA account, give us a call today at 1-800-228-1872. We'll
make it easy for you.
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+ "No-fee" refers to no annual maintenance fee. An IRA investment in any BB&T
mutual fund is subject to applicable sales charges and fund management fees.
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WILL ASIA SINK? WILL U.S. MARKETS REMAIN BUOYANT?
Looking ahead at the financial markets over the next six months, we see reason
for both caution and optimism. We expect the fallout from Asia to continue for
some time, and we agree with the consensus view that the earnings growth of
many U.S. companies will slow in 1998 as a result of slack markets throughout
the Far East. Such a decline could certainly have an adverse effect on stock
prices, which are already richly valued (some would say overvalued).
On the other hand, the U.S. economy promises to deliver continued growth,
though at a pace less torrid than we've seen in recent years. Also, inflation
continues to be remarkably benign--employment and producer price index data
released in early April confirmed the absence of any inflationary pressure--
which bodes well for both stocks and bonds. And while many observers predicted
earlier that 1998 would not be another banner year for stocks--such predictions
also were made at the start of 1996 and 1997, two outstanding years for
equities--the market has pretty much ignored the warnings of such analysts, and
continued its climb to new heights. It's inevitable that, at some point, stocks
will experience a significant correction, but trying to time such an event is
pure folly.
Our conclusions? As always, we are committed to remaining as fully invested as
possible. We are not market timers; we are investors, continually searching for
the best stocks and bonds we can find. This discipline has served our
shareholders, and us, very well in recent years, and we believe it's the right
course for any long-term investment program.
We thank you for your support and stand ready to answer any questions you might
have about the funds and your investment needs.
/s/ Walter B. Grimm
Walter B. Grimm
Chairman
BB&T Mutual Funds Group
/s/ David C. McMahon
David C. McMahon
Executive Vice President and Chief Investment Officer
Branch Banking and Trust Company
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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
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.
/1/Morningstar proprietary ratings reflect risk-adjusted performance through
3/31/98. The ratings are subject to change every month. Morningstar ratings are
calculated from a fund's 3-, 5-, and 10-year returns (with fee adjustments) in
excess of 90-day Treasury Bill returns and a risk factor that reflects fund
performance below 90-day Treasury Bill returns. The BB&T Growth and Income
Stock Fund Trust shares received 4 stars from among 1,363 domestic equity funds
for the 5-year period ending 3/31/98. The Fund's A-shares received 4-stars from
among 1,363 domestic equity funds for the 5-year period ending 3/31/98. The
Fund received 5 stars for Trust shares for the 3-year period ending 3/31/98
from among 2,437 domestic equity funds. The Fund's A shares received 4-stars
from among 2,437 domestic equity funds for the 3-year period ending 3/31/98.
Ten percent of the funds in an investment category receive five stars, and the
next 22.5% receive four stars.
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THE BB&T INTERNATIONAL EQUITY FUND/1/
For the six months ended March 31, 1998, the Fund produced a total return of
8.31% (Trust Shares),/2/ and 8.17% (A Shares),/2/ outperforming the Lipper
International Fund Average,/3/ which gained 6.11%.
This exceptionally volatile time--after all, this was when international
investors became fully aware of the meltdown in Asia--could be characterized by
two distinct periods. In the fourth quarter of 1997, global markets overall
were quite flat, with Asia's weakness dragging down the broader international
indices. But then, in the first quarter of 1998, we saw something of a
recovery. While Asia's economies certainly are not out of the woods, investors
realized that some positive action was being taken by the International
Monetary Fund and others.
CAUTIOUS IN ASIA, BULLISH ON EUROPE
We believe that, in 1998, economic growth in Asia will be depressed and earnings
will be virtually nonexistent. For some time, we've kept the Fund's exposure to
the Far East at very modest levels, which protected us during last year's
downturn. We've also benefited from the consistent, steady performance of our
European holdings, especially those from countries such as Italy, Spain and
France. The economies of these and other European nations have demonstrated
good, solid growth, with low inflation and falling interest rates.
Therefore, while we remain underweighted in Japan and the rest of Asia, we are
overweighted in Europe, where we believe the most promising opportunities are to
be found. As of March 31, 1998, approximately 43% of the portfolio's holdings
were invested in Continental Europe, 25.3% in the United Kingdom, 12.1% in
Japan, 5.5% in other Pacific Basin countries, 8.5% in the world's emerging
markets and 6.3% in cash and cash equivalents./4/
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Average Annual Total Return+
As of 3/31/98
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Inception Since
Class Date 6 Month 1 Year Inception
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Class A Shares* 1/2/97 3.29% 12.74% 13.15%
Class B Shares** 1/2/97 2.72% 13.37% 13.64%
Trust Shares 1/2/97 8.31% 18.63% 17.97%
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* 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.
The top five equity holdings in the Fund were Lloyds TSB Group PLC (2.0% of the
portfolios assets), ING Groupe N.V. (1.9%), Telefonica de Espana (1.8%),
Novartis AG (1.8%) and Glaxo Wellcome PLC (1.7%).
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/1/International investing involves increased risk and volatility.
/2/For the Fund's total return with sales charges, see the performance box
above.
/3/The Lipper International Fund Average represents the average performance of
a universe of 30 actively managed international funds.
/4/The composition of the Fund's portfolio is subject to change.
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THE BB&T SMALL COMPANY GROWTH FUND/1/
For the six months ended March 31, 1998, the Fund produced a total return of -
1.35% (Trust Shares)./2/ For the same period, the Fund's A Shares produced a
total return of -1.49%./2/ The fourth quarter of 1997, highlighted by the
October decline that crushed many stocks--particularly many of the technology
issues we favored--was a difficult time. Small stocks then staged a strong
recovery and, by and large, performed very well during the first three months
of 1998.
ROTATING INTO THE CONSUMER SECTOR
Moving into 1998, we've continued to lighten up on technology. We've been seeing
renewed interest in selected restaurant issues, some wine stocks and health-food
retailers--companies such as Whole Foods Market (1.5% of the portfolio's
assets), Wild Oats Markets (0.8%) and Gardenburger (0.1%), which makes a meat-
substitute hamburger.
Over the next six months, we believe performance in the small-stock sector will
be determined by what the broader market does. If the market can continue to
move upward, we believe there will come a point when smaller stocks will draw
more investor attention. On the other hand, if the market goes through a
corrective phase--which is certainly possible--investors may shy away from small
caps. However, when such a correction is over, we believe small companies may
present valuations that are so compelling that investors will be likely to put
more money in small stocks. On a relative valuation basis, small companies look
more attractive than the overall market.
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Average Annual Total Return+
As of 3/31/98
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Inception Since
Class Date 6 Month 1 Year Inception
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Class A Shares* 12/7/94 -5.92% 36.72% 26.81%
Class B Shares** 1/2/96 -6.69% 38.36% 18.15%
Trust Shares 12/7/94 -1.35% 43.58% 28.95%
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* 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 would have been lower.
As of March 31, 1998, the top five equity holdings in the Fund were Saville
Systems PLC ADR (2.4% of the portfolio's assets), CBT Group PLC ADR (2.1%),
Linens "N Things, Inc. (1.9%), Theragenics Corp. (1.9%) and Ciber, Inc.
(1.7%)./3/
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/1/Small-capitalization companies typically carry additional risks, since
smaller companies generally have a higher risk of failure and, by definition,
are not as well established as "blue-chip" companies. Historically, small-
company stocks have experienced a greater degree of market volatility than
stocks on average.
/2/For the Fund's total return with sales charges, see the performance box
above.
/3/The composition of the Fund's portfolio is subject to change.
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THE BB&T LARGE COMPANY GROWTH FUND
The BB&T Large Company Growth Fund was opened to investors on October 3, 1997.
For the period ended March 31, 1998, which represents just under six months of
performance, the Fund produced a total return of 7.63% (Trust Shares). For the
same period, the Fund's A Shares produced a total return of 7.37%./1/
The Fund follows a quantitative approach to investing, mostly in the type of
large-capitalization stocks that have led the market in recent years. The Fund
may be most appropriate for long-term investors whose primary goal is capital
appreciation, with less concern about current income.
THE FUEL DRIVING THE LARGE-CAP RALLY
It's our opinion that the money that keeps pouring into large-cap stocks is
being driven by 401(k) investing and the graying of the baby boom generation.
We're seeing a market that's on fire because people keep adding fuel to it. We
believe another reason large-cap stocks have continued to climb is that there
are a number of huge mutual funds whose managers need to stay fully invested;
their size precludes their buying the shares of smaller, less-liquid companies,
so they put their money into the larger issues.
We are well positioned to take advantage of the current market environment, in
which the large-cap sector has remained the darling of investors. About 73% of
the portfolio is invested in stocks with capitalizations of $7 billion or
more./2/ Typically, our large-cap growth orientation leads us to look for value
in such sectors as health care, technology and finance. We buy mostly household
names, the kinds of companies with which many investors are familiar.
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Aggregate Total Return+
As of 3/31/98
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Inception Since
Class Date Inception
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Class A Shares* 10/3/97 2.55%
Class B Shares** 10/3/97 2.18%
Trust Shares 10/3/97 7.63%
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* 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.
As of March 31, 1998, the top five equity holdings in the Fund were General
Electric Co. (2.8% of the portfolio's assets), BellSouth (2.5%), Merck & Co.,
Inc. (2.4%), Bristol-Myers Squibb Co. (2.4%) and Lucent Technologies (2.3%).
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/1/ For the Fund's total return with sales charges, see the performance box
above.
/2/ The composition of the Fund's portfolio is subject to change.
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PERFORMANCE REPORT
THE BB&T GROWTH AND INCOME STOCK FUND
For the six months ended March 31, 1998, the Fund produced a total return of
13.38% (Trust Shares)/1/ and 13.27% (A Shares),/1/ outperforming the Lipper
Growth and Income Fund Average, which rose 12.57%./2/ Our performance was
particularly outstanding on a risk-adjusted basis, as the Fund delivered very
strong returns while experiencing less volatility than the market as a whole.
AN EMPHASIS ON RELATIVE VALUE
While we don't make major sector bets, the Fund remains overweighted in mid-cap
issues. This allocation is due to the fact that in our search for relative
value, we discovered the most attractively valued stocks to be in the mid-cap
range. The Fund's average market capitalization is about half that of the
Standard & Poor's 500/3/; our yield is significantly higher, while the average
price-to-book and price-to-earnings ratios of our holdings are lower. These are
some of the valuation characteristics that have led us in the past to stocks
with meaningful, long-term growth potential./4/
Our diversified value investment strategy emphasizes reasonably priced stocks of
financially strong, large to mid-sized companies. This fully invested strategy
yields relatively low turnover, reflecting our three- to five-year investment
horizon.
[GRAPH APPEARS HERE]
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Average Annual Total Return+
As of 3/31/98
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Inception Since
Class Date 6 Month 1 Year 5 Year Inception
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Class A Shares* 10/9/92 8.18% 36.18% 18.67% 19.06%
Class B Shares** 1/2/96 7.80% 37.57% N/A 26.59%
Trust Shares 10/9/92 13.38% 42.88% 20.03% 20.36%
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* 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.
As of March 31, 1998, the top five equity holdings in the Fund were SAFECO
Corp. (2.5x% of the portfolio's assets), Anheuser-Busch Co. (2.4%), SBC
Communications, Inc. (2.4%), Johnson & Johnson (2.4%) and SUPERVALU, Inc.
(2.3%).
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/1/For the Fund's total return with sales charges, see the performance box
above.
/2/The Lipper Growth and Income Fund Average represents the average performance
of a universe of 30 actively managed growth and income funds.
/3/The S&P 500 Stock Index is an unmanaged index generally representative of the
U.S. stock market.
/4/The composition of the Fund's portfolio is subject to change.
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THE BB&T BALANCED FUND
For the six months ended March 31, 1998, the Fund produced a total return of
11.90% (Trust Shares)/1/ and 11.74% (A Shares),/1/ outperforming the Lipper
Balanced Fund Average, which rose 9.47%./2/ The period was marked by a great
deal of volatility in both stocks and bonds, though both markets moved solidly
ahead for the period as a whole.
This kind of volatility is not surprising. Investors need to be prepared for
such short-term fluctuations, which can be tempered to some degree by the
asset-allocation strategy of a balanced fund. We expect more volatility in both
stocks and bonds during 1998, and we have positioned the Fund to take advantage
of opportunities that can emerge in that type of environment.
PURSUING GROWTH WHILE MODERATING RISK
During the last six months, we allocated a greater portion of the Fund to
equities, believing that it was a good time to take a prudent measure of risk in
the stock market. We also increased the average maturity of the portfolio in
order to increase the yield slightly. For example, we've purchased Federal Farm
Credit Bureau bonds, due 2004, which provide a yield about 30 basis points
(0.30%) higher than Treasuries of comparable length. Overall, our fixed-income
positions provide a nicely laddered portfolio, with good liquidity.
As of March 31, 1998, approximately 60.3% of the portfolio's holdings were
invested in stocks, 33.5% in fixed-income holdings and 5.8% in cash and cash
equivalents./3/ The Fund's top five equity holdings were Xerox Corp. (1.6% of
the portfolio's assets), SBC Communications, Inc. (1.5%), Banc One Corp. (1.4%),
J.P. Morgan & Co. (1.4%) and Ameritech Corp. (1.3%). The Fund's fixed-income
holdings were invested in U.S. Treasury and mortgage-backed securities. The
average maturity of the portfolio was approximately 5.8 years; the average
credit quality was AAA.
[GRAPH APPEARS HERE]
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Average Annual Total Return+
As of 3/31/98
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Inception Since
Class Date 6 Month 1 Year Inception
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Class A Shares* 7/1/93 6.73% 23.65% 12.66%
Class B Shares** 1/2/96 6.33% 24.48% 15.89%
Trust Shares 7/1/93 11.90% 29.73% 13.99%
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* 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.
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/1/For the Fund's total return with sales charges, see the performance box
above.
/2/The Lipper Balanced Fund Average represents the average performance of a
universe of 30 actively managed balanced funds.
/3/The composition of the Fund's portfolio is subject to change.
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THE BB&T CAPITAL MANAGER FUNDS
Growth Fund
Moderate Growth Fund
Conservative Growth Fund
The BB&T Capital Manager Funds were opened to investors on October 3, 1997. For
the period ended March 31, 1998, which represents just under six months of
performance, the three portfolios produced these total returns:
TRUST SHARES/1/ A SHARES/1/
.Growth Fund: 7.61% .Growth 7.88%
.Moderate Growth Fund: 7.06% .Moderate 6.29%
.Conservative Growth Fund: 6.23% .Conservative 4.39%
[GRAPHS APPEAR HERE]
The BB&T Capital Manager
Growth Fund
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Aggregate Total Return+
As of 3/31/98
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Inception Since
Class Date Inception
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Class A Shares* 1/29/98 3.01%
Trust Shares 10/2/97 7.61%
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* Reflects 4.50% Maximum Sales Charge
The BB&T Capital Manager
Moderate Growth Fund
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Aggregate Total Return+
As of 3/31/98
- --------------------------------------------------------------------------------
Inception Since
Class Date Inception
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Class A Shares* 1/29/98 1.52%
Trust Shares 10/2/97 7.06%
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* Reflects 4.50% Maximum Sales Charge
The BB&T Capital Manager
Conservative Growth Fund
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Aggregate Total Return+
As of 3/31/98
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Inception Since
Class Date Inception
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Class A Shares* 1/29/98 -0.35%
Trust Shares 10/2/97 6.32%
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* Reflects 4.50% 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.
OUR ASSET-ALLOCATION FORMULAS DELIVERED SOLID RETURNS
During the period, the three funds performed exactly as expected. Last fall,
when the market turned lower, the Conservative Growth Fund significantly
outperformed the more aggressive Moderate Growth and Growth Funds, and when the
market recovered its losses and bulled ahead, the more aggressive funds turned
in the better performances.
The Conservative Growth Fund is providing more dividend income, which is what
shareholders would expect, and has been less volatile. To date, this has proven
to be an option for shareholders who are close to retirement or who have begun
to draw off retirement income.
By having a greater exposure to the BB&T International Equity Fund, the more
aggressive funds have participated in the resurgence we saw in many
international markets during the first quarter of 1998. These two Capital
Manager funds have also benefited from their greater exposure to the BB&T
Growth & Income and Large Company Growth funds--which invest primarily in
equities./2/
As of March 31, 1998, the funds were in line with their asset-allocation target
exposures. We believe it makes sense to assume each portfolio's target level of
risk, but not to take extra risk. Going forward, we intend to actively shift
each portfolio's weightings to take advantage of opportunities in the market.
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/1/For the Funds' total returns with sales charges, see the performance boxes
above.
/2/The composition of the Funds' portfolios are subject to change.
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THE BB&T NORTH CAROLINA INTERMEDIATE TAX-FREE FUND/1/
For the six months ended March 31, 1998, the Fund produced a total return of
2.62% (Trust Shares)./2/ For the same period, the Fund's A shares produced a
total return of 2.54%./2/
The Fund's yield declined during the last 10 weeks of the period, due to a
strong run-up in bond prices (prices and yields move inversely). While
shareholders may be somewhat concerned about the declining yield, they should
understand that their investment has actually appreciated in value, as the
prices of our holdings have risen.
TAKING STEPS TO INCREASE OUR YIELD
During the last 90 days of the period, we extended the portfolio's maturity,
while takings steps not to upset the Fund's yield. Our intent has been to fully
capture the movement of the muni bond market going forward and boost our coupon
rate. We believe that we're in a stable interest rate environment, at least as
far as the Fed Funds rate is concerned. We don't anticipate the Federal Reserve
Board changing interest rates in the short term, though we believe they may take
action some time in 1999.
Our holdings are most concentrated in the city of Charlotte and the
Charlotte/Mecklinburg area. The rest of the portfolio is spread out fairly
evenly among the other counties of North Carolina.
[GRAPH APPEARS HERE]
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Average Annual Total Return+
As of 3/31/98
- --------------------------------------------------------------------------------
Inception Since
Class Date 6 Month 1 Year 5 Year Inception
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Class A Shares* 10/16/92 0.49% 5.15% 3.90% 4.03%
Trust Shares 10/16/92 2.62% 7.42% 4.47% 4.54%
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* 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.
As of March 31, 1998, the Fund's entire portfolio was invested in debt
instruments issued by government entities in the state of North Carolina.
Approximately 74.0% of our holdings were general obligation bonds, 24.4% were
revenue bonds and 1.6% was in cash and cash equivalents. The average maturity
of our holdings was 5.8 years, and the average credit quality was AAA./3/
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/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.
Regional investing may entail additional risks since investments are limited
to one geographical area.
/2/For the Fund's total return with sales charges, see the performance box
above.
/3/The composition of the Fund's portfolio is subject to change.
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[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
THE BB&T SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND/1/
The BB&T South Carolina Intermediate Tax-Free Fund was opened to investors on
October 3, 1997. For the period ended March 31, 1998, which represents just
under six months of performance, the Fund produced a total return of 3.44%
(Trust Shares)./2/ For the same period, the Fund's A shares produced a total
return of 3.42%./2/
For investors looking for tax-free income, a mutual fund such as ours offers
advantages not available to most investors who invest in individual bonds.
First, the benefits of diversification; our holdings are spread out across the
state of South Carolina, in a variety of issues. Second, the breadth of our
bond purchases can be spread out, cost-effectively, over a longer period of
time. Third, pricing power; we buy new issues in larger lots than an individual
investor can, leveraging the Fund's pricing power.
TIGHT SUPPLY TRANSLATED TO LOWER YIELDS
The majority of new South Carolina muni bond issues that came to market in 1997
were revenue bonds, and the overall supply was unusually limited. Through the
first quarter of 1998, supply has remained tight. When new issues have come to
market, they have not remained available for very long, and partly because of
this strong demand, yields have come down over the last 12 months. The state and
counties have not been issuing a lot of debt, a situation that results in high
demand, high prices and lower yields.
As of March 31, 1998, the Fund's entire portfolio was invested in debt
instruments issued by government entities in the state of South Carolina.
Approximately 66% of our holdings were revenue bonds, and 30% were general
obligation bonds. The average maturity of our holdings was 6.0 years, and the
average credit quality was AAA.
[GRAPH APPEARS HERE]
- --------------------------------------------------------------------------------
Aggregate Total Return+
As of 3/31/98
- --------------------------------------------------------------------------------
Inception Since
Class Date Inception
- --------------------------------------------------------------------------------
Class A Shares* 10/19/97 1.39%
Trust Shares 10/19/97 3.44%
- --------------------------------------------------------------------------------
* 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.
- --------------------------------------------------------------------------------
/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.
Regional investing may entail additional risks since investments are limited
to one geographical area.
/2/For the Fund's total return with sales charges, see the performance box
above.
/3/The composition of the Fund's portfolio is subject to change.
-11-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
THE BB&T INTERMEDIATE U.S. GOVERNMENT BOND FUND
THE BB&T SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
For the six months ended March 31, 1998, the Intermediate U.S. Government Bond
Fund produced a total return of 4.57% (Trust Shares)/1/ and 4.43% (A
Shares),/1/ outperforming the Lipper Intermediate U.S. Government Bond Fund
Average,/2/ which rose 3.91%. The Short-Intermediate U.S. Government Income
Fund produced a total return of 3.20% (Trust Shares)/1/ and 3.07% (A
Shares),/1/ beating the Lipper Short-Intermediate U.S. Government Bond Fund
Average,/2/ which gained 3.04%.
The turmoil in Asia proved to be beneficial to the Treasury bond market, in
which our two funds participate. Investors seeking greater safety and stability
poured money into U.S. Treasury securities, boosting the prices of those
securities.
[GRAPHS APPEAR HERE]
The BB&T Intermediate
U.S. Government Bond Fund
- --------------------------------------------------------------------------------
Average Annual Total Return+
As of 3/31/98
- --------------------------------------------------------------------------------
Inception Since
Class Date 6 Month 1 Year 5 Year Inception
- --------------------------------------------------------------------------------
Class A Shares* 10/9/92 -0.23% 6.24% 4.70% 5.22%
Class B Shares** 1/2/96 -0.95% 6.47% N/A 2.53%
Trust Shares 10/9/92 4.57% 11.44% 5.95% 6.35%
- --------------------------------------------------------------------------------
* Reflects 4.50% Maximum Sales Charge
** Reflects CDSC of 5.00%
The BB&T Short-Intermediate
U.S. Government Income Fund
- --------------------------------------------------------------------------------
Average Annual Total Return+
As of 3/31/98
- --------------------------------------------------------------------------------
Inception Since
Class Date 6 Month 1 Year 5 Year Inception
- --------------------------------------------------------------------------------
Class A Shares* 11/30/92 1.00% 5.35% 4.27% 4.79%
Trust Shares 11/30/92 3.20% 7.81% 4.96% 5.43%
- --------------------------------------------------------------------------------
* 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.
A MOVE TOWARD CORPORATE BONDS AND LONGER MATURITIES
We added to our positions in corporate debt instruments throughout the last six
months, in an effort to take advantage of some very attractive opportunities.
That strategy has paid off, with corporate paper outperforming Treasury debt
during the first quarter of 1998. We also lengthened the maturities of our
portfolios, consistent with our belief that interest rates would decline--as
they did dramatically in January.
As of March 31, 1998, the estimated average maturity of the Intermediate U.S.
Government Bond Fund was 9.4 years. Sixty-five percent of the portfolio was
invested in securities issued by the U.S. Treasury and agencies, 20% in
corporate debt and 15% in mortgage-backed securities. The portfolio's average
credit quality was AAA./3/
For the Short-Intermediate U.S. Government Income Fund, the estimated average
maturity was 4.8 years. Seventy percent of the portfolio was invested in
securities issued by the U.S. Treasury and agencies, 10% in corporate debt and
19% in mortgage-backed securities. The portfolio's average credit quality was
AAA.
- --------------------------------------------------------------------------------
/1/For the Funds' total returns with sales charges, see the performance boxes
above.
/2/The Lipper Intermediate U.S. Government Bond Fund Average represents the
average performance of a universe of 30 actively managed intermediate U.S.
Government bond funds. The Lipper Short-Intermediate U.S. Government Bond
Fund Average represents the average performance of a universe of 30 actively
managed short-intermediate U.S. Government bond funds.
/3/The composition of the Fund's portfolio is subject to change.
-12-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
THE BB&T PRIME MONEY MARKET FUND/1/
THE BB&T U.S. TREASURY MONEY MARKET FUND/1/
The BB&T Prime Money Market Fund was opened to investors on October 1, 1997.
For the period ended March 31, 1998, which represents just under six months of
performance, the Fund produced a total return of 2.59% (Trust Shares) with a 7-
day yield of 5.11%. For the full six months ended March 31, 1998, the U.S.
Treasury Money Market Fund produced a total return of 2.48% (Trust Shares). For
the same periods, the Funds' A shares provided total returns of 2.43% (7-day
yield 4.86%) and 2.35% (7-day yield 4.70%), respectively.
During the period, the Federal Reserve Board's Open Market Committee (FOMC)
left the Federal Funds rate unchanged at 5.5%. With this key rate remaining
static, money market yields displayed little movement. Although the threat of
inflation could spark a rise in interest rates, ongoing economic problems in
Japan and the rest of Asia--and the effect they could have on the earnings
growth of companies in the U.S.--have encouraged the FOMC to assume a "wait-
and-see" posture in the near term.
As of March 31, 1998, approximately 72.2% of the Prime Money Market Fund's
portfolio was invested in commercial paper, 5.1% in repurchase agreements
("repos"), 17.8% in variable rate notes and 5.1% in certificates of deposit.
The average maturity of the Fund's holdings was 44 days, and the average credit
quality was AAA./1/
As of March 31, 1998, approximately 51% of the U.S. Treasury Money Market
Fund's portfolio was invested in repurchase agreements and 49% in U.S. Treasury
securities. The average maturity of the Fund's holdings was 42 days, and the
average credit quality was AAA./3/
- --------------------------------------------------------------------------------
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.
/1/The composition of the Fund's portfolio is subject to change.
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.
Some of the fees of the BB&T Mutual Funds are currently being waived, resulting
in higher total returns than would occur if the full fees were charged.
This literature is authorized for distribution only when preceded or
accompanied by a prospectus.
-13-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE] 5/98
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
PRIME U.S. TREASURY SHORT-INTERMEDIATE INTERMEDIATE U.S.
MONEY MARKET MONEY MARKET U.S. GOVERNMENT GOVERNMENT
FUND FUND INCOME FUND BOND FUND
------------ ------------- ------------------ -----------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Amortized cost
$55,565,697;
$140,572,796;
$153,865,988; and
$175,741,642,
respectively)........... $55,565,697 $140,572,796 $154,492,577 $178,592,896
Repurchase agreements,
at cost................. 2,982,000 143,352,949 -- --
----------- ------------ ------------ ------------
Total investments.... 58,547,697 283,925,745 154,492,577 178,592,896
Cash.................... 780 -- -- --
Interest receivable..... 108,283 1,099,967 2,193,097 1,939,616
Receivable for capital
shares issued........... -- 533 -- --
Unamortized organization
costs................... 5,220 -- -- --
Prepaid expenses and
other................... 73,596 98,625 26,336 29,048
----------- ------------ ------------ ------------
Total Assets......... 58,735,576 285,124,870 156,712,010 180,561,560
----------- ------------ ------------ ------------
LIABILITIES:
Dividends payable....... 255,468 1,176,609 715,112 831,919
Payable for capital
shares redeemed......... -- 42,534 -- 52
Accrued expenses and
other payables:
Investment advisory
fees................... 15,010 72,440 66,214 77,293
Administration fees.... 1,169 5,762 3,214 4,934
Distribution fees--
Class A................ 148 7,695 978 892
Distribution fees--
Class B................ -- 969 -- 705
Other.................. 15,877 36,235 13,241 31,088
----------- ------------ ------------ ------------
Total Liabilities.... 287,672 1,342,244 798,759 946,883
----------- ------------ ------------ ------------
NET ASSETS:
Capital................. 58,447,904 283,782,380 156,961,427 177,086,456
Undistributed
(distributions in excess
of) net investment
income.................. -- -- 75,292 (10,106)
Net unrealized
appreciation
(depreciation) on
investments............. -- -- 626,589 2,851,254
Accumulated
undistributed net
realized gains (losses)
on investment
transactions............ -- 246 (1,750,057) (312,927)
----------- ------------ ------------ ------------
Net Assets........... $58,447,904 $283,782,626 $155,913,251 $179,614,677
=========== ============ ============ ============
</TABLE>
Continued
-14-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
PRIME U.S. TREASURY SHORT-INTERMEDIATE INTERMEDIATE U.S.
MONEY MARKET MONEY MARKET U.S. GOVERNMENT GOVERNMENT
FUND FUND INCOME FUND BOND FUND
------------ ------------- ------------------ -----------------
<S> <C> <C> <C> <C>
Net Assets
Class A................ $ 2,125,868 $ 36,914,674 $ 4,478,722 $ 4,208,943
Class B................ -- 1,104,597 -- 902,306
Trust Class............ 56,322,036 245,763,355 151,434,529 174,503,428
----------- ------------ ------------ ------------
Total.................. $58,447,904 $283,782,626 $155,913,251 $179,614,677
=========== ============ ============ ============
Outstanding units of
beneficial interest
(shares)
Class A................ 2,125,868 36,914,736 457,097 420,604
Class B................ -- 1,104,596 -- 90,449
Trust Class............ 56,322,036 245,763,141 15,443,187 17,414,928
----------- ------------ ------------ ------------
Total.................. 58,447,904 283,782,473 15,900,284 17,925,981
=========== ============ ============ ============
Net asset value
Class A--redemption
price per share........ $ 1.00 $ 1.00 $ 9.80 $ 10.01
Class B--offering price
per share*............. $ -- $ 1.00 $ -- $ 9.98
Trust Class--offering
and redemption price
per share.............. $ 1.00 $ 1.00 $ 9.81 $ 10.02
----------- ------------ ------------ ------------
Maximum Sales Charge--
Class A................. N/A N/A 2.00% 4.50%
=========== ============ ============ ============
Maximum Offering Price
(100%/(100%-Maximum
Sales Charge) of net as-
set value adjusted to
nearest cent) per
share--Class A.......... $ 1.00(a) $ 1.00(a) $ 10.00 $ 10.48
=========== ============ ============ ============
Maximum Redemption Price
(100%/(100%-Maximum Re-
demption Charge) of net
asset value adjusted to
nearest cent) per
share--Class B*......... $ N/A $ 1.00 $ N/A $ 10.51
=========== ============ ============ ============
</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 Prime Money Market
Fund and the U.S. Treasury Money Market Fund.
