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BB&T Funds
Sensible Investing for Generations/TM/
[PHOTO]
ANNUAL
[GRAPHIC]
TO SHAREHOLDERS
SEPTEMBER 30, 1999
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TABLE OF CONTENTS
Letter from the Chairman and the Investment Advisor
Page 2
Performance Report
Page 2
Statements of Assets and Liabilities
Page 26
Statements of Operations
Page 33
Statements of Changes in Net Assets
Page 37
Statements of Cash Flows
Page 45
Schedules of Portfolio Investments
Page 46
Notes to Financial Statements
Page 83
Financial Highlights
Page 106
Independent Auditors' Report
Page 147
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Letter From the Chairman and the Investment Advisor
Dear Shareholders:
We are pleased to send you this annual report for the 12 months ended September
30, 1999, a time when "Fed watching" remained investors' most popular spectator
sport and financial markets reacted volcanically to every piece of news--
whether it be real or imaginary.
Here at BB&T, we attempted to maintain our balance, focus on long-term
performance and use time-tested strategies in an effort to preserve and grow
shareholders' capital.
To that end, we continue our ongoing program to broaden your investment
opportunities into new sectors, by introducing several new funds. In May, we
launched the BB&T Virginia Intermediate Tax-Free Fund, which enables
shareholders to enjoy current income that is virtually free from federal and
state income taxes./1/ Later this year, we expect to roll out the BB&T
Intermediate Corporate Bond Fund, which we feel could take advantage of
generous yield opportunities in the corporate debt market. We are also
considering a number of other fund offerings, which we will announce as plans
are confirmed.
Stocks: Rising From the Depths
When we began our fiscal year on October 1, 1998, stocks were suffering from a
sharp sell-off. Among the culprits was a wave of frightening economic news from
around the world. Asia was still reeling from its earlier troubles; Russia
defaulted on an enormous sum of government debt; and the impending collapse of
an American hedge fund, Long-Term Capital Management, threatened to sink global
credit markets.
Fortunately, stocks hit bottom in early October and began to recover strongly.
Sparked by the Federal Reserve Board's ("the Fed") decision to cut short-term
rates three times in four months, stocks were carried upward by a wave of fresh
liquidity and a renewed sense of optimism among investors.
In March, the Dow Jones Industrial Average/2/ ("the Dow") closed above 10,000
for the first time in its history and later edged over the 11,000 mark. As we
write this report in mid-October, even a recent round of profit-taking has
caused only modest erosion to key indices, such as the Dow.
Nonetheless, we think it is prudent to point out that the broader market has
been experiencing a "stealth correction," with more stocks down than up in many
sectors. In fact, nearly 60 percent of all issues on the New York Stock
Exchange are down 20 percent or more from their 52-week highs and more than a
third are down at least 30 percent. This is not what one would expect to see in
a strong, broad-based market surge. However, the way we see it, with so many
stocks down, and corporate earnings generally up, many excellent investing
opportunities abound.
Bonds: Overwhelmed by the Fed's Reversal
After the Fed's three interest-rate cuts in the last four months of 1998,
fixed-income investors were feeling good about their positions. Unfortunately,
the good times did not last. Early in 1999, Fed officials began to express
their concern about inflationary pressures, which effectively put upward
pressure on rates. And they did not stop there. Beginning in June, the Fed
began to formally tighten--raising rates on June 30 and again on August 24.
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/1/The Fund's income may be subject to certain state and local taxes and,
depending on one's tax status, the federal alternative minimum tax.
/2/The Dow Jones Industrial Average is a price-weighted average based on the
price-only performance of 30 blue-chip stocks.
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One may ask why the Fed took such actions. While measurable consumer inflation
remains contained, the Fed is concerned with building pipeline inflationary
pressures and wage inflation. The fear is that productivity gains will not be
able to keep pace with rising inflationary pressures. It is the Fed's job not
to react to current events, but to take preemptive measures against future
inflation.
Bonds and bond funds of every stripe struggled against the weight of higher
rates, and our fixed-income portfolios were no exception. However, while we
acknowledge that there is potential for even higher rates, we believe the worst
of the interest-rate rise may be over. Therefore, going forward, we will be
seeking opportunities to increase interest-rate sensitivity.
We are Optimistic About the Year Ahead
We believe the domestic economy will continue to grow, though perhaps not as
robustly as in recent years. Consequently, we do not think the Fed needs to be
as aggressive in raising rates. We anticipate continuing, sound monetary policy
and lack of regulatory constraints. The risk is that the Fed could make a
mistake and overreact to perceived inflationary pressures. However, Fed
officials have not erred in recent years and have led us through this marvelous
economic expansion.
As for stocks, we see the market broadening to include small- and mid-cap
companies. In our opinion, that is where the value lies. We expect more
volatility on a short-term basis, until the Fed completes its current,
tightening cycle. However, for the long term, we remain positive on the
markets; we think this is a very productive environment for investors with
long-term horizons.
As always, we thank you for continued support and look forward to serving your
investment needs.
Sincerely,
/s/ Walter B. Grimm
Walter B. Grimm
Chairman
BB&T Funds
/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 Funds are distributed by BISYS Fund Services LP.
The BB&T Funds are NOT FDIC INSURED and are not deposits or obligations of, or
guaranteed or endorsed by, Branch Banking and Trust Company or its affiliates.
Investment products involve investment risk, including the possible loss of
principal.
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The BB&T International Equity Fund+
For the period ended September 30, 1999, the Fund produced a total return of
28.33% (A shares without load), compared to 30.95% for its benchmark, the
Morgan Stanley Capital International EAFE Index.
International markets were strong during the year, with Pacific Basin and
emerging markets leading the way. The portfolio largely matched the indices,
with a strong performance against the benchmark in the United Kingdom,
Continental Europe and the Far East. Our Japanese selections matched the index
return, while our emerging market stocks lagged. The value orientation of the
portfolio resulted in some volatility, with value outperforming strongly in the
early months of the period, before running into some profit-taking.
We Profited in All Geographic Sectors
Many foreign markets were up during the period, reflecting some major changes.
Japan and much of the rest of Asia began to recover, quite substantially, from
the wave of currency devaluations and market turmoil that plagued the Far East
the previous year. Exports grew substantially, currencies stabilized, and
foreign economies picked up dramatically, and their stock markets recovered,
likewise.
In Japan, specifically, individual companies are restructuring; managements are
becoming more aware of the need to become more efficient, to improve
productivity and to provide value to shareholders. And while the Japanese
banking system is still somewhat fragile, bank managers and regulators have
taken measures to resolve their problems. We believe that the actions that have
been taken--including recapitalizations and mergers--can strengthen the banking
system over the next few years. Consequently, the portfolio was overweighted in
Japan.
In Continental Europe and the United Kingdom, a majority of attention was paid
to the European Union's introduction of a single currency, the Euro. However,
the actual rollout turned out to be a non-event; concerns that the new currency
would cause computer problems, and dislocate markets, proved to be unfounded.
On the contrary, we saw strong, unhampered economic growth throughout the
region. The Euro's weakness against the U.S. dollar boosted export flows.
The other major trend in Europe, and one that benefited the portfolio, was a
high degree of merger-and-acquisition activity. One of our most significant
holdings was Telecom Italia, which was eventually bought by Olivetti at a sharp
premium to our initial cost. Other M&A activity cut across many industry
sectors--including energy, utilities, banking and insurance.
Looking ahead, we believe the economic outlook is particularly promising in
Europe. The inflation rate in the U.K. is at its lowest level in 36 years; we
do not believe interest rates need to rise any higher than they have.
Continental Europe also boasts high consumer and business confidence. Earnings
should rise significantly in the region over the next 12 months.
As of September 30, 1999, approximately 43% of the Fund's holdings were
invested in Continental Europe, 16% in the United Kingdom, 25.4% in Japan, 4.3%
in other Pacific Basin countries, 5.1% in the world's emerging markets and 6.2%
in cash and cash equivalents.
The top five equity holdings in the Fund were British Petroleum Co., PLC (2.0%
of the portfolio's assets), Sharp Corp. (1.4%), Vodafone Group PLC (1.4%),
Mannesman AG (1.3%) and Ricoh Co., Ltd. (1.3%).*
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+International investing involves increased risk and volatility.
*The composition of the Fund's holdings is subject to change.
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BB&T INTERNATIONAL EQUITY FUND
Average Annual Total Return
As of 9/30/99
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Inception Since
Class Date 1 Year Inception
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Class A Shares* 1/2/97 22.52% 8.49%
Class B Shares** 1/2/97 23.48% 8.68%
Trust Shares 1/2/97 28.70% 10.68%
* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge.
Value of $10,000 Investment
[CHART]
Trust Shares Class A Shares* Class B Shares** Morgan Stanley EAFE
1/2/97 10,000 9,551 10,000 10,000
9/30/97 11,334 10,778 11,251 11,043
9/30/98 10,264 9,743 10,093 10,151
9/30/99 13,209 12,503 12,564 13,293
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Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T 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 performance of the BB&T International Equity Fund is measured against the
Morgan Stanley Capital International EAFE Index (Europe, Australia and Far
East), which is unmanaged and is generally representative of the performance of
stock markets in that region. The index is unmanaged and does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance reflects the
deduction of fees for these services.
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The BB&T Small Company Growth Fund+
For the 12 months ended September 30, 1999, the Fund produced a total return of
42.32% (A shares without sales load), compared to its benchmark, the Russell
2000 Index, with a return of 19.07%.
Overall, it was a pretty good period for small-company growth stocks. There
were periods of very high volatility--times when stocks did quite well and
times when they did very poorly--but for the 12 months as a whole, we provided
shareholders with returns that were outstanding on an historical basis.