See notes to financial statements
-15-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
NORTH CAROLINA SOUTH CAROLINA GROWTH AND
INTERMEDIATE INTERMEDIATE INCOME BALANCED
TAX-FREE FUND TAX-FREE FUND STOCK FUND FUND
-------------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $81,588,966;
$19,309,102;
$294,250,504; and
$112,802,824, respec-
tively)................. $84,414,879 $19,665,076 $459,327,056 $143,260,866
Interest and dividends
receivable.............. 1,243,381 226,064 570,669 944,006
Receivable for capital
shares issued........... -- -- 18,482 1,133
Receivables for invest-
ments sold.............. 996,720 -- -- --
Unamortized organization
costs................... -- 17,923 -- --
Prepaid expenses........ 20,626 17,041 88,180 35,905
----------- ----------- ------------ ------------
Total Assets......... 86,675,606 19,926,104 460,004,387 144,241,910
----------- ----------- ------------ ------------
LIABILITIES:
Dividends payable....... 304,709 64,394 497,358 337,126
Payable for capital
shares redeemed......... -- -- 1,750 2,427
Payable for investments
purchased............... 1,881,765 497,545 568,311 --
Accrued expenses and
other payables:
Investment advisory
fees................... 35,608 6,577 190,925 59,903
Administration fees.... 1,736 398 12,545 3,932
Distribution fees--
Class A................ 1,278 33 8,665 5,011
Distribution fees--
Class B................ -- -- 21,313 8,876
Other.................. 9,367 4,183 37,473 10,595
----------- ----------- ------------ ------------
Total Liabilities.... 2,234,463 573,130 1,338,340 427,870
----------- ----------- ------------ ------------
NET ASSETS:
Capital................. 81,427,634 18,935,603 281,973,617 111,102,492
Net unrealized apprecia-
tion (depreciation) on
investments............. 2,825,913 355,974 165,076,552 30,458,042
Accumulated
undistributed net
realized gains (losses)
on investment
transactions............ 187,596 61,397 11,615,878 2,253,506
----------- ----------- ------------ ------------
Net Assets............. $84,441,143 $19,352,974 $458,666,047 $143,814,040
=========== =========== ============ ============
</TABLE>
Continued
-16-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
NORTH CAROLINA SOUTH CAROLINA GROWTH AND
INTERMEDIATE INTERMEDIATE INCOME BALANCED
TAX-FREE FUND TAX-FREE FUND STOCK FUND FUND
-------------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
Net Assets
Class A................ $10,048,334 $ 258,228 $ 41,935,866 $ 24,104,371
Class B................ -- -- 26,592,361 10,960,405
Trust Class............ 74,392,809 19,094,746 390,137,820 108,749,264
----------- ----------- ------------ ------------
Total................ $84,441,143 $19,352,974 $458,666,047 $143,814,040
=========== =========== ============ ============
Outstanding units of
beneficial interest
(shares)
Class A................ 974,054 25,258 1,993,207 1,646,779
Class B................ -- -- 1,267,887 752,406
Trust Class............ 7,209,481 1,878,560 18,503,647 7,445,190
----------- ----------- ------------ ------------
Total................ 8,183,535 1,903,818 21,764,741 9,844,375
=========== =========== ============ ============
Net asset value
Class A--redemption
price per share........ $ 10.32 $ 10.22 $ 21.04 $ 14.64
Class B--offering
price per share*....... $ -- $ -- $ 20.97 $ 14.57
Trust Class--offering
and redemption price
per share.............. $ 10.32 $ 10.17 $ 21.08 $ 14.61
=========== =========== ============ ============
Maximum Sales Charge--
Class A................. 2.00% 2.00% 4.50% 4.50%
=========== =========== ============ ============
Maximum Offering Price
(100%/(100%-Maximum
Sales Charge) of net as-
set value adjusted to
nearest cent) per
share--Class A.......... $ 10.53 $ 10.43 $ 22.03 $ 15.33
=========== =========== ============ ============
Maximum Redemption Price
(100%/(100%-Maximum
Redemption Charge) of
net asset value adjusted
to nearest cent) per
share--Class B*......... $ N/A $ N/A $ 22.07 $ 15.34
=========== =========== ============ ============
</TABLE>
- ----
* Redemption price per share (Class B) varies by length of time shares are
held.
See notes to financial statements
-17-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
LARGE COMPANY SMALL COMPANY INTERNATIONAL CAPITAL MANAGER
GROWTH GROWTH EQUITY CONSERVATIVE
FUND FUND FUND GROWTH FUND
------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $41,487,436;
$73,358,229;
$66,603,958; and
$22,441,634 respective-
ly)..................... $54,675,533 $96,212,691 $75,815,966 $23,092,089
Cash.................... -- 817 125,078 --
Interest and dividends
receivable.............. 45,503 1,662 190,237 71,126
Receivables for invest-
ments sold.............. -- 2,127,963 433,093 --
Tax reclaim receivable.. -- -- 44,088 --
Unamortized organization
costs................... 17,600 -- -- 10,332
Foreign currency (Cost
$16,434)................ -- -- 16,415 --
Prepaid expenses........ 35,111 60,787 28,009 15,164
----------- ----------- ----------- -----------
Total Assets......... 54,773,747 98,403,920 76,652,886 23,188,711
----------- ----------- ----------- -----------
LIABILITIES:
Dividends payable....... 73,467 -- 95,110 182,776
Payable for capital
shares redeemed......... -- 317 -- --
Payable for investments
purchased............... 94,875 768,866 1,044,785 --
Unrealized foreign cur-
rency losses............ -- -- 5,023 --
Accrued expenses and
other payables:
Investment advisory
fees................... 22,508 80,218 62,017 976
Administration fees.... 1,481 2,623 2,078 158
Distribution fees--
Class A................ 95 2,614 240 --
Distribution fees--
Class B................ 744 8,159 1,427 --
Other.................. 23,323 17,474 56,448 4,650
----------- ----------- ----------- -----------
Total Liabilities.... 216,493 880,271 1,267,128 188,560
----------- ----------- ----------- -----------
NET ASSETS:
Capital................. 37,874,881 72,916,956 66,044,185 22,006,792
Undistributed net in-
vestment income (loss).. -- (535,519) (7,423) 560
Net unrealized
appreciation
(depreciation) on
investments and assets
and liabilities
denominated in foreign
currencies.............. 13,188,097 22,854,462 9,212,284 650,455
Accumulated
undistributed net
realized gains (losses)
on investment and
foreign currency
transactions............ 3,494,276 2,287,750 136,712 342,344
----------- ----------- ----------- -----------
Net Assets........... $54,557,254 $97,523,649 $75,385,758 $23,000,151
=========== =========== =========== ===========
</TABLE>
Continued
-18-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
LARGE COMPANY SMALL COMPANY INTERNATIONAL CAPITAL MANAGER
GROWTH GROWTH EQUITY CONSERVATIVE
FUND FUND FUND GROWTH FUND
------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
Net Assets
Class A................ $ 569,034 $12,105,016 $ 1,231,189 $ 5,881
Class B................ 1,163,135 10,054,015 1,742,133 --
Trust Class............ 52,825,085 75,364,618 72,412,436 22,994,270
----------- ----------- ----------- -----------
Total................ $54,557,254 $97,523,649 $75,385,758 $23,000,151
=========== =========== =========== ===========
Outstanding units of
beneficial interest
(shares)
Class A................ 53,668 534,624 103,515 563
Class B................ 109,702 451,857 147,119 --
Trust Class............ 4,976,400 3,296,574 6,066,485 2,200,101
----------- ----------- ----------- -----------
Total................ 5,139,770 4,283,055 6,317,119 2,200,664
=========== =========== =========== ===========
Net asset value
Class A--redemption
price per share........ $ 10.60 $ 22.64 $ 11.89 $ 10.45
Class B--offering
price per share*....... $ 10.60 $ 22.25 $ 11.84 $ --
Trust Class--offering
and redemption price
per share.............. $ 10.62 $ 22.86 $ 11.94 $ 10.45
=========== =========== =========== ===========
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.......... $ 11.10 $ 23.71 $ 12.45 $ 10.94
=========== =========== =========== ===========
Maximum Redemption Price
(100%/(100%-Maximum
Redemption Charge) of
net asset value adjusted
to nearest cent) per
share--Class B*......... $ 11.16 $ 23.42 $ 12.46 $ N/A
=========== =========== =========== ===========
</TABLE>
- ----
* Redemption price per share (Class B) varies by length of time shares are
held.
See notes to financial statements
-19-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
CAPITAL MANAGER
MODERATE GROWTH CAPITAL MANAGER
FUND GROWTH FUND
--------------- ---------------
<S> <C> <C>
ASSETS:
Investments, at value (Cost $22,581,856 and
$22,711,973, respectively)..................... $23,339,256 $23,526,616
Interest and dividends receivable.............. 55,752 44,283
Unamortized organization costs................. 10,332 10,332
Prepaid expenses............................... 15,067 15,076
----------- -----------
Total Assets................................ 23,420,407 23,596,307
----------- -----------
LIABILITIES:
Dividends payable.............................. 131,480 93,816
Accrued expenses and other payables:
Investment advisory fees...................... 983 989
Administration fees........................... 160 161
Other......................................... 4,648 4,647
----------- -----------
Total Liabilities........................... 137,271 99,613
----------- -----------
NET ASSETS:
Capital........................................ 22,004,016 22,025,059
Undistributed net investment income (loss)..... 33 (325)
Net unrealized appreciation (depreciation) on
investments.................................... 757,400 814,643
Accumulated undistributed net realized gains
(losses) on investment transactions............ 521,687 657,317
----------- -----------
Net Assets.................................... $23,283,136 $23,496,694
=========== ===========
Net Assets
Class A....................................... $ 3,085 $ 5,309
Trust Class................................... 23,280,051 23,491,385
----------- -----------
Total....................................... $23,283,136 $23,496,694
=========== ===========
Outstanding units of beneficial interest
(shares)
Class A....................................... 292 498
Trust Class................................... 2,200,100 2,201,913
----------- -----------
Total....................................... 2,200,392 2,202,411
=========== ===========
Net asset value
Class A--redemption price per share........... $ 10.58 $ 10.67
Trust Class--offering and redemption price
per share..................................... $ 10.58 $ 10.67
=========== ===========
Maximum Sales Charge--Class A.................. 4.50% 4.50%
=========== ===========
Maximum Offering Price (100%/(100%-Maximum
Sales Charge) of net asset value adjusted to
nearest cent) per share--Class A............... $ 11.08 $ 11.17
=========== ===========
</TABLE>
- ----
* Redemption price per share (Class B) varies by length of time shares are
held.
See notes to financial statements
-20-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
SHORT-
PRIME U.S. TREASURY INTERMEDIATE INTERMEDIATE U.S.
MONEY MARKET MONEY MARKET U.S. GOVERNMENT GOVERNMENT
FUND FUND INCOME FUND BOND FUND
------------ ------------- --------------- -----------------
FOR THE FOR THE SIX FOR THE SIX FOR THE SIX
PERIOD ENDED MONTHS ENDED MONTHS ENDED MONTHS ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1998 (A) 1998 1998 1998
------------ ------------- --------------- -----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income........... $1,423,383 $7,998,117 $4,689,624 $5,511,011
Dividend income........... -- -- 43,809 52,385
---------- ---------- ---------- ----------
Total Income........... 1,423,383 7,998,117 4,733,433 5,563,396
---------- ---------- ---------- ----------
EXPENSES:
Investment advisory fees.. 99,636 579,082 450,189 534,986
Administration fees....... 49,818 289,541 147,874 178,154
Distribution fees--Class
A......................... 484 45,999 5,998 5,228
Distribution fees--Class
B......................... -- 6,599 -- 3,539
Custodian fees............ 4,186 5,033 3,877 3,208
Accounting fees........... 20,237 54,422 29,255 39,090
Legal fees................ 4,186 14,331 5,050 6,475
Audit fees................ 3,411 1,498 2,472 2,040
Organization Costs........ 14,996 -- -- --
Trustees' fees and
expenses.................. 1,151 5,934 2,946 3,712
Transfer agent fees....... 12,997 56,490 22,970 35,367
Registration and filing
fees...................... 12,745 31,774 5,636 7,321
Printing costs............ 4,203 24,878 7,419 9,891
Other..................... 787 4,486 2,439 2,933
---------- ---------- ---------- ----------
Gross Expenses......... 228,837 1,120,067 686,125 831,944
Expenses voluntarily
reduced/reimbursed..... (90,608) (191,569) (75,680) (89,607)
---------- ---------- ---------- ----------
Total Expenses......... 138,229 928,498 610,445 742,337
---------- ---------- ---------- ----------
Net Investment Income..... 1,285,154 7,069,619 4,122,988 4,821,059
---------- ---------- ---------- ----------
REALIZED/UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gains
(losses) on investment
transactions.............. -- -- (249,206) 1,839,625
Change in unrealized
appreciation(depreciation)
on investments............ -- -- 742,829 1,196,134
---------- ---------- ---------- ----------
Net realized/unrealized
gains on investments...... -- -- 493,623 3,035,759
---------- ---------- ---------- ----------
Change in net assets
resulting from
operations................ $1,285,154 $7,069,619 $4,616,611 $7,856,818
========== ========== ========== ==========
</TABLE>
- ----
(a) For the period from October 1, 1997 (commencement of operations) through
March 31, 1998.
See notes to financial statements
-21-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
NORTH CAROLINA SOUTH CAROLINA GROWTH AND
INTERMEDIATE INTERMEDIATE INCOME BALANCED
TAX-FREE FUND TAX-FREE FUND STOCK FUND FUND
-------------- -------------- ------------ ------------
FOR THE SIX FOR THE FOR THE SIX FOR THE SIX
MONTHS ENDED PERIOD ENDED MONTHS ENDED MONTHS ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1998 1998 (A) 1998 1998
-------------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income......... $ 2,067,292 $ 405,119 $ 176,461 $ 1,664,990
Dividend income......... 16,870 12,493 4,184,714 935,616
----------- --------- ----------- -----------
Total Income......... 2,084,162 417,612 4,361,175 2,600,606
----------- --------- ----------- -----------
EXPENSES:
Investment advisory
fees.................... 250,268 52,323 1,435,758 478,864
Administration fees..... 83,423 17,441 387,519 129,254
Distribution fees--Class
A....................... 7,203 99 45,612 25,329
Distribution fees--Class
B....................... -- -- 102,178 42,199
Custodian fees.......... 2,734 978 4,825 5,189
Accounting fees......... 17,138 9,746 70,261 32,797
Legal fees.............. 2,662 1,630 16,863 3,724
Audit fees.............. 630 1,431 3,542 1,384
Organization costs...... -- 685 -- --
Trustees' fees and
expenses................ 1,782 326 7,462 2,603
Transfer agent fees..... 17,272 6,031 93,916 62,214
Registration and filing
fees.................... 3,544 2,210 10,166 3,880
Printing costs.......... 4,113 434 20,182 7,119
Other................... 1,473 163 6,209 1,968
----------- --------- ----------- -----------
Gross Expenses....... 392,242 93,497 2,204,493 796,524
Expenses voluntarily
reduced.............. (62,816) (21,662) (466,970) (155,733)
----------- --------- ----------- -----------
Total Expenses....... 329,426 71,835 1,737,523 640,791
----------- --------- ----------- -----------
Net Investment Income... 1,754,736 345,777 2,623,652 1,959,815
----------- --------- ----------- -----------
REALIZED/UNREALIZED
GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains
(losses) on investment
transactions............ 253,455 65,837 15,430,337 2,554,510
Net change in unrealized
appreciation
(depreciation) on
investments............. 364,675 355,974 37,922,826 10,278,716
----------- --------- ----------- -----------
Net realized/unrealized
gains on investments.... 618,130 421,811 53,353,163 12,833,226
----------- --------- ----------- -----------
Change in net assets
resulting from
operations.............. $2,372,866 $767,588 $55,976,815 $14,793,041
=========== ========= =========== ===========
</TABLE>
- ----
(a) For the period from October 19, 1997 (commencement of operations) through
March 31, 1998.
See notes to financial statements
-22-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF OPERATIONS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
LARGE COMPANY SMALL COMPANY INTERNATIONAL CAPITAL MANAGER
GROWTH GROWTH EQUITY CONSERVATIVE GROWTH
FUND FUND FUND FUND
------------- ------------- ------------- -------------------
FOR THE FOR THE SIX FOR THE SIX FOR THE
PERIOD ENDED MONTHS ENDED MONTHS ENDED PERIOD ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1998 (A) 1998 1998 1998 (B)
------------- ------------- ------------- -------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income......... $ 35,364 $ 184,577 $ 176,459 $ 3,361
Dividend income......... 331,221 11,730 462,816 401,924
Foreign tax witholding.. -- -- (61,562) --
----------- ---------- ---------- ----------
Total Income......... 366,585 196,307 577,713 405,285
----------- ---------- ---------- ----------
EXPENSES:
Investment advisory
fees.................... 164,930 428,248 315,634 27,378
Administration fees..... 44,336 85,650 63,128 5,474
Distribution fees--Class
A....................... 207 14,637 1,159 --
Distribution fees--Class
B....................... 1,813 43,851 7,144 --
Custodian fees.......... 1,080 18,121 14,465 1,086
Accounting fees......... 25,594 28,831 32,546 9,584
Legal fees.............. 5,707 1,921 1,100 55
Audit fees.............. 1,652 1,109 605 1,448
Organization costs...... 1,007 5,278 5,680 905
Trustees' fees and
expenses................ 879 1,765 1,126 308
Transfer agent fees..... 6,756 76,693 29,347 6,335
Registration and filing
fees.................... 18,083 2,684 4,541 2,283
Printing costs.......... 1,547 11,319 1,675 525
Other................... 392 1,329 1,156 181
----------- ---------- ---------- ----------
Gross Expenses....... 273,983 721,436 479,306 55,562
Expenses voluntarily
reduced.............. (54,091) -- -- (21,904)
----------- ---------- ---------- ----------
Total Expenses....... 219,892 721,436 479,306 33,658
----------- ---------- ---------- ----------
Net Investment Income... 146,693 (525,129) 98,407 371,627
----------- ---------- ---------- ----------
REALIZED/UNREALIZED
GAINS (LOSSES) ON IN-
VESTMENTS:
Net realized gains
(losses) on investment
transactions............ 3,968,631 3,970,880 (209,950) 342,344
Net realized gains
(losses) from foreign
currency transactions... -- -- 346,662 --
Net change in unrealized
appreciation
(depreciation) on
investments............. 13,188,097 (3,960,044) 5,591,271 650,455
Net change in unrealized
appreciation
(depreciation) on
translation of assets
and liabilities in
foreign currencies...... -- -- (3,675) --
----------- ---------- ---------- ----------
Net realized/unrealized
gains on investments and
foreign currency
transactions............ 17,156,728 10,836 5,724,308 992,799
----------- ---------- ---------- ----------
Change in net assets
resulting from
operations.............. $17,303,421 $ (514,293) $5,822,715 $1,364,426
=========== ========== ========== ==========
</TABLE>
- ----
(a) For the period from October 3, 1997 (commencement of operations) through
March 31, 1998.
(b) For the period from October 2, 1997 (commencement of operations) through
March 31, 1998.
See notes to financial statements
-23-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
CAPITAL MANAGER
MODERATE GROWTH CAPITAL MANAGER
FUND GROWTH FUND
--------------- ---------------
FOR THE FOR THE
PERIOD ENDED PERIOD ENDED
MARCH 31, MARCH 31,
1998 (A) 1998 (A)
--------------- ---------------
<S> <C> <C>
INVESTMENT INCOME:
Interest income............................... $ 3,361 $ 3,361
Dividend income............................... 298,709 222,085
---------- ----------
Total Income............................... 302,070 225,446
---------- ----------
EXPENSES:
Investment advisory fees...................... 27,248 27,147
Administration fees........................... 5,448 5,428
Custodian fees................................ 1,086 1,086
Accounting fees............................... 9,584 9,584
Legal fees.................................... 54 54
Audit fees.................................... 1,448 1,448
Organization costs............................ 905 905
Trustees' fees and expenses................... 308 308
Transfer agent fees........................... 6,335 6,335
Registration and filing fees.................. 2,283 2,283
Printing costs................................ 525 525
Other......................................... 181 181
---------- ----------
Gross Expenses............................. 55,405 55,284
Expenses voluntarily reduced............... (21,800) (21,720)
---------- ----------
Total Expenses............................. 33,605 33,564
---------- ----------
Net Investment Income......................... 268,465 191,882
---------- ----------
REALIZED/UNREALIZED GAINS (LOSSES) ON INVEST-
MENTS:
Net realized gains (losses) on investment
transactions.................................. 521,687 657,317
Net change in unrealized appreciation
(depreciation) on investments................. 757,400 814,643
---------- ----------
Net realized/unrealized gains on investments.. 1,279,087 1,471,960
---------- ----------
Change in net assets resulting from
operations.................................... $1,547,552 $1,663,842
========== ==========
</TABLE>
- ----
(a) For the period from October 2, 1997 (commencement of operations) through
March 31, 1998.
See notes to financial statements
-24-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT-INTERMEDIATE
PRIME MONEY U.S. TREASURY U.S. GOVERNMENT
MARKET FUND MONEYMARKET FUND INCOME FUND
------------------ ----------------------------- ----------------------------
FOR THE FOR THE
FOR THE FOR THE SIX YEAR ENDED FOR THE SIX YEAR ENDED
PERIOD ENDED MONTHS ENDED SEPTEMBER 30, MONTHS ENDED SEPTEMBER 30,
MARCH 31, 1998 (A) MARCH 31, 1998 1997 MARCH 31, 1998 1997
------------------ -------------- ------------- -------------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVI-
TIES:
OPERATIONS:
Net investment income.. $ 1,285,154 $ 7,069,619 $ 10,765,763 $ 4,122,988 $ 5,475,151
Net realized gains
(losses) on investment
transactions........... -- -- 246 (249,206) 36,735
Net change in
unrealized appreciation
(depreciation) on
investments............ -- -- -- 742,829 312,560
------------ ------------- ------------- ------------ ------------
Change in net assets
resulting from
operations.............. 1,285,154 7,069,619 10,766,009 4,616,611 5,824,446
------------ ------------- ------------- ------------ ------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income................. (9,211) (864,045) (1,278,099) (126,061) (323,078)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment
income................. -- (25,841) (55,272) -- --
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment
income................. (1,275,943) (6,179,733) (9,432,392) (3,996,927) (5,152,073)
------------ ------------- ------------- ------------ ------------
Change in net assets
from shareholder
distributions........... (1,285,154) (7,069,619) (10,765,763) (4,122,988) (5,475,151)
------------ ------------- ------------- ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................. 133,682,082 273,492,619 477,597,555 58,094,422 54,649,047
Dividends reinvested... 9,205 2,099,395 2,984,920 281,844 1,090,543
Cost of shares
redeemed............... (75,243,383) (292,692,647) (414,910,057) (11,630,755) (16,392,254)
------------ ------------- ------------- ------------ ------------
Change in net assets
from share
transactions............ 58,447,904 (17,100,633) 65,672,418 46,745,511 39,347,336
------------ ------------- ------------- ------------ ------------
Change in net assets.... 58,447,904 (17,100,633) 65,672,664 47,239,134 39,696,631
NET ASSETS:
Beginning of period.... -- 300,883,259 235,210,595 108,674,117 68,977,486
------------ ------------- ------------- ------------ ------------
End of period.......... $ 58,447,904 $ 283,782,626 $ 300,883,259 $155,913,251 $108,674,117
============ ============= ============= ============ ============
SHARE TRANSACTIONS:
Issued................. 133,682,082 273,492,619 477,597,555 5,931,737 5,613,734
Reinvested............. 9,205 2,099,395 2,984,920 28,734 111,753
Redeemed............... (75,243,383) (292,692,647) (414,909,964) (1,184,641) (1,684,651)
------------ ------------- ------------- ------------ ------------
Change in shares........ 58,447,904 (17,100,633) 65,672,511 4,775,830 4,040,836
============ ============= ============= ============ ============
</TABLE>
- ----
(a) From October 1, 1997 (commencement of operations) through March 31, 1998.
See notes to financial statements
-25-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SOUTH CAROLINA
INTERMEDIATE U.S. NORTH CAROLINA INTERMEDIATE
GOVERNMENT BOND INTERMEDIATE TAX-FREE TAX-FREE
FUND FUND FUND
---------------------------- ---------------------------- ------------------
FOR THE FOR THE
FOR THE SIX YEAR ENDED FOR THE SIX YEAR ENDED FOR THE
MONTHS ENDED SEPTEMBER 30, MONTHS ENDED SEPTEMBER 30, PERIOD ENDED
MARCH 31, 1998 1997 MARCH 31, 1998 1997 MARCH 31, 1998 (A)
-------------- ------------- -------------- ------------- ------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.. $ 4,821,059 $ 7,760,619 $ 1,754,736 $ 2,490,880 $ 345,777
Net realized gains
(losses) on investment
transactions........... 1,839,625 (124,190) 253,455 59,163 65,837
Net change in
unrealized appreciation
(depreciation) on
investments............ 1,196,134 3,189,400 364,675 1,337,500 355,974
------------ ------------ ------------ ------------ -----------
Change in net assets
resulting from
operations.............. 7,856,818 10,825,829 2,372,866 3,887,543 767,588
------------ ------------ ------------ ------------ -----------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income................. (110,430) (237,636) (196,355) (364,471) (2,516)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment
income................. (16,061) (23,493) -- -- --
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment
income................. (4,796,737) (7,499,490) (1,558,381) (2,126,409) (343,261)
From net realized gains
from investment
transactions........... -- -- -- -- (4,440)
------------ ------------ ------------ ------------ -----------
Change in net assets
from shareholder
distributions........... (4,923,228) (7,760,619) (1,754,736) (2,490,880) (350,217)
------------ ------------ ------------ ------------ -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................. 56,625,259 45,662,151 24,097,664 44,964,506 22,999,214
Dividends reinvested... 1,567,998 4,043,560 193,549 297,458 6,724
Cost of shares
redeemed............... (28,891,405) (29,036,797) (11,008,046) (13,823,035) (4,070,335)
------------ ------------ ------------ ------------ -----------
Change in net assets
from share
transactions............ 29,301,852 20,668,914 13,283,167 31,438,929 18,935,603
------------ ------------ ------------ ------------ -----------
Change in net assets.... 32,235,442 23,734,124 13,901,297 32,835,592 19,352,974
NET ASSETS:
Beginning of period.... 147,379,235 123,645,111 70,539,846 37,704,254 --
------------ ------------ ------------ ------------ -----------
End of period.......... $179,614,677 $147,379,235 $ 84,441,143 $ 70,539,846 $19,352,974
============ ============ ============ ============ ===========
SHARE TRANSACTIONS:
Issued................. 5,692,068 4,698,844 2,359,142 4,443,543 2,296,938
Reinvested............. 156,934 415,863 18,764 29,323 667
Redeemed............... (2,880,516) (2,985,297) (1,060,703) (1,359,225) (393,787)
------------ ------------ ------------ ------------ -----------
Change in shares........ 2,968,486 2,129,410 1,317,203 3,113,641 1,903,818
============ ============ ============ ============ ===========
</TABLE>
- ----
(a) From October 19, 1997 (commencement of operations) through March 31, 1998.
See notes to financial statements
-26-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH AND INCOME BALANCED LARGE COMPANY
STOCK FUND FUND GROWTH FUND
---------------------------- ---------------------------- ------------------
FOR THE FOR THE
FOR THE SIX YEAR ENDED FOR THE SIX YEAR ENDED FOR THE
MONTHS ENDED SEPTEMBER 30, MONTHS ENDED SEPTEMBER 30, PERIOD ENDED
MARCH 31, 1998 1997 MARCH 31, 1998 1997 MARCH 31, 1998 (A)
-------------- ------------- -------------- ------------- ------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.. $ 2,623,652 $ 4,981,914 $ 1,959,815 $ 3,628,963 $ 146,693
Net realized gains
(losses) on investment
transactions........... 15,430,337 21,222,568 2,554,510 3,823,461 3,968,631
Net change in
unrealized appreciation
(depreciation) on
investments............ 37,922,826 68,548,798 10,278,716 11,630,206 13,188,097
------------ ------------ ------------ ------------ ------------
Change in net assets
resulting from
operations.............. 55,976,815 94,753,280 14,793,041 19,082,630 17,303,421
------------ ------------ ------------ ------------ ------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income................. (214,872) (406,746) (295,018) (532,096) (802)
From net realized gains
from investment
transactions........... (2,344,787) (886,255) (488,935) (398,078) (1,053)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment
income................. (48,957) (75,802) (94,857) (125,357) (382)
From net realized gains
from investment
transactions........... (1,273,210) (206,225) (195,167) (88,738) (2,298)
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment
income................. (2,355,714) (4,503,475) (1,580,886) (2,972,191) (145,509)
From net realized gains
from investment
transactions........... (20,939,456) (8,604,815) (2,542,690) (2,213,599) (471,004)
------------ ------------ ------------ ------------ ------------
Change in net assets
from shareholder
distributions........... (27,176,996) (14,683,318) (5,197,553) (6,330,059) (621,048)
------------ ------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................. 102,756,651 123,241,859 32,256,759 34,516,341 65,929,298
Dividends reinvested... 14,208,813 9,323,443 3,909,089 5,447,735 10,964
Cost of shares
redeemed............... (47,452,100) (81,770,389) (14,064,916) (24,767,622) (28,065,381)
------------ ------------ ------------ ------------ ------------
Change in net assets
from share
transactions............ 69,513,364 50,794,913 22,100,932 15,196,454 37,874,881
------------ ------------ ------------ ------------ ------------
Change in net assets.... 98,313,183 130,864,875 31,696,420 27,949,025 54,557,254
NET ASSETS:
Beginning of period.... 360,352,864 229,487,989 112,117,620 84,168,595 --
------------ ------------ ------------ ------------ ------------
End of period.......... $458,666,047 $360,352,864 $143,814,040 $112,117,620 $ 54,557,254
============ ============ ============ ============ ============
SHARE TRANSACTIONS:
Issued................. 5,395,745 7,276,447 2,339,522 2,754,247 8,012,020
Reinvested............. 736,699 580,100 286,215 444,651 1,116
Redeemed............... (2,375,549) (4,808,625) (1,025,044) (2,005,976) (2,873,366)
------------ ------------ ------------ ------------ ------------
Change in shares........ 3,756,895 3,047,922 1,600,693 1,192,922 5,139,770
============ ============ ============ ============ ============
</TABLE>
- ----
(a) From October 2, 1997 (commencement of operations) through March 31, 1998.