As is our custom, we did not worry much about short-term swings. We remained
focused on our objectives and spent most of our energy looking for dynamic
stocks to buy. As it turned out, we found some good ones.
Technology Was a Winning Sector
Early in the period, we enjoyed a measure of success in the retail sector, with
a profitable position in Pacific Sunwear (1.5%). For the full 12 months,
however, a very significant portion of our gains came from our technology
holdings, specifically, in telecommunications.*
For example, one of our biggest winners was Pinnacle Holdings (1.6%). This is
not a high-tech company--they own communications transmission towers that
handle cell phone, microwave and other data traffic--but their services are
greatly in demand. Another stock, one that was an enormous success for us, was
Veritas Software (2.1%), which designs, markets and supports enterprise data-
storage management services. Our cost per share was around $13, and the stock's
price is up around $75. Other technology winners included Clarify, Inc. (1.1%),
a developer of enterprise software for client/server applications; Mercury
Interactive (2.2%), which owns a program that can identify computer network
problems; and Peregrine Systems (1.5%), a provider of packaged, infrastructure
management application software.*
Toward the end of the fiscal year, we also built positions in a number of
energy companies, including CalDive International (0.5%), which builds and
maintains oil drilling platforms; and Stone Energy (1.3%), an oil and gas
producer.*
Looking forward, we believe it is a time to be cautious. The Fed looks to be in
the middle of credit-tightening maneuvers, which is creating some nervousness
among investors. We also anticipate a number of inflationary pressures on the
horizon; unemployment is at a very low level, which can lead to inflationary
wage increases. Within the stock market, what we saw this year was a
continuation of a disturbing trend, with more stocks declining in price than
advancing. Despite the strong performance of a handful of issues that drove
many indices higher, stocks in general continue to be sluggish. Some time in
the near future, we could see a meaningful correction.
On the positive side, relative valuations for the types of stocks we buy are
more attractive than they have been for many years.
As of September 30, 1999, the top five equity holdings in the Fund were
Harmonic, Inc. (2.4%), Applied Micro Circuits Corp. (2.3%), Mercury Interactive
Corp. (2.2%), Veritas Software Co. (2.1%) and Calpine Corp. (2.1%).*
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+Small-capitalization funds typically carry additional risks since smaller
companies generally have a higher risk of failure and, historically, their
stocks have experienced a greater degree of market volatility than stocks on
average.
*The composition of the Fund's holdings is subject to change.
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BB&T SMALL COMPANY GROWTH FUND
Average Annual Total Return
As of 9/30/99
-----------------------------------------------------
Inception Since
Class Date 1 Year Inception
-----------------------------------------------------
Class A Shares* 12/7/94 35.88% 20.14%
Class B Shares** 1/1/96/1/ 37.25% 20.37%
Trust Shares 12/7/94 42.66% 21.62%
* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge.
Value of $10,000 Investment
[CHART]
Trust Shares Class A Shares* Russell 2000 Index
12/7/94 10,000 9,551 10,000
9/30/95 14,570 13,878 12,923
9/30/96 21,180 20,115 14,620
9/30/97 23,545 22,307 19,472
9/30/98 17,985 16,995 15,768
9/30/99 25,656 24,188 18,775
Value of $10,000 Investment
[CHART]
Class B Shares Russell 2000 Index
12/7/94 10000 10000
9/30/95 14530 12923
9/30/96 20920 14620
9/30/97 23045 19472
9/30/98 17422 15768
9/30/99 24409 18775
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Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T 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/Class B shares were not in existence prior to 1/1/96. Performance calculated
for any period up to and through 1/1/96 is based upon the historical
performance of the Class A Shares and is adjusted for the Class B Shares CDSC,
but does not include any 12b-1 fees, which, if reflected, performance would
have been lower.
The performance of the BB&T Small Company Growth Fund is measured against the
Russell 2000, an unmanaged index generally representative of the performance of
small-capitalization stocks. The index is unmanaged and does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance reflects the
deduction of fees for these value-added services.
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The BB&T Large Company Growth Fund
For the period ended September 30, 1999, the Fund produced a total return of
30.93% (A shares without load), compared to 27.79% for its benchmark, the S&P
500 Stock Index.
For the period as a whole, we generated excellent returns by investing in
large-cap growth stocks--which, as a group, were favored by investors for
nearly the entire 12 months. Market leadership was unusually narrow, but we
benefited from investing in shares of large, well-known companies with proven
earnings growth--the type of stocks in which we specialize. We are especially
proud that we have achieved our results while maintaining a standard deviation
(a measure of volatility) lower than that of the S&P 500.
Our Emphasis on Technology Was Beneficial
Despite generally strong performance, we took a critical look at the portfolio
earlier in the period and determined there were a number of characteristics in
the portfolio we wanted to improve. We committed ourselves to focusing on
companies with sustainable return on equity ("ROE"), identifiable and
verifiable earnings growth and strong price and earnings momentum. We are not
slavish about price momentum, but we are sensitive to it. We also decided to
reduce our turnover rate (the frequency of buying and selling securities) below
the average growth fund's level--to lower shareholder expenses.
With regard to sector preference, we maintained a higher-than-average
technology weighting, with better than 37 percent of our assets in technology
stocks--including industry leaders such as Microsoft Corp. (3.3% of the
portfolio's net holdings), Intel Corp. (2.7%), Cisco Systems, Inc. (2.3%) and
Oracle Corp. (1.8%). At the same time, we were underweighted in health care,
telecommunications and finance; this helped the Fund, as all three of these
sectors hit rough patches during the period.*
Within the Internet arena, we profited from investments in such names as
America Online, Inc. (1.4%) and Yahoo!, Inc. (1.2%). We believe the Web
business is going to get a lot bigger, much faster, than many people think. In
our opinion, we are seeing the beginning of a defined segmentation in the
Internet sector, and these segments are going to be controlled by first movers
such as AOL and Yahoo. We believe the Internet has a very promising future, and
we will continue to be looking for new companies who look viable and come into
the game with the right sort of strategic plan.*
Looking ahead, we intend to continue doing what has worked for us in the past:
buying big names with big earnings potential. This is what our shareholders
expect of us, and we will continue to maintain our discipline in this area.
As of September 30, 1999, the top five equity holdings in the Fund were
Microsoft Corp. (3.3% of the portfolio's net holdings), Sun Microsystems, Inc.
(2.8%), Intel Corp. (2.7%), General Electric Co. (2.6%) and MCI Worldcom, Inc.
(2.5%).*
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*The composition of the Fund's holdings is subject to change.
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BB&T Large Company Growth Fund
Average Annual Total Return
As of 9/30/99
-----------------------------------------------------
Inception Date Since
Class Date 1 Year Inception
-----------------------------------------------------
Class A Shares* 10/3/97 25.08% 10.44%
Class B Shares** 10/3/97 25.97% 10.91%
Trust Shares 10/3/97 31.15% 13.24%
* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge.
Value of $10,000 Investment
[CHART]
Trust Shares Class A Shares* S & P 500 Stock Index
10/3/97 10,000 9,550 10,000
9/30/98 9,767 9,309 10,905
9/30/99 12,810 12,188 13,935
Value of $10,000 Investment
[CHART]
Class B Shares S&P 500 Stock Index
10/3/97 10,000 10,000
9/30/98 9,687 10,905
9/30/99 12,290 13,935
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Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T 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 performance of the BB&T Large Company Growth Fund is measured against the
S&P 500 Stock Index, an unmanaged index generally considered to be
representative of the performance of the stock market as a whole. The index is
unmanaged and does not reflect the deduction of expenses associated with a
mutual fund, such as investment management and fund accounting fees. The Fund's
performance reflects the deduction of fees for these services.
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The BB&T Growth and Income Stock Fund
For the 12-month period ended September 30, 1999, the Fund produced a total
return of 11.64% (A shares without load), compared to 27.79% for its benchmark,
the S&P 500 Stock Index.
The last twelve months proved challenging for all funds managed with a value
orientation like ours. Except for a brief period during the third quarter of
the fiscal year, investors were attracted to a very narrow group of large-cap
growth stocks. If anything the leadership became even narrower as the year wore
on. Formerly, high-flying sectors such as consumer nondurables and health care
have fallen by the wayside, leaving technology as the sole leadership group.
Technology stocks historically possess very few of the characteristics that
value investors tend to cherish.
Staying True to our Diversified Value Strategy
Our value style has led us to hold a slight underweighting in technology and a
slight overweighting in consumer non-durables and basic materials. Because the
types of stocks we favor have not done particularly well recently, many
attractive names that were cheap are now cheaper. It still appears to us that
the most promising value is to be found in the mid-cap arena.
Why have we not pursued more "hot" stocks in the technology sector? For the
simple reason, that we just are not comfortable with the astronomical valuation
levels most technology stocks carry. Nor are we finding new ideas in technology
that we feel overcome the disadvantage of being so richly overpriced.
In our opinion, the important thing is that we continue to do what we have done
successfully for years: follow our long-term commitment to diversified value
investing, focus on strong fundamentals and make sure the things we own are
decently priced. We buy the stocks of high-quality companies that are going to
be in business for years to come and offer outstanding growth prospects.
Looking at the Fund in the aggregate, our shareholders are buying a portfolio
of stocks priced at less than 40 percent of the overall market's valuation
multiples, with double-digit earnings growth expectations. This emphasis on
value has served our shareholders well over the long term, and we see no reason
to stray from this successful philosophy.
As of September 30, 1999, the top five equity holdings in the Fund were Johnson
& Johnson (2.9% of the portfolio's net holdings), SBC Communications, Inc.