See notes to financial statements
-27-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CAPITAL MANAGER
SMALL COMPANY INTERNATIONAL CONSERVATIVE GROWTH
GROWTH FUND FUND FUND
---------------------------- ---------------------------- -------------------
FOR THE FOR THE
FOR THE SIX YEAR ENDED FOR THE SIX YEAR ENDED FOR THE
MONTHS ENDED SEPTEMBER 30, MONTHS ENDED SEPTEMBER 30, PERIOD ENDED
MARCH 31, 1998 1997 MARCH 31, 1998 1997 MARCH 31, 1998 (A)
-------------- ------------- -------------- ------------- -------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.. $ (525,129) $ (648,459) $ 98,407 $ 100,321 $ 371,627
Net realized gains
(losses) on investment
transactions........... 3,970,880 (226,983) (209,950) 1,278,028 342,344
Net realized gains
(losses) from foreign
currency transactions.. -- -- 346,662 114,474 --
Net change in
unrealized appreciation
(depreciation) on
investments............ (3,960,044) 10,884,559 5,591,271 3,620,737 650,455
Net change in
unrealized appreciation
(depreciation) on
translation of assets
and liabilities in
foreign currencies..... -- -- (3,675) 3,951 --
----------- ------------ ------------ ------------ ------------
Change in net assets
resulting from
operations.............. (514,293) 10,009,117 5,822,715 5,117,511 1,364,426
----------- ------------ ------------ ------------ ------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income................. -- -- (983) (489) (47)(b)
From net realized gains
from investment
transactions........... (166,425) (8,888) (18,552) -- --
In excess of net
investment income...... -- -- -- (559) --
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment
income................. -- -- -- (251) --
From net realized gains
from investment
transactions........... (128,891) (4,428) (29,878) -- --
In excess of net
investment income...... -- -- -- (286) --
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment
income................. -- -- (108,581) (99,581) (371,020)
From net realized gains
from investment
transactions........... (933,116) (40,858) (1,229,598) -- --
In excess of net
investment income...... -- -- -- (113,629) --
----------- ------------ ------------ ------------ ------------
Change in net assets
from shareholder
distributions........... (1,228,432) (54,174) (1,387,592) (214,795) (371,067)
----------- ------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................. 45,971,544 48,655,648 21,073,080 51,911,874 22,006,783
Dividends reinvested... 743,228 40,212 468,234 89,459 9
Cost of shares
redeemed............... (27,653,117) (25,431,484) (4,975,744) (2,518,984) --
----------- ------------ ------------ ------------ ------------
Change in net assets
from share
transactions............ 19,061,655 23,264,376 16,565,570 49,482,349 22,006,792
----------- ------------ ------------ ------------ ------------
Change in net assets.... 17,318,930 33,219,319 21,000,693 54,385,065 23,000,151
NET ASSETS:
Beginning of period.... 80,204,719 46,985,400 54,385,065 -- --
----------- ------------ ------------ ------------ ------------
End of period.......... 97,523,649 $ 80,204,719 $ 75,385,758 $ 54,385,065 $ 23,000,151
=========== ============ ============ ============ ============
SHARE TRANSACTIONS:
Issued................. 2,123,934 2,498,285 1,913,636 5,042,411 2,200,663
Reinvested............. 35,920 2,036 44,558 8,292 1
Redeemed............... (1,299,434) (1,300,018) (463,994) (227,784) --
----------- ------------ ------------ ------------ ------------
Change in shares........ 860,420 1,200,303 1,494,200 4,822,919 2,200,664
=========== ============ ============ ============ ============
</TABLE>
- ----
(a) From October 2, 1997 (commencement of operations) through March 31, 1998.
(b) The Fund commenced offering Class A Shares on January 29, 1998.
See notes to financial statements
-28-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CAPITAL MANAGER
MODERATE GROWTH CAPITAL MANAGER
FUND GROWTH FUND
------------------ ------------------
FOR THE FOR THE
PERIOD ENDED PERIOD ENDED
MARCH 31, 1998 (A) MARCH 31, 1998 (A)
------------------ ------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income................... $ 268,465 $ 191,882
Net realized gains (losses) on
investment transactions................. 521,687 657,317
Net change in unrealized appreciation
(depreciation) on investments........... 757,400 814,643
----------- -----------
Change in net assets resulting from
operations............................... 1,547,552 1,663,842
----------- -----------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:(B)
From net investment income.............. (17) (21)
DISTRIBUTIONS TO TRUST CLASS SHAREHOLD-
ERS:
From net investment income.............. (268,415) (192,186)
----------- -----------
Change in net assets from shareholder
distributions............................ (268,432) (192,207)
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............. 22,004,016 22,025,059
Dividends reinvested.................... -- --
Cost of shares redeemed................. -- --
----------- -----------
Change in net assets from share
transactions............................. 22,004,016 22,025,059
----------- -----------
Change in net assets..................... 23,283,136 23,496,694
NET ASSETS:
Beginning of period..................... -- --
----------- -----------
End of period........................... $23,283,136 $23,496,694
=========== ===========
SHARE TRANSACTIONS:
Issued.................................. 2,200,392 2,202,411
Reinvested.............................. -- --
Redeemed................................ -- --
----------- -----------
Change in shares......................... 2,200,392 2,202,411
=========== ===========
</TABLE>
- ----
(a) From October 2, 1997 (commencement of operations) through March 31, 1998.
(b) From January 29, 1998 (commencement of operations) through March 31, 1998.
See notes to financial statements
-29-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
PRIME MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ------------------------------------------------------ -----------
<C> <S> <C>
CERTIFICATE OF DEPOSIT (5.1%):
Banks (5.1%):
$3,000,000 Fleet National Bank, 5.53%, 6/8/98.................... $ 3,000,000
-----------
Total Certificate of Deposit 3,000,000
-----------
COMMERCIAL PAPER (72.2%):
Banks (14.9%):
3,000,000 BBV Finance (de), Inc., 5.48%, 4/7/98................. 2,997,260
2,800,000 Commonwealth Bank of Australia, 5.43%, 9/28/98........ 2,723,980
3,000,000 NationsBank Corp., 5.48%, 4/24/98..................... 2,989,497
-----------
8,710,737
-----------
Chemicals & Allied Products (5.9%):
2,700,000 Hoechst Corp., 6.12%, 4/1/98.......................... 2,700,000
750,000 U.S. Borax & Chemical, 5.70%, 4/20/98................. 747,744
-----------
3,447,744
-----------
Financial Services (27.8%):
2,000,000 AB Spin Tab Swed Mortgage, 5.60%, 4/6/98.............. 1,998,444
3,000,000 Associates First Capital Corp., 5.45%, 6/17/98........ 2,965,028
2,900,000 Beta Finance, Inc., 5.49%, 6/22/98.................... 2,863,736
1,000,000 Corporate Asset Fund, 5.54%, 4/9/98................... 998,769
1,400,000 General Electric Capital Corp., 5.67%, 6/1/98......... 1,386,550
2,000,000 Goldman Sachs, 5.70%, 5/14/98......................... 1,986,383
2,000,000 John Deere Capital Corp., 5.41%, 5/20/98.............. 1,985,273
2,000,000 Windmill Funding, 5.58%, 4/24/98...................... 1,992,870
-----------
16,177,053
-----------
Health Care (3.4%):
2,000,000 Kaiser Foundation, 5.64%, 6/4/98...................... 1,979,947
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------------------------------------------------- -----------
<C> <S> <C>
COMMERCIAL PAPER, CONTINUED:
Industrial Goods & Services (4.6%):
$2,740,000 BTR, 5.42%, 7/9/98................................... $ 2,699,160
-----------
Insurance (9.3%):
2,500,000 American General Corp., 5.49%, 6/29/98............... 2,466,069
3,000,000 Prudential Funding Corp., 5.44%, 5/8/98.............. 2,983,226
-----------
5,449,295
-----------
Petroleum (6.3%):
1,000,000 Colonial Pipeline Co., 5.55%, 4/6/98................. 999,229
2,700,000 Koch Industries, 6.05%, 4/1/98....................... 2,700,000
-----------
3,699,229
-----------
Total Commercial Paper 42,163,165
-----------
VARIABLE RATE NOTES (17.8%):
Banks (5.1%):
3,000,000 Key Bank New York, 5.92%, 10/2/98.................... 3,000,268
-----------
Financial Services (5.1%):
3,000,000 Bear Stearns Cos., Inc., 5.70%, 2/10/99.............. 3,002,933
-----------
Industrial Goods & Services (7.6%):
2,500,000 PHH Corp., 5.63%, 3/5/99............................. 2,499,331
1,900,000 SMM Co. NV, 5.69%, 12/14/98.......................... 1,900,000
-----------
4,399,331
-----------
Total Variable Rate Notes 10,402,532
-----------
REPURCHASE AGREEMENTS (5.1%):
2,982,000 HSBC Securities, 5.75%, 4/1/98
(Collateralized by $2,982,476 U.S. Treasury Bonds,
10.53%, 8/15/15, market value--$3,057,264)........... 2,982,000
-----------
Total Repurchase Agreements 2,982,000
-----------
Total (Amortized Cost $58,547,697)(a) $58,547,697
===========
</TABLE>
- ----
Percentages indicated are based on net assets of $58,447,904.
(a) Cost for federal income tax and financial reporting purposes are the same.
See notes to financial statements
-30-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ---------------------------------------------------- ------------
<C> <S> <C>
U.S. TREASURY BILLS (21.0%):
$30,000,000 4/2/98.............................................. $ 29,995,688
15,000,000 5/28/98............................................. 14,875,906
15,000,000 6/18/98............................................. 14,838,453
------------
Total U.S. Treasury Bills 59,710,047
------------
U.S. TREASURY NOTES (28.5%):
21,000,000 5.13%, 4/30/98...................................... 20,993,267
15,000,000 5.13%, 6/30/98...................................... 14,982,964
15,000,000 5.25%, 7/31/98...................................... 14,983,689
15,000,000 4.75%, 9/30/98...................................... 14,949,160
15,000,000 4.75%, 10/31/98..................................... 14,953,669
------------
Total U.S. Treasury Notes 80,862,749
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- --------------------------- ------------
<C> <S> <C>
REPURCHASE AGREEMENTS (50.6%):
$50,000,000 First Boston, 5.92%, 4/1/98
(Collateralized by
$52,550,000 U.S Treasury
Bills, 4.95%, 9/24/98,
market value--$51,252,120).... $ 50,000,000
13,000,000 HSBC Securities, 5.85%,
4/1/98 (Collateralized by
$20,002,113 U.S. Treasury
Notes, 7.50%, 11/15/06,
market value--$13,260,813).... 13,000,000
13,000,000 Merrill Lynch, 5.75%,
4/1/98 (Collateralized by
$12,585,000, U.S. Treasury
Notes, 7.75%, 12/31/99,
market value--$13,282,455).... 13,000,000
67,352,950 NationsBank, 5.75%, 4/1/98
(Collateralized by
$68,900,000 U.S. Treasury
Notes, 5.50%, 1/31/03--
3/31/03, market value--
$68,969,554).................. 67,352,949
------------
Total Repurchase Agreements 143,352,949
------------
Total (Amortized Cost $283,925,745)(a) $283,925,745
============
</TABLE>
- ----
Percentages indicated are based on net assets of $283,782,626.
(a) Cost for federal income tax and financial reporting purposes are the same.
See notes to financial statements
-31-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ---------------------------------------------------- ------------
<C> <S> <C>
CORPORATE BONDS (9.7%):
Banks (2.0%):
$ 3,000,000 Suntrust Banks, 7.38%, 7/1/02....................... $ 3,112,500
Financial Services (4.4%):
3,000,000 Ford Motor Credit Co., 6.55%, 9/10/02............... 3,030,000
4,000,000 Sears Roebuck Acceptance, 6.00%, 3/20/03............ 3,955,000
------------
6,985,000
------------
Industrial Goods & Services (3.3%):
5,000,000 IBM Corp., 6.22%, 8/1/27............................ 5,068,750
------------
Total Corporate Bonds 15,166,250
------------
PASS-THROUGHS MORTGAGE SECURITIES (19.0%):
Federal Home Loan Mortgage Corp.: (6.9%):
2,312,096 5.50%, 8/1/00, Pool # M80285........................ 2,309,206
2,421,932 6.00%, 10/1/00, Pool # G40018....................... 2,427,212
2,555,935 6.00%, 11/1/02, Pool # G40168....................... 2,554,325
1,564,780 6.50%, 2/1/11, Pool # G10473........................ 1,576,515
1,892,231 6.00%, 3/1/11, Pool # E20228........................ 1,872,703
------------
10,739,961
------------
Federal National Mortgage Assoc.: (12.1%):
2,315,506 6.50%, 4/1/03, Pool # 303863........................ 2,329,237
1,649,419 7.00%, 6/1/08, Pool # 50751......................... 1,691,166
2,334,291 7.50%, 12/1/08, Pool # 190611....................... 2,407,238
2,062,393 6.00%, 3/1/09, Pool # 50986......................... 2,040,470
2,184,681 6.00%, 4/1/09, Pool # 190759........................ 2,161,458
1,975,454 6.50%, 4/1/09, Pool # 250009........................ 1,990,269
6,357,540 6.00%, 12/1/09, Pool # 313658....................... 6,287,988
------------
18,907,826
------------
Total Pass-throughs Mortgage Securities 29,647,787
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ---------------------------------------------------- ------------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES (6.6%):
Federal Home Loan Bank: (6.6%):
$ 2,000,000 6.84%, 4/25/00 $ 2,039,040
3,000,000 6.17%, 3/8/01....................................... 3,027,780
3,000,000 6.41%, 10/11/05..................................... 3,077,070
2,000,000 6.79%, 2/5/07....................................... 2,105,740
------------
Total U.S. Government Agencies 10,249,630
------------
U.S. TREASURY BONDS (1.3%):
2,000,000 6.00%, 2/15/26...................................... 1,998,580
------------
Total U.S. Treasury Bonds 1,998,580
------------
U.S. TREASURY NOTES (61.9%):
12,000,000 5.75%, 12/31/98..................................... 12,024,720
15,500,000 6.50%, 4/30/99...................................... 15,649,730
9,500,000 8.00%, 8/15/99...................................... 9,794,785
9,500,000 5.63%, 10/31/99..................................... 9,500,095
14,000,000 6.75%, 4/30/00...................................... 14,302,680
15,000,000 5.63%, 2/28/01...................................... 14,985,000
5,500,000 5.88%, 11/30/01..................................... 5,530,910
7,500,000 6.38%, 8/15/02...................................... 7,693,875
7,000,000 5.88%, 11/15/05..................................... 7,052,640
------------
Total U.S. Treasury Notes 96,534,435
------------
INVESTMENT COMPANIES (0.6%):
895,895 Provident Federal Fund.............................. 895,895
------------
Total Investment Companies 895,895
------------
Total (Cost $153,865,988)(a) $154,492,577
============
</TABLE>
- ----
Percentages indicated are based on net assets of $155,913,251.
(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.. $1,165,832
Unrealized depreciation.. (539,243)
----------
Net unrealized apprecia-
tion..................... $ 626,589
==========
</TABLE>
See notes to financial statements
-32-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ----------------------------------------------------- -----------
<C> <S> <C>
CORPORATE BONDS (19.7%):
Banks (4.5%):
$3,000,000 AmSouth Bank, 6.45%, 2/1/18.......................... $ 2,970,000
5,000,000 Suntrust Banks, 7.38%, 7/1/02........................ 5,187,500
-----------
8,157,500
-----------
Financial Services (8.3%):
5,000,000 Ford Motor Credit Co., 6.55%, 9/10/02................ 5,050,000
5,000,000 Morgan Stanley Dean Witter Discover & Co., 6.38%,
8/1/02............................................... 5,025,000
5,000,000 Sears Roebuck Acceptance, 6.00%, 3/20/03............. 4,943,750
-----------
15,018,750
-----------
Industrial Goods & Services (4.0%):
7,000,000 IBM Corp., 6.22%, 8/1/27............................. 7,096,250
-----------
Leisure Time Industries (2.9%):
5,000,000 The Walt Disney Co., 6.75%, 3/30/06.................. 5,168,750
-----------
Total Corporate Bonds.......................................... 35,441,250
-----------
PASS-THROUGHS MORTGAGE SECURITIES (14.8%):
Federal Home Loan Mortgage Corp.: (5.1%):
2,069,766 7.50%, 7/1/07, Pool # E00108......................... 2,137,033
1,862,602 6.50%, 2/1/11, Pool # G10473......................... 1,876,571
1,892,231 6.00%, 3/1/11, Pool # E20228......................... 1,872,703
3,321,950 6.50%, 4/1/11, Pool # E20235......................... 3,349,955
-----------
9,236,262
-----------
Federal National Mortgage Assoc.: (7.6%):
4,385,910 6.00%, 6/1/08, Pool # 124885......................... 4,363,981
3,063,206 7.00%, 6/1/08, Pool # 50751.......................... 3,140,736
2,724,660 6.00%, 12/1/09, Pool # 313658........................ 2,694,852
3,184,164 7.00%, 4/1/24, Pool # 250005......................... 3,226,927
-----------
13,426,496
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ---------------------------------------------------- -------------
<C> <S> <C>
PASS-THROUGHS MORTGAGE SECURITIES, CONTINUED:
Government National Mortgage Assoc.: (2.1%):
$3,774,771 7.00%, 8/15/23, Pool # 354627....................... $ 3,831,392
-------------
Total Pass-throughs Mortgage Securities....................... 26,494,150
-------------
U.S. GOVERNMENT AGENCIES (6.4%):
Federal Farm Credit Bank: (1.7%):
3,000,000 5.92%, 12/29/04..................................... 3,004,140
-------------
Federal Home Loan Bank: (4.7%):
3,000,000 7.36%, 7/1/04....................................... 3,225,240
3,000,000 6.41%, 10/11/05..................................... 3,077,070
2,000,000 6.79%, 2/5/07....................................... 2,105,740
-------------
8,408,050
-------------
Total U.S. Government Agencies................................ 11,412,190
-------------
U.S. TREASURY BONDS (9.7%):
17,500,000 6.00%, 2/15/26...................................... 17,487,575
-------------
Total U.S. Treasury Bonds..................................... 17,487,575
-------------
U.S. TREASURY NOTES (48.5%):
10,500,000 5.63%, 11/30/00..................................... 10,492,545
3,500,000 7.88%, 8/15/01...................................... 3,731,315
12,500,000 6.38%, 8/15/02...................................... 12,823,125
16,000,000 6.25%, 2/15/03...................................... 16,378,561
10,500,000 7.25%, 8/15/04...................................... 11,357,535
10,500,000 5.88%, 11/15/05..................................... 10,578,960
10,000,000 6.50%, 10/15/06..................................... 10,487,100
11,000,000 6.25%, 2/15/07...................................... 11,370,040
-------------
Total U.S. Treasury Notes..................................... 87,219,181
-------------
INVESTMENT COMPANIES (0.3%):
538,550 Provident Federal Fund.............................. 538,550
-------------
Total Investment Companies.................................... 538,550
-------------
Total (Cost $175,741,642)(a).................................. $ 178,592,896
=============
</TABLE>
- ----
Percentages indicated are based on net assets of $179,614,677.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.. $3,583,905
Unrealized depreciation.. (732,651)
----------
Net unrealized apprecia-
tion..................... $2,851,254
==========
</TABLE>
Continued
-33-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------------------------------------------------- -----------
<C> <S> <C>
MUNICIPAL BONDS (98.4%):
Education Bonds (2.2%):
$ 500,000 North Carolina Educational Facilities, 5.00%,
10/1/17, Callable 10/1/06 @ 102...................... $ 492,655
550,000 University of North Carolina, Asheville Revenue,
5.15%, 6/1/18, Callable 6/1/07 @102, AMBAC........... 545,193
250,000 University of North Carolina, University Revenues,
4.90%, 8/1/03, Callable 8/1/02 @ 102................. 258,633
500,000 University of North Carolina, University Revenues,
5.20%, 5/15/05....................................... 525,140
-----------
1,821,621
-----------
General Obligation Bonds (74.0%):
1,200,000 Asheville, North Carolina, 6.00%, 3/1/01............. 1,265,975
250,000 Asheville, North Carolina, 4.80%, 6/1/06............. 257,475
250,000 Asheville, North Carolina, 5.00%, 6/1/09, Callable
6/1/07 @ 101, MBIA................................... 257,540
500,000 Buncombe County, North Carolina, 5.00%, 3/1/01....... 513,995
500,000 Buncombe County, North Carolina, 5.00%, 3/1/03....... 518,935
850,000 Buncombe County, North Carolina, 5.10%, 3/1/04....... 888,777
500,000 Buncombe County, North Carolina, 5.80%, 2/1/05,
Callable 2/1/04 @ 100.5.............................. 539,930
1,000,000 Buncombe County, North Carolina, 5.10%, 3/1/07....... 1,050,380
500,000 Buncombe County, North Carolina, 5.30%, 3/1/08, FSA.. 528,825
750,000 Burke County, North Carolina, 6.25%, 3/1/99, MBIA.... 767,670
500,000 Burke County, North Carolina, 6.30%, 3/1/01, MBIA.... 531,300
400,000 Burlington, North Carolina, 5.10%, 2/1/07............ 418,796
500,000 Cabarrus County, North Carolina, 5.30%, 2/1/11,
Callable 2/1/07 @ 102, MBIA.......................... 524,595
1,500,000 Cabarrus County, North Carolina, 5.30%, 2/1/13,
Callable 2/1/07 @ 102, MBIA.......................... 1,556,519
500,000 Cary, North Carolina, 5.50%, 2/1/99.................. 507,675
1,000,000 Cary, North Carolina, 5.50%, 2/1/01.................. 1,040,640
500,000 Catawba County, North Carolina, 5.70%, 6/1/06,
Callable 6/1/04 @ 101................................ 539,125
500,000 Catawba County, North Carolina, 4.75%, 6/1/12,
Callable 6/1/07 @ 102................................ 491,370
500,000 Centennial Authority, North Carolina, Hotel, Tax
Revenue Arena, 5.00%, 9/15/12, Callable 9/1/07 @ 102,
FSA.................................................. 501,705
825,000 Charlotte, North Carolina, 6.40%, 2/1/99............. 843,695
1,000,000 Charlotte, North Carolina, 6.20%, 6/1/01............. 1,063,110
395,000 Charlotte, North Carolina, 5.20%, 7/1/01............. 409,655
500,000 Charlotte, North Carolina, Series A, 5.50%, 7/1/06,
Callable 7/1/02 @ 102................................ 530,785
500,000 Chatham County, North Carolina, 5.40%, 4/1/11,
Callable 4/1/06 @102................................. 527,740
275,000 Cleveland County, North Carolina, 7.10%, 6/1/99,
AMBAC................................................ 285,689
600,000 Cleveland County, North Carolina, 5.10%, 6/1/03,
FGIC................................................. 625,182
1,000,000 Craven County, North Carolina, 5.50%, 6/1/07,
Callable 6/1/06 @ 100.5, MBIA........................ 1,074,660
500,000 Craven County, North Carolina, 5.50%, 6/1/09,
Callable 6/1/06 @ 102, MBIA.......................... 535,840
1,000,000 Craven County, North Carolina, 5.50%, 6/1/16,
Callable 6/1/06 @ 102, MBIA.......................... 1,047,850
500,000 Cumberland County, North Carolina, Certificate of
Participation, Civic Center Project-Series A, 5.80%,
12/1/03, AMBAC....................................... 538,370
500,000 Currituck County, North Carolina, 5.40%, 4/1/15,
Callable 4/1/05 @ 102, MBIA.......................... 518,045
500,000 Durham & Wake Counties, North Carolina, 5.75%,
4/1/02............................................... 531,290
400,000 Durham County, North Carolina, 5.20%, 3/1/01......... 413,600
500,000 Durham County, North Carolina, 5.40%, 2/1/02......... 523,895
250,000 Durham County, North Carolina, 5.20%, 3/1/03,
Callable 3/1/02 @ 100.5.............................. 260,823
340,000 Durham County, North Carolina, 5.20%, 3/1/05,
Callable 3/1/02 @ 101.5.............................. 355,477
</TABLE>
Continued
-34-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------------------------------------------------- -----------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
General Obligations Bonds, continued:
$ 500,000 Durham County, North Carolina, Certificate of
Participation, 5.00%, 5/1/14, Callable 5/1/08 @ 102.. $ 492,920
1,000,000 Durham, North Carolina, 4.90%, 2/1/04................ 1,036,350
500,000 Durham, North Carolina, 5.00%, 2/1/05................ 521,105
500,000 Fayetteville, North Carolina, 6.50%, 3/1/20, FGIC.... 533,570
1,000,000 Fayetteville, North Carolina, 4.80%, 5/1/05, Callable
5/1/03 @ 101, FGIC................................... 1,027,140
1,000,000 Forsyth County, North Carolina, 5.20%, 6/1/02........ 1,043,750
500,000 Forsyth County, North Carolina, 5.60%, 8/1/03,
Callable 8/1/02 @ 100.5.............................. 531,160
500,000 Forsyth County, North Carolina, 6.20%, 3/1/04,
Callable 3/1/01 @ 101.5.............................. 536,375
265,000 Forsyth County, North Carolina, 5.40%, 6/1/04,
Callable 6/1/02 @101................................. 279,355
500,000 Forsyth County, North Carolina, 5.10%, 8/1/04........ 525,050
500,000 Gaston County, North Carolina, 5.00%, 3/1/08,
Callable 3/1/06 @ 101, AMBAC......................... 519,805
1,000,000 Gaston County, North Carolina, 5.50%, 5/1/09,
Callable 5/1/07 @ 101, FGIC.......................... 1,076,860
500,000 Gaston County, North Carolina, 5.00%, 3/1/14, FGIC... 498,890
500,000 Goldsboro, North Carolina, 4.90%, 6/1/01............. 512,890
500,000 Greensboro, North Carolina, 5.40%, 4/1/02............ 524,510
500,000 Greensboro, North Carolina, 4.70%, 4/1/12, Callable,
4/1/08 @ 102......................................... 490,550
500,000 Greensboro, North Carolina, 5.20%, 6/1/12, Callable
6/1/07 @ 102......................................... 514,395
300,000 Guilford County, North Carolina, 4.50%, 2/1/15,
Callable 2/1/08 @ 102................................ 281,097
890,000 Henderson County, North Carolina, 6.50%, 6/1/01...... 954,872
600,000 Hickory, North Carolina, 6.50%, 5/1/01............... 642,774
500,000 Iredell County, North Carolina, 4.75%, 2/1/15,
Callable 2/1/07 @ 102................................ 481,445
500,000 Johnston County, North Carolina, 5.00%, 5/1/09,
Callable 5/1/07 @ 101, FGIC.......................... 516,315
500,000 Lee County, North Carolina, 5.50%, 2/1/00............ 514,555
250,000 Lee County, North Carolina, 5.60%, 2/1/03, Callable
2/1/02 @ 100.5....................................... 263,505
500,000 Lincoln County, North Carolina, 4.70%, 6/1/01, FGIC.. 509,945
1,000,000 Lincoln County, North Carolina, 4.80%, 6/1/04, FGIC.. 1,029,510
500,000 Lincolnton, North Carolina, Enterprise System,
Revenue, 5.10%, 5/1/09, Callable 11/1/06 @ 102,
MBIA................................................. 520,230
700,000 Mecklenburg County, North Carolina, 5.75%, 3/1/03,
Callable 3/1/02 @ 100.50............................. 744,100
1,000,000 Mecklenburg County, North Carolina, 5.40%, 4/1/03.... 1,057,770
1,000,000 Mecklenburg County, North Carolina, 5.00%, 4/1/08.... 1,047,300
1,500,000 Mecklenburg County, North Carolina, 5.50%, 4/1/11,
Callable 4/1/04 @ 102................................ 1,587,239
625,000 New Hanover County, North Carolina, 5.30%, 5/1/09,
Callable 5/1/06 @ 101.5.............................. 660,725
500,000 New Hanover County, North Carolina, 5.30%, 5/1/13,
Callable 5/1/06 @ 102................................ 518,665
815,000 North Carolina State, 5.60%, 4/1/00.................. 843,476
500,000 North Carolina State, 4.70%, 2/1/01.................. 510,380
250,000 North Carolina State, 6.10%, 3/1/03, Callable 3/1/02
@ 100.5.............................................. 268,790
500,000 North Carolina State, 5.10%, 3/1/05.................. 525,220
1,000,000 North Carolina State, 5.10%, 6/1/09, Callable 6/1/06
@ 101.5.............................................. 1,050,290
500,000 North Carolina State, 4.75%, 4/1/12, Callable 4/1/08
@ 102................................................ 495,460
500,000 Onslow County, North Carolina, 5.30%, 5/1/05......... 528,670
670,000 Orange County, North Carolina, 5.10%, 6/1/00......... 687,072
500,000 Orange County, North Carolina, 5.10%, 6/1/06,
Callable 6/1/03 @ 101.5.............................. 522,450
500,000 Orange County, North Carolina, 5.10%, 6/1/07,
Callable 6/1/03 @ 102................................ 523,265
965,000 Raleigh, North Carolina, 6.30%, 3/1/99............... 988,228
</TABLE>
Continued
-35-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------------------------------------------------- -----------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
General Obligations Bonds, continued:
$ 500,000 Raleigh, North Carolina, 5.00%, 2/1/08, Callable
2/1/00 @ 102......................................... $ 514,165
500,000 Raleigh, North Carolina, Comb Enterprise System,
5.13%, 3/1/10, Callable 3/1/07 @ 102................. 517,530
500,000 Rocky Mount, North Carolina, 6.10%, 5/1/03, Callable
5/1/02 @ 100.5....................................... 536,870
625,000 Rowan County, North Carolina, 5.50%, 4/1/04, MBIA.... 665,994
700,000 Rowan County, North Carolina, 5.50%, 4/1/05, MBIA.... 748,132
225,000 Rowan County, North Carolina, 5.50%, 2/1/07, Callable
2/1/06 @ 100.5, MBIA................................. 241,263
1,000,000 Surry County, North Carolina, 6.25%, 4/1/00, AMBAC... 1,045,780
500,000 Surry County, North Carolina, 6.25%, 4/1/01, AMBAC... 531,365
200,000 Union County, North Carolina, 5.80%, 3/1/05, Callable
3/1/02 @ 101.5....................................... 212,718
500,000 Wake County, North Carolina, 4.50%, 4/1/03........... 508,735
500,000 Wake County, North Carolina, 4.90%, 2/1/11, Callable
2/1/04 @ 102......................................... 505,675
510,000 Wayne County, North Carolina, 4.80%, 4/1/02.......... 522,668
500,000 Wayne County, North Carolina, 4.80%, 4/1/03.......... 513,405
500,000 Wilkes County, North Carolina, 5.00%, 6/1/01, AMBAC.. 514,360
500,000 Wilkes County, North Carolina, 5.00%, 6/1/02, AMBAC.. 516,910
500,000 Wilkes County, North Carolina, 5.30%, 6/1/08,
Callable 6/1/03 @ 102................................ 525,225
1,000,000 Wilmington, North Carolina, 4.60%, 3/1/02............ 1,018,000
505,000 Winston-Salem, North Carolina, 6.50%, 6/1/99......... 521,180
200,000 Winston-Salem, North Carolina, 6.40%, 6/1/02,
Callable 6/1/01 @ 102................................ 217,134
350,000 Winston-Salem, North Carolina, 6.25%, 4/1/07,
Callable 4/1/02 @ 102................................ 382,368
-----------
62,484,433
-----------
Health Care Bonds (10.3%):
245,000 Charlotte-Mecklenberg Hospital Authority, North
Carolina, 5.70%, 1/1/01.............................. 255,403
500,000 Charlotte-Mecklenberg Hospital Authority, North
Carolina, Health Care System Revenue, 4.90%, 1/15/11,
Callable 1/15/07 @102................................ 502,465
405,000 Charlotte-Mecklenburg Hospital Authority, North
Carolina, 5.70%, 1/1/01.............................. 422,626
185,000 Charlotte-Mecklenburg Hospital Authority, North
Carolina, 5.90%, 1/1/02.............................. 196,057
315,000 Charlotte-Mecklenburg Hospital Authority, North
Carolina, 5.90%, 1/1/02.............................. 334,388
110,000 Charlotte-Mecklenburg Hospital Authority, North
Carolina, Health Care System Revenue, 6.00%, 1/1/03.. 118,837
190,000 Charlotte-Mecklenburg Hospital Authority, North
Carolina, Health Care System Revenue, 6.00%, 1/1/03,
Callable 1/1/02 @ 102................................ 204,575
750,000 North Carolina Medical Care Commission, Hospital
Revenue, Baptist Hospital, 6.38%, 6/1/14............. 812,603
550,000 North Carolina Medical Care Commission, Presbyterian
Health Service Project, 4.90%, 10/1/01............... 565,296
400,000 North Carolina Medical Care Commission, Presbyterian
Health Service Project, 5.70%, 10/1/04, Callable
10/1/02 @ 102........................................ 429,468
900,000 North Carolina Medical Care Community, Hospital
Revenue, 4.63%, 6/1/09, Callable 6/1/08 @ 101,
AMBAC................................................ 887,220
500,000 North Carolina Medical Care Community, Hospital
Revenue, 5.10%, 11/1/09, Callable 11/1/07 @ 100,
AMBAC................................................ 517,220
1,000,000 North Carolina Medical Care Community, Hospital
Revenue, 6.13%, 6/1/10, Callable 6/1/03 @ 102........ 1,101,549
1,000,000 North Carolina Medical Care Community, Hospital
Revenue, 5.00%, 10/1/10, Callable 10/1/07 @ 102,
MBIA................................................. 1,024,630
1,000,000 Pitt County, North Carolina Revenue, Memorial
Hospital, 5.50%, 12/1/15, Callable 12/1/05 @ 102..... 1,034,010
250,000 University of North Carolina, Chapel Hill Hospital,
Revenue, 5.05%, 2/15/09, Callable 2/15/06 @ 102...... 257,233
-----------
8,663,580
-----------
</TABLE>
Continued
-36-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------------------------------------------------- -----------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Housing Bonds (0.5%):
$ 265,000 North Carolina Housing Finance Agency, 5.65%,
9/1/02............................................... $ 276,512
150,000 North Carolina Housing Finance Agency, 6.35%, 9/1/04,
Callable 9/1/02 @ 102, GNMA/FNMA..................... 158,886
-----------
435,398
-----------
Utility Bonds (11.4%):
500,000 Asheville, North Carolina, Water System Revenue,
5.30%, 8/1/09, Callable 8/1/06 @ 102, FGIC........... 528,495
1,500,000 Asheville, North Carolina, Water System Revenue,
5.63%, 8/1/16, Callable 8/1/06 @ 102, FGIC........... 1,579,785
600,000 Charlotte, North Carolina, Water & Sewer, 5.70%,
2/1/06, Callable 2/1/04 @ 101........................ 646,608
500,000 Charlotte, North Carolina, Water & Sewer, 5.60%,
5/1/17, Callable 5/1/06 @ 102........................ 527,120
1,000,000 Charlotte, North Carolina, Water & Sewer, 5.60%,
5/1/21, Callable 5/1/06 @ 102........................ 1,050,820
1,000,000 Charlotte, North Carolina, Water & Sewer, System
Revenue, 5.25%, 12/1/21, Callable 12/1/06 @ 102...... 1,005,610
305,000 Gastonia, North Carolina, Comb Utilities Revenue,
5.00%, 5/1/08, MBIA.................................. 316,239
500,000 Greensboro, North Carolina, Enterprise System
Revenue, Water Utility Improvements, 5.38%, 6/1/19,
Callable 6/1/05 @ 102................................ 508,830
500,000 North Carolina Municipal Power Agency, No 1, Catawba
Electric Revenue, 5.25%, 1/1/09...................... 514,030
380,000 North Carolina Municipal Power Agency, No 1, Catawba
Electric Revenue, 5.13%, 1/1/17...................... 376,132
500,000 Orange County, North Carolina, Water & Sewer
Authority Revenue, 5.20%, 7/1/16, Callable 7/1/03 @
102.................................................. 502,355
1,000,000 Shelby, North Carolina, Combined Enterprise System
Revenue, 5.63%, 5/1/14, Callable 5/1/05 @ 102........ 1,037,740
1,025,000 Winston-Salem, North Carolina, Water & Sewer, 5.00%,
6/1/12, Callable 6/1/07 @ 102........................ 1,031,427
-----------
9,625,191
-----------
Total Municipal Bonds 83,030,223
-----------
INVESTMENT COMPANIES (1.6%):
1,384,656 Blackrock Funds...................................... 1,384,656
-----------
Total Investment Companies 1,384,656
-----------
Total (Cost $81,588,966)(a) $84,414,879
===========
</TABLE>
- ----
Percentages indicated are based on net assets of $84,441,143.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion.................... $ 2,947,177
Unrealized deprecia-
tion.................... (121,264)
-----------
Net unrealized apprecia-
tion.................... $ 2,825,913
===========
</TABLE>
AMBAC - AMBAC Indemnity Corporation.
FGIC - Insured by Financial Guaranty Insurance Corporation.
FNMA - Insured by Federal National Mortgage Association.
GNMA - Insured by Government National Mortgage Association.
MBIA - Municipal Bond Insurance Association.
Continued
-37-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------------------------------------------------- -----------
<C> <S> <C>
MUNICIPAL BONDS (95.2%):
Education Bonds (32.9%):
$ 100,000 Beaufort County, South Carolina, School District,
7.00%, 2/1/00, Callable 5/11/98 @ 101................ $ 101,258
575,000 Beaufort County, South Carolina, School District,
6.75%, 3/1/00........................................ 605,360
250,000 Beaufort County, South Carolina, School District,
Series B, 5.00%, 3/1/06, Callable 3/1/04 @ 101....... 258,550
500,000 Brookland Cayce, South Carolina, School District,
5.00%, 3/1/11, Callable 3/1/05 @ 101................. 507,165
250,000 Cherokee County, South Carolina, School District No.
1, 5.00%, 3/1/01..................................... 256,790
250,000 Cherokee County, South Carolina, School District No.
1, 5.00%, 3/1/09, Callable 3/1/07 @ 101.............. 257,480
750,000 Citadel Military College, South Carolina, 5.13%,
4/1/12, Callable 4/1/06 @ 102........................ 760,312
500,000 Dorchester County, South Carolina, School District,
5.15%, 7/1/08, Callable 7/1/03 @ 102................. 518,625
250,000 Horry County, South Carolina, School District, 5.13%,
3/1/08, Callable 3/1/03 @ 101........................ 258,375
500,000 Horry County, South Carolina, School District, 5.60%,
1/1/16, Callable 1/1/05 @ 100........................ 517,605
250,000 Horry County, South Carolina, School District, Series
A, 5.10%, 3/1/09, Callable 3/1/05 @ 101.............. 257,670
750,000 Lexington County, South Carolina, School District No.
1, 6.30%, 2/1/00..................................... 782,812
500,000 South Carolina, Educational Facilities Authority,
Private Nonprofit Institutions, Furman University,
Project-Series A, 5.50%, 10/1/16, Callable 10/1/06 @
102.................................................. 518,575
500,000 University South Carolina, University Revenues,
5.65%, 6/1/12........................................ 529,965
250,000 York County, South Carolina, School District, 5.00%,
7/1/14, Callable 7/1/05 @ 102........................ 248,333
-----------
6,378,875
-----------
General Obligation Bonds (29.5%):
250,000 Anderson County, South Carolina, 4.70%, 4/1/12,
Callable 4/1/07 @ 102................................ 245,523
200,000 Charleston County, South Carolina, 5.50%, 6/1/06,
Callable 6/1/04 @102................................. 214,814
500,000 Charleston, South Carolina, 5.00%, 2/1/08, Callable
2/1/05 @ 102......................................... 518,025
250,000 Greenville Hospital System, South Carolina, Hospital
Facilities Revenue, Series A, 5.75%, 5/1/14, Callable
5/1/06 @ 102......................................... 261,470
250,000 Horry County, South Carolina, School District, 5.60%,
1/1/15, Callable 1/1/05 @ 100........................ 260,225
175,000 Irmo-Chapin, South Carolina, Recreation lmprovements,
5.00%, 2/1/16, Callable 2/1/08 @ 100................. 174,578
400,000 Irmo-Chapin, South Carolina, Recreation lmprovements,
5.00%, 2/1/15, Callable 2/1/08 @ 100................. 399,972
500,000 Lancaster County, South Carolina, School District,
4.80%, 7/1/11, Callable 7/1/08 @ 101................. 498,995
250,000 Myrtle Beach, South Carolina, Water & Sewer, 5.10%,
3/1/08, Callable 3/1/05 @ 102........................ 260,163
250,000 Richland County, South Carolina, Recreation District,
4.70%, 3/1/09........................................ 253,405
500,000 South Carolina State, 5.75%, 3/1/01.................. 524,504
300,000 South Carolina State, State Highway--Series B, 5.63%,
7/1/13, Callable 1/1/06 @ 102........................ 321,084
500,000 South Carolina State, State Highway--Series B, 5.65%,
7/1/19............................................... 527,419
250,000 South Carolina, Capital Improvements, Series B,
5.60%, 3/1/00, Callable 10/1/06 @ 102................ 258,248
500,000 Spartanburg, South Carolina, Water Works, 5.00%,
6/1/17, Callable 6/1/07 @ 101........................ 490,895
500,000 York County, South Carolina, 5.00%, 6/1/11, Callable
6/1/01 @ 102, AMBAC.................................. 503,360
-----------
5,712,680
-----------
Health Care Bonds (1.6%):
300,000 Lexington County, South Carolina, Health Services,
5.00%, 11/1/10, Callable 11/1/08 @ 102............... 300,543
-----------
Pollution Control Bonds (4.1%):
500,000 Charleston County, South Carolina, Solid Waste,
5.60%, 1/1/04........................................ 533,290
250,000 Oconee County, South Carolina, Pollution Revenue,
5.80%, 4/1/14, Callable 4/1/03 @ 102................. 262,143
-----------
795,433
-----------
</TABLE>
Continued
-38-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------------------------------------------------- -----------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Utility Bonds (27.1%):
$ 750,000 Beaufort-Jasper, South Carolina, Water & Sewer
Authority, Waterworks & Sewer System Revenue, 6.50%,
3/1/13, Callable 3/1/02 @ 102........................ $ 817,298
1,000,000 Berkeley County, South Carolina, Water & Sewer,
7.00%, 6/1/16........................................ 1,103,320
200,000 Camden, South Carolina, Public Utility Revenue,
5.50%, 3/1/22, Callable 3/1/07 @ 102................. 206,286
750,000 Columbia, South Carolina, Water & Sewer, 5.50%,
2/1/09............................................... 806,370
750,000 Greenville, South Carolina, Water Works, 5.30%,
2/1/14, Callable 2/1/07 @ 102........................ 769,095
500,000 Mount Pleasant, South Carolina, Water & Sewer, 6.00%,
12/1/20, Callable 12/1/02 @ 102...................... 539,120
500,000 Piedmont Municipal Power Agency, South Carolina
Electric Revenue, Series B, 5.25%, 1/1/12, Callable
1/1/07 @ 101.50...................................... 507,345
500,000 South Carolina, State Publishing Service Authority
Revenue, 5.00%, 1/1/18, Callable 1/1/03 @ 102........ 488,310
-----------
5,237,144
-----------
Total Municipal Bonds 18,424,675
INVESTMENT COMPANIES (6.4%):
702,006 Federated Municipal Obligations Fund................. 702,007
538,394 PNC Municipal Cash Fund.............................. 538,394
-----------
Total Investment Companies 1,240,401
-----------
Total (Cost $19,309,102)(a) $19,665,076
-----------
</TABLE>
- ----
Percentages indicated are based on net assets of $19,352,974.
(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.... $364,988
Unrealized depreciation.... (9,014)
--------
Net unrealized apprecia-
tion....................... $355,974
========
</TABLE>
AMBAC--AMBAC Indemnity Corporation.
See notes to financial statements.
-39-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
GROWTH AND INCOME STOCK FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (95.4%):
Aerospace/Defense (5.4%):
75,800 Lockheed Martin Corp. ............... $ 8,527,500
129,000 Parker-Hannifin Corp. ............... 6,611,250
17,500 Raytheon Co.--Class A................ 995,313
149,000 Raytheon Co.--Class B................ 8,697,875
-----------
24,831,938
-----------
Apparel (1.1%):
93,200 V. F. Corp. ......................... 4,898,825
-----------
Automobiles & Trucks (1.6%):
109,815 Ford Motor Co. ...................... 7,117,385
-----------
Banks (6.3%):
74,560 J.P. Morgan & Co. ................... 10,014,339
55,262 NationsBank Corp. ................... 4,030,672
135,450 Old Kent Financial Corp. ............ 5,197,894
93,000 Pacific Century Financial Corp. ..... 2,214,563
91,400 Wachovia Corp. ...................... 7,751,862
-----------
29,209,330
-----------
Beverages (2.4%):
241,305 Anheuser-Busch Cos.(b).................. 11,175,438
-----------
Business Equipment & Services (3.8%):
187,400 Harris Corp. ........................ 9,768,225
153,600 Pitney Bowes, Inc. .................. 7,708,800
-----------
17,477,025
-----------
Chemicals (2.5%):
44,300 Air Products & Chemicals, Inc. ...... 3,671,363
58,600 Great Lakes Chemical Corp. .......... 3,164,400
41,100 Vulcan Materials Co. ................ 4,500,450
-----------
11,336,213
-----------
Computer Software (1.0%):
103,000 Adobe Systems, Inc. ................. 4,654,313
-----------
Computers (3.0%):
123,000 Hewlett-Packard Co. ................. 7,795,125
57,400 IBM Corp. ........................... 5,962,425
-----------
13,757,550
-----------
Containers (1.3%):
94,000 Ball Corp. .......................... 3,078,500
70,750 Sonoco Products Co. ................. 2,834,422
-----------
5,912,922
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ --------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (CONTINUED):
Electrical Equipment (1.7%):
116,870 Emerson Electric......................................... $ 7,618,463
-----------
Electronic Components (1.2%):
94,000 Avnet, Inc. ............................................. 5,410,875
-----------
Electronic Instruments (1.0%):
98,950 Tektronix, Inc. ......................................... 4,415,644
-----------
Food & Related (4.7%):
160,000 Bob Evans Farms.......................................... 3,390,000
105,900 Dean Foods Co. .......................................... 5,328,094
223,700 SUPERVALU, Inc. ......................................... 10,430,012
52,500 Universal Foods Corp. ................................... 2,572,500
-----------
21,720,606
-----------
Forest & Paper Products (2.3%):
78,000 Kimberly-Clark Corp. .................................... 3,909,750
120,900 Weyerhaeuser Co. ........................................ 6,830,850
-----------
10,740,600
-----------
Health Care--General (7.8%):
116,000 Abbott Laboratories...................................... 8,736,250
152,000 Bausch & Lomb............................................ 6,944,500
148,300 Johnson & Johnson........................................ 10,872,243
241,500 Mallinckrodt, Inc. ...................................... 9,539,250
-----------
36,092,243
-----------
Household--Major Appliances (1.1%):
74,200 Whirlpool Corp. ......................................... 5,087,338
-----------
Household Products/Wares (3.3%):
145,500 American Greetings Corp. ................................ 6,693,000
121,000 Unilever NV, New York Shares............................. 8,303,625
-----------
14,996,625
-----------
Insurance (6.8%):
65,175 AON Corp. ............................................... 4,220,081
101,800 Lincoln National Corp. .................................. 8,640,275
209,800 SAFECO Corp. ............................................ 11,466,880
81,500 St. Paul Cos., Inc. ..................................... 7,263,688
-----------
31,590,924
-----------
Leisure Time Industries (1.7%):
216,350 Hasbro, Inc. ............................................ 7,639,859
-----------
Machinery & Equipment (1.8%):
148,500 Trinity Industries....................................... 8,148,938
-----------
Materials (1.1%):
109,700 Corning, Inc. ........................................... 4,854,225
-----------
</TABLE>
Continued
-40-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
GROWTH AND INCOME STOCK FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ --------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (CONTINUED):
Media (2.8%):
187,500 Banta Corp. ............................................. $ 5,800,781
140,800 Media General, Inc. ..................................... 6,925,600
-----------
12,726,381
-----------
Mining (0.7%):
48,500 Phelps Dodge Corp. ...................................... 3,131,281
-----------
Petroleum (6.1%):
117,500 Ashland, Inc. ........................................... 6,653,438
89,030 Chevron Corp. ........................................... 7,150,222
67,200 Mobil Corp. ............................................. 5,149,200
187,200 Phillips Petroleum Co. .................................. 9,348,299
-----------
28,301,159
-----------
Petroleum--International (1.1%):
92,600 Royal Dutch Petroleum Co. ............................... 5,260,838
-----------
Pharmaceuticals (2.8%):
84,740 Bristol-Myers Squibb Co. ................................ 8,839,441
50,200 Schering-Plough Corp. ................................... 4,100,713
-----------
12,940,154
-----------
Publishing (0.8%):
110,000 Houghton Mifflin Co. .................................... 3,506,250
-----------
Railroad (0.5%):
38,000 CSX Corp. ............................................... 2,261,000
-----------
Retail (1.4%):
98,500 May Department Stores Co. ............................... 6,254,750
-----------
Retail--Food Stores (1.1%):
194,000 American Stores Co. ..................................... 5,044,000
-----------
Security & Commission Brokers (2.1%):
217,762 Edwards (A.G.), Inc. .................................... 9,527,088
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ---------------------------------------------- -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED):
Tobacco (2.0%):
104,290 Philip Morris Cos., Inc. ..................... $ 4,347,589
152,600 U.S.T., Inc. ................................. 4,921,350
-------------
9,268,939
-------------
Transportation--Marine (0.8%):
126,500 Alexander & Baldwin........................... 3,866,156
-------------
Utilities--Electric (3.0%):
96,400 New Century Energies, Inc.(b).................... 4,856,150
206,000 Western Resources, Inc. ...................... 8,806,500
-------------
13,662,650
-------------
Utilities--Gas & Pipeline (1.7%):
60,400 Consolidated Natural Gas Co. ................. 3,484,325
100,800 NICOR, Inc. .................................. 4,258,800
-------------
7,743,125
-------------
Utilities--Telephone (5.6%):
139,415 AT&T Corp. ................................... 9,149,109
20,000 Cable & Wireless PLC.......................... 755,000
254,400 SBC Communications, Inc. ..................... 11,098,200
68,200 Sprint Corp. ................................. 4,616,288
-------------
25,618,597
-------------
Total Common Stocks 437,799,647
-------------
U.S. GOVERNMENT AGENCIES (1.5%):
Federal Home Loan Bank: (1.5%):
7,000,000 0.00%*, 5/1/98................................ 6,968,360
-------------
Total U.S. Government Agencies 6,968,360
-------------
INVESTMENT COMPANIES (3.2%):
14,559,049 Provident Federal Fund........................ 14,559,049
-------------
Total Investment Companies 14,559,049
-------------
Total (Cost--$294,250,504)(a) $ 459,327,056
-------------
</TABLE>
- ----
Percentages indicated are based on net assets of $458,666,047.
*Represents Discount Note.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion................... $165,692,450
Unrealized deprecia-
tion................... (615,898)
------------
Net unrealized appreci-
ation.................. $165,076,552
============
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements
-41-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
BALANCED FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (60.3%):
Aerospace/Defense (2.3%):
11,000 Lockheed Martin Corp. .................................... $ 1,237,499
23,000 Parker-Hannifin, Corp. ................................... 1,178,750
5,000 Raytheon Co--Class A...................................... 284,375
10,000 Raytheon Co--Class B...................................... 583,750
------------
3,284,374
------------
Apparel (0.9%):
25,000 V. F., Corp. ............................................. 1,314,063
------------
Automobiles & Trucks (1.1%):
25,000 Ford Motor Co. ........................................... 1,620,313
------------
Banks (3.9%):
30,800 Banc One Corp. ........................................... 1,948,099
14,500 J.P. Morgan & Co. ........................................ 1,947,531
20,000 Wachovia Corp. ........................................... 1,696,250
------------
5,591,880
------------
Beverages (1.0%):
30,000 Anheuser-Busch Cos.(b).................................... 1,389,375
------------
Business Equipment & Services (2.0%):
31,500 Harris Corp. ............................................. 1,641,938
26,000 Pitney Bowes, Inc. ....................................... 1,304,875
------------
2,946,813
------------
Chemicals (1.0%):
7,500 Air Products & Chemicals, Inc. ........................... 621,563
8,000 Vulcan Materials Co. ..................................... 876,000
------------
1,497,563
------------
Chemicals--Plastics (0.3%):
19,500 Schulman (A.), Inc. ...................................... 492,375
------------
Computer Software (1.0%):
31,000 Adobe Systems, Inc. ...................................... 1,400,813
------------
Computers (3.4%):
15,000 Hewlett-Packard Co. ...................................... 950,625
15,000 IBM Corp. ................................................ 1,558,125
22,000 Xerox Corp. .............................................. 2,341,624
------------
4,850,374
------------
Containers (0.6%):
23,000 Sonoco Products Co. ...................................... 921,438
------------
Diversified Products (0.5%):
10,000 E.I. duPont de Nemours Co. ............................... 680,000
------------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ------------------------------------------------------------ ----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Electrical & Electronic (0.4%):
7,200 Honeywell, Inc. ............................................ $ 595,350
----------
Electronic Equipment (0.8%):
17,500 Emerson Electric ........................................... 1,140,781
----------
Electronic Components (0.8%):
21,000 Avnet, Inc. ................................................ 1,208,813
----------
Electronic Instruments (1.0%):
32,500 Textronix, Inc. ............................................ 1,450,313
----------
Food & Related (3.7%):
29,000 Dean Foods Co. ............................................. 1,459,063
8,000 Dole Food Co. .............................................. 387,000
15,000 Sara Lee Corp. ............................................. 924,375
34,000 SUPERVALU, Inc. ............................................ 1,585,249
20,000 Universal Foods Corp. ...................................... 980,000
----------
5,335,687
----------
Forest & Paper Products (0.6%):
16,200 Weyerhaeuser Co. ........................................... 915,300
----------
Health Care--General (3.8%):
18,000 Abbott Laboratories......................................... 1,355,625
24,000 Bausch & Lomb............................................... 1,096,500
19,000 Johnson & Johnson........................................... 1,392,938
42,000 Mallinckrodt, Inc. ......................................... 1,658,999
----------
5,504,062
----------
Household--Major Appliances (1.0%):
22,000 Whirlpool Corp. ............................................ 1,508,375
----------
Household Products/Wares (0.5%):
9,500 Unilever NV, New York Shares................................ 651,938
----------
Insurance (5.8%):
27,000 American General Corp. ..................................... 1,746,562
6,750 Cigna Corp. ................................................ 1,383,749
15,000 Lincoln National Corp. ..................................... 1,273,125
24,000 SAFECO Corp. ............................................... 1,311,750
13,500 St. Paul Cos., Inc. ........................................ 1,203,188
29,000 Torchmark Corp. ............................................ 1,328,563
----------
8,246,937
----------
Machinery & Equipment (1.6%):
27,000 Ingersoll-Rand Co. ......................................... 1,294,312
17,500 Trinity Industries.......................................... 960,313
----------
2,254,625
----------
</TABLE>
Continued
-42-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
BALANCED FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Manufacturing--Capital Goods (0.4%):
11,000 Aeroquip-Vickers, Inc. ................................... $ 635,938
------------
Media (1.6%):
32,000 Banta Corp. .............................................. 990,000
12,000 Gannett Co. Inc. ......................................... 862,500
10,000 Media General, Inc. ...................................... 491,875
------------
2,344,375
------------
Medical Instruments (0.7%):
15,000 Becton Dickinson & Co. ................................... 1,020,938
------------
Petroleum (4.9%):
23,000 Ashland, Inc. ............................................ 1,302,375
13,000 Atlantic Richfield Co. ................................... 1,022,125
10,000 Chevron Corp. ............................................ 803,125
14,000 Mobil Corp. .............................................. 1,072,750
30,000 Phillips Petroleum Co. ................................... 1,498,124
5,500 Schlumberger Ltd. ........................................ 416,625
12,000 Texaco, Inc. 723,000
------------
6,838,124
------------
Pharmaceuticals (2.2%):
13,500 Bristol-Myers Squibb Co. ................................. 1,408,219
22,000 Schering-Plough Corp. .................................... 1,797,125
------------
3,205,355
------------
Railroad (0.5%)
12,000 CSX Corp. ................................................ 714,000
------------
Retail (2.0%):
13,000 Dayton Hudson Corp. ...................................... 1,144,000
14,500 J. C. Penney, Inc. ....................................... 1,097,469
10,000 May Department Stores Co. ................................ 635,000
------------
2.876,469
------------
Retail--Drug Stores (0.6%):
24,000 Rite-Aid Corp. ........................................... 822,000
------------
Retail--Food Stores (0.9%):
25,000 Albertson's, Inc. ........................................ 1,315,625
------------
Security Brokers & Dealers (0.7%):
24,000 Edwards (A.G.), Inc. ..................................... 1,050,000
------------
Tobacco (1.2%):
25,000 Philip Morris, Inc. ...................................... 1,042,188
22,000 U.S.T., Inc. ............................................. 709,500
------------
1,751,688
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Transportation--Marine (0.2%):
11,750 Alexander & Baldwin.................................... $ 359,109
------------
Utilities--Electric (1.8%):
13,000 FPL Group, Inc. ....................................... 835,250
30,000 Scana Corp. ........................................... 928,125
19,000 Western Resources, Inc. ............................... 812,250
------------
2,575,625
------------
Utilities--Gas & Pipeline (0.5%):
18,500 NICOR, Inc. ........................................... 781,625
------------
Utilities--Telephone (4.1%):
37,000 Ameritech Corp. ....................................... 1,829,188
11,000 AT&T Corp. ............................................ 721,875
50,000 SBC Communications, Inc. .............................. 2,181,249
16,000 Sprint Corp. .......................................... 1,083,000
------------
5,815,312
------------
Total Common Stocks 86,907,734
------------
PASS-THROUGH MORTGAGE SECURITIES (5.1%):
Federal Home Loan Mortgage Corp.: (0.5%):
730,192 7.50%, 7/1/07, Pool # E00108........................... 753,923
------------
Federal National Mortgage Assoc.: (4.6%):
1,868,622 6.00%, 6/1/03, Pool # 250581........................... 1,856,346
1,148,572 6.50%, 1/1/09, Pool # 50974............................ 1,157,186
1,316,969 6.50%, 4/1/09, Pool # 250009........................... 1,326,846
1,218,663 7.00%, 5/1/09, Pool # 250055........................... 1,244,560
924,152 7.00%, 4/1/24, Pool # 250005........................... 936,563
------------
6,521,501
------------
Total Pass-throughs Mortgage Securities 7,275,424
------------
U.S. GOVERNMENT AGENCIES (2.1%):
Federal Farm Credit Bank: (2.1%):
3,000,000 5.92%, 12/29/04........................................ 3,004,140
------------
Total U.S. Government Agencies 3,004,140
------------
U. S. Treasury Bonds (2.6%):
3,000,000 9.38%, 2/15/06......................................... 3,680,670
------------
Total U. S. Treasury Bonds 3,680,670
------------
U. S. Treasury Notes (23.7%):
3,000,000 7.50%, 5/15/02......................................... 3,195,960
7,000,000 6.25%, 2/15/03......................................... 7,165,620
5,000,000 7.25%, 5/15/04......................................... 5,394,800
</TABLE>
Continued
-43-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
BALANCED FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- ------------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES, CONTINUED:
U. S. Treasury Notes, continued:
3,000,000 7.88%, 11/15/04........................................ $ 3,350,010
4,000,000 7.50%, 2/15/05......................................... 4,399,360
5,000,000 6.50%, 10/15/06........................................ 5,243,550
5,000,000 6.63%, 5/15/07......................................... 5,303,550
------------
Total U. S. Treasury Notes 34,052,850
------------
INVESTMENT COMPANIES (5.8%):
2,522,789 Federated Short-Term U.S. Government Trust............. 2,522,789
5,817,260 Provident Federal Fund................................. 5,817,259
------------
Total Investment Companies 8,340,048
------------
Total (Cost--$112,802,824)(a) $143,260,866
============
</TABLE>
- ----
Percentages indicated are based on net assets of $143,814,040.