(2.8%), Hewlett-Packard Co. (2.8%), SUPERVALU, Inc. (2.4%) and AT&T Corp.
(2.4%).*
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*The composition of the Fund's holdings is subject to change.
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<PAGE>
BB&T GROWTH & INCOME STOCK FUND
Average Annual Total Return
As of 9/30/99
----------------------------------------------------------------
Inception Since
Class Date 1 Year 5 Year Inception
----------------------------------------------------------------
Class A Shares* 10/09/92 6.62% 16.52% 14.47%
Class B Shares** 1/01/96/1/ 6.73% 16.79% 14.74%
Trust Shares 10/09/92 11.89% 17.86% 15.51%
* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge.
[CHART]
Value of $10,000 Investment
Trust Shares Class A Shares* S&P 500 Stock Index
10/9/92 10,000 9,551 10,000
9/30/93 11,606 11,052 11,714
9/30/94 12,021 11,420 12,147
9/30/95 14,531 13,775 15,759
9/30/96 17,628 16,664 18,949
9/30/97 24,350 22,963 26,610
9/30/98 24,434 22,987 29,018
9/30/99 27,339 25,661 37,082
[CHART]
Value of $10,000 Investment
Class B Shares** S&P 500 Stock
10/9/92 10,000 10,000
9/30/93 11,572 11,714
9/30/94 11,956 12,147
9/30/95 14,422 15,759
9/30/96 17,355 18,949
9/30/97 23,728 26,610
9/30/98 23,568 29,018
9/30/99 26,097 37,082
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Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T 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 performance of the BB&T Growth and Income Stock Fund is measured against
the S&P 500 Stock Index, an unmanaged index generally considered to be
representative of the performance of the stock market as a whole. The index is
unmanaged and does not reflect the deduction of expenses associated with a
mutual fund, such as investment management and fund accounting fees. The Fund's
performance reflects the deduction of fees for these value-added services.
/1/Class B shares were not in existence prior to 1/1/96. Performance calculated
for any period up to and through 1/1/96 is based upon the historical
performance of the Class A Shares and is adjusted for the Class B Shares CDSC,
but does not include any 12b-1 fees, which, if reflected, performance would
have been lower.
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<PAGE>
The BB&T Balanced Fund
For the 12 months ended September 30, 1999, the Fund produced a total return of
7.72% (A shares without load), compared to 27.79% and 0.78% for the Fund's
benchmarks, the S&P 500 Stock Index and the Lehman Brothers Intermediate
Government Bond Index, respectively.
We were not completely pleased with our performance for the period as a whole.
On the equity side, market leadership was mostly confined to a handful of very
large growth stocks--not the sort of issues that complements our value style.
The Fund did perform very well during the second calendar quarter of 1999, when
investors rotated back to value stocks in a big way; bond prices also rose
during that time. However, during the three months that concluded September 30,
the end of our fiscal year, the stock market again returned to its narrow
growth focus.
We Countered Volatility With Active Management
Both the stock and bond markets were unusually volatile during the period, and
as a result, we changed our asset-allocation percentages more often than we
usually do. Going into the fiscal year--which was the tail end of a major sell-
off--we carried a slight overweighting in equities. As the market rallied
through the last calendar quarter of 1998 and the first calendar quarter of
1999, we trimmed our equity exposure back to slightly below our target levels
of 60% stocks and 40% bonds.
On the fixed-income side of our portfolio, the higher interest-rate environment
caused us to hold a slightly shorter-than-target average weighted maturity--a
position that helped us throughout the period. We emphasized non-U.S. Treasury
investments; we shifted some money into high-quality, corporate bonds. We also
continued to emphasize mortgage-backed securities, because we felt that,
looking ahead, they offered very favorable returns relative to Treasuries. We
also had a very heavy emphasis on U.S. Government agency securities, which we
also believed offered good, relative performance potential. In a choppy, up-
and-down bond market like the one we had the last 12 months, we felt this
allocation was a pretty good strategy.
Going forward, we believe that holding a widely diversified portfolio such as
ours, with significant holdings in both stocks and bonds, is likely to benefit
investors as the markets broaden and carry more issues higher. We have reached
this conclusion after a great deal of research, discussion and consideration of
many possible scenarios. Do we believe that broad diversification is an
appropriate strategy? Absolutely.
As of September 30, 1999, approximately 56% of the portfolio's holdings were
invested in stocks, 41% in fixed-income holdings and 3% in cash and cash
equivalents. The Fund's top five equity holdings were IBM Corp. (1.9% of the
portfolio's net holdings), Adobe Systems, Inc. (1.8%), Hewlett-Packard Co.
(1.5%), Anheuser-Busch Cos. (1.5%) and Honeywell, Inc. (1.3%). The Fund's
fixed-income holdings were invested in U.S. Treasury, government agency and
mortgage-backed securities. The average maturity of the fixed-income portfolio
was approximately 5.6 years; the average credit quality was AAA.*
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*The composition of the Fund's holdings is subject to change.
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<PAGE>
BB&T Balanced Fund
Average Annual Total Return
As of 9/30/99
------------------------------------------------------------------------
Inception Since
Class Date 1 year 5 Year Inception
------------------------------------------------------------------------
Class A Shares* 7/1/93 2.88% 12.18% 10.02%
Class B Shares** 1/1/96 2.82% 12.39% 10.28%
Trust Shares 7/1/93 8.01% 13.51% 11.07%
* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge.
Value of $10,000 Investment
[GRAPH]
Lehman Bros. Int.
Trust Shares Class B Shares** S&P 500 Stock Index Govt. Bond Index
7/1/93 10,000 9,551 10,000 10,000
9/30/93 10,274 9,826 10,257 10,211
9/30/94 10,231 9,763 10,637 10,058
9/30/95 12,095 11,521 13,800 11,124
9/30/96 13,637 12,953 16,593 11,691
9/30/97 16,652 15,771 23,302 12,606
9/30/98 17,847 16,858 25,410 13,942
9/30/99 19,276 18,160 32,471 14,051
Value of $10,000 Investment
[GRAPH]
Lehman Bros. Int.
Class B Shares** S&P 500 Stock Index Govt. Bond Index
7/1/93 10,000 10,000 10,000
9/30/93 10,288 10,257 10,211
9/30/94 10,222 10,637 10,058
9/30/95 12,062 13,800 11,124
9/30/96 13,447 16,593 11,691
9/30/97 16,258 23,302 12,606
9/30/98 17,260 25,410 13,942
9/30/99 18,437 32,471 14,051
- --------------------------------------------------------------------------------
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T 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/Class B shares were not in existence prior to 1/1/96. Performance calculated
for any period up to and through 1/1/96 is based upon the historical
performance of the Class A Shares and is adjusted for the Class B Shares CDSC,
but does not include any 12b-1 fees, which, if reflected, performance would
have been lower.
The performance of the BB&T Balanced Fund is measured against the S&P 500 Stock
Index, an unmanaged index generally considered to be representative of the
performance of the stock market as a whole, and against the Lehman Brothers
Intermediate Government Bond Index, widely used as a broad measure of the
performance of U.S. Government Bonds with maturities of less than 10 years. The
indices are unmanaged and do not reflect the deduction of expenses associated
with a mutual fund, such as investment management and fund accounting fees. The
Funds' performance reflects the deduction of fees for these value-added
services.
-13-
[LOGO OF BB&T FUNDS]
<PAGE>
The BB&T Capital Manager Funds
Conservative Growth Fund
Moderate Growth Fund
Growth Fund
The three BB&T Capital Manager Funds--Conservative Growth Fund, Moderate Growth
Fund and Growth Fund--invest in underlying funds from the BB&T Funds family.
The Capital Manager Funds seek varying degrees of capital appreciation and
income, based on each portfolio's specific and separate asset allocation mix.
Our investment discipline leads us to buy shares of specific sectors when they
are relatively cheap, and to sell those shares that are relatively expensive.
We believe that, in the long run, this asset allocation strategy helps us
reduce volatility for our shareholders while providing competitive returns.
We Leveraged Volatility to Buy Shares Cheaply
As a group, the Capital Manager Funds performed exactly as we expected them to
during the period. Each Fund had representation in some of the stock market's
best-performing sectors--on both the domestic and global fronts. All three
portfolios were invested, in varying degrees, in the BB&T Large Company Growth,
Small Company Growth and International Equity Funds; when these underlying
Funds prospered, so did the Capital Manager Funds.
One of the ways we use volatility to our advantage is to regularly "re-balance"
each Fund's exposure to different underlying portfolios, based on each Fund's
risk profile; this strategy proved especially beneficial in the most recent 12-
month period. When some foreign markets lagged behind the U.S. market, we
logically bought more shares of the BB&T International Equity Fund. That Fund's
subsequent ascent contributed to the performance of the Capital Manager Funds.
We also bought more shares of the BB&T Small Company Growth Fund when small
stocks suffered, and saw our fortunes rise when small stocks in general, and
the Small Company Growth Fund in particular, climbed sharply.
We believe our job is to manage risk. That means not avoiding risk, but looking
at the potential for risk, scrutinizing opportunities for return, then deciding
on an appropriate risk-return tradeoff. Evaluating the markets and the economy
at the end of the most recent period, we decided that it made more sense to not
take on extra risk in stocks; bonds appeared to offer a bit more potential
return for their relative risk. Therefore, as of September 30, 1999, each of
our three Funds was situated either at, or slightly under, its target exposure
for equities.
[GRAPH]
BB&T Capital Manager A Shares
Value of $10,000 Investment
<TABLE>
<CAPTION>
Lehman Bros. Int.