(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........ $30,793,456
Unrealized depreciation........ (335,434)
-----------
Net unrealized appreciation.... $30,458,042
===========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements
-44-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
LARGE COMPANY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (95.3%):
Aerospace/Defense (2.6%):
16,000 AlliedSignal, Inc. ....................................... $ 672,000
15,000 Parker-Hannifin Corp. .................................... 768,750
-----------
1,440,750
-----------
Air Transportation (1.4%):
20,000 Airborne Freight Corp. ................................... 752,500
-----------
Apparel (0.8%):
10,000 Nike, Inc. ............................................... 442,500
-----------
Automobiles & Trucks (1.1%):
10,000 PACCAR, Inc. ............................................. 595,625
-----------
Banks (7.9%):
8,000 Citicorp.................................................. 1,135,999
10,000 First American Corp. ..................................... 490,000
6,500 Mellon Bank Corp. ........................................ 412,750
11,400 Norwest Corp. ............................................ 473,813
10,000 State Street Corp. ....................................... 680,625
9,000 U.S. Bancorp.............................................. 1,122,750
-----------
4,315,937
-----------
Beverages (2.8%):
12,000 Coca-Cola Co. ............................................ 929,250
14,000 PepsiCo, Inc. ............................................ 597,625
-----------
1,526,875
-----------
Building/Construction Products (1.3%):
11,200 Illinois Tool Works, Inc. ................................ 725,200
-----------
Chemicals (0.5%):
10,000 Ecolab, Inc. ............................................. 290,000
-----------
Commercial Services (2.1%):
12,000 Apollo Group, Inc.(b)..................................... 577,500
10,000 Volt Information Sciences, Inc. .......................... 557,500
-----------
1,135,000
-----------
Computer Software (5.2%):
15,000 Cisco Systems, Inc.(b).................................... 1,025,625
16,000 Computer Associates International, Inc. .................. 924,000
10,000 Microsoft Corp.(b)........................................ 895,000
-----------
2,844,625
-----------
Computers (1.0%):
5,000 IBM Corp. ................................................ 519,375
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Diversified Products (7.8%):
10,000 Colgate-Palmolive Co...................................... $ 866,250
10,000 E.I. duPont de Nemours Co. ............................... 680,000
18,000 General Electric Co. ..................................... 1,551,374
9,700 Gillette Co. ............................................. 1,151,269
-----------
4,248,893
-----------
Electronic Components (8.3%):
13,000 Altera Corp.(b)........................................... 490,750
9,400 Avnet, Inc. .............................................. 541,088
25,000 Dallas Semiconductor Corp. ............................... 840,624
11,000 Intel Corp. .............................................. 858,687
10,000 Johnson Controls, Inc. ................................... 606,875
10,000 Motorola, Inc. ........................................... 606,250
15,000 Xilinx, Inc.(b)........................................... 561,563
-----------
4,505,837
-----------
Federal Corp. (1.0%):
10,000 Monsanto Co. ............................................. 520,000
-----------
Financial Services (5.7%):
7,000 American Express Co. ..................................... 642,688
20,000 Americredit Corp. ........................................ 550,000
15,000 Bear Stearns Cos, Inc. ................................... 770,625
5,000 Merrill Lynch & Co., Inc. ................................ 415,000
10,000 Morgan Stanley Dean Witter & Co. ......................... 728,750
-----------
3,107,063
-----------
Food & Related (6.1%):
5,000 Bestfoods................................................. 584,375
24,000 ConAgra, Inc. ............................................ 771,000
10,000 Dean Foods Co. ........................................... 503,125
14,000 Heinz (H.J.) Co. ......................................... 817,250
20,000 Interstate Bakeries Corp. ................................ 646,250
-----------
3,322,000
-----------
Health Care--General (1.1%):
8,000 Johnson & Johnson......................................... 586,500
-----------
Household Products/Wares (0.9%):
6,000 Procter & Gamble Co. ..................................... 506,250
-----------
Insurance (3.9%):
5,000 American International Group, Inc. ....................... 629,688
10,000 EXEL Ltd. ................................................ 775,000
15,000 SunAmerica, Inc. ......................................... 718,125
-----------
2,122,813
-----------
</TABLE>
Continued
-45-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
LARGE COMPANY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Leisure Time Industries (0.8%):
15,000 Callaway Golf Co. ........................................ $ 435,000
-----------
Medical Information Systems (1.1%):
10,000 HBO & Co. ................................................ 603,750
-----------
Medical Instruments (3.1%):
20,000 Medtronic, Inc. .......................................... 1,037,500
20,000 United States Surgical Corp. ............................. 660,000
-----------
1,697,500
-----------
Petroleum (5.4%):
5,000 Amoco Corp. .............................................. 431,875
10,000 Enron Corp. .............................................. 463,750
5,000 Mobil Corp. .............................................. 383,125
10,400 Texaco, Inc. ............................................. 626,600
10,000 Tidewater, Inc. .......................................... 438,125
15,300 USX-Marathon Group........................................ 575,663
-----------
2,919,138
-----------
Pharmaceuticals (8.7%):
5,000 American Home Products Corp. ............................. 476,875
12,600 Bristol-Myers Squibb Co. ................................. 1,314,337
30,000 Jones Medical Industries, Inc. ........................... 1,085,625
10,300 Merck & Co., Inc. ........................................ 1,322,262
6,000 Pfizer, Inc. ............................................. 598,125
-----------
4,797,224
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Retail (3.1%):
5,000 Gap, Inc. ............................................. $ 225,000
15,000 Wal-Mart Stores, Inc. ................................. 762,188
20,000 Walgreen Co. .......................................... 703,750
-----------
1,690,938
-----------
Retail--Speciality Stores (2.0%):
24,000 Claire's Stores, Inc. ................................. 550,500
8,000 Home Depot, Inc. ...................................... 539,500
-----------
1,090,000
-----------
Telecommunication--Equipment (2.3%):
10,000 Lucent Technologies, Inc. ............................. 1,278,750
-----------
Utilities--Telephone (7.3%):
15,000 Aliant Communications, Inc. ........................... 510,000
19,000 Ameritech Corp. ....................................... 939,313
20,000 BellSouth Corp. ....................................... 1,351,250
27,200 SBC Communications, Inc. .............................. 1,186,600
-----------
3,987,163
-----------
Total Common Stocks 52,007,206
-----------
INVESTMENT COMPANIES (4.9%):
460,466 Federated Short Term U.S. Government Fund.............. 460,466
2,207,861 Provident Federal Fund................................. 2,207,861
-----------
Total Investment Companies 2,668,327
-----------
Total (Cost $41,487,436)(a) $54,675,533
===========
</TABLE>
- ----
Percentages indicated are based on net assets of $54,557,254.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion.................... $13,591,855
Unrealized deprecia-
tion.................... (403,758)
-----------
Net unrealized apprecia-
tion.................... $13,188,097
===========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements
-46-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (92.0%):
Aerospace/Defense (0.5%):
7,300 Aeroflex, Inc.(b).................$ 96,725
14,600 Kellstrom Industries, Inc.(b)..... 367,738
-----------
464,463
-----------
Apparel (0.4%):
18,200 Ashworth, Inc.(b)................. 311,675
2,100 Columbia Sportswear Co.(b)........ 44,363
-----------
356,038
-----------
Beverages (0.3%):
6,200 Beringer Wine Estates(b).......... 320,075
-----------
Building/Construction Products (0.3%):
11,400 Advanced Lighting Technologies,
Inc.(b)........................ 294,975
-----------
Business Services (2.7%):
13,100 AccuStaff, Inc.(b)............. 451,950
18,100 Devry, Inc.(b)................. 618,794
33,400 Robert Half International,
Inc. .......................... 1,603,200
-----------
2,673,944
-----------
Collectibles (0.9%):
25,900 Action Performance Cos.,
Inc.(b)........................ 911,356
-----------
Commercial Services (6.8%):
21,050 Apollo Group, Inc.(b).......... 1,013,031
30,400 Cambridge Technology Partners,
Inc.(b)........................ 1,506,700
27,052 Concentra Managed Care,
Inc.(b)........................ 831,849
9,400 Envoy Corp.(b)................. 404,200
15,400 First Consulting Group,
Inc.(b)........................ 317,625
10,800 Hagler Bailly, Inc.(b)......... 270,000
22,700 Quintiles Transnational
Corp.(b)....................... 1,093,856
25,900 Whittman-Hart, Inc.(b)......... 1,171,975
-----------
6,609,236
-----------
Communications Equipment (5.9%):
12,800 Abacus Direct Corp.(b)......... 668,800
11,600 Billing Concepts Corp.(b)...... 300,875
2,500 DSET Corp.(b).................. 46,719
7,100 Geotel Communications
Corp.(b)....................... 196,138
10,200 Inter-Tel, Inc. ............... 274,763
17,800 International Telecommunication
Data Systems, Inc.(b).......... 465,025
1,400 Natural Microsystems Corp.(b).. 55,475
14,850 NCO Group, Inc.(b)............. 371,250
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Communications Equipment, continued:
16,100 Nice-Systems Ltd.(b)...................................... $ 740,600
37,400 Prepaid Legal Services, Inc.(b)........................... 1,327,699
6,300 Steiner Leisure Ltd.(b)................................... 320,119
32,000 Superior Services, Inc.(b)................................ 997,999
-----------
5,765,462
-----------
Computer Services (4.4%):
7,200 Affiliated Computer Services, Inc.(b)..................... 238,950
24,000 Ciber, Inc.(b)............................................ 1,678,499
32,600 Complete Business Solutions, Inc.(b)...................... 1,169,524
11,400 Computer Management Sciences, Inc.(b)..................... 315,638
4,900 Cotelligent Group, Inc.(b)................................ 145,163
10,800 Mastech Corp.(b).......................................... 550,463
4,700 SPR, Inc.(b).............................................. 155,100
-----------
4,253,337
-----------
Computer Software (18.4%):
18,200 Aspect Development, Inc.(b)............................... 998,725
7,100 Axent Technologies, Inc.(b)............................... 216,550
39,600 CBT Group PLC ADR(b)...................................... 2,049,299
8,900 CCC Information Services Group, Inc.(b)................... 244,750
22,400 Datastream Systems, Inc.(b)............................... 495,600
10,000 Documentum, Inc.(b)....................................... 541,250
5,100 Edify Corp.(b)............................................ 102,956
17,250 Engineering Animation, Inc.(b)............................ 715,875
4,700 FlexiInternational Software, Inc.(b)...................... 58,750
4,900 Fundtech Ltd.(b).......................................... 88,200
5,300 Genesys Telecomm Labs, Inc.(b)............................ 201,400
22,100 Hyperion Software Corp.(b)................................ 977,925
29,100 Industri-Matematik International Corp.(b)................. 913,013
10,800 Information Management Resources, Inc.(b)................. 635,850
11,100 INSpire Insurance Solutions, Inc.(b)...................... 369,075
24,400 JDA Software Group, Inc.(b)............................... 1,296,249
8,200 Legato Systems, Inc.(b)................................... 486,875
16,700 Manugistics Group, Inc.(b)................................ 936,244
9,300 Mecklermedia Corp.(b)..................................... 224,363
4,500 Memco Software Ltd.(b).................................... 140,625
20,000 Mercury Interactive Corp.(b).............................. 730,000
</TABLE>
Continued
-47-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Computer Software, continued:
15,000 Platinum Software Corp.(b)................................ $ 348,750
11,800 Sapient Corp.(b).......................................... 559,025
45,400 Saville Systems Ireland PLC ADR(b)........................ 2,326,749
1,900 Smallworldwide PLC ADR(b)................................. 37,050
7,000 SS&C Technologies, Inc.(b)................................ 118,125
7,100 STB Systems, Inc.(b)...................................... 142,000
4,500 Transition Systems, Inc.(b)............................... 91,688
20,100 VERITAS Software Corp.(b)................................. 1,188,413
13,600 Visio Corp.(b)............................................ 584,800
4,700 Walker Interactive Systems, Inc.(b)....................... 91,944
-----------
17,912,118
-----------
Computers (0.7%):
10,600 Henry (Jack) & Associates, Inc. .......................... 381,600
2,400 ISS Group, Inc.(b)........................................ 93,300
2,900 Micros Systems, Inc.(b)................................... 174,363
4,700 MTI Technology Corp.(b)................................... 81,075
-----------
730,338
-----------
Distribution Services (1.0%):
42,000 Keystone Automotive Industries, Inc.(b)................... 1,002,750
-----------
Educational Services (2.0%):
9,300 Advantage Learning Systems, Inc.(b)....................... 319,688
4,500 Bright Horizons, Inc.(b).................................. 114,750
18,100 Strayer Education, Inc.(b)................................ 601,825
19,800 Sylvan Learning Systems, Inc.(b).......................... 933,075
-----------
1,969,338
-----------
Electronic Components (1.9%):
6,700 Aavid Thermal Technologies, Inc.(b)....................... 206,863
6,450 Burr-Brown Corp.(b)....................................... 161,250
8,600 Cable Design Technologies(b).............................. 259,075
5,200 QLogic Corp.(b)........................................... 184,600
7,300 SIPEX Corp.(b)............................................ 240,900
17,600 Vitesse Semiconductor Corp.(b)............................ 829,950
-----------
1,882,638
-----------
Entertainment (2.8%):
24,500 Cinar Films, Inc.(b)...................................... 1,044,312
8,200 Dover Downs Entertainment, Inc. .......................... 241,900
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Entertainment, continued:
29,000 Speedway Motorsports, Inc.(b)............................. $ 777,563
25,300 Vistana, Inc.(b).......................................... 670,450
-----------
2,734,225
-----------
Environmental Services (1.7%):
28,200 American Disposal Services, Inc.(b)....................... 1,064,550
25,300 Eastern Environmental Services, Inc.(b)................... 641,988
-----------
1,706,538
-----------
Food & Related (0.7%):
17,000 American Italian Pasta Co.(b)............................. 614,125
4,200 Gardenburger, Inc.(b)..................................... 57,225
-----------
671,350
-----------
Health Care--Hospitals (1.5%):
31,700 National Surgery Centers, Inc.(b)......................... 810,331
11,900 Province Healthcare Co.(b)................................ 312,375
9,600 Res-Care, Inc.(b)......................................... 357,600
-----------
1,480,306
-----------
Homebuilders--Mobile Homes (1.4%):
37,000 Oakwood Homes Corp. ...................................... 1,355,125
-----------
Hotels & Motels (1.0%):
28,200 CapStar Hotel Co.(b)...................................... 978,188
-----------
Household Products/Wares (0.9%):
5,400 Central Garden & Pet Co.(b)............................... 210,938
19,600 Fossil, Inc.(b)........................................... 634,550
-----------
845,488
-----------
Insurance (0.7%):
12,200 Vesta Insurance Group, Inc. .............................. 654,225
-----------
Leisure Time Industries (0.8%):
12,700 Family Golf Centers, Inc. ................................ 514,350
10,200 North Face, Inc.(b)....................................... 247,350
-----------
761,700
-----------
Medical--Biotechnology (2.2%):
24,800 Incyte Pharmaceuticals, Inc.(b)........................... 1,159,400
7,100 QIAGEN N.V.(b)............................................ 473,925
18,400 Serologicals Corp.(b)..................................... 519,800
-----------
2,153,125
-----------
</TABLE>
Continued
-48-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Medical--Hospital Management & Services (1.7%):
33,000 American Oncology Resources, Inc.(b)...................... $ 503,250
38,300 Orthodontic Centers of America, Inc.(b)................... 830,631
8,000 Renal Care Group, Inc.(b)................................. 304,000
-----------
1,637,881
-----------
Medical Equipment & Suplies (0.8%):
9,600 ATL Ultrasound, Inc.(b)................................... 488,400
17,500 Hanger Orthopedic Group, Inc.(b).......................... 294,219
-----------
782,619
-----------
Medical Information Systems (1.1%):
17,900 IDX Systems Corp.(b)...................................... 778,650
11,800 Medical Manager Corp.(b).................................. 342,200
-----------
1,120,850
-----------
Medical Instruments (3.4%):
9,500 Impath, Inc.(b)........................................... 363,375
10,750 Patterson Dental Co.(b)................................... 333,250
20,200 Sabratek Corp.(b)......................................... 706,999
22,700 Safeskin Corp.(b)......................................... 1,676,962
8,300 Ventana Medical Systems, Inc.(b).......................... 220,988
-----------
3,301,574
-----------
Office Equipment & Services (0.8%):
14,400 Applied Graphics Technologies, Inc. ...................... 693,000
4,800 CompX International, Inc.(b).............................. 112,200
-----------
805,200
-----------
Petroleum (4.4%):
20,500 Atwood Oceanics, Inc.(b).................................. 1,108,281
51,800 Core Laboratories N.V.(b)................................. 1,262,624
28,400 Global Industries Ltd.(b)................................. 578,650
22,200 Marine Drilling Cos., Inc.(b)............................. 480,075
14,000 Petroleum Geo-Services ASA(b)............................. 831,250
-----------
4,260,880
-----------
Pharmaceuticals (2.4%):
6,900 Rexall Sundown, Inc.(b)................................... 235,031
15,000 Shire Pharmaceuticals(b).................................. 321,563
28,100 Theragenics Corp.(b)...................................... 1,789,619
-----------
2,346,213
-----------
Professional Sports (0.0%):
2,400 Championship Auto Racing Teams, Inc.(b)................... 44,400
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Restaurants (3.1%):
9,000 Cheesecake Factory (The)(b)............................... $ 299,813
30,940 CKE Restaurants, Inc. .................................... 1,137,045
40,325 Papa John's International, Inc.(b)........................ 1,547,471
-----------
2,984,329
-----------
Retail--Apparel (2.1%):
4,900 American Eagle Outfitters, Inc.(b)........................ 215,600
17,500 dELiA*s, Inc.(b).......................................... 420,000
7,000 Hot Topic, Inc.(b)........................................ 196,000
22,550 Pacific Sunwear of California(b).......................... 935,825
8,400 Wet Seal, Inc. ........................................... 317,625
-----------
2,085,050
-----------
Retail--Food Stores (2.2%):
20,200 Whole Foods Market, Inc.(b)............................... 1,408,950
20,700 Wild Oats Markets, Inc.(b)................................ 737,438
-----------
2,146,388
-----------
Retail--Speciality Stores (2.1%):
15,600 Hancock Fabrics, Inc. .................................... 242,775
33,700 Linens 'N Things, Inc.(b)................................. 1,851,394
-----------
2,094,169
-----------
Retirement/Aged Care (1.6%):
8,100 Brookdale Living Communities, Inc.(b)..................... 204,525
8,900 Carematrix Corp.(b)....................................... 273,675
23,700 Sunrise Assisted Living, Inc.(b).......................... 1,060,575
-----------
1,538,775
-----------
Telecommunications (2.4%):
17,600 IDT Corp.(b).............................................. 660,000
15,900 Tekelec(b)................................................ 721,463
40,600 Tel-Save Holdings, Inc.(b)................................ 923,650
-----------
2,305,113
-----------
Transportation Services (0.4%):
8,700 Coach USA, Inc.(b)........................................ 378,450
-----------
Utilities--Telephone (3.6%):
24,000 Pacific Gateway Exchange, Inc.(b)......................... 1,374,000
19,400 SmarTalk Teleservices, Inc.(b)............................ 619,588
27,000 Star Telecommunications, Inc.(b).......................... 1,501,874
-----------
3,495,462
-----------
Total Common Stocks 89,813,691
-----------
</TABLE>
Continued
-49-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
PASS-THROUGHS MORTGAGE SECURITIES (6.6%):
Federal Home Loan Mortgage Corp.: (6.6%):
6,399,000 0.00%*, 4/1/98......................................... $ 6,399,000
-----------
Total Pass-throughs Mortgage Securities 6,399,000
-----------
Total (Cost $73,358,229)(a) $96,212,691
===========
</TABLE>
- ----
Percentages indicated are based on net assets of $97,523,649.
* Represents Discount Note.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion.................... $23,653,320
Unrealized deprecia-
tion.................... (798,858)
-----------
Net unrealized apprecia-
tion.................... $22,854,462
===========
</TABLE>
(b) Represents non-income producing securities.
ADR--American Depository Receipt.
PLC--Private Limited Company.
See notes to financial statements
-50-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (93.0%):
AUSTRALIA (1.2%):
Banks (0.3%):
50,000 Australia & New Zeland Banking Group Ltd............... $ 334,893
-----------
Broadcasting (0.4%):
42,000 News Corp. ............................................ 277,690
-----------
Communication Equipment (0.3%):
78,000 Telstra Corp. Ltd.--Installment Recapture.............. 201,215
-----------
Metals--Diversified (0.2%):
215,000 M.I.M. Holdings........................................ 125,469
-----------
939,267
-----------
BRAZIL (2.5%):
Banks (1.2%):
24,324 Unibanco--GDR.......................................... 881,745
-----------
Telecommunications (0.8%):
5,900,000 Telebras............................................... 612,236
-----------
Utilities--Electric (0.5%):
28,000 Copel.................................................. 407,750
-----------
1,901,731
-----------
CHILE (0.5%):
Metals--Diversified (0.5%):
26,300 Cristalerias de Chile--ADR............................. 361,625
-----------
FINLAND (0.9%):
Diversified Products (0.9%):
38,500 Asko Oy-A.............................................. 705,861
-----------
FRANCE (10.1%):
Banks (2.4%):
5,000 Dexia France........................................... 669,821
6,000 Societe Generale....................................... 1,200,835
-----------
1,870,656
-----------
Communication Equipment (1.0%):
15,000 France Telecom SA...................................... 791,195
-----------
Consumer Goods & Services (0.6%):
8,000 Guy Degrenne SA........................................ 423,520
-----------
Diversified Products (0.9%):
4,000 Compagnie Generale des Eaux............................ 649,484
-----------
Electronic Components (0.2%):
2,250 SGS-Thompson Microelectronics NV(b).................... 176,821
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ --------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
FRANCE, CONTINUED:
Household--General Products (0.8%):
24,000 Moulinex................................................. $ 596,544
-----------
Insurance--Multiline (1.1%):
8,000 Axa--AUP................................................. 823,799
-----------
Petroleum (1.0%):
6,000 Total SA-B............................................... 720,501
-----------
Retail--General Merchandise (1.3%):
1,250 Pinault-Printemps-Redoute SA............................. 966,398
-----------
Tire & Rubber Products (0.8%):
10,000 Michelin................................................. 597,028
-----------
7,615,946
-----------
GERMANY (6.9%):
Automobiles & Trucks (1.4%):
2,000 MAN AG................................................... 665,644
500 Volkswagen AG............................................ 391,492
-----------
1,057,136
-----------
Banks (1.7%):
25,000 Commerzbank AG........................................... 905,730
5,000 Deutsche Bank AG......................................... 374,864
-----------
1,280,594
-----------
Diversified Products (1.0%):
10,500 VEBA AG.................................................. 748,606
-----------
Machine Diversified (0.8%):
15,000 Boewe Systec AG.......................................... 628,604
-----------
Machinery & Equipment (2.0%):
800 GEA AG................................................... 329,199
1,630 Mannesmann AG............................................ 1,179,309
-----------
1,508,508
-----------
5,223,448
-----------
GREAT BRITAIN (25.3%):
Aerospace/Defense (0.7%):
15,000 British Aerospace PLC.................................... 493,589
-----------
Auto Parts (0.7%):
150,000 Mayflower Corp. PLC...................................... 536,291
-----------
Banks (5.2%):
30,000 Abbey National PLC....................................... 577,738
25,000 Barclays PLC............................................. 748,128
</TABLE>
Continued
-51-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ --------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
GREAT BRITAIN, CONTINUED:
Banks, continued:
32,000 HSBC Holdings PLC........................................ $ 1,033,698
95,000 Lloyds TSB Group PLC..................................... 1,482,691
-----------
3,842,255
-----------
Communication Equipment (1.5%):
70,000 British Telecommunications PLC........................... 760,771
215,000 IMS Group PLC............................................ 383,442
-----------
1,144,213
-----------
Construction Materials (0.4%):
120,000 Bryant Group PLC......................................... 284,347
-----------
Consumer Goods & Services (0.8%):
63,000 Unilever PLC............................................. 592,382
-----------
Diversified Products (1.5%):
40,000 BBA Group PLC............................................ 298,079
40,000 General Electric Co. PLC................................. 317,170
30,000 Granada Group PLC........................................ 539,305
-----------
1,154,554
-----------
Food & Related (2.4%):
180,000 Asda Group PLC........................................... 604,364
35,000 Cadbury Schweppes PLC.................................... 477,680
63,072 Diageo PLC............................................... 740,399
-----------
1,822,443
-----------
Hotel Management & Related Services (0.4%):
115,000 Jarvis Hotels PLC........................................ 325,459
-----------
Household--General Products (0.1%):
215,000 Limelight Group PLC(b)................................... 100,811
-----------
Insurance--Life (2.1%):
45,000 Norwich Union PLC........................................ 349,468
43,000 Prudential Corp. PLC..................................... 630,790
45,000 Royal & Sun Alliance Insurance Group..................... 570,076
-----------
1,550,334
-----------
Petroleum (1.3%):
67,407 British Petroleum Co. PLC................................ 967,945
-----------
Pharmaceuticals (3.0%):
48,000 Glaxo Wellcome PLC....................................... 1,274,840
80,000 SmithKline Beecham PLC................................... 1,002,082
-----------
2,276,922
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ --------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
GREAT BRITAIN, CONTINUED:
Real Estate (0.8%):
33,000 Land Securities PLC...................................... $ 589,644
-----------
Restaurants (0.8%):
33,000 Whitbread PLC............................................ 613,407
-----------
Retail--General Merchandise (1.1%):
28,000 Boots Co. PLC............................................ 441,224
22,000 Kingfisher PLC........................................... 412,253
-----------
853,477
-----------
Transportation (0.5%):
115,000 NFC PLC.................................................. 347,605
-----------
Utilities--Electric (0.6%):
78,250 National Grid Group PLC.................................. 459,287
-----------
Utilities--Gas (0.7%):
105,000 BG PLC................................................... 543,324
-----------
Utilities--Water (0.7%):
57,500 Yorkshire Water PLC...................................... 504,076
-----------
19,002,365
-----------
HONG KONG (0.6%):
Machinery & Equipment (0.6%):
640,000 First Tractor Co. ....................................... 437,787
-----------
INDIA (0.5%):
Banks (0.5%):
20,000 State Bank of India GDR.................................. 343,750
-----------
INDIONESIA (0.1%):
Retail--General Merchandise (0.1%):
70,000 PT Ramayana Lestari Sentosa.............................. 44,308
-----------
ITALY (5.7%):
Building & Construction (0.7%):
50,000 Unicem SpA............................................... 565,043
-----------
Insurance--Multiline (1.6%):
370,000 Instituto Naztionale Delle Assicurazioni................. 1,199,591
-----------
Petroleum (1.4%):
150,000 ENI SpA.................................................. 1,022,014
-----------
Telecommunications (2.0%):
50,000 Telecom Italia Mobile SpA................................ 268,670
155,000 Telecom Italia SpA....................................... 1,221,466
-----------
1,490,136
-----------
4,276,784
-----------
</TABLE>
Continued
-52-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
JAPAN (12.1%):
Automobiles & Trucks (0.7%):
57,000 Suzuki Motor Corp. ....................................... $ 534,304
-----------
Banks (1.4%):
74,000 Eighteenth Bank........................................... 427,293
30,000 Sanwa Bank Ltd. .......................................... 267,714
47,000 Sumitomo Trust & Banking.................................. 303,462
-----------
998,469
-----------
Chemicals--Petroleum & Inorganic (0.5%):
20,000 Shin-Etsu Chemical Co. Ltd. .............................. 395,947
-----------
Communication Equipment (0.3%):
85,000 C-Cube Corp. ............................................. 254,329
-----------
Cosmetics & Toiletries (0.5%):
34,000 Shiseido Co., Ltd. ....................................... 390,098
-----------
Data Processing (0.5%):
40,000 Ricoh Co. Ltd. ........................................... 401,947
-----------
Electrical Equipment (1.3%):
21,000 Hitachi Cable, Ltd. ...................................... 122,834
25,000 Matsushita Electric Industrial Co., Ltd. ................. 401,197
5,000 Sony Corp. ............................................... 423,693
-----------
947,724
-----------
Electronic Components (1.3%):
79,000 Hitachi, Ltd. ............................................ 574,649
7,000 Mabuchi Motor Co., Ltd. .................................. 388,448
-----------
963,097
-----------
Insurance--Property & Casualty (0.7%):
80,000 Sumitomo Marine & Fire.................................... 494,334
-----------
Machinery & Equipment (0.5%):
22,000 Komori Corp. ............................................. 349,753
-----------
Metals--Diversified (0.2%):
40,000 Tsubaki Nakashima Co. Ltd. ............................... 182,676
-----------
Pharmaceuticals (0.3%):
19,000 Eisai Co. Ltd. ........................................... 260,740
-----------
Photographic Equipment (0.8%):
17,000 Fuji Photo Film........................................... 632,316
-----------
Real Estate (0.6%):
44,000 Mitsui Fudosan............................................ 419,044
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ --------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
JAPAN, CONTINUED:
Retail--Food Stores (0.8%):
11,000 ITO-Yokado Co. Ltd. ..................................... $ 595,571
-----------
Telecommunications (0.5%):
45 NTT Corp. ............................................... 374,575
-----------
Textiles (0.5%):
39,000 Kuraray Co. Ltd. ........................................ 342,179
-----------
Tire & Rubber Products (0.6%):
20,000 Bridgestone Corp. ....................................... 452,940
-----------
Toys/Games/Hobbies (0.1%):
1,300 Nintendo Company Ltd. ................................... 112,110
-----------
9,102,153
-----------
MALAYSIA (1.2%):
Banks (0.4%):
87,000 Malayan Banking Berhad................................... 334,623
-----------
Leisure & Recreation (0.5%):
98,000 Genting Berhad........................................... 336,547
-----------
Utilities--Electric (0.3%):
103,000 Tenaga Nasional Berhad................................... 260,336
-----------
931,506
-----------
MEXICO (2.0%):
Building & Construction (1.0%):
170,000 Cemex.................................................... 770,387
-----------
Telecommunications (1.0%):
13,200 Telmex ADR............................................... 744,150
-----------
1,514,537
-----------
NETHERLANDS (5.7%):
Banks (1.8%):
25,000 ING Grouep N.V........................................... 1,418,686
-----------
Business Services (0.4%):
10,800 Vedior N.V.-CVA.......................................... 271,985
-----------
Electronic Components (0.9%):
9,000 Philips Electronics...................................... 660,534
-----------
Publishing (1.6%):
35,000 VNU-Verenigde Nederalndse Uitgeversbedrijven............. 1,197,069
-----------
Retail--General Merchandise (1.0%):
12,000 Vendex International N.V. ............................... 759,830
-----------
4,308,104
-----------
</TABLE>
Continued
-53-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ --------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
NORWAY (0.5%):
Petroleum (0.5%):
7,050 Petroleum Geo-Services(b)................................ $ 411,495
-----------
PERU (0.7%):
Telecommunications (0.7%):
26,200 Telefonica del Peru ADR.................................. 564,938
-----------
PHILIPPINES (0.4%):
Multi-Media (0.1%):
25,000 Benpres Holdings Corp.--GDR.............................. 75,000
-----------
Telecommunications (0.3%):
61,000 Manila Electric Co.-B.................................... 199,584
-----------
274,584
-----------
POLAND (0.3%):
Banks (0.3%):
13,334 Bank Handlowy............................................ 214,321
-----------
SINGAPORE (2.5%):
Banks (0.9%):
55,000 Development Bank of Singapore (Foreign).................. 401,870
52,000 United Overseas Bank (Foreign)........................... 288,182
-----------
690,052
-----------
Electrical Equipment (0.7%):
153,000 GP Batteries International............................... 502,120
-----------
Publishing (0.8%):
49,764 Singapore Press Holdings................................. 570,069
-----------
Real Estate (0.1%):
58,000 DBS Land................................................. 98,046
-----------
1,860,287
-----------
SOUTH AFRICA (1.2%):
Building & Construction (0.6%):
280,000 Murray & Roberts Holdings, Ltd. ......................... 466,771
-----------
Chemicals (0.6%):
115,000 Aeci Ltd. ............................................... 429,064
-----------
895,835
-----------
SPAIN (3.8%):
Apparel (0.6%):
13,000 Adolfo Dominguez SA...................................... 441,309
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
SPAIN, CONTINUED:
Banks (1.4%):
3,250 Argentaria............................................ $ 269,091
16,000 Banco Santander SA.................................... 796,890
-----------
1,065,981
-----------
Communication Equipment (1.8%):
30,200 Telefonica de Espana.................................. 1,331,020
-----------
2,838,310
-----------
SWEDEN (1.5%):
Banks (0.9%):
20,000 Foreningssparbanken A................................. 659,222
-----------
Medical Equipment & Supplies (0.6%):
25,000 Getinge Industrier AB-B Shares........................ 480,032
-----------
1,139,254
-----------
SWITZERLAND (6.8%):
Banks (1.7%):
3,000 Credit Suisse Group-Registered........................ 600,203
2,000 Union Bank of Switzerland............................. 652,681
-----------
1,252,884
-----------
Food & Related (1.5%):
600 Nestle SA-Registered.................................. 1,146,487
-----------
Medical--Biotechnology (0.3%):
1,000 Sulzer Medica-Registered.............................. 249,921
-----------
Pharmaceuticals (3.3%):
750 Novartis AG........................................... 1,327,335
105 Roche Holding AG-Genusss.............................. 1,136,451
-----------
2,463,786
-----------
5,113,078
-----------
Total Common Stocks 70,021,274
-----------
PREFERRED STOCKS (1.3%):
BRAZIL (0.3%):
Utilities--Electric (0.3%):
16,500,000 Copel ADR............................................. 237,550
-----------
GERMANY (1.0%):
Machinery & Equipment (0.4%):
800 GEA AG................................................ 294,159
-----------
Medical--Biotechnology (0.6%):
14,000 Biotest AG............................................ 461,787
-----------
755,946
-----------
Total Preferred Stocks 993,496
-----------
</TABLE>
Continued
-54-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
WARRANTS AND RIGHTS (0.0%):
FRANCE (0.0%):
Diversified Products (0.0%):
4,000 Generale des Eaux...................................... $ 4,487
-----------
GERMANY (0.0%):
Automobiles & Trucks (0.0%):
500 Volkswagen............................................. 9,084
-----------
SINGAPORE (0.0%):
Banks (0.0%):
10,000 Development Bank of Singapore (Foreign)................ 20,434
-----------
Total Warrants and Rights 34,005
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
CASH SWEEP (6.3%):
4,767,191 Bank of New York, Brussels Cash Account................ $ 4,767,191
-----------
Total Cash Sweep 4,767,191
-----------
Total (Cost $66,603,958)(a) $75,815,966
===========
</TABLE>
- ----
Percentages indicated are based on net assets of $75,385,758.