Moderate Conservative Growth S&P 500 Stock Index Govt. Bond Index
<S> <C> <C> <C> <C> <C>
1/29/98 9,550 9,550 9,550 10,000 10,000
9/30/98 9,559 9,731 9,411 10,484 10,681
9/30/99 10,808 10,528 10,993 13,398 10,764
</TABLE>
-14-
[LOGO OF BB&T FUNDS]
<PAGE>
The BB&T Capital Manager
Moderate Growth Fund
Average Annual Total Return
As of 9/30/99
-----------------------------------------------------
Inception Since
Class Date 1 Year Inception
-----------------------------------------------------
Class A Shares* 1/29/98 8.02% 4.26%
Class B** 1/29/99 NA -3.71%+
Trust Shares 10/2/97 13.34% 6.84%
* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge.
+ Aggregate Total Return
The BB&T Capital Manager
Conservative Growth Fund
Average Annual Total Return
As of 9/30/99
-----------------------------------------------------
Inception Since
Class Date 1 Year Inception
-----------------------------------------------------
Class A Shares* 1/29/98 3.38% 3.47%
Class B** 1/29/99 NA -4.34%+
Trust Shares 10/2/97 8.47% 6.20%
* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge.
+ Aggregate Total Return
The BB&T Capital Manager
Growth Fund
Average Annual Total Return
As of 9/30/99
-----------------------------------------------------
Inception Since
Class Date 1 Year Inception
-----------------------------------------------------
Class A Shares* 1/29/98 11.51% 4.63%
Class B** 1/29/99 NA -3.13%+
Trust Shares 10/2/97 16.96% 7.24%
* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge.
+ Aggregate Total Return
BB&T CAPITAL MANAGER TRUST SHARES
[CHART]
Value of $10,000 Investment
S&P 500 Lehman Bros. Int.
Moderate Conservative Growth Stock Index Govt. Bond Index
10/2/97 10,000 10,000 10,000 10,000 10,000
9/30/98 10,068 10,395 9,828 10,905 11,059
9/30/99 11,411 11,275 11,495 13,935 11,145
BB&T CAPITAL MANAGER B SHARES
[CHART]
Value of $10,000 Investment
S&P 500 Lehman Bros. Int.
Moderate** Conservative** Growth** Stock Index Govt. Bond Index
1/29/98 9,550 9,550 9,550 10,000 10,000
9/30/98 9,559 9,731 9,411 10,484 10,681
- --------------------------------------------------------------------------------
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T Funds will fluctuate, so that shares,
when redeemed, may be worth more or less than their original cost.
A portion of the Funds' 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 performance of the BB&T Capital Manager Funds are measured against the S&P
500 Stock Index, an unmanaged index generally considered to be representative
of the performance of the stock market as a whole, and against the Lehman
Brothers Intermediate Government Bond Index, widely used as a broad measure of
the performance of U.S. Government Bonds with maturities of less than 10 years.
The indices are unmanaged and do not reflect the deduction of expenses
associated with a mutual fund, such as investment management and fund
accounting fees. The Funds' performance reflects the deduction of fees for
these services.
-15-
[LOGO OF BB&T FUNDS]
<PAGE>
The BB&T North Carolina Intermediate Tax-Free Fund/1/,/2/
For the 12-month period ended September 30, 1999, the Fund produced a -1.53% (A
shares without load) return compared to a 1.55% return for the Lehman Brothers
5-Year General Obligations Index.
The period was marked by extreme interest-rate volatility, with the Federal
Reserve first lowering the fed funds' rate two times, then "taking back" the
cuts with rate hikes in the latter half of the period. We correctly anticipated
the early rate cuts and, expecting an equally benign environment in calendar
year 1999, entered January with the portfolio's average maturity extended.
Unfortunately, negative comments made by Fed Chairman Alan Greenspan, along
with investors' fear of inflation, ignited a precipitous slide in bond prices
that began in February and spread into the spring. As the yield curves rose we
began efforts to shorten duration and maturity in the fund to lessen the impact
on performance and to reduce volatility. Nonetheless we suffered some
performance degradation that has only recently begun to improve.
While the Fund's overall performance was disappointing, we are still satisfied
with the fact that we provided shareholders with adequate, tax-free yields with
only modest volatility.
The Muni Market Was Buffeted by Uncertainty and Natural Disasters
There were three especially dynamic forces at play in the North Carolina
municipal market. First, was the issue of quantity in the hospital sector.
Throughout the period, we saw a steady erosion in bond prices for health care-
related bonds; this was due not to credit concerns, but to the huge volume that
was brought to market in the fourth calendar quarter of 1998 and the first
calendar quarter of 1999. This high volume, coupled with limited demand, drove
yields up and prices down.
The second dynamic that took hold in the state was the fear of deregulation in
the municipal power arena; the changing of government in Raleigh had a serious
impact on the issuance of municipal power debt. The uncertainty of how this
situation would affect the municipal power structure caused power-backed
securities to be rated down at the BBB level.
Finally, a significant portion of the state suffered enormous damage from the
three major hurricanes that struck the state in as many months. The
consequences of these disasters are still being assessed, but the economic
damage will be felt for a long time and will affect the muni market to some
degree.
As of September 30, 1999, 98.0% of the Fund's portfolio was invested in debt
instruments issued by government entities in the state of North Carolina, with
1.2% in Puerto Rican securities (also free from income taxes). Approximately
70.5% of our holdings were general obligation bonds, and 28.7% were revenue
bonds; cash was negligible. The effective maturity of our portfolio was 8.19
years, and the average credit quality was AAA.*
- --------------------------------------------------------------------------------
/1/The Fund's income may be subject to certain state and local taxes and,
depending on one's tax status, to the federal alternative minimum tax.
/2/Regional investing may incur additional risks since investments are limited
to one geographical area.
*The composition of the portfolio is subject to change.
-16-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T North Carolina Intermediate Tax-Free Fund
Average Annual Total Return
As Of 9/30/99
-------------------------------------------------------------
Inception Since
Class Date 1 Year 5 Year Inception
-------------------------------------------------------------
Class A Shares* 10/16/92 -3.45% 3.84% 3.50%
Trust Shares 10/16/92 -1.47% 4.42% 3.93%
* Reflects 2.00% Maximum Sales Charge.
[CHART AND GRAPH]
Value of $10,000 Investment
Lehman Bros.
5-Year General
Trust Shares Class A Shares* Oblig. Index
10/16/92 10,000 9,804 10,000
9/30/93 10,662 10,451 10,833
9/30/94 10,537 10,313 10,850
9/30/95 11,355 11,097 11,856
9/30/96 11,669 11,386 12,366
9/30/97 12,420 12,101 13,213
9/30/98 13,277 12,904 14,130
9/30/99 13,078 12,708 14,349
- --------------------------------------------------------------------------------
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T 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 performance of the BB&T North Carolina Intermediate Tax-Free Fund is
measured against the Lehman Brothers 5-Year General Obligations Index, an
unmanaged index generally considered to be representative of the performance of
tax-exempt municipal securities with an average maturity of five years. The
index is unmanaged and does not reflect the deduction of expenses associated
with a mutual fund, such as investment management and fund accounting fees. The
Fund's performance reflects the deduction of fees for these services.
-17-
[LOGO OF BB&T FUNDS]
<PAGE>
The BB&T South Carolina Intermediate Tax-Free Fund /1/,/2/
For the 12 months ended September 30, 1999 the Fund produced a total return of
- -2.09% (A shares without load), compared to the 1.55% for the Fund's benchmark,
the Lehman Brothers 5-Year General Obligation Index.
The period was marked by extreme interest-rate volatility, with the Fed first
lowering the fed funds rate two times, then "taking back" the cuts with rate
hikes in the latter half of the period. We correctly anticipated the early rate
cuts and, expecting an equally benign environment in calendar year 1999, we
entered January with the portfolio's average maturity extended. Unfortunately,
negative comments made by Fed Chairman Alan Greenspan, along with investors'
fear of inflation, ignited a precipitous slide in bond prices that began in
February and spread into the spring. As the yield curves rose we began efforts
to shorten duration and maturity in the fund to lessen the impact on
performance and to reduce volatility. Nonetheless we suffered some performance
degradation that has only recently begun to improve.
While the Fund's performance was disappointing, we are still satisfied with the
fact that we provided shareholders with adequate, tax-free yields with only
modest volatility.
We Found More Opportunities With Revenue Bonds
In many ways, the year was a replay of the previous 12-month period, in terms
of the number and type of issues that came out. South Carolina is still trying
to make itself into a completely AAA state; paper issued by the state itself is
generally rated AAA, but much of the issues offered by school districts and
other smaller entities are insured.
During the period, the yield rose incrementally, as did our average coupon.
Because many of our shareholders seem to want to put their money into the Fund
for periods ranging from six months to two years, generating higher income is
one of our priorities.
Over the last 12 months, we favored state intercept revenue bonds, which
offered a better yield and coupon structure than general obligation issues.
As of September 30, 1999, the Fund's portfolio was invested in debt instruments
issued by government entities in the state of South Carolina. Approximately
29.3% of our holdings were general obligation bonds, and 67.4% were revenue
bonds; cash was negligible. The effective maturity of our holdings was 8.44
years, and the average credit quality was AAA.*
- --------------------------------------------------------------------------------
/1/The Fund's income may be subject to certain state and local taxes and,
depending on one's tax status, to the federal alternative minimum tax.
/2/Regional investing may incur additional risks since investments are limited
to one geographical area.
*The composition of the portfolio is subject to change.