(a) Represents cost for federal income tax purposes and differs from market
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion.................... $12,716,290
Unrealized deprecia-
tion.................... (3,504,282)
-----------
Net unrealized apprecia-
tion.................... $ 9,212,008
===========
</TABLE>
(b) Represents non-income producing securities.
ADR - American Depository Receipt
AG - Aktiengesellschaft (West German Stock Co.)
GDR - Global Depository Receipt
PLC - Public Limited Company
SA - Societe Anonyme (French Corp.)
SpA - Societa per Azioni (Italian Corp.)
At March 31, 1998, the International Equity Fund's open forward foreign
currency exchange contracts were as follows:
<TABLE>
<CAPTION>
UNREALIZED
DELIVERY CONTRACT CONTRACT CONTRACT MARKET APPRECIATION/
CURRENCY DATE PRICE ** AMOUNT VALUE VALUE (DEPRECIATION)
- -------- -------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Short Contracts
U.S. Dollar............ 4/1/98 1.000000 65,703 $ 65,703 $ 65,703 $ 0
U.S. Dollar............ 4/1/98 1.000000 177,140 177,140 177,140 0
U.S. Dollar............ 4/2/98 1.000000 170,012 170,012 170,012 0
U.S. Dollar............ 4/2/98 1.000000 308,481 308,481 308,481 0
-------- -------- -------
Total Short Contracts.............................. $721,336 $721,336 $ 0
======== ======== =======
Long Contracts
British Sterling
Pound.................. 4/1/98 0.592066 38,900 $ 65,703 $ 65,143 $ (560)
British Sterling
Pound.................. 4/1/98 0.592066 104,879 177,140 175,630 (1510)
British Sterling
Pound.................. 4/2/98 0.593472 100,597 170,012 168,963 (1,049)
British Sterling
Pound.................. 4/2/98 0.593472 183,075 308,481 306,577 (1,904)
-------- -------- -------
Total Long Contracts............................... $721,336 $716,313 $(5,023)
======== ======== =======
</TABLE>
** Contract price is in local currency
See notes to financial statements
-55-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
CAPITAL MANAGER CONSERVATIVE GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
INVESTMENT COMPANIES (100.4%):
402,067 BB&T Balanced Fund..................................... $ 5,874,194
112,506 BB&T Growth & Income Stock Fund........................ 2,371,620
439,133 BB&T Intermediate Bond Fund............................ 4,400,114
123,755 BB&T International Equity Fund......................... 1,477,636
96,674 BB&T Large Company Growth Fund......................... 1,026,678
560,182 BB&T Short-Intermediate Bond Fund...................... 5,495,388
54,192 BB&T Small Company Growth Fund......................... 1,238,833
1,207,627 BB&T U.S. Treasury Money Market Fund................... 1,207,626
-----------
Total Investment Companies...................................... 23,092,089
-----------
Total (Cost $22,441,634)(a)..................................... $23,092,089
===========
</TABLE>
- ----
Percentages indicated are based on net assets of $23,000,151.
(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.... $681,394
Unrealized depreciation.... (30,939)
--------
Net unrealized apprecia-
tion....................... $650,455
========
</TABLE>
Continued
-56-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
CAPITAL MANAGER GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
INVESTMENT COMPANIES (100.1%):
79,285 BB&T Balanced Fund..................................... $ 1,158,348
403,999 BB&T Growth & Income Stock Fund........................ 8,516,296
281,485 BB&T Intermediate Bond Fund............................ 2,820,484
244,035 BB&T International Equity Fund......................... 2,913,783
347,135 BB&T Large Company Growth Fund......................... 3,686,577
110,462 BB&T Short-Intermediate Bond Fund...................... 1,083,630
96,178 BB&T Small Company Growth Fund......................... 2,198,635
1,148,863 BB&T U.S. Treasury Money Market Fund................... 1,148,863
-----------
Total Investment Companies...................................... 23,526,616
-----------
Total (Cost $22,711,973)(a)..................................... $23,526,616
===========
</TABLE>
- ----
Percentages indicated are based on net assets of $23,496,694.
(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.... $868,566
Unrealized depreciation.... (53,923)
--------
Net unrealized apprecia-
tion....................... $814,643
========
</TABLE>
Continued
-57-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
CAPITAL MANAGER MODERATE GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
INVESTMENT COMPANIES (100.2%):
239,385 BB&T Balanced Fund..................................... $ 3,497,412
271,074 BB&T Growth & Income Stock Fund........................ 5,714,230
305,032 BB&T Intermediate Bond Fund............................ 3,056,425
204,670 BB&T International Equity Fund......................... 2,443,765
232,925 BB&T Large Company Growth Fund......................... 2,473,669
333,517 BB&T Short-Intermediate Bond Fund...................... 3,271,802
75,284 BB&T Small Company Growth Fund......................... 1,720,993
1,160,960 BB&T U.S. Treasury Money Market Fund................... 1,160,960
-----------
Total Investment Companies...................................... 23,339,256
-----------
Total (Cost $22,581,856)(a)..................................... $23,339,256
===========
</TABLE>
- ----
Percentages indicated are based on net assets of $23,283,136.
(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.... $799,835
Unrealized depreciation.... (42,435)
--------
Net unrealized apprecia-
tion....................... $757,400
========
</TABLE>
See notes to financial statements
-58-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
(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 Prime Money Market Fund, 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 South Carolina Intermediate Tax-Free Fund,
the Growth and Income Stock Fund, the Balanced Fund, the Large Company Growth
Fund, the Small Company Growth Fund, the International Equity Fund, the
Capital Manager Conservative Growth Fund, the Capital Manager Moderate Growth
Fund, and the Capital Manager Growth Fund, (referred to individually as a
"Fund"). The Capital Manager Conservative Growth Fund, the Capital Manager
Moderate Growth Fund, and the Capital Manager Growth Fund are referred to as
the "Funds of 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 South Carolina Intermediate Tax-Free Fund, the Growth and
Income Stock Fund, the Balanced Fund, the Large Company Growth Fund, the
Small Company Growth Fund, the International Equity Fund, the Capital Manager
Conservative Growth Fund, the Capital Manager Moderate Growth Fund, and the
Capital Manager Growth Fund (collectively, "the variable net asset value
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 Prime Money Market Fund and the U.S. Treasury Money Market Fund (the
"money market funds") seek current income with liquidity and stability of
principal. The Short-Intermediate U.S. Government Income Fund and the
Intermediate U.S. Government Bond Fund seek current income consistent with
preservation of capital guaranteed by the U.S. Government. The North Carolina
Intermediate Tax-Free Fund and the South Carolina Intermediate Tax-Free Fund
seek to produce a high level of current interest income that is exempt from
both federal and state 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 Large Company Growth Fund and the
Small Company Growth Fund seek long-term capital appreciation through
investments primarily in equity securities of growth companies. The
International Equity Fund seeks long-term capital appreciation through
investments primarily in equity securities of foreign issuers. The Capital
Manager Conservative Growth Fund seeks capital appreciation and income by
investing primarily in a group of diversified BB&T mutual funds which invest
primarily in equity and fixed income securities. The Capital Manager Moderate
Growth Fund seeks capital appreciation, and secondarily, income by investing
primarily in a group of
Continued
-59-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
diversified BB&T mutual funds which invest primarily in equity and fixed
income securities. The Capital Manager Growth Fund seeks capital appreciation
by investing primarily in a group of diversified BB&T mutual funds which
invest primarily in equity securities.
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.
SECURITIES VALUATION:
Investments of the money market funds are valued at amortized cost, which
approximates market value. Under the amortized cost method, discount or
premium is amortized on a constant basis to the maturity of the security.
Investments in common stocks, commercial paper, corporate bonds, municipal
securities, U.S. Government securities, and U.S. Government agency securities
of the variable net asset value funds are valued at their market values
determined on the latest available bid prices in the principal market
(closing sales prices if the principal market is an exchange) in which such
securities are normally traded. The variable net asset value funds may also
use an independent pricing service approved by the Board of Trustees to value
certain securities. Such prices reflect market values which, may be
established through the use of electronic, and matrix techniques. 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:
The market value of investment securities, other assets and liabilities of
the International Equity Fund denominated in a foreign currency are
translated into U.S. dollars at the current exchange rate. Purchases and
sales of securities, income receipts and expense payments are translated into
U.S. dollars at the exchange rate on the dates of the transactions.
The International Equity Fund isolates that portion of the results of
operations resulting from changes in foreign exchange rates on investments
from the fluctuation arising from changes in market prices of securities
held.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of foreign securities, sales of foreign currencies, currency
exchange fluctuations between the trade and settlement dates on securities
transactions, and the difference between the amount of assets and liabilities
recorded and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise
Continued
-60-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
from changes in the value of assets and liabilities, including investments in
securities, resulting from changes in exchange rates.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS:
The International Equity Fund may enter into forward foreign currency
exchange contracts. The purpose of these contracts is to hedge against
fluctuation in the value of the underlying currency of certain portfolio
investments. A forward foreign currency exchange contract is an agreement to
purchase or sell a specified currency at a specified price on a future date.
Risks associated with the contract include changes in the value of the
foreign currency relative to the U.S. dollar and/or the counterparty's
potential inability to perform under the contract.
The forward foreign currency exchange contracts are valued daily using the
current exchange rate of the underlying currency with any fluctuations
recorded as unrealized gains or losses. Realized gains or losses are
recognized when entering a closing or offsetting forward foreign currency
contract with the same settlement date and broker.
RISKS ASSOCIATED WITH FOREIGN SECURITIES AND CURRENCIES:
Investments in securities of foreign issuers carry certain risks not
ordinarily associated with investments in securities of domestic issuers.
Such risks include future political and economic developments, and the
possible imposition of exchange controls or other foreign governmental laws
and restrictions. In addition, with respect to certain countries, there is
the possibility of expropriation of assets, confiscatory taxation, political
or social instability or diplomatic developments, which could adversely
affect investments in those countries.
Certain countries may also impose substantial restrictions on investments in
their capital markets by foreign entities, including restrictions on
investments in issuers of industries deemed sensitive to relevant national
interests. These factors may limit the investment opportunities available in
the International Equity Fund and result in a lack of liquidity and high
price volatility with respect to securities of issuers from developing
countries.
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/accretion of
premium or original issue 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.
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
Continued
-61-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
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. While the Funds purchased securities on a "when-
issued" basis during the year, the Funds held no such securities as of March
31, 1998.
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 sellers 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 Funds custodian, 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 Prime Money Market Fund, 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, and the South
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 Large Company Growth Fund, the Small Company Growth Fund,
the International Equity Fund, and the Funds of Funds. 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 "book/tax" differences are
primarily due to differing treatments for mortgage-backed securities and
deferrals of certain losses. These "book/tax" differences are either
considered temporary or permanent in nature. To the extent these differences
are permanent in nature, such amounts are reclassified within the composition
of net assets based on their federal tax-basis treatment; temporary
differences do not require reclassifications. Dividends and distributions to
shareholders which exceed net investment income and net realized gains for
financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of
net realized gains. To the extent they exceed net investment income and net
realized gains for tax purposes, they are reported as distribution of
capital.
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
Continued
-62-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
the Internal Revenue Code, and to make distributions of net investment income
and net realized capital gains sufficient to relieve it from all, or
substantially all, federal income taxes.
OTHER:
Expenses that are directly related to one of the Funds are charged directly
to that Fund. Other operating expenses for the Group are prorated to the
Funds on the basis of relative net assets. All expenses in connection with
the Prime Money Market Fund, the South Carolina Intermediate Tax-Free Fund,
the Large Company Growth Fund, the International Equity Fund, the Capital
Manager Conservative Growth Fund, the Capital Manager Moderate Growth Fund,
and the Capital Manager 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 capitalized and 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, 1998 are as follows:
PURCHASES SALES
----------- -----------
Short-Intermediate U.S. Government Income Fund..... $96,339,305 $46,049,180
Intermediate U.S. Government Bond Fund............. $88,096,445 $58,782,635
North Carolina Intermediate Tax-Free Fund.......... $26,636,424 $12,186,002
South Carolina Intermediate Tax-Free Fund (a)...... $23,654,166 $ 5,557,875
Growth and Income Stock Fund....................... $69,834,495 $33,047,612
Balanced Fund...................................... $39,232,259 $22,480,708
Large Company Growth Fund (b)...................... $64,869,764 $30,018,861
Small Company Growth Fund.......................... $63,863,924 $52,522,086
International Equity Fund.......................... $27,162,822 $13,670,981
Capital Manager Conservative Growth Fund (c)....... $21,577,778 $ 334,537
Capital Manager Moderate Growth Fund (c)........... $21,643,643 $ 216,383
Capital Manager Growth Fund (c).................... $21,732,177 $ 163,170
(a) For the period from October 19, 1997 (commencement of operations) to
March 31, 1998.
(b) For the period from October 3, 1997 (commencement of operations) to March
31, 1998.
(c) For the period from October 2, 1997 (commencement of operations) to March
31, 1998.
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, PEAC, an indirect wholly-
owned subsidiary of PNC Bank, National Association ("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, PEAC is entitled to a fee,
Continued
-63-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
payable by BB&T, at the following annual rates as a percentage of the Small
Company Growth Fund's average daily net assets: (1) 0.50% of net assets up to
$50 million, (2) 0.45% of the next $50 million in net assets, and (3) 0.40%
of the net assets over $100 million. Pursuant to a Sub-Advisory agreement
with BB&T, Castle International Asset Management Limited ("Castle
International") serves as the Sub-Advisor to the International Equity Fund.
Under the agreement, Castle International manages the International Equity
Fund subject to the general supervision of the Group's Board of Trustees and
BB&T. For it's services, Castle International is entitled to a fee, payable
by BB&T, at the following annual rates as a percentage of the International
Equity Funds average daily net assets: (1) 0.50% of net assets up to $50
million, (2) 0.45% of the next $50 million in net assets, and (3) 0.40% of
the net assets over $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, with whom certain
trustees and officers of the Funds are affiliated, serves the Funds as
administrator and distributor. 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% of the average daily net
assets of each Fund. BISYS Ohio, serves the Funds as transfer agent and
mutual fund accountant.
The Funds have adopted a Distribution and Shareholder Services Plan (the
"Plan") in accordance with Rule 12b-1 under the 1940 Act. The Plan provides
for payments to the Distributor of up to 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 value funds. For the six months
ended March 31, 1998, BISYS received $776,200 from commissions earned on
sales of shares of the Funds' variable net asset value funds, of which
$762,403 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. BB&T has reimbursed the Prime
Money Market Fund $53,864 during the six months ended March 31, 1998.
Continued
-64-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
Information regarding these transactions is as follows for the six months
ended March 31, 1998.
<TABLE>
<CAPTION>
INVESTMENT ADVISORY ADMINISTRATION
FEES FEES
---------------------- --------------
(AS A MUTUAL
PERCENTAGE VOLUNTARY VOLUNTARY TRANSFER FUND
OF AVERAGE FEE FEE AGENT ACCOUNTING
NET ASSETS) REDUCTIONS REDUCTIONS FEES FEES
----------- ---------- -------------- -------- ----------
<S> <C> <C> <C> <C> <C>
Prime Money Market Fund
(a).................... 0.40% $ 24,496 $12,248 $12,997 $20,237
U.S. Treasury Money Mar-
ket Fund............... 0.40% $127,713 $63,856 $56,490 $54,422
Short-Intermediate U.S.
Government Income
Fund................... 0.60% $ 75,680 -- $22,970 $29,255
Intermediate U.S. Gov-
ernment Bond Fund...... 0.60% $ 89,607 -- $35,367 $39,090
North Carolina Interme-
diate Tax-Free Fund.... 0.60% $ 41,902 $20,914 $17,272 $17,138
South Carolina Interme-
diate
Tax-Free Fund (b)....... 0.60% $ 17,298 $ 4,364 $ 6,031 $ 9,746
Growth and Income Stock
Fund................... 0.74% $466,970 -- $93,916 $70,261
Balanced Fund........... 0.74% $155,733 -- $62,214 $32,797
Large Company Growth
Fund (c)............... 0.74% $ 54,091 -- $ 6,756 $25,594
Small Company Growth
Fund................... 1.00% -- -- $76,693 $28,831
International Equity
Fund................... 1.00% -- -- $29,347 $32,546
Capital Manager Conser-
vative Growth Fund
(d).................... 0.25% $ 21,904 -- $ 6,335 $ 9,584
Capital Manager Moderate
Growth Fund (d)........ 0.25% $ 21,800 -- $ 6,335 $ 9,584
Capital Manager Growth
Fund (d)............... 0.25% $ 21,720 -- $ 6,335 $ 9,584
</TABLE>
(a) For the period from October 1, 1997 (commencement of operations) to March
31, 1998.
(b) For the period from October 19, 1997 (commencement of operations) to
March 31, 1998.
(c) For the period from October 3, 1997 (commencement of operations) to March
31, 1998.
(d) For the period from October 2, 1997 (commencement of operations) to March
31, 1998.
5. CONCENTRATION OF CREDIT RISK
The North Carolina Intermediate Tax-Free Fund and the South Carolina
Intermediate Tax-Free Fund invest in debt instruments of municipal issuers.
The issuers' abilities to meet their obligations may be affected by economic
developments in a specific state or region.
Continued
-65-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
The Fund invests in securities, which include revenue bonds, tax exempt
commercial paper, tax and revenue anticipation notes, and general obligation
bonds. At March 31, 1998, the percentage of portfolio investments by each
revenue source were as follows:
<TABLE>
<CAPTION>
NORTH CAROLINA SOUTH CAROLINA
INTERMEDIATE INTERMEDIATE
TAX-FREE TAX-FREE
FUND FUND
-------------- --------------
<S> <C> <C>
Revenue Bonds:
Education.................................... 2.2% 32.4%
General Obligation........................... 74.0% 29.0%
Health Care.................................. 10.3% 1.5%
Housing...................................... 0.5% --
Mutual Funds................................. 1.6% 6.4%
Pollution.................................... -- 4.0%
Utilities.................................... 11.4% 26.7%
</TABLE>
Continued
-66-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
6.CAPITAL SHARE TRANSACTIONS:
Transactions in capital shares for the Fund were as follows:
<TABLE>
<CAPTION>
PRIME MONEY U.S. TREASURY SHORT INTERMEDIATE
MARKET FUND MONEY MARKET FUND U.S. GOVERNMENT INCOME FUND
------------ ------------------------------ ------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
PERIOD ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31, MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30,
1998 (A) 1998 1997 1998 1997
------------ ---------------- ------------- ---------------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
CLASS A SHARES:
Proceeds from shares
issued................. $ 2,573,207 $ 37,597,499 $ 70,989,333 $ 4,933 $ 885,456
Dividends reinvested... 6,323 826,900 1,246,105 93,441 256,211
Shares redeemed........ (453,662) (34,051,084) (67,625,463) (788,546) (2,362,962)
------------ ------------- ------------- ------------ ------------
Change in net assets
from Class A Share
transactions........... $ 2,125,868 $ 4,373,315 $ 4,609,975 $ (690,172) $ (1,221,295)
============ ============= ============= ============ ============
CLASS B SHARES:
Proceeds from shares
issued................. $ 603,782 $ 2,616,434
Dividends reinvested... 26,771 52,966
Shares redeemed........ (1,027,880) (2,472,263)
------------- -------------
Change in net assets
from Class B Share
transactions........... $ (397,327) $ 197,137
============= =============
TRUST SHARES:
Proceeds from shares
issued................. $131,108,885 $ 235,291,338 $ 403,991,788 $ 58,089,489 $ 53,763,591
Dividends reinvested... 2,882 1,245,724 1,685,849 188,403 834,332
Shares redeemed........ (74,789,720) (257,613,682) (344,812,331) (10,842,209) (14,029,292)
------------ ------------- ------------- ------------ ------------
Change in net assets
from Trust Share trans-
actions................ $ 56,322,047 $ (21,076,620) $ 60,865,306 $ 47,435,683 $ 40,568,631
============ ============= ============= ============ ============
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 2,573,207 37,597,499 70,989,333 504 91,005
Reinvested............. 6,323 826,900 1,246,105 9,530 26,322
Redeemed............... (453,662) (34,051,084) (67,625,371) (80,564) (242,739)
------------ ------------- ------------- ------------ ------------
Change in Investor A
Shares................. 2,125,868 4,373,315 4,610,067 (70,530) (125,412)
============ ============= ============= ============ ============
CLASS B SHARES:
Issued................. 603,782 2,616,434
Reinvested............. 26,771 52,966
Redeemed............... (1,027,880) (2,472,262)
------------- -------------
Change in Investor B
Shares................. (397,327) 197,138
============= =============
TRUST SHARES:
Issued................. 131,108,885 235,291,338 403,991,788 5,931,233 5,522,729
Reinvested............. 2,882 1,245,724 1,685,849 19,204 85,431
Redeemed............... (74,789,720) (257,613,682) (344,812,331) (1,104,077) (1,441,912)
------------ ------------- ------------- ------------ ------------
Change in Trust
Shares................. 56,322,047 (21,076,620) 60,865,306 4,846,360 4,166,248
============ ============= ============= ============ ============
</TABLE>
- ----
(a) For the period from October 1, 1997 (commencement of operations) to March
31,1998.
Continued
-67-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
NORTH CAROLINA SOUTH CAROLINA
INTERMEDIATE INTERMEDIATE INTERMEDIATE
U.S. GOVERNMENT BOND FUND TAX-FREE FUND TAX-FREE FUND
------------------------------ ------------------------------ --------------
FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31,
1998 1997 1998 1997 1998 (A)
---------------- ------------- ---------------- ------------- --------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
CLASS A SHARES:
Proceeds from shares
issued................. $ 343,739 $ 1,310,434 $ 973,153 $ 1,088,682 $ 262,864
Dividends reinvested... 80,728 180,302 156,570 297,458 1,037
Shares redeemed........ (494,237) (1,022,240) (541,592) (1,432,371) (5,000)
------------ ------------ ------------ ------------ -----------
Change in net assets
from Class A Share
transactions........... $ (69,770) $ 468,496 $ 588,131 $ (46,231) $ 258,901
============ ============ ============ ============ ===========
CLASS B SHARES:
Proceeds from shares
issued................. $ 274,018 $ 335,144
Dividends reinvested... 12,606 20,305
Shares redeemed........ (17,380) (97,593)
------------ ------------
Change in net assets
from Class B Share
transactions........... $ 269,244 $ 257,856
============ ============
TRUST SHARES:
Proceeds from shares
issued................. $ 56,007,502 $ 44,016,573 $ 23,124,511 $ 43,875,824 $22,736,350
Dividends reinvested... 1,474,664 3,842,953 36,979 -- 5,687
Shares redeemed........ (28,379,788) (27,916,964) (10,466,454) (12,390,664) (4,065,335)
------------ ------------ ------------ ------------ -----------
Change in net assets
from Trust Share trans-
actions................ $ 29,102,378 $ 19,942,562 $ 12,695,036 $ 31,485,160 $18,676,702
============ ============ ============ ============ ===========
SHARE TRANSACTIONS:
CLASS A SHARES:
Issued................. 34,092 134,656 93,763 106,962 25,646
Reinvested............. 8,088 18,586 15,165 29,323 101
Redeemed............... (49,481) (105,409) (51,968) (141,088) (489)
------------ ------------ ------------ ------------ -----------
Change in Investor A
Shares................. (7,301) 47,833 56,960 (4,803) 25,258
============ ============ ============ ============ ===========
CLASS B SHARES:
Issued................. 27,428 34,677
Reinvested............. 1,266 2,100
Redeemed............... (1,744) (10,069)
------------ ------------
Change in Investor B
Shares................. 26,950 26,708
============ ============
TRUST SHARES:
Issued................. 5,630,547 4,529,511 2,265,379 4,336,581 2,271,292
Reinvested............. 147,579 395,177 3,599 -- 566
Redeemed............... (2,829,292) (2,869,819) (1,008,735) (1,218,137) (393,298)
------------ ------------ ------------ ------------ -----------
Change in Trust
Shares................. 2,948,834 2,054,869 1,260,243 3,118,444 1,878,560
============ ============ ============ ============ ===========
</TABLE>
- ----
(a) For the period from October 19, 1997 (commencement of operations) to March
31, 1998.