-18-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T South Carolina Intermediate Tax-Free Fund
Average Annual Total Return
As of 9/30/99
----------------------------------------------------------------
Inception Since
Class Date 1 year Inception
----------------------------------------------------------------
Class A Shares* 10/20/97 -4.02% 1.82%
Trust Shares 10/20/97 -1.98% 2.98%
* Reflects 2.00% Maximum Sales Charge.
Value of $10,000 Investment
[GRAPH]
Lehman Bros.
5-Year General
Trust Shares Oblig. Index
10/19/97 10,000 10,000
9/30/98 10,802 10,629
9/30/99 10,588 10,794
Value of $10,000 Investment
[GRAPH]
Lehman Bros.
5-Year General
Class A Shares* Oblig. Index
12/10/97 9,800 10,000
9/30/98 10,579 10,629
9/30/99 10,358 10,794
- --------------------------------------------------------------------------------
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T 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 performance of the BB&T South Carolina Intermediate Tax-Free Fund is
measured against the Lehman Brothers 5-Year General Obligation Index, an
unmanaged index generally considered to be representative of the performance of
tax-exempt municipal securities with an average maturity of five years. The
index is unmanaged and does not reflect the deduction of expenses associated
with a mutual fund, such as investment management and fund accounting fees. The
Fund's performance reflects the deduction of fees for these services.
-19-
[LOGO OF BB&T FUNDS]
<PAGE>
The BB&T Virginia Intermediate Tax-Free Fund/1/,/2/
For the period ended September 30, 1999 the Fund produced a total return of -
0.66% (A shares without load), compared to the -0.24% for the Fund's benchmark,
the Lehman Brothers 5-Year General Obligation Index.
At the time the Fund was opened to investors, the interest-rate cuts of 1998
were only a distant, faintly pleasant memory. Since then, the environment for
fixed-income securities soured. Negative comments made by Fed Chairman Alan
Greenspan, along with investors' fear of inflation ignited a precipitous slide
in bond prices that began in February and spread into the spring. As the yield
curves rose we began efforts to shorten duration and maturity in the fund to
lessen the impact on performance and to reduce volatility. Nonetheless we
suffered some performance degradation that has only recently begun to improve.
However, while our total return was somewhat disappointing, we are still
satisfied with the fact that we provided shareholders with acceptable, tax-free
yields with only modest volatility.
Good Opportunities in a Unique State
Virginia presents a unique municipal landscape, different in many ways from its
neighbors. Being a Commonwealth, Virginia favors decentralized government; it
is a very Jeffersonian environment, and a great deal of fiscal decision-making
is left to individual counties and cities. In fact, there are more counties
with AAA credit ratings than there are in North Carolina. Virginia itself
carries a AAA rating.
A positive aspect of investing in Virginia municipal paper is that the market
is very liquid, which has helped us in pricing. Many of the largest
institutional investors in the country desire Virginia paper. When deals come
out, they come out very publicly and very regularly; they're easy to get your
hands on. And when we've sold on the open market, we've been getting very
competitive bids.
This early in the Fund's history, we have found particularly good opportunities
in Fairfax County and the City of Arlington--two of the fastest-growing areas
in Virginia. Both feature good, reliable tax bases.
As of September 30, 1999, 97.3% of the Fund's portfolio was invested in debt
instruments issued by government entities in the Commonwealth of Virginia, with
1.3% in Puerto Rican securities (also free from income taxes) and 1.1% invested
in Metro District of Columbia securities (part of this income is subject to the
federal alternative minimum tax). Approximately 40% of our holdings were
general obligation bonds, and 58% were revenue bonds; cash was negligible. The
effective maturity of our portfolio was 9.58 years, and the average credit
quality was AA.*
- --------------------------------------------------------------------------------
/1/The Fund's income may be subject to certain state and local taxes and,
depending on one's tax status, to the federal alternative minimum tax.
/2/Regional investing may incur additional risks since investments are limited
to one geographical area.
*The composition of the portfolio is subject to change.
-20-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T VIRGINIA INTERMEDIATE TAX-FREE FUND
Aggregate Total Return
As of 9/30/99
---------------------------------------------------
Inception Since
Class Date Inception+
---------------------------------------------------
Class A Shares* 5/17/99 -2.65%
Trust Shares 5/17/99 -1.77%
* Reflects 2.00% Maximum Sales Charge.
+ Aggregate Total Return
Value of $10,000 Investment
[GRAPH]
Lehman Bros.
5-Year General
Trust Shares Oblig. Index
5/17/99 10,000 10,000
9/30/99 9,823 9,976
Value of $10,000 Investment
[GRAPH]
Lehman Bros.
5-Year General
Class A Shares* Oblig. Index
5/17/99 9,800 10,000
9/30/99 9,735 9,976
- --------------------------------------------------------------------------------
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T 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 performance of the BB&T Virginia Intermediate Tax-Free Fund is measured
against the Lehman Brothers 5-Year General Obligation Index, an unmanaged index
generally considered to be representative of the performance of tax-exempt
municipal securities with an average maturity of five years. The index is
unmanaged and does not reflect the deduction of expenses associated with a
mutual fund, such as investment management and fund accounting fees. The Fund's
performance reflects the deduction of fees for these services.
-21-
[LOGO OF BB&T FUNDS]
<PAGE>
The BB&T Intermediate U.S. Government Bond Fund
The BB&T Short-Intermediate U.S. Government Income Fund
As stated in our semi annual report to you six months ago, each of the Funds
has replaced its current benchmark to compare relative performance. The
Intermediate U.S. Government Bond Fund's new benchmark is the Merrill Lynch 5-
10-Year U.S. Government Index, replacing the Lehman Brothers Intermediate U.S.
Government Bond Index. The Short-Intermediate U.S. Government Index Fund's new
benchmark is the Merrill Lynch 1-5-Year U.S. Government Index, replacing the
Merrill Lynch 1-3-Year Government Bond Index. We believe the new indices better
represent the current and future management of the Funds.
For the 12 months ended September 30, 1999, the Intermediate U.S. Government
Bond Fund produced a -2.49% return (A shares without load). This outperformed
the Merrill Lynch 5-10-Year U.S. Government Index with a return of -2.97%. For
the same period, the Fund underperformed the Lehman Brothers Intermediate U.S.
Government Bond Index, which had a return of 0.78%.
For the 12 months ended September 30, 1999, the Short-Intermediate U.S.
Government Income Fund produced a 0.95% return (A shares without load). This
underperformed the Merrill Lynch 1-5-Year U.S. Government Index, which produced
a return of 2.25%. For the same period, the Fund underperformed the Merrill
Lynch 1-3-Year Government Bond Index, which returned 3.27%.
Volatile Interest Rates Dampened Returns
Interest rates for the period were up well over 100 basis points, affecting a
meaningful decline in bond prices. Interest rates rose for most of calendar
year 1999, as economic growth exceeded expectations and the Fed twice increased
the fed funds rate in an effort to slow consumption. The bond market reacted
severely to the Fed's rise in overnight rates, and domestic bond markets posted
some of their worst year-to-date returns ever.
Our strategy in both funds was to limit interest-rate sensitivity (particularly
in the more interest-rate sensitive Intermediate U.S. Government Bond Fund),
while increasing the use of spread product. In an effort to improve yield and
pursue some excellent value opportunities, both Funds increased their exposure
to agency notes, pass-through mortgage securities and collateralized mortgage
obligations.
As of September 30, 1999, the effective maturity of the Intermediate U.S.
Government Bond Fund was 6.3 years. Approximately 28% of the portfolio was
invested in securities issued by the U.S. Treasury, 15% in corporate debt, 39%
in mortgage-backed securities, 16% in U.S. government agency securities and 2%
in cash and cash equivalents. The portfolio's average credit quality was AAA.*
As of September 30, 1999, the effective maturity of the Short-Intermediate U.S.
Government Income Fund was 2.9 years. Approximately 20% of the portfolio was
invested in securities issued by the U.S. Treasury, 39% in mortgage-backed
securities, 10% in corporate debt, 29% in U.S. government agency securities and
2% in cash and cash equivalents. The portfolio's average credit quality was
AAA.*
- --------------------------------------------------------------------------------
*The composition of the Funds' holdings is subject to change.
-22-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T Intermediate U.S. Government Bond Fund
Average Annual Total Return
As Of 9/30/99
-------------------------------------------------------------
Inception Date Since
Class Date 1 Year 5 Year Inception
-------------------------------------------------------------
Class A Shares* 10/9/92 -6.90% 5.72% 4.89%
Class B Shares** 1/1/96 -6.81% 5.81% 5.06%
Trust Shares 10/9/92 -2.23% 6.98% 5.84%
* Reflects 4.50% Maximum Sales Charge.
** Reflects applicable deferred sales charge
Value of $10,000 Investment
[CHART]
Lehman Bros. Int. U.S. Merrill Lynch
Trust Class A Govt. Bond 5-10 Year U.S.
Shares Shares* Index Govt. Index
10/9/92 10,000 9,551 10,000 10,000
9/30/93 11,076 10,557 10,823 11,176
9/30/94 10,607 10,083 10,661 10,662
9/30/95 11,976 11,357 11,791 12,201
9/30/96 12,386 11,717 12,392 12,598
9/30/97 13,402 12,647 13,362 13,560
9/30/98 15,206 14,300 14,778 15,084
9/30/99 14,858 13,944 14,893 14,636
Value of $10,000 Investment
[GRAPH]
Lehman Bros. Int. U.S. Merrill Lynch 5-10
Class B Shares* Govt. Bond Index Year U.S. Govt. Index
10/9/92 10,000 10,000 10,000
9/30/93 11,053 10,823 11,176
9/30/94 10,558 10,661 10,662
9/30/95 11,891 11,791 12,201
9/30/96 12,107 12,392 12,598
9/30/97 12,972 13,362 13,560
9/30/98 14,562 14,778 15,084
9/30/99 14,106 14,893 14,636
- --------------------------------------------------------------------------------
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T Funds will fluctuate, so that shares,
when redeemed, may be worth more or less than their original cost.
A portion of the Funds' fees have been voluntarily waived. If the fees had not
been waived, the Funds' total return for the period would have been lower.
/1/Class B shares were not in existence prior to 1/1/96. Performance calculated
for any period up to and through 1/1/96 is based upon the historical
performance of the Class A Shares and is adjusted for the Class B Shares CDSC,
but does not include any 12b-1 fees, which, if reflected, performance would
have been lower.
The performance of the BB&T Intermediate U.S. Government Bond Fund is measured
against the Lehman Brothers Intermediate U.S. Government Bond Index, and the
Merrill Lynch 5-10-Year U.S. Government Index, these indices are widely used as
a broad measure of the performance of U.S. Government bonds with maturities of
less than 10 years. The performance of the BB&T Short-Intermediate U.S.
Government Income Fund is measured against the Merrill Lynch 1-3-Year
Government Index, and the Merrill Lynch 1-5-Year Government Bond Index these
indices are widely used as a measure of the performance of U.S. Government
bonds in that maturity range. The indices are unmanaged and do not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance reflects the
deduction of fees for these services.
-23-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T Short-Intermediate U.S. Government Income Fund
Average Annual Total Return
As of 9/30/99
-------------------------------------------------------------
Inception Since
Class Date 1 Year 5 Year Inception
-------------------------------------------------------------
Class A Shares** 11/30/92 -1.12% 5.19% 4.86%
Trust Shares 11/30/92 1.10% 5.88% 5.18%
** Reflects 2.00% Maximum Sales Charge.
Value of $10,000 Investment
[CHART]
Merrill Lynch Merrill Lynch
1-3 Year 1-5 Year
Trust Shares Class A Shares** Govt. Index Govt. Index
11/30/92 10,000 9,804 10,000 10,000
9/30/93 10,801 10,569 10,579 10,626
9/30/94 10,622 10,373 10,702 10,618
9/30/95 11,579 11,280 11,588 11,561
9/30/96 12,083 11,741 12,238 12,100
9/30/97 12,848 12,454 12,937 12,381
9/30/98 13,974 13,511 13,963 13,745
9/30/99 14,121 13,640 14,420 14,054
- --------------------------------------------------------------------------------
Past performance is not predictive of future results. Investment return and the
principal value of shares in the BB&T Funds will fluctuate, so that shares,
when redeemed, may be worth more or less than their original cost.
A portion of the Funds' fees have been voluntarily waived. If the fees had not
been waived, the Funds' total return for the period would have been lower.
The performance of the BB&T Intermediate U.S. Government Bond Fund is measured
against the Lehman Brothers Intermediate U.S. Government Bond Index, and the
Merrill Lynch 5-10-Year U.S. Government Index, these indices are widely used as
a broad measure of the performance of U.S. Government bonds with maturities of
less than 10 years. The performance of the BB&T Short-Intermediate U.S.
Government Income Fund is measured against the Merrill Lynch 1-3-Year
Government Index, and the Merrill Lynch 1-5-Year Government Bond Index these
indices are widely used as a measure of the performance of U.S. Government
bonds in that maturity range. The indices are unmanaged and do not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance reflects the
deduction of fees for these services.
-24-
[LOGO OF BB&T FUNDS]
<PAGE>
The BB&T Prime Money Market Fund/1/
The BB&T U.S. Treasury Money Market Fund/1/
Throughout the period, all eyes were on the Fed, and its decisions to cut the
fed funds rate twice during the first half of our fiscal year, and then raise
them twice during the most recent six months (the Fed already had cut rates
once just before the beginning of the period). As a result, our money market
funds required unusually careful attention, to enhance yields while maintaining
high relative safety. Further, continued low inflation provided shareholders
with attractive "real returns" (total return minus inflation).
When rates went down early in the fiscal year, we extended the BB&T Prime Money
Market Fund's portfolio average weighted maturity to capture as much income as
possible for shareholders. To help lock in incremental yield, we made abundant
use of variable rate notes, many of which reset rates every three months; this
strategy became increasingly important, and beneficial, as the year went on.
The BB&T U.S. Treasury Money Market Fund continued to actively seek the
highest-possible yields while maintaining a degree of safety commensurate with
the portfolio's AAA average credit quality. The Fed's decision to tighten
during the latter half of the period caused overnight rates to creep up; the
front end of the yield curve (where we do our investing) took on a steep
configuration, inviting us to venture out to the edge of our normal operating
arena to pick up more yield.
As of September 30, 1999, approximately 65% of the Prime Money Market Fund's
portfolio was invested in commercial paper, 29.4% in variable rate notes and
5.6% in certificates of deposit. The average maturity of the Fund's holdings
was 39 days, and the average credit quality was A1+.*
As of September 30, 1999, approximately 58% of the U.S. Treasury Money Market
Fund's portfolio was invested in repurchase agreements and 42% in U.S. Treasury
securities. The average maturity of the Fund's holdings was 55 days, and the
average credit quality was AAA.*
- --------------------------------------------------------------------------------
/1/An investment in the Fund is not insured nor guaranteed by the FDIC or any
other government agency. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
Fund.
*The composition of the Fund's portfolio is subject to change.
Shares in the Funds involve investment risks, including possible loss of
principal, so that an investor's shares, when redeemed, may be worth more or
less than their original cost. Fund shares are not deposits or obligations of,
or guaranteed or endorsed by, Branch Banking and Trust Company or its
affiliates, nor are they insured by the FDIC or any other agency.
Some of the fees of the BB&T Funds are currently being waived, resulting in
higher total returns than would occur if the full fees were charged.
-25-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities
September 30, 1999
<TABLE>
<CAPTION>
U.S. Short-
Prime Treasury Intermediate Intermediate U.S.
Money Market Money Market U.S. Government Government Bond
Fund Fund Income Fund Fund
------------ ------------ --------------- -----------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $71,320,519;
$137,734,017;
$191,435,756;
$253,691,405)........... $71,320,519 $137,734,017 $188,752,405 $249,277,864
Repurchase agreements,
at cost................. -- 188,895,524 20,000,000 25,000,000
----------- ------------ ------------ ------------
Total investments.... 71,320,519 326,629,541 208,752,405 274,277,864
----------- ------------ ------------ ------------
Cash.................... 442 -- -- --
Interest and dividends
receivable.............. 250,299 1,898,953 1,904,465 2,203,582
Receivable for capital
shares issued........... -- 5,752 -- --
Receivable for expense
reimbursement........... 127 -- -- --
Unamortized organization
costs................... 13 -- -- --
Prepaid expenses and
other................... 899 1,750 (1,344) 1,102
----------- ------------ ------------ ------------
Total Assets......... 71,572,299 328,535,996 210,655,526 276,482,548
----------- ------------ ------------ ------------
LIABILITIES:
Dividends payable....... 255,874 1,210,428 745,129 971,251
Payable for capital
shares redeemed......... -- 68,689 -- 514
Payable for collateral
received on loaned
securities.............. -- -- 37,892,497 55,963,750
Accrued expenses and
other payables:
Investment advisory
fees................... 11,291 82,606 70,883 89,375
Administration fees.... 1,154 7,116 2,825 4,811
Distribution fees...... 8,333 10,351 951 2,877
Other.................. 17,347 67,289 31,569 45,666
----------- ------------ ------------ ------------
Total Liabilities.... 293,999 1,446,479 38,743,854 57,078,244
----------- ------------ ------------ ------------
NET ASSETS:
Capital................. 71,274,381 327,089,271 175,643,824 223,067,646
Undistributed net
investment income....... 4,810 246 159,851 213,443
Accumulated
undistributed
(distributions in excess
of) net realized gains
on investment
transactions............ (891) -- (1,208,652) 536,756
Net unrealized
depreciation on
investments............. -- -- (2,683,351) (4,413,541)
----------- ------------ ------------ ------------
Net Assets........... $71,278,300 $327,089,517 $171,911,672 $219,404,304
=========== ============ ============ ============
</TABLE>
Continued
-26-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities, Continued
September 30, 1999
<TABLE>
<CAPTION>
U.S. Short-
Prime Treasury Intermediate Intermediate U.S.