Continued
-68-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
LARGE
GROWTH AND INCOME STOCK FUND BALANCED FUND COMPANY FUND
------------------------------ ------------------------------ ------------
FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31,
1998 1997 1998 1997 1998 (A)
---------------- ------------- ---------------- ------------- ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
CLASS A SHARES:
Proceeds from shares
issued................. $ 5,127,017 $ 10,205,516 $ 5,387,282 $ 3,940,696 $ 536,557
Dividends reinvested... 2,524,156 1,262,092 763,899 903,966 1,239
Shares redeemed........ (2,547,296) (3,145,887) (873,185) (2,046,437) (2,082)
------------ ------------ ------------ ------------ ------------
Change in net assets
from Class A Share
transactions........... $ 5,103,877 $ 8,321,721 $ 5,277,996 $ 2,798,225 $ 535,714
============ ============ ============ ============ ============
CLASS B SHARES:
Proceeds from shares
issued................. $ 7,803,961 $ 10,402,303 $ 4,142,168 $ 3,538,410 $ 1,104,903
Dividends reinvested... 1,317,369 269,261 285,153 204,283 2,529
Shares redeemed........ (572,352) (596,414) (515,703) (344,991) (14,038)
------------ ------------ ------------ ------------ ------------
Change in net assets
from Class B Share
transactions........... $ 8,548,978 $ 10,075,150 $ 3,911,618 $ 3,397,702 $ 1,093,394
============ ============ ============ ============ ============
TRUST SHARES:
Proceeds from shares
issued................. $ 89,825,673 $102,634,040 $ 22,727,308 $ 27,037,235 $ 64,287,837
Dividends reinvested... 10,367,289 7,792,090 2,860,039 4,339,486 7,196
Shares redeemed........ (44,332,452) (78,028,088) (12,676,028) (22,376,194) (28,049,260)
------------ ------------ ------------ ------------ ------------
Change in net assets
from Trust Share trans-
actions................ $ 55,860,510 $ 32,398,042 $ 12,911,319 $ 9,000,527 $ 36,245,773
============ ============ ============ ============ ============
SHARE TRANSACTIONS:
CLASS A SHARES:
Issued................. 255,500 603,380 389,782 311,695 53,745
Reinvested............. 131,112 78,513 55,820 73,556 126
Redeemed............... (129,156) (183,421) (63,609) (162,113) (203)
------------ ------------ ------------ ------------ ------------
Change in Investor A
Shares................. 257,456 498,472 381,993 223,138 53,668
============ ============ ============ ============ ============
CLASS B SHARES:
Issued................. 390,642 601,095 299,879 282,902 110,876
Reinvested............. 68,689 16,806 20,947 16,642 257
Redeemed............... (29,033) (33,998) (37,261) (27,001) (1,431)
------------ ------------ ------------ ------------ ------------
Change in Investor B
Shares................. 430,298 583,903 283,565 272,543 109,702
============ ============ ============ ============ ============
TRUST SHARES:
Issued................. 4,749,603 6,071,972 1,649,861 2,159,650 7,847,399
Reinvested............. 536,898 484,781 209,448 354,453 733
Redeemed............... (2,217,360) (4,591,206) (924,174) (1,816,862) (2,871,732)
------------ ------------ ------------ ------------ ------------
Change in Trust
Shares................. 3,069,141 1,965,547 935,135 697,241 4,976,400
============ ============ ============ ============ ============
</TABLE>
- ----
(a) For the period from October 3, 1997 (commencement of operations) to March
31, 1998.
Continued
-69-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1998
<TABLE>
<CAPTION>
CAPITAL MANAGER
CONSERVATIVE GROWTH
SMALL COMPANY GROWTH FUND INTERNATIONAL FUND FUND
------------------------------ ------------------------------ -------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31,
1998 1997 1998 1997 (C) 1997 (A)
---------------- ------------- ---------------- ------------- -------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
CLASS A SHARES:
Proceeds from shares
issued................. $ 13,976,397 $ 14,389,954 $ 338,389 $ 827,829 $ 5,783(b)
Dividends reinvested... 166,111 8,868 16,890 1,006 --(b)
Shares redeemed........ (14,479,221) (10,695,064) (29,957) (18,193) --(b)
------------ ------------ ----------- ----------- -----------
Change in net assets
from Class A Share
transactions........... $ (336,713) $ 3,703,758 $ 325,322 $ 810,642 $ 5,783(b)
============ ============ =========== =========== ===========
CLASS B SHARES:
Proceeds from shares
issued................. $ 1,916,124 $ 4,994,141 $ 512,692 $ 1,177,260
Dividends reinvested... 128,528 4,428 29,784 542
Shares redeemed........ (644,527) (584,820) (84,859) (35,486)
------------ ------------ ----------- -----------
Change in net assets
from Class B Share
transactions........... $ 1,400,125 $ 4,413,749 $ 457,617 $ 1,142,316
============ ============ =========== ===========
TRUST SHARES:
Proceeds from shares
issued................. $ 30,079,023 $ 29,271,553 $20,221,999 $49,906,784 $22,001,000
Dividends reinvested... 448,589 26,916 421,560 87,911 9
Shares redeemed........ (12,529,370) (14,151,600) (4,860,928) (2,465,305) --
------------ ------------ ----------- ----------- -----------
Change in net assets
from Trust Share trans-
actions................ $ 17,998,242 $ 15,146,869 $15,782,631 $47,529,390 $22,001,009
============ ============ =========== =========== ===========
SHARE TRANSACTIONS:
CLASS A SHARES:
Issued................. 665,885 727,199 30,627 75,712 563(b)
Reinvested............. 8,052 450 1,617 92 --(b)
Redeemed............... (682,646) (536,287) (2,823) (1,710) --(b)
------------ ------------ ----------- ----------- -----------
Change in Investor A
Shares................. (8,719) 191,362 29,421 74,094 563(b)
============ ============ =========== =========== ===========
CLASS B SHARES:
Issued................. 91,110 263,521 47,234 108,207
Reinvested............. 6,322 227 2,850 51
Redeemed............... (30,884) (31,401) (7,933) (3,291)
------------ ------------ ----------- -----------
Change in Investor B
Shares................. 66,548 232,347 42,151 104,967
============ ============ =========== ===========
TRUST SHARES:
Issued................. 1,366,939 1,507,565 1,835,775 4,858,492 2,200,100
Reinvested............. 21,546 1,359 40,091 8,149 1
Redeemed............... (585,904) (732,330) (453,238) (222,783) --
------------ ------------ ----------- ----------- -----------
Change in Trust
Shares................. 802,581 776,594 1,422,628 4,643,858 2,200,101
============ ============ =========== =========== ===========
</TABLE>
- ----
(a) For the period from October 2, 1997 (commencement of operations) to March
31, 1998.
(b) The Fund commenced offering Class A Shares on January 29, 1998.
(c) For the period from January 2, 1997 (commencement of operations) to
September 30, 1997.
Continued
-70-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
CAPITAL MANAGER
MODERATE GROWTH CAPITAL MANAGER
FUND GROWTH FUND
--------------- ---------------
FOR THE FOR THE
PERIOD ENDED PERIOD ENDED
MARCH 31, MARCH 31,
1998 (A) 1998 (A)
--------------- ---------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CAPITAL TRANSACTIONS:
CLASS A SHARES:(B)
Proceeds from shares issued................... $ 3,010 $ 5,206
Dividends reinvested.......................... -- --
Shares redeemed............................... -- --
----------- -----------
Change in net assets from Class A Share trans-
actions....................................... $ 3,010 $ 5,206
=========== ===========
TRUST SHARES:
Proceeds from shares issued................... $22,001,006 $22,019,853
Dividends reinvested.......................... -- --
Shares redeemed............................... -- --
----------- -----------
Change in net assets from Trust Share transac-
tions......................................... $22,001,006 $22,019,853
=========== ===========
SHARE TRANSACTIONS:
CLASS A SHARES:(B)
Issued........................................ 291 498
Reinvested.................................... -- --
Redeemed...................................... -- --
----------- -----------
Change in Investor A Shares................... 291 498
=========== ===========
TRUST SHARES:
Issued........................................ 2,200,101 2,201,913
Reinvested.................................... -- --
Redeemed...................................... -- --
----------- -----------
Change in Trust Shares........................ 2,200,101 2,201,913
=========== ===========
</TABLE>
- ----
(a) For the period from October 2, 1997 (commencement of operations) to March
31, 1998.
(b) The Fund commenced offering Class A Shares on January 29, 1998.
Continued
-71-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
PRIME MONEY MARKET FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED
MARCH 31,
1998 (A)
------------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................. $ 1.000
-------
INVESTMENT ACTIVITIES
Net investment income........................................... 0.024
-------
Total from Investment Activities............................... 0.024
-------
DISTRIBUTIONS
Net investment income........................................... (0.024)
-------
Total Distributions............................................ (0.024)
-------
NET ASSET VALUE, END OF PERIOD................................... $ 1.000
=======
Total Return..................................................... 2.43%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)................................. $ 2,126
Ratio of expenses to average net assets......................... 0.80%(c)
Ratio of net investment income to average net assets............ 4.91%(c)
Ratio of expenses to average net assets*........................ 0.95%(c)
Ratio of net investment income to average net assets*........... 4.76%(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 October 1, 1997 (commencement of operations) through March 31,
1998
(b) Not annualized.
(c) Annualized.
-72-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
PRIME MONEY MARKET FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED
MARCH 31,
1998 (A)
------------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................. $ 1.000
-------
INVESTMENT ACTIVITIES
Net investment income........................................... 0.026
-------
Total from Investment Activities............................... 0.026
-------
DISTRIBUTIONS
Net investment income........................................... (0.026)
-------
Total Distributions............................................ (0.026)
-------
NET ASSET VALUE, END OF PERIOD................................... $ 1.000
=======
Total Return..................................................... 2.59%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)................................. $56,322
Ratio of expenses to average net assets......................... 0.55%(c)
Ratio of net investment income to average net assets............ 5.16%(c)
Ratio of expenses to average net assets*........................ 0.70%(c)
Ratio of net investment income to average net assets*........... 5.01%(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 October 1, 1997 (commencement of operations) through March 31,
1998
(b) Not annualized.
(c) Annualized.
-73-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX OCTOBER 5,
MONTHS FOR THE YEAR ENDED SEPTEMBER 30, 1992 TO
ENDED -------------------------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 1994 1993 (A)
-------------- -------- -------- -------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD.......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- -------- -------- -------- -------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.023 0.044 0.044 0.047 0.027 0.026
------- -------- -------- -------- -------- -------
Total from Investment
Activities............ 0.023 0.044 0.044 0.047 0.027 0.026
------- -------- -------- -------- -------- -------
DISTRIBUTIONS
Net investment income.. (0.023) (0.044) (0.044) (0.047) (0.027) (0.026)
------- -------- -------- -------- -------- -------
Total Distributions... (0.023) (0.044) (0.044) (0.047) (0.027) (0.026)
------- -------- -------- -------- -------- -------
NET ASSET VALUE, END OF
PERIOD.................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======== ======== ======== ======== =======
Total Return............ 2.35%(b) 4.50% 4.49% 4.81% 2.76% 2.60%(b)
RATIOS/SUPPLEMENTARY DA-
TA:
Net Assets, End of Pe-
riod (000)............. $36,915 $ 32,541 $ 27,931 $ 13,948 $ 1,486 $ 279
Ratio of expenses to
average net assets..... 0.85%(c) 0.95% 0.99% 0.98% 0.94% 0.51%(c)
Ratio of net investment
income to average net
assets................. 4.67%(c) 4.41% 4.37% 4.81% 2.89% 2.58%(c)
Ratio of expenses to
average net assets*.... 0.98%(c) 1.25% 1.25% 1.24% 1.32% 1.32%(c)
Ratio of net investment
income to average net
assets*................ 4.54%(c) 4.11% 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.
-74-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Class B Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR JANUARY 1,
MONTHS ENDED 1996 TO
ENDED SEPTEMBER 30, SEPTEMBER 30,
MARCH 31, 1998 1997 1996 (A)
-------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERI-
OD................................. $ 1.000 $ 1.000 $ 1.000
------- ------- -------
INVESTMENT ACTIVITIES
Net investment income............. 0.020 0.036 0.025
------- ------- -------
Total from Investment Activi-
ties............................. 0.020 0.036 0.025
------- ------- -------
DISTRIBUTIONS
Net investment income............. (0.020) (0.036) (0.025)
------- ------- -------
Total Distributions.............. (0.020) (0.036) (0.025)
------- ------- -------
NET ASSET VALUE, END OF PERIOD..... $ 1.000 $ 1.000 $ 1.000
======= ======= =======
Total Return (excludes redemption
charge)............................ 1.97%(b) 3.67% 2.53%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)... $ 1,105 $ 1,502 $ 1,305
Ratio of expenses to average net
assets............................ 1.61%(c) 1.75% 1.75%(c)
Ratio of net investment income to
average net assets................ 3.92%(c) 3.61% 3.55%(c)
Ratio of expenses to average net
assets*........................... 1.74%(c) ** **
Ratio of net investment income to
average net assets*............... 3.79%(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.
** There were no voluntary fee reductions during this time.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
-75-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX OCTOBER 5,
MONTHS FOR THE YEAR ENDED SEPTEMBER 30, 1992 TO
ENDED ------------------------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 1994 1993 (A)
-------------- -------- -------- -------- ------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- ------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.024 0.046 0.046 0.050 0.030 0.027
-------- -------- -------- -------- ------- -------
Total from Investment
Activities............ 0.024 0.046 0.046 0.050 0.030 0.027
-------- -------- -------- -------- ------- -------
DISTRIBUTIONS
Net investment income.. (0.024) (0.046) (0.046) (0.050) (0.030) (0.027)
-------- -------- -------- -------- ------- -------
Total Distributions... (0.024) (0.046) (0.046) (0.050) (0.030) (0.027)
-------- -------- -------- -------- ------- -------
NET ASSET VALUE, END OF
PERIOD.................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======= =======
Total Return............ 2.48%(b) 4.71% 4.74% 5.07% 3.01% 2.70%(b)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets, End of
Period (000)........... $245,763 $266,840 $205,974 $120,083 $77,464 $74,962
Ratio of expenses to
average net assets..... 0.61%(c) 0.75% 0.75% 0.72% 0.67% 0.38%(c)
Ratio of net investment
income to average net
assets................. 4.92%(c) 4.61% 4.63% 4.97% 2.97% 2.71%(c)
Ratio of expenses to
average net assets*.... 0.74%(c) 0.75% 0.75% 0.75% 0.83% 0.81%(c)
Ratio of net investment
income to average net
assets*................ 4.79%(c) 4.61% 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.
-76-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX NOVEMBER 30,
MONTHS FOR THE YEAR ENDED SEPTEMBER 30, 1992 TO
ENDED ----------------------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 1994 1993 (A)
-------------- -------- -------- -------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 9.76 $ 9.73 $ 9.88 $ 9.60 $ 10.29 $ 10.00
------ ------- ------- ------- -------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.26 0.54 0.55 0.53 0.50 0.47
Net realized and
unrealized gains
(losses) on
investments............ 0.04 0.03 (0.15) 0.29 (0.68) 0.30
------ ------- ------- ------- -------- -------
Total from Investment
Activities............ 0.30 0.57 0.40 0.82 (0.18) 0.77
------ ------- ------- ------- -------- -------
DISTRIBUTIONS
Net investment income.. (0.26) (0.54) (0.55) (0.54) (0.50) (0.48)
Net realized gains..... -- -- -- -- (0.01) --
------ ------- ------- ------- -------- -------
Total Distributions... (0.26) (0.54) (0.55) (0.54) (0.51) (0.48)
------ ------- ------- ------- -------- -------
NET ASSET VALUE, END OF
PERIOD.................. $ 9.80 $ 9.76 $ 9.73 $ 9.88 $ 9.60 $ 10.29
====== ======= ======= ======= ======== =======
Total Return (excludes
sales charge)........... 3.07%(b) 6.07% 4.09% 8.74% (1.86%) 7.80%(b)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets, End of
Period (000)........... $4,479 $ 5,151 $ 6,356 $ 7,102 $ 10,345 $14,915
Ratio of expenses to
average net assets..... 1.06%(c) 1.11% 1.19% 1.17% 0.89% 0.56%(c)
Ratio of net investment
income to average net
assets................. 5.26%(c) 5.60% 5.55% 5.50% 5.01% 5.43%(c)
Ratio of expenses to
average net assets*.... 1.16%(c) 1.46% 1.54% 1.58% 1.58% 1.56%(c)
Ratio of net investment
income to average net
assets*................ 5.16%(c) 5.25% 5.20% 5.09% 4.32% 4.42%(c)
Portfolio Turnover(d).. 33.64% 87.99% 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 classes of shares issued.
-77-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX NOVEMBER 30,
MONTHS FOR THE YEAR ENDED SEPTEMBER 30, 1992 TO
ENDED ----------------------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 1994 1993 (A)
-------------- -------- ------- ------- ------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 9.77 $ 9.74 $ 9.89 $ 9.61 $ 10.30 $ 10.00
-------- -------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.27 0.57 0.57 0.56 0.52 0.49
Net realized and
unrealized gains
(losses) on
investments............ 0.04 0.03 (0.15) 0.28 (0.68) 0.30
-------- -------- ------- ------- ------- -------
Total from Investment
Activities............ 0.31 0.60 0.42 0.84 (0.16) 0.79
-------- -------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income.. (0.27) (0.57) (0.57) (0.56) (0.52) (0.49)
Net realized gains..... -- -- -- -- (0.01) --
-------- -------- ------- ------- ------- -------
Total Distributions... (0.27) (0.57) (0.57) (0.56) (0.53) (0.49)
-------- -------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD.................. $ 9.81 $ 9.77 $ 9.74 $ 9.89 $ 9.61 $ 10.30
======== ======== ======= ======= ======= =======
Total Return............ 3.20%(b) 6.33% 4.36% 9.01% (1.66%) 8.01%(b)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets, End of
Period (000)........... $151,435 $103,523 $62,621 $45,005 $38,208 $34,646
Ratio of expenses to
average net assets..... 0.81%(c) 0.86% 0.93% 0.93% 0.71% 0.39%(c)
Ratio of net investment
income to average net
assets................. 5.50%(c) 5.85% 5.81% 5.78% 5.20% 5.60%(c)
Ratio of expenses to
average net assets*.... 0.91%(c) 0.96% 1.03% 1.08% 1.08% 1.05%(c)
Ratio of net investment
income to average net
assets*................ 5.40%(c) 5.75% 5.71% 5.64% 4.83% 4.94%(c)
Portfolio Turnover(d).. 33.64% 87.99% 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 classes of shares issued.
-78-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX OCTOBER 9,
MONTHS FOR THE YEAR ENDED SEPTEMBER 30, 1992 TO
ENDED -------------------------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 1994 1993 (A)
-------------- -------- -------- -------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 9.84 $ 9.63 $ 9.88 $ 9.33 $ 10.39 $10.00
------ -------- -------- -------- -------- ------
INVESTMENT ACTIVITIES
Net investment income.. 0.25 0.53 0.56 0.59 0.59 0.63
Net realized and
unrealized gains
(losses) on
investments............ 0.18 0.21 (0.25) 0.55 (1.04) 0.39
------ -------- -------- -------- -------- ------
Total from Investment
Activities............ 0.43 0.74 0.31 1.14 (0.45) 1.02
------ -------- -------- -------- -------- ------
DISTRIBUTIONS
Net investment income.. (0.26) (0.53) (0.56) (0.59) (0.59) (0.63)
Net realized gains..... -- -- -- -- (0.02) --
------ -------- -------- -------- -------- ------
Total Distributions... (0.26) (0.53) (0.56) (0.59) (0.61) (0.63)
------ -------- -------- -------- -------- ------
NET ASSET VALUE, END OF
PERIOD.................. $10.01 $ 9.84 $ 9.63 $ 9.88 $ 9.33 $10.39
====== ======== ======== ======== ======== ======
Total Return (excludes
sales charge)........... 4.43%(b) 7.93% 3.17% 12.63% (4.48)% 10.53%(b)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets, End of
Period (000)........... $4,209 $ 4,211 $ 3,659 $ 5,173 $ 6,772 $5,238
Ratio of expenses to
average net assets..... 1.07%(c) 1.12% 1.13% 1.09% 0.96% 0.59%(c)
Ratio of net investment
income to average net
assets................. 5.17%(c) 5.49% 5.68% 6.22% 6.03% 6.26%(c)
Ratio of expenses to
average net assets*.... 1.17%(c) 1.47% 1.48% 1.50% 1.56% 1.55%(c)
Ratio of net investment
income to average net
assets*................ 5.07%(c) 5.14% 5.33% 5.81% 5.43% 5.30%(c)
Portfolio Turnover(d).. 34.15% 62.45% 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 classes of shares issued.
-79-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Class B Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR JANUARY 1,
MONTHS ENDED 1996 TO
ENDED SEPTEMBER 30, SEPTEMBER 30,
MARCH 31, 1998 1997 1996 (A)
-------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................ $ 9.81 $ 9.60 $10.17
------ ------ ------
INVESTMENT ACTIVITIES
Net investment income............ 0.21 0.46 0.31
Net realized and unrealized gains
(losses) on investments.......... 0.18 0.21 (0.57)
------ ------ ------
Total from Investment
Activities...................... 0.39 0.67 (0.26)
------ ------ ------
DISTRIBUTIONS
Net investment income............ (0.22) (0.46) (0.31)
------ ------ ------
Total Distributions............. (0.22) (0.46) (0.31)
------ ------ ------
NET ASSET VALUE, END OF PERIOD.... $ 9.98 $ 9.81 $ 9.60
====== ====== ======
Total Return (excludes redemption
charge)........................... 4.05%(b) 7.14% (2.48%)(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000).. $ 902 $ 623 $ 353
Ratio of expenses to average net
assets........................... 1.82%(c) 1.87% 1.85%(c)
Ratio of net investment income to
average net assets............... 4.42%(c) 4.74% 5.01%(c)
Ratio of expenses to average net
assets*.......................... 1.92%(c) 1.97% 1.95%(c)
Ratio of net investment income to
average net assets*.............. 4.32% 4.64% 4.91%(c)
Portfolio Turnover(d)............ 34.15% 62.45% 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 classes of shares issued.
-80-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX OCTOBER 9,
MONTHS FOR THE YEAR ENDED SEPTEMBER 30, 1992 TO
ENDED ------------------------------------ SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 1994 1993 (A)
-------------- -------- -------- ------- ------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 9.85 $ 9.64 $ 9.89 $ 9.34 $ 10.40 $ 10.00
-------- -------- -------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.27 0.56 0.58 0.61 0.62 0.64
Net realized and
unrealized gains
(losses) on
investments............ 0.18 0.21 (0.25) 0.55 (1.04) 0.40
-------- -------- -------- ------- ------- -------
Total from Investment
Activities............ 0.45 0.77 0.33 1.16 (0.42) 1.04
-------- -------- -------- ------- ------- -------
DISTRIBUTIONS
Net investment income.. (0.28) (0.56) (0.58) (0.61) (0.62) (0.64)
Net realized gains..... -- -- -- -- (0.02) --
-------- -------- -------- ------- ------- -------
Total Distributions... (0.28) (0.56) (0.58) (0.61) (0.64) (0.64)
-------- -------- -------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD.................. $ 10.02 $ 9.85 $ 9.64 $ 9.89 $ 9.34 $ 10.40
======== ======== ======== ======= ======= =======
Total Return............ 4.57%(b) 8.20% 3.43% 12.91% (4.23)% 10.76%(b)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets, End of
Period (000)........... $174,503 $142,545 $119,633 $78,578 $68,451 $59,816
Ratio of expenses to
average net assets..... 0.82%(c) 0.87% 0.87% 0.85% 0.70% 0.39%(c)
Ratio of net investment
income to average net
assets................. 5.42%(c) 5.74% 5.94% 6.43% 6.27% 6.45%(c)
Ratio of expenses to
average net assets*.... 0.92%(c) 0.97% 0.97% 1.00% 1.06% 1.03%(c)
Ratio of net investment
income to average net
assets*................ 5.32%(c) 5.64% 5.84% 6.28% 5.91% 5.82%(c)
Portfolio Turnover(d).. 34.15% 62.45% 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 classes of shares issued.
-81-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX OCTOBER 16
MONTHS FOR THE YEAR ENDED SEPTEMBER 30, 1992 TO
ENDED ----------------------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 1994 1993 (A)
-------------- -------- -------- -------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 10.27 $ 10.05 $ 10.15 $ 9.78 $ 10.29 $ 10.00
------- ------- ------- ------- -------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.21 0.40 0.36 0.36 0.36 0.36
Net realized and
unrealized gains
(losses) on
investments............ 0.05 0.22 (0.10) 0.37 (0.50) 0.29
------- ------- ------- ------- -------- -------
Total from Investment
Activities............ 0.26 0.62 0.26 0.73 (0.14) 0.65
------- ------- ------- ------- -------- -------
DISTRIBUTIONS
Net investment income.. (0.21) (0.40) (0.36) (0.36) (0.36) (0.36)
Net realized gains..... -- -- -- -- (0.01) --
------- ------- ------- ------- -------- -------
Total Distributions... (0.21) (0.40) (0.36) (0.36) (0.37) (0.36)
------- ------- ------- ------- -------- -------
NET ASSET VALUE, END OF
PERIOD.................. $ 10.32 $ 10.27 $ 10.05 $ 10.15 $ 9.78 $ 10.29
======= ======= ======= ======= ======== =======
Total Return (excludes
sales charge)........... 2.54%(b) 6.28% 2.61% 7.61% (1.33%) 6.60%(b)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets, End of
Period (000)........... $10,048 $ 9,419 $ 9,261 $ 8,717 $ 11,083 $13,695
Ratio of expenses to
average net assets..... 0.92%(c) 1.00% 1.11% 1.05% 0.75% 0.43%(c)
Ratio of net investment
income to average net
assets................. 4.07%(c) 3.94% 3.58% 3.63% 3.63% 3.80%(c)
Ratio of expenses to
average net assets*.... 1.07%(c) 1.50% 1.61% 1.63% 1.66% 1.77%(c)
Ratio of net investment
income to average net
assets*................ 3.92%(c) 3.44% 3.08% 3.05% 2.72% 2.45%(c)
Portfolio Turnover(d).. 14.99% 16.98% 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 classes of shares issued.
-82-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX OCTOBER 16,
MONTHS FOR THE YEAR ENDED SEPTEMBER 30, 1992 TO
ENDED -------------------------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 1994 1993 (A)
-------------- -------- -------- -------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 10.27 $ 10.05 $ 10.15 $ 9.78 $ 10.29 $ 10.00
------- -------- -------- -------- -------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.22 0.41 0.38 0.37 0.38 0.36
Net realized and
unrealized gains
(losses) on
investments............ 0.05 0.22 (0.10) 0.37 (0.50) 0.29
------- -------- -------- -------- -------- -------
Total from Investment
Activities............ 0.27 0.63 0.28 0.74 (0.12) 0.65
------- -------- -------- -------- -------- -------
DISTRIBUTIONS
Net investment income.. (0.22) (0.41) (0.38) (0.37) (0.38) (0.36)
Net realized gains..... -- -- -- -- (0.01) --
------- -------- -------- -------- -------- -------
Total Distributions... (0.22) (0.41) (0.38) (0.37) (0.39) (0.36)
------- -------- -------- -------- -------- -------
NET ASSET VALUE, END OF
PERIOD.................. $ 10.32 $ 10.27 $ 10.05 $ 10.15 $ 9.78 $ 10.29
======= ======== ======== ======== ======== =======
Total Return............ 2.62%(b) 6.43% 2.77% 7.77% (1.18%) 6.62%(b)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets, End of
Period (000)........... $74,393 $ 61,120 $ 28,443 $ 28,091 $ 27,770 $20,128
Ratio of expenses to
average net assets..... 0.77%(c) 0.85% 0.96% 0.91% 0.63% 0.42%(c)
Ratio of net investment
income to average net
assets................. 4.22%(c) 4.13% 3.72% 3.78% 3.77% 3.80%(c)
Ratio of expenses to
average net assets*.... 0.92%(c) 1.00% 1.11% 1.13% 1.17% 1.30%(c)
Ratio of net investment
income to average net
assets*................ 4.07%(c) 3.98% 3.57% 3.55% 3.24% 2.92%(c)
Portfolio Turnover(d).. 14.99% 16.98% 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 classes of shares issued.
-83-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OCTOBER 19,
1997 TO
MARCH 31,
1998 (A)
-----------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.............................. $10.00
------
INVESTMENT ACTIVITIES
Net investment income............................................ 0.12
Net realized and unrealized gains (losses) on investments........ 0.22
------
Total from Investment Activities................................ 0.34
------
DISTRIBUTIONS
Net investment income............................................ (0.12)
------
Total Distributions............................................. (0.12)
------
NET ASSET VALUE, END OF PERIOD.................................... $10.22
======
Total Return (excludes sales charge).............................. 3.42%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000).................................. $ 258
Ratio of expenses to average net assets.......................... 0.96%(c)
Ratio of net investment income to average net assets............. 3.79%(c)
Ratio of expenses to average net assets*......................... 1.21%(c)
Ratio of net investment income to average net assets*............ 3.54%(c)
Portfolio Turnover(d)............................................ 29.96%
</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 classes of shares issued.
-84-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OCTOBER 19,
1997 TO
MARCH 31,
1998 (A)
-----------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................. $ 10.00
-------
INVESTMENT ACTIVITIES
Net investment income........................................... 0.18
Net realized and unrealized gains (losses) on investments....... 0.17
-------
Total from Investment Activities............................... 0.35
-------
DISTRIBUTIONS
Net investment income........................................... (0.18)
-------
Total Distributions............................................ (0.18)
-------
NET ASSET VALUE, END OF PERIOD................................... $ 10.17
=======
Total Return..................................................... 3.44%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)................................. $19,095
Ratio of expenses to average net assets......................... 0.82%(c)
Ratio of net investment income to average net assets............ 3.97%(c)
Ratio of expenses to average net assets*........................ 1.07%(c)
Ratio of net investment income to average net assets*........... 3.72%(c)
Portfolio Turnover(d)........................................... 29.96%
</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 classes of shares issued.