Money Market Money Market U.S. Government Government Bond
Fund Fund Income Fund Fund
------------ ------------ --------------- -----------------
<S> <C> <C> <C> <C>
Net Assets
Class A................ $ 5,394,763 $ 42,240,807 $ 4,626,440 $ 3,307,898
Class B................ 9,391,134 2,264,020 -- 2,679,439
Trust Class............ 56,492,403 282,584,690 167,285,232 213,416,967
----------- ------------ ------------ ------------
Total................ $71,278,300 $327,089,517 $171,911,672 $219,404,304
=========== ============ ============ ============
Outstanding units of
beneficial interest
(shares)
Class A................ 5,394,528 42,240,869 479,527 340,851
Class B................ 9,391,079 2,264,018 -- 276,837
Trust Class............ 56,493,584 282,584,476 17,328,996 21,958,549
----------- ------------ ------------ ------------
Total................ 71,279,191 327,089,363 17,808,523 22,576,237
=========== ============ ============ ============
Net asset value
Class A--redemption
price per share........ $ 1.00 $ 1.00 $ 9.65 $ 9.70
Class B--offering
price per share*....... $ 1.00 $ 1.00 -- $ 9.68
Trust Class--offering
and redemption price
per share.............. $ 1.00 $ 1.00 $ 9.65 $ 9.72
=========== ============ ============ ============
Maximum Sales Charge--
Class A................. N/A N/A 2.00% 4.50%
=========== ============ ============ ============
Maximum Offering Price
(100%/(100%-Maximum
Sales Charge) of net
asset value adjusted to
the nearest cent)
per share--Class A...... $ 1.00 $ 1.00 $ 9.85 $ 10.16
=========== ============ ============ ============
</TABLE>
- ----
* Redemption price per share (Class B) varies by length of time shares are
held. (See note 1)
See notes to financial statements
-27-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities
September 30, 1999
<TABLE>
<CAPTION>
North Carolina South Carolina Virginia Growth and
Intermediate Intermediate Intermediate Income
Tax-Free Fund Tax-Free Fund Tax-Free Fund Stock Fund
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $83,328,569;
$18,660,597;
$79,328,251;
$379,639,832)........... $ 82,911,702 $ 18,337,759 $ 78,653,121 $ 493,400,465
Repurchase agreements,
at cost................. -- -- -- 88,000,000
------------ ------------ ------------ -------------
Total investments.... 82,911,702 18,337,759 78,653,121 581,400,465
------------ ------------ ------------ -------------
Interest and dividends
receivable.............. 1,277,963 218,332 1,130,753 752,935
Receivable for capital
shares issued........... -- -- -- 12
Receivable for
investments sold........ 1,256,034 -- -- 708,439
Receivable for expense
reimbursement........... -- 1,129 -- --
Unamortized organization
costs................... -- 7 -- --
Prepaid expenses and
other................... 322 660 -- 7,731
------------ ------------ ------------ -------------
Total Assets......... 85,446,021 18,557,887 79,783,874 582,869,582
------------ ------------ ------------ -------------
LIABILITIES:
Dividends payable....... 288,884 56,326 276,863 565,370
Payable for investments
purchased............... 995,900 1,031,630 -- 1,369,301
Payable for capital
shares redeemed......... -- -- -- 682
Payable for collateral
received on loaned
securities.............. -- -- -- 124,062,703
Accrued expenses and
other payables:
Investment advisory
fees................... 34,466 5,465 32,767 195,813
Administration fees.... 1,382 96 1,306 10,001
Distribution fees...... 1,704 143 9 41,411
Other.................. 16,192 9,121 45,473 109,100
------------ ------------ ------------ -------------
Total Liabilities.... 1,338,528 1,102,781 356,418 126,354,381
------------ ------------ ------------ -------------
NET ASSETS:
Capital................. 84,666,124 17,809,890 80,290,932 306,200,369
Undistributed net
investment income....... 31,686 1,008 2,700 --
Accumulated
undistributed
(distributions in excess
of) net realized gains
on investment
transactions............ (173,450) (32,954) (191,046) 36,554,199
Net unrealized
appreciation
(depreciation) on
investments............. (416,867) (322,838) (675,130) 113,760,633
------------ ------------ ------------ -------------
Net Assets........... $ 84,107,493 $ 17,455,106 $ 79,427,456 $ 456,515,201
============ ============ ============ =============
</TABLE>
Continued
-28-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities, Continued
September 30, 1999
<TABLE>
<CAPTION>
North Carolina South Carolina Virginia Growth and
Intermediate Intermediate Intermediate Income
Tax-Free Fund Tax-Free Fund Tax-Free Fund Stock Fund
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Assets
Class A................ $ 13,677,091 $ 1,159,793 $ 74,495 $ 38,604,211
Class B................ -- -- -- 38,590,349
Trust Class............ 70,430,402 16,295,313 79,352,961 379,320,641
------------ ------------ ------------ -------------
Total................ $ 84,107,493 $ 17,455,106 $ 79,427,456 $ 456,515,201
============ ============ ============ =============
Outstanding units of
beneficial interest
(shares)
Class A................ 1,383,412 118,336 6,858 1,969,459
Class B................ -- -- -- 1,977,539
Trust Class............ 7,122,450 1,672,689 7,307,078 19,314,652
------------ ------------ ------------ -------------
Total................ 8,505,862 1,791,025 7,313,936 23,261,650
============ ============ ============ =============
Net asset value
Class A--redemption
price per share........ $ 9.89 $ 9.80 $ 10.86 $ 19.60
Class B--offering
price per share*....... -- -- -- $ 19.51
Trust Class--offering
and redemption price
per share.............. $ 9.89 $ 9.74 $ 10.86 $ 19.64
============ ============ ============ =============
Maximum Sales Charge--
Class A................. 2.00% 2.00% 2.00% 4.50%
============ ============ ============ =============
Maximum Offering Price
(100%/(100%-Maximum
Sales Charge) of net
asset value adjusted to
the nearest cent)
per share--Class A...... $ 10.09 $ 10.00 $ 11.08 $ 20.52
============ ============ ============ =============
</TABLE>
- ----
* Redemption price per share (Class B) varies by length of time shares are
held. (See note 1)
See notes to financial statements
-29-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities
September 30, 1999
<TABLE>
<CAPTION>
Large Company Small Company International
Balanced Growth Growth Equity
Fund Fund Fund Fund
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $153,008,146;
$75,306,613;
$96,745,180;
$85,420,018)............ $170,430,563 $110,701,870 $130,019,384 $ 95,690,355
Repurchase agreements,
at cost................. 31,000,000 2,720,200 -- --
------------ ------------ ------------ ------------
Total investments.... 201,430,563 113,422,070 130,019,384 95,690,355
------------ ------------ ------------ ------------
Cash.................... -- -- 40,757 5,387,945
Interest and dividends
receivable.............. 1,163,162 83,034 591 163,672
Receivable for capital
shares issued........... -- -- 6,026 --
Receivable for
investments sold........ -- 261,384 1,884,731 1,462,819
Unamortized organization
costs................... -- 7 -- --
Variation margin
receivable on futures
contracts............... -- -- 27,450 --
Reclaim receivable...... -- -- -- 119,619
Prepaid expenses and
other................... 650 581 -- 424
------------ ------------ ------------ ------------
Total Assets......... 202,594,375 113,767,076 131,978,939 102,824,834
------------ ------------ ------------ ------------
LIABILITIES:
Payable to custodian.... -- -- -- 44,722
Dividends payable....... 419,260 -- -- --
Payable for investments
purchased............... -- 225,752 641,778 927,067
Payable for capital
shares redeemed......... 958 -- 16,865 --
Payable for collateral
received on loaned
securities.............. 38,937,050 4,610,200 3,024,600 --
Net payable on open
currency contracts...... -- -- -- 2,139
Accrued expenses and
other payables:
Investment advisory
fees................... 68,280 45,651 107,198 84,580
Administration fees.... 3,591 2,373 2,797 2,202
Distribution fees...... 22,565 11,304 11,784 2,363
Other.................. 47,152 36,080 58,389 30,961
------------ ------------ ------------ ------------
Total Liabilities.... 39,498,856 4,931,360 3,863,411 1,094,034
------------ ------------ ------------ ------------
NET ASSETS:
Capital................. 139,407,409 67,412,081 84,553,322 86,482,923
Undistributed
(distributions in excess
of) net investment
income.................. 24,662 (13,131) (800) (143,290)
Accumulated
undistributed net
realized gains on
foreign currency
transactions, futures
transactions and
investments............. 6,241,031 6,041,509 10,261,352 5,113,700
Net unrealized
appreciation on foreign
currency transactions,
futures transactions and
investments............. 17,422,417 35,395,257 33,301,654 10,277,467
------------ ------------ ------------ ------------
Net Assets........... $163,095,519 $108,835,716 $128,115,528 $101,730,800
============ ============ ============ ============
</TABLE>
Continued
-30-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities, Continued
September 30, 1999
<TABLE>
<CAPTION>
Large Company Small Company International
Balanced Growth Growth Equity
Fund Fund Fund Fund
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Assets
Class A................ $ 21,207,286 $ 5,912,184 $ 11,335,868 $ 1,905,749
Class B................ 21,610,198 12,288,552 11,054,435 2,378,166
Trust Class............ 120,278,035 90,634,980 105,725,225 97,446,885
------------ ------------ ------------ ------------
Total................ $163,095,519 $108,835,716 $128,115,528 $101,730,800
============ ============ ============ ============
Outstanding units of
beneficial interest
(shares)
Class A................ 1,533,291 494,424 454,892 152,716
Class B................ 1,571,117 1,039,465 456,644 192,744
Trust Class............ 8,716,144 7,558,888 4,187,403 7,756,579
------------ ------------ ------------ ------------
Total................ 11,820,552 9,092,777 5,098,939 8,102,039
============ ============ ============ ============
Net asset value
Class A--redemption
price per share........ $ 13.83 $ 11.96 $ 24.92 $ 12.48
Class B--offering
price per share*....... $ 13.75 $ 11.82 $ 24.21 $ 12.34
Trust Class--offering
and redemption price
per share.............. $ 13.80 $ 11.99 $ 25.25 $ 12.56
============ ============ ============ ============
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
the nearest cent)
per share--Class A...... $ 14.48 $ 12.52 $ 26.09 $ 13.07
============ ============ ============ ============
</TABLE>
- ----