-85-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
GROWTH AND INCOME STOCK FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX OCTOBER 9,
MONTHS FOR THE YEAR ENDED SEPTEMBER 30, 1992 TO
ENDED -------------------------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 1994 1993 (A)
-------------- -------- -------- -------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD.......... $ 19.98 $ 15.31 $ 12.97 $ 11.26 $ 11.26 $10.00
------- -------- -------- -------- ------- ------
Investment Activities
Net investment income.. 0.12 0.26 0.26 0.25 0.25 0.28
Net realized and
unrealized gains (loss-
es) on investments..... 2.39 5.30 2.43 1.98 0.12 1.27
------- -------- -------- -------- ------- ------
Total from Investment
Activities............ 2.51 5.56 2.69 2.23 0.37 1.55
------- -------- -------- -------- ------- ------
DISTRIBUTIONS
Net investment income.. (0.12) (0.26) (0.26) (0.25) (0.26) (0.29)
Net realized gains..... (1.33) (0.63) (0.09) (0.12) (0.11) --
In excess of net real-
ized gains............. -- -- -- (0.15) -- --
------- -------- -------- -------- ------- ------
Total Distributions... (1.45) (0.89) (0.35) (0.52) (0.37) (0.29)
------- -------- -------- -------- ------- ------
NET ASSET VALUE, END OF
PERIOD.................. $ 21.04 $ 19.98 $ 15.31 $ 12.97 $ 11.26 $11.26
======= ======== ======== ======== ======= ======
Total Return (excludes
sales charge)........... 13.27%(b) 37.80% 20.97% 20.62% 3.33% 15.72%(b)
RATIOS/SUPPLEMENTARY DA-
TA:
Net Assets, End of Pe-
riod (000)............. $41,936 $ 34,679 $ 18,949 $ 10,842 $ 7,973 $6,009
Ratio of expenses to
average net assets..... 1.07%(c) 1.09% 1.11% 1.07% 0.92% 0.63%(c)
Ratio of net investment
income to average net
assets................. 1.17%(c) 1.52% 1.82% 2.15% 2.26% 2.85%(c)
Ratio of expenses to
average net assets*.... 1.31%(c) 1.58% 1.60% 1.60% 1.65% 1.68%(c)
Ratio of net investment
income to average net
assets*................ 0.93%(c) 1.03% 1.33% 1.62% 1.52% 1.81%(c)
Portfolio Turnover(d).. 8.88% 22.66% 19.82% 8.73% 21.30% 27.17%
Average commission
rate(e)................ $0.0616 $ 0.0637 $ 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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-86-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
GROWTH AND INCOME STOCK FUND
Class B Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR JANUARY 1,
MONTHS ENDED 1996 TO
ENDED SEPTEMBER 30, SEPTEMBER 30,
MARCH 31, 1998 1997 1996 (A)
-------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERI-
OD................................. $ 19.93 $ 15.29 $13.78
------- ------- -------
INVESTMENT ACTIVITIES
Net investment income............. 0.05 0.13 0.13
Net realized and unrealized gains
(losses) on investments........... 2.37 5.28 1.52
------- ------- -------
Total from Investment Activi-
ties............................. 2.42 5.41 1.65
------- ------- -------
DISTRIBUTIONS
Net investment income............. (0.05) (0.14) (0.14)
Net realized gains................ (1.33) (0.63) --
------- ------- -------
Total Distributions.............. (1.38) (0.77) (0.14)
------- ------- -------
NET ASSET VALUE, END OF PERIOD..... $ 20.97 $ 19.93 $15.29
======= ======= =======
Total Return (excludes redemption
charge)............................ 12.80%(b) 36.70% 12.01%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)... $26,592 $16,690 $3,880
Ratio of expenses to average net
assets............................ 1.82%(c) 1.84% 1.85%(c)
Ratio of net investment income to
average net assets................ 0.43%(c) 0.77% 1.13%(c)
Ratio of expenses to average net
assets*........................... 2.06%(c) 2.08% 2.09%(c)
Ratio of net investment income to
average net assets*............... 0.19%(c) 0.53% 0.89%(c)
Portfolio Turnover(d)............. 8.88% 22.66% 19.82%
Average commission rate(e)........ $0.0616 $0.0637 $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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-87-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
GROWTH AND INCOME STOCK FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX OCTOBER 9,
MONTHS FOR THE YEAR ENDED SEPTEMBER 30, 1992 TO
ENDED ------------------------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 1994 1993 (A)
-------------- -------- -------- -------- ------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD.......... $ 20.02 $ 15.34 $ 12.99 $ 11.28 $ 11.28 $ 10.00
-------- -------- -------- -------- ------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.14 0.30 0.29 0.28 0.28 0.30
Net realized and
unrealized gains
(losses) on
investments............ 2.39 5.31 2.44 1.98 0.11 1.28
-------- -------- -------- -------- ------- -------
Total from Investment
Activities............ 2.53 5.61 2.73 2.26 0.39 1.58
-------- -------- -------- -------- ------- -------
DISTRIBUTIONS
Net investment income.. (0.14) (0.30) (0.29) (0.28) (0.28) (0.30)
Net realized gains..... (1.33) (0.63) (0.09) (0.12) (0.11) --
In excess of net real-
ized gains............. -- -- -- (0.15) -- --
-------- -------- -------- -------- ------- -------
Total Distributions... (1.47) (0.93) (0.38) (0.55) (0.39) (0.30)
-------- -------- -------- -------- ------- -------
NET ASSET VALUE, END OF
PERIOD.................. $ 21.08 $ 20.02 $ 15.34 $ 12.99 $ 11.28 $ 11.28
======== ======== ======== ======== ======= =======
Total Return............ 13.38%(b) 38.13% 21.31% 20.88% 3.58% 16.06%(b)
RATIOS/SUPPLEMENTARY DA-
TA:
Net Assets, End of Pe-
riod (000)............. $390,138 $308,984 $206,659 $145,603 $89,355 $82,358
Ratio of expenses to
average net assets..... 0.82%(c) 0.84% 0.86% 0.82% 0.66% 0.40%(c)
Ratio of net investment
income to average net
assets................. 1.43%(c) 1.77% 2.07% 2.40% 2.51% 3.08%(c)
Ratio of expenses to
average net assets*.... 1.06%(c) 1.08% 1.10% 1.10% 1.15% 1.17%(c)
Ratio of net investment
income to average net
assets*................ 1.19%(c) 1.53% 1.83% 2.11% 2.02% 2.31%(c)
Portfolio Turnover(d).. 8.88% 22.66% 19.82% 8.73% 21.30% 27.17%
Average commission
rate(e)................ $ 0.0616 $ 0.0637 $ 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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-88-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
BALANCED FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX JULY 1,
MONTHS FOR THE YEAR ENDED SEPTEMBER 30, 1993 TO
ENDED ------------------------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 1994 1993 (A)
-------------- -------- -------- -------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD.......... $ 13.63 $ 11.96 $ 11.04 $ 9.76 $ 10.20 $10.00
------- -------- -------- ------- ------- ------
INVESTMENT ACTIVITIES
Net investment income.. 0.20 0.45 0.43 0.44 0.38 0.08
Net realized and
unrealized gains (loss-
es) on investments..... 1.36 2.04 0.92 1.27 (0.44) 0.21
------- -------- -------- ------- ------- ------
Total from Investment
Activities............ 1.56 2.49 1.35 1.71 (0.06) 0.29
------- -------- -------- ------- ------- ------
DISTRIBUTIONS
Net investment income.. (0.20) (0.45) (0.43) (0.43) (0.38) (0.09)
Net realized gains..... (0.35) (0.37) -- -- -- --
------- -------- -------- ------- ------- ------
Total Distributions... (0.55) (0.82) (0.43) (0.43) (0.38) (0.09)
------- -------- -------- ------- ------- ------
NET ASSET VALUE, END OF
PERIOD.................. $ 14.64 $ 13.63 $ 11.96 $ 11.04 $ 9.76 $10.20
======= ======== ======== ======= ======= ======
Total Return (excludes
sales charge)........... 11.74%(b) 21.76% 12.43% 18.00% (0.64%) 2.88%(b)
RATIOS/SUPPLEMENTARY DA-
TA:
Net Assets, End of Pe-
riod (000)............. $24,104 $ 17,234 $ 12,456 $ 9,257 $ 8,560 $2,569
Ratio of expenses to
average net assets..... 1.14%(c) 1.18% 1.20% 1.17% 0.98% 0.50%(c)
Ratio of net investment
income to average net
assets................. 2.88%(c) 3.63% 3.78% 4.27% 4.02% 4.39%(c)
Ratio of expenses to
average net assets*.... 1.38%(c) 1.67% 1.69% 1.71% 1.75% 2.00%(c)
Ratio of net investment
income to average net
assets*................ 2.64%(c) 3.14% 3.29% 3.73% 3.25% 2.89%(c)
Portfolio Turnover(d).. 18.35% 27.07% 19.87% 23.68% 12.91% 8.32%
Average commission
rate(e)................ $0.0701 $ 0.0658 $ 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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-89-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
BALANCED FUND
Class B Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR JANUARY 1,
MONTHS ENDED 1996 TO
ENDED SEPTEMBER 30, SEPTEMBER 30,
MARCH 31, 1998 1997 1996 (A)
-------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERI-
OD................................. $ 13.57 $ 11.91 $ 11.54
------- ------- -------
INVESTMENT ACTIVITIES
Net investment income............. 0.14 0.36 0.27
Net realized and unrealized gains
(losses) on investments........... 1.36 2.04 0.37
------- ------- -------
Total from Investment Activi-
ties............................. 1.50 2.40 0.64
------- ------- -------
DISTRIBUTIONS
Net investment income............. (0.15) (0.37) (0.27)
Net realized gains................ (0.35) (0.37) --
------- ------- -------
Total Distributions.............. (0.50) (0.74) (0.27)
------- ------- -------
NET ASSET VALUE, END OF PERIOD..... $ 14.57 $ 13.57 $ 11.91
======= ======= =======
Total Return (excludes redemption
charge)............................ 11.33%(b) 20.90% 5.67%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)... $10,960 $ 6,360 $ 2,339
Ratio of expenses to average net
assets............................ 1.88%(c) 1.93% 1.95%(c)
Ratio of net investment income to
average net assets................ 2.12%(c) 2.88% 3.13%(c)
Ratio of expenses to average net
assets*........................... 2.12%(c) 2.17% 2.18%(c)
Ratio of net investment income to
average net assets*............... 1.88%(c) 2.64% 2.90%(c)
Portfolio Turnover(d)............. 18.35% 27.07% 19.87%
Average commission rate(e)........ $0.0701 $0.0658 $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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-90-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
BALANCED FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX JULY 1,
MONTHS FOR THE YEAR ENDED SEPTEMBER 30, 1993 TO
ENDED -------------------------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 1994 1993 (A)
-------------- -------- -------- -------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD.......... $ 13.60 $ 11.93 $ 11.01 $ 9.74 $ 10.18 $ 10.00
-------- -------- -------- -------- -------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.22 0.49 0.46 0.46 0.40 0.09
Net realized and
unrealized gains
(losses) on
investments............ 1.36 2.04 0.92 1.27 (0.44) 0.18
-------- -------- -------- -------- -------- -------
Total from Investment
Activities............ 1.58 2.53 1.38 1.73 (0.04) 0.27
-------- -------- -------- -------- -------- -------
DISTRIBUTIONS
Net investment income.. (0.22) (0.49) (0.46) (0.46) (0.40) (0.09)
Net realized gains..... (0.35) (0.37) -- -- -- --
-------- -------- -------- -------- -------- -------
Total Distributions... (0.57) (0.86) (0.46) (0.46) (0.40) (0.09)
-------- -------- -------- -------- -------- -------
NET ASSET VALUE, END OF
PERIOD.................. $ 14.61 $ 13.60 $ 11.93 $ 11.01 $ 9.74 $ 10.18
======== ======== ======== ======== ======== =======
Total Return............ 11.90%(b) 22.11% 12.74% 18.23% (0.42)% 2.74%(b)
RATIOS/SUPPLEMENTARY DA-
TA:
Net Assets, End of Pe-
riod (000)............. $108,749 $ 88,524 $ 69,374 $ 49,794 $ 39,715 $20,374
Ratio of expenses to
average net assets..... 0.89%(c) 0.93% 0.95% 0.92% 0.73% 0.44%(c)
Ratio of net investment
income to average net
assets................. 3.13%(c) 3.88% 4.03% 4.51% 4.22% 4.44%(c)
Ratio of expenses to
average net assets*.... 1.13%(c) 1.17% 1.19% 1.21% 1.25% 1.47%(c)
Ratio of net investment
income to average net
assets*................ 2.89%(c) 3.64% 3.79% 4.22% 3.70% 3.42%(c)
Portfolio Turnover(d).. 18.35% 27.07% 19.87% 23.68% 12.91% 8.32%
Average commission
rate(e)................ $ 0.0701 $ 0.0658 $ 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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-91-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
LARGE COMPANY GROWTH FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OCTOBER 3,
1997 TO
MARCH 31,
1998 (A)
-----------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................. $ 10.00
-------
INVESTMENT ACTIVITIES
Net investment income........................................... 0.02
Net realized and unrealized gains (losses) on investments....... 0.71
-------
Total from Investment Activities............................... 0.73
-------
DISTRIBUTIONS
Net investment income........................................... (0.03)
Net realized gains.............................................. (0.10)
-------
Total Distributions............................................ (0.13)
-------
NET ASSET VALUE, END OF PERIOD................................... $ 10.60
=======
Total Return (excludes sales charge)............................. 7.37%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)................................. $ 569
Ratio of expenses to average net assets......................... 1.14%(c)
Ratio of net investment income to average net assets............ 0.33%(c)
Ratio of expenses to average net assets*........................ 1.38%(c)
Ratio of net investment income to average net assets*........... 0.09%(c)
Portfolio Turnover(d)........................................... 76.97%
Average commission rate(e)...................................... $0.0651
</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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-92-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
LARGE COMPANY GROWTH FUND
Class B Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OCTOBER 3,
1997 TO
MARCH 31,
1998 (A)
-----------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................ $ 10.00
-------
INVESTMENT ACTIVITIES
Net realized and unrealized gains (losses) on investments...... 0.71
-------
Total from Investment Activities.............................. 0.71
-------
DISTRIBUTIONS
Net investment income.......................................... (0.01)
Net realized gains............................................. (0.10)
-------
Total Distributions........................................... (0.11)
-------
NET ASSET VALUE, END OF PERIOD.................................. $ 10.60
=======
Total Return (excludes redemption charge)....................... 7.18%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)................................ $ 1,163
Ratio of expenses to average net assets........................ 1.89%(c)
Ratio of net investment income to average net assets........... (0.39%)(c)
Ratio of expenses to average net assets*....................... 2.13%(c)
Ratio of net investment income to average net assets*.......... (0.63%)(c)
Portfolio Turnover(d).......................................... 76.97%
Average commission rate(e)..................................... $0.0651
</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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-93-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
LARGE COMPANY GROWTH FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OCTOBER 3,
1997 TO
MARCH 31,
1998 (A)
-----------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................. $ 10.00
-------
INVESTMENT ACTIVITIES
Net investment income........................................... 0.03
Net realized and unrealized gains (losses) on investments....... 0.72
-------
Total from Investment Activities............................... 0.75
-------
DISTRIBUTIONS
Net investment income........................................... (0.03)
Net realized gains.............................................. (0.10)
-------
Total Distributions............................................ (0.13)
-------
NET ASSET VALUE, END OF PERIOD................................... $ 10.62
=======
Total Return..................................................... 7.63%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)................................. $52,825
Ratio of expenses to average net assets......................... 0.98%(c)
Ratio of net investment income to average net assets............ 0.66%(c)
Ratio of expenses to average net assets*........................ 1.22%(c)
Ratio of net investment income to average net assets*........... 0.42%(c)
Portfolio Turnover(d)........................................... 76.97%
Average commission rate(e)...................................... $0.0651
</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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-94-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED DECEMBER 7,
MONTHS SEPTEMBER 30, 1994 TO
ENDED --------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 (A)
-------------- --------- --------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD.......... $ 23.33 $ 21.06 $ 14.53 $10.00
------- --------- --------- ------
INVESTMENT ACTIVITIES
Net investment income
(loss)................. (0.15) (0.15) (0.20) (0.08)
Net realized and
unrealized gains (loss-
es) on investments..... (0.23) 2.44 6.73 4.61
------- --------- --------- ------
Total from Investment
Activities............ (0.38) 2.29 6.53 4.53
------- --------- --------- ------
DISTRIBUTIONS
Net realized gains..... (0.31) (0.02) -- --
------- --------- --------- ------
Total Distributions... (0.31) (0.02) -- --
------- --------- --------- ------
NET ASSET VALUE, END OF
PERIOD.................. $ 22.64 $ 23.33 $ 21.06 $14.53
======= ========= ========= ======
Total Return (excludes
sales charge)........... (1.49%)(b) 10.90% 44.94% 45.30%(b)
RATIOS/SUPPLEMENTARY DA-
TA:
Net Assets, End of Pe-
riod (000)............. $12,105 $ 12,675 $ 7,413 $1,096
Ratio of expenses to
average net assets..... 1.80% (c) 1.89% 2.01% 2.50% (c)
Ratio of net investment
income to average net
assets................. (1.34%)(c) (1.29%) (1.26%) (1.56%)(c)
Ratio of expenses to
average net assets*.... 1.80% (c) 2.14% 2.26% 2.84% (c)
Ratio of net investment
income to average net
assets*................ (1.34%)(c) (1.54%) (1.51%) (1.90%)(c)
Portfolio Turnover(d).. 65.48% 80.66% 71.62% 46.97%
Average commission
rate(e)................ $0.0579 $ 0.0570 $ 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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-95-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
Class B Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR JANUARY 1,
MONTHS ENDED 1996 TO
ENDED SEPTEMBER 30, SEPTEMBER 30,
MARCH 31, 1998 1997 1996 (A)
-------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PE-
RIOD............................. $ 23.02 $ 20.92 $ 15.24
------- ------- -------
INVESTMENT ACTIVITIES
Net investment income (loss).... (0.20) (0.20) (0.21)
Net realized and unrealized
gains (losses) on investments... (0.26) 2.32 5.89
------- ------- -------
Total from Investment Activi-
ties........................... (0.46) 2.12 5.68
------- ------- -------
DISTRIBUTIONS
Net realized gains.............. (0.31) (0.02) --
------- ------- -------
Total Distributions............ (0.31) (0.02) --
------- ------- -------
NET ASSET VALUE, END OF PERIOD... $ 22.25 $ 23.02 $ 20.92
======= ======= =======
Total Return (excludes redemption
charge).......................... (1.86%)(b) 10.16% 37.27% (b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period
(000)........................... $10,054 $ 8,869 $ 3,200
Ratio of expenses to average net
assets.......................... 2.55% (c) 2.64% 2.72% (c)
Ratio of net investment income
to average net assets........... (2.09%)(c) (2.04%) (2.01%)(c)
Portfolio Turnover(d)........... 65.48% 80.66% 71.62%
Average commission rate(e)...... $0.0579 $0.0570 $0.0562
</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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-96-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SMALL COMPANY GROWTH FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED DECEMBER 7,
MONTHS SEPTEMBER 30, 1994 TO
ENDED --------------------- SEPTEMBER 30,
MARCH 31, 1998 1997 1996 1995 (A)
-------------- --------- --------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD.......... $ 23.52 $ 21.18 $ 14.57 $ 10.00
------- --------- --------- -------
INVESTMENT ACTIVITIES
Net investment income
(loss)................. (0.11) (0.11) (0.17) (0.07)
Net realized and
unrealized gains (loss-
es) on investments..... (0.24) 2.47 6.78 4.64
------- --------- --------- -------
Total from Investment
Activities............ (0.35) 2.36 6.61 4.57
------- --------- --------- -------
DISTRIBUTIONS
Net realized gains..... (0.31) (0.02) -- --
------- --------- --------- -------
Total Distributions... (0.31) (0.02) -- --
------- --------- --------- -------
NET ASSET VALUE, END OF
PERIOD.................. $ 22.86 $ 23.52 $ 21.18 $ 14.57
======= ========= ========= =======
Total Return............ (1.35%)(b) 11.17% 45.37% 45.70% (b)
RATIOS/SUPPLEMENTARY DA-
TA:
Net Assets, End of Pe-
riod (000)............. $75,365 $ 58,660 $ 36,373 $16,962
Ratio of expenses to
average net assets..... 1.55% (c) 1.64% 1.79% 2.33% (c)
Ratio of net investment
income to average net
assets................. (1.09%)(c) (1.04%) (1.00%) (1.34%)(c)
Ratio of expenses to
average net assets*.... 1.55% (c) 1.64% 1.79% 2.42% (c)
Ratio of net investment
income to average net
assets*................ (1.09%)(c) (1.04%) (1.00%) (1.43%)(c)
Portfolio Turnover(d).. 65.48% 80.66% 71.62% 46.97%
Average commission
rate(e)................ $0.0579 $ 0.0570 $ 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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-97-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
INTERNATIONAL FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX JANUARY 2,
MONTHS 1997 TO
ENDED SEPTEMBER 30,
MARCH 31, 1998 1997 (A)
-------------- -------------
(UNAUDITED)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............ $ 11.24 $ 10.00
------- -------
INVESTMENT ACTIVITIES
Net investment income.......................... 0.01 0.03
Net realized and unrealized gains (losses) on
investments.................................... 0.88 1.25
------- -------
Total from Investment Activities.............. 0.89 1.28
------- -------
DISTRIBUTIONS
Net investment income.......................... (0.01) (0.02)
Net realized gains............................. (0.23) (0.02)
------- -------
Total Distributions........................... (0.24) (0.04)
------- -------
NET ASSET VALUE, END OF PERIOD.................. $ 11.89 $ 11.24
======= =======
Total Return (excludes sales charge)............ 8.17%(b) 12.84% (b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)................ $ 1,231 $ 833
Ratio of expenses to average net assets........ 1.74%(c) 1.97% (c)
Ratio of net investment income to average net
assets......................................... 0.12%(c) 0.14% (c)
Ratio of expenses to average net assets*....... 1.74%(c) 2.24% (c)
Ratio of net investment income to average net
assets*........................................ 0.12%(c) (0.13%)(c)
Portfolio Turnover(d).......................... 23.24% 41.45%
Average commission rate(e)..................... $0.0048 $0.0457
</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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-98-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
INTERNATIONAL FUND
Class B Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX JANUARY 2,
MONTHS 1997 TO
ENDED SEPTEMBER 30,
MARCH 31, 1998 1997 (A)
-------------- -------------
(UNAUDITED)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........... $ 11.23 $10.00
------- ------
INVESTMENT ACTIVITIES
Net investment income (loss).................. (0.03) (0.01)
Net realized and unrealized gains (losses) on
investments................................... 0.87 1.26
------- ------
Total from Investment Activities............. 0.84 1.25
------- ------
DISTRIBUTIONS
Net investment income......................... -- (0.01)
Net realized gains............................ (0.23) (0.01)
------- ------
Total Distributions.......................... (0.23) (0.02)
------- ------
NET ASSET VALUE, END OF PERIOD................. $ 11.84 $11.23
======= ======
Total Return (excludes redemption charge)...... 7.72% (b) 12.51% (b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)............... $ 1,742 $1,179
Ratio of expenses to average net assets....... 2.48% (c) 2.69% (c)
Ratio of net investment income to average net
assets........................................ (0.63%)(c) (0.62%)(c)
Ratio of expenses to average net assets*...... 2.48% (c) 2.74% (c)
Ratio of net investment income to average net
assets*....................................... (0.63%)(c) (0.66%)(c)
Portfolio Turnover(d)......................... 23.24% 41.45%
Average commission rate(e).................... $0.0048 0.0457
</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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-99-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
INTERNATIONAL FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX JANUARY 2,
MONTHS 1997 TO
ENDED SEPTEMBER 30,
MARCH 31, 1998 1997 (A)
-------------- -------------
(UNAUDITED)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............. $ 11.28 $ 10.00
------- -------
INVESTMENT ACTIVITIES
Net investment income........................... 0.02 0.03
Net realized and unrealized gains (losses) on
investments..................................... 0.89 1.30
------- -------
Total from Investment Activities............... 0.91 1.33
------- -------
DISTRIBUTIONS
Net investment income........................... (0.02) (0.02)
Net realized gains.............................. (0.23) (0.03)
------- -------
Total Distributions............................ (0.25) (0.05)
------- -------
NET ASSET VALUE, END OF PERIOD................... $ 11.94 $ 11.28
======= =======
Total Return..................................... 8.31%(b) 13.34%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)................. $72,412 $52,373
Ratio of expenses to average net assets......... 1.49%(c) 1.79%(c)
Ratio of net investment income to average net
assets.......................................... 0.34%(c) 0.32%(c)
Ratio of expenses to average net assets*........ 1.49%(c) 1.81%(c)
Ratio of net investment income to average net
assets*......................................... 0.34%(c) 0.30%(c)
Portfolio Turnover(d)........................... 23.24% 41.45%
Average commission rate(e)...................... $0.0048 0.0457
</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 classes of shares issued.
(e) Represents the total dollar amount of commissions paid on security
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
-100-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
CAPITAL MANAGER CONSERVATIVE GROWTH FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JANUARY 29,
1998 TO
MARCH 31,
1998 (A)
-----------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.............................. $10.09
------
INVESTMENT ACTIVITIES
Net investment income............................................ 0.04
Net realized and unrealized gains (losses) on investments........ 0.40
------
Total from Investment Activities................................ 0.44
------
DISTRIBUTIONS
Net investment income............................................ (0.08)
------
Total Distributions............................................. (0.08)
------
NET ASSET VALUE, END OF PERIOD.................................... $10.45
======
Total Return (excludes sales charge).............................. 4.39%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000).................................. $ 6
Ratio of expenses to average net assets.......................... 0.36%(c)
Ratio of net investment income to average net assets............. 4.35%(c)
Ratio of expenses to average net assets*......................... 0.56%(c)
Ratio of net investment income to average net assets*............ 4.15%(c)
Portfolio Turnover(d)............................................ 1.60%
</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 classes of shares issued.
-101-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
CAPITAL MANAGER CONSERVATIVE GROWTH FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OCTOBER 2,
1997 TO
MARCH 31,
1998 (A)
-----------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................. $ 9.99
-------
INVESTMENT ACTIVITIES
Net investment income........................................... 0.17
Net realized and unrealized gains (losses) on investments....... 0.46
-------
Total from Investment Activities............................... 0.63
-------
DISTRIBUTIONS
Net investment income........................................... (0.17)
-------
Total Distributions............................................ (0.17)
-------
NET ASSET VALUE, END OF PERIOD................................... $ 10.45
=======
Total Return..................................................... 6.23%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)................................. $22,994
Ratio of expenses to average net assets......................... 0.31%(c)
Ratio of net investment income to average net assets............ 3.36%(c)
Ratio of expenses to average net assets*........................ 0.51%(c)
Ratio of net investment income to average net assets*........... 3.16%(c)
Portfolio Turnover(d)........................................... 1.60%
</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 classes of shares issued.
-102-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
CAPITAL MANAGER MODERATE GROWTH FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JANUARY 29,
1998 TO
MARCH 31,
1998 (A)
-----------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.............................. $10.01
------
INVESTMENT ACTIVITIES
Net investment income............................................ 0.03
Net realized and unrealized gains (losses) on investments........ 0.60
------
Total from Investment Activities................................ 0.63
------
DISTRIBUTIONS
Net investment income............................................ (0.06)
------
Total Distributions............................................. (0.06)
------
NET ASSET VALUE, END OF PERIOD.................................... $10.58
======
Total Return (excludes sales charge).............................. 6.29%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000).................................. $ 3
Ratio of expenses to average net assets.......................... 0.36%(c)
Ratio of net investment income to average net assets............. 2.87%(c)
Ratio of expenses to average net assets*......................... 0.56%(c)
Ratio of net investment income to average net assets*............ 2.67%(c)
Portfolio Turnover(d)............................................ 1.03%
</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 classes of shares issued.
-103-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
CAPITAL MANAGER MODERATE GROWTH FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OCTOBER 2,
1997 TO
MARCH 31,
1998 (A)
-----------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................. $ 9.87
-------
INVESTMENT ACTIVITIES
Net investment income........................................... 0.12
Net realized and unrealized gains (losses) on investments....... 0.71
-------
Total from Investment Activities............................... 0.83
-------
DISTRIBUTIONS
Net investment income........................................... (0.12)
-------
Total Distributions............................................ (0.12)
-------
NET ASSET VALUE, END OF PERIOD................................... $ 10.58
=======
Total Return..................................................... 7.06%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)................................. $23,280
Ratio of expenses to average net assets......................... 0.31%(c)
Ratio of net investment income to average net assets............ 2.43%(c)
Ratio of expenses to average net assets*........................ 0.51%(c)
Ratio of net investment income to average net assets*........... 2.23%(c)
Portfolio Turnover(d)........................................... 1.03%
</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 classes of shares issued.
-104-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
CAPITAL MANAGER GROWTH FUND
Class A Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JANUARY 29,
1998 TO
MARCH 31,
1998 (A)
-----------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.............................. $ 9.93
------
INVESTMENT ACTIVITIES
Net investment income............................................ 0.02
Net realized and unrealized gains (losses) on investments........ 0.76
------
Total from Investment Activities................................ 0.78
------
DISTRIBUTIONS
Net investment income............................................ (0.04)
------
Total Distributions............................................. (0.04)
------
NET ASSET VALUE, END OF PERIOD.................................... $10.67
======
Total Return (excludes sales charge).............................. 7.88%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000).................................. $ 5
Ratio of expenses to average net assets.......................... 0.36%(c)
Ratio of net investment income to average net assets............. 2.44%(c)
Ratio of expenses to average net assets*......................... 0.56%(c)
Ratio of net investment income to average net assets*............ 2.24%(c)
Portfolio Turnover(d)............................................ 0.78%
</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 classes of shares issued.
-105-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
CAPITAL MANAGER GROWTH FUND
Trust Shares
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OCTOBER 2,
1997 TO
MARCH 31,
1998 (A)
-----------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................. $ 9.78
-------
INVESTMENT ACTIVITIES
Net investment income........................................... 0.09
Net realized and unrealized gains (losses) on investments....... 0.89
-------
Total from Investment Activities............................... 0.98
-------
DISTRIBUTIONS
Net investment income........................................... (0.09)
-------
Total Distributions............................................ (0.09)
-------
NET ASSET VALUE, END OF PERIOD................................... $ 10.67
=======
Total Return..................................................... 7.61%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)................................. $23,491
Ratio of expenses to average net assets......................... 0.31%(c)
Ratio of net investment income to average net assets............ 1.74%(c)
Ratio of expenses to average net assets*........................ 0.51%(c)
Ratio of net investment income to average net assets*........... 1.54%(c)
Portfolio Turnover(d)........................................... 0.78%
</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 classes of shares issued.
-106-
[LOGO OF BB&T MUTUAL FUNDS APPEARS HERE]
<PAGE>
SEMI-ANNUAL REPORT
To Shareholders
INVESTMENT ADVISOR
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, 1998
5/98
[PHOTO APPEARS HERE]