* Redemption price per share (Class B) varies by length of time shares are
held. (See note 1)
See notes to financial statements
-31-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities
September 30, 1999
<TABLE>
<CAPTION>
Capital Manager Capital Manager Capital
Conservative Moderate Manager
Growth Fund Growth Fund Growth Fund
--------------- --------------- -----------
<S> <C> <C> <C>
ASSETS:
Investments in affliliates, at
value (Cost $33,233,080;
$28,030,171; $24,367,304)......... $33,412,539 $28,723,155 $25,279,771
Interest and dividends
receivable........................ 100,948 64,091 42,661
Receivable for capital shares
issued............................ -- 7,646 --
Prepaid expenses and other........ 270 268 267
----------- ----------- -----------
Total Assets................... 33,513,757 28,795,160 25,322,699
----------- ----------- -----------
LIABILITIES:
Dividends payable................. 268,643 151,203 94,153
Accrued expenses and other
payables:
Investment advisory fees......... 1,397 1,156 1,060
Administration fees.............. 183 157 138
Distribution fees................ 203 510 327
Other............................ 11,099 10,537 10,317
----------- ----------- -----------
Total Liabilities.............. 281,525 163,563 105,995
----------- ----------- -----------
NET ASSETS:
Capital........................... 32,342,429 27,193,464 23,473,688
Distributions in excess of net
investment income................. (2,004) (2,004) (2,002)
Accumulated undistributed net
realized gains on investment
transactions...................... 712,348 747,153 832,551
Net unrealized appreciation on
investments....................... 179,459 692,984 912,467
----------- ----------- -----------
Net Assets..................... $33,232,232 $28,631,597 $25,216,704
=========== =========== ===========
Net Assets
Class A.......................... $ 532,272 $ 1,634,885 $ 990,427
Class B.......................... 109,998 196,841 163,486
Trust Class...................... 32,589,962 26,799,871 24,062,791
----------- ----------- -----------
Total.......................... $33,232,232 $28,631,597 $25,216,704
=========== =========== ===========
Outstanding units of beneficial
interest (shares)
Class A.......................... 51,211 153,504 91,782
Class B.......................... 10,582 18,498 15,153
Trust Class...................... 3,123,154 2,515,468 2,231,002
----------- ----------- -----------
3,184,947 2,687,470 2,337,937
=========== =========== ===========
Net asset value
Class A--redemption price per
share............................ $ 10.39 $ 10.65 $ 10.79
Class B--offering price per
share*........................... $ 10.39 $ 10.64 $ 10.79
Trust Class--offering and
redemption price per share....... $ 10.43 $ 10.65 $ 10.79
=========== =========== ===========
Maximum Sales Charge--Class A..... 4.50% 4.50% 4.50%
=========== =========== ===========
Maximum Offering Price
(100%/(100% - Maximum Sales
Charge) of net asset value
adjusted to the nearest cent) per
share--Class A.................... $ 10.88 $ 11.15 $ 11.30
=========== =========== ===========
</TABLE>
- ----
* Redemption price per share (Class B) varies by length of time shares are
held. (See note 1)
See notes to financial statements
-32-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Operations
For the Year Ended September 30, 1999
<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
------------ ------------- --------------- -----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income.......... $3,091,994 $15,438,085 $ 9,787,788 $ 11,787,291
Dividend income.......... -- -- 150,566 161,711
Income from securities
lending.................. -- 4,897 69,020 83,390
---------- ----------- ----------- ------------
Total Income.......... 3,091,994 15,442,982 10,007,374 12,032,392
---------- ----------- ----------- ------------
EXPENSES:
Investment advisory
fees..................... 241,997 1,274,677 991,148 1,184,055
Administration fees...... 120,998 637,338 330,383 394,685
Distribution fees--Class
A........................ 17,517 216,980 22,262 18,923
Distribution fees--Class
B........................ 32,895 18,817 -- 19,571
Accounting fees.......... 51,974 116,472 67,647 86,595
Organization costs....... 2,338 -- -- --
Transfer agent fees...... 61,706 109,104 43,569 78,482
Trustees' fees and
expenses................. 2,386 12,953 5,981 7,737
Other.................... 49,634 187,577 76,667 91,053
---------- ----------- ----------- ------------
Gross Expenses........ 581,445 2,573,918 1,537,657 1,881,101
Expenses waived....... (213,566) (569,061) (259,099) (207,357)
Expenses voluntarily
reimbursed............ (127) -- -- --
---------- ----------- ----------- ------------
Total Expenses........ 367,752 2,004,857 1,278,558 1,673,744
---------- ----------- ----------- ------------
Net Investment Income.... 2,724,242 13,438,125 8,728,816 10,358,648
---------- ----------- ----------- ------------
REALIZED/UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gains on
investment transactions.. 3,555 -- 506,677 2,542,689
Net change in unrealized
appreciation/depreciation
on investments........... -- -- (7,407,066) (17,109,843)
---------- ----------- ----------- ------------
Net realized/unrealized
gains (losses) on
investments.............. 3,555 -- (6,900,389) (14,567,154)
---------- ----------- ----------- ------------
Change in net assets
resulting from
operations............... $2,727,797 $13,438,125 $ 1,828,427 $ (4,208,506)
========== =========== =========== ============
</TABLE>
See notes to financial statements
-33-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Operations
For the Year Ended September 30, 1999
<TABLE>
<CAPTION>
North Carolina South Carolina Virginia Growth and
Intermediate Intermediate Intermediate Income
Tax-Free Fund Tax-Free Fund Tax-Free Fund (a) Stock Fund
-------------- -------------- ----------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income.......... $ 4,050,344 $ 845,886 $ 1,512,249 $ 389,572
Dividend income.......... 53,946 15,841 15,980 10,776,223
Income from securities
lending.................. -- -- -- 43,597
----------- ----------- ----------- -----------
Total Income.......... 4,104,290 861,727 1,528,229 11,209,392
----------- ----------- ----------- -----------
EXPENSES:
Investment advisory
fees..................... 503,192 110,397 181,436 3,581,191
Administration fees...... 167,730 36,799 60,479 967,889
Distribution fees--Class
A........................ 67,477 3,625 56 212,084
Distribution fees--Class
B........................ -- -- -- 389,541
Accounting fees.......... 59,841 48,139 25,586 169,019
Organization costs....... -- 12,636 -- --
Transfer agent fees...... 43,154 30,468 25,861 330,906
Trustees' fees and
expenses................. 3,181 727 899 16,862
Other.................... 39,777 20,387 23,218 185,153
----------- ----------- ----------- -----------
Gross Expenses........ 884,352 263,178 317,535 5,852,645
Expenses waived....... (193,026) (105,326) (52,775) (1,268,645)
Expenses voluntarily
reimbursed............ -- (5,586) -- --
----------- ----------- ----------- -----------
Total Expenses........ 691,326 152,266 264,760 4,584,000
----------- ----------- ----------- -----------
Net Investment Income.... 3,412,964 709,461 1,263,469 6,625,392
----------- ----------- ----------- -----------
REALIZED/UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gains
(losses) on investment
transactions............. (102,373) 1,730 (191,046) 37,465,613
Net change in unrealized
appreciation/depreciation
on investments........... (4,541,542) (1,074,450) (2,572,782) 7,984,149
----------- ----------- ----------- -----------
Net realized/unrealized
gains (losses) on
investments.............. (4,643,915) (1,072,720) (2,763,828) 45,449,762
----------- ----------- ----------- -----------
Change in net assets
resulting from
operations............... $(1,230,951) $ (363,259) $(1,500,359) $52,075,154
=========== =========== =========== ===========
</TABLE>
- ----
(a) For the period from May 17, 1999 (commencement of operations) through
September 30, 1999.
See notes to financial statements
-34-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Operations
For the Year Ended September 30, 1999
<TABLE>
<CAPTION>
Large Company Small Company International
Balanced Growth Growth Equity
Fund Fund Fund Fund
----------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income.......... $ 3,594,199 $ 4,156 $ 533,184 $ --
Dividend income.......... 2,271,920 792,586 28,705 1,720,383
Foreign tax withholding.. -- -- -- (131,690)
Income from securities
lending.................. 11,224 4,175 49,362 --
----------- ----------- ----------- -----------
Total Income.......... 5,877,343 800,917 611,251 1,588,693
----------- ----------- ----------- -----------
EXPENSES:
Investment advisory
fees..................... 1,213,274 661,013 1,088,009 910,871
Administration fees...... 327,913 178,652 217,602 182,022
Distribution fees--Class
A........................ 111,268 19,623 56,174 8,158
Distribution fees--Class
B........................ 196,428 82,419 99,129 22,239
Custodian fees........... 11,918 10,951 71,316 109,924
Accounting fees.......... 76,737 54,076 58,140 80,848
Organization costs....... -- 12,273 -- 42
Transfer agent fees...... 169,377 133,078 188,775 99,748
Trustees' fees and
expenses................. 5,862 2,766 3,608 3,131
Other.................... 60,390 34,150 54,442 37,282
----------- ----------- ----------- -----------
Gross Expenses........ 2,173,167 1,189,001 1,837,195 1,454,265
Expenses waived....... (449,662) (225,217) (29,638) (4,853)
----------- ----------- ----------- -----------
Total Expenses........ 1,723,505 963,784 1,807,557 1,449,412
----------- ----------- ----------- -----------
Net Investment Income
(Loss)................... 4,153,838 (162,867) (1,196,306) 139,281
----------- ----------- ----------- -----------
REALIZED/UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gains on
foreign currency
transactions, futures
transactions and
investments.............. 9,253,980 6,107,190 12,616,268 4,835,636
Net change in unrealized
appreciation/depreciation
on foreign currency
transactions, futures
transactions and
investments.............. (2,071,623) 12,965,625 28,117,911 16,606,815
----------- ----------- ----------- -----------
Net realized/unrealized
gains on investments..... 7,182,357 19,072,815 40,734,179 21,442,451
----------- ----------- ----------- -----------
Change in net assets
resulting from
operations............... $11,336,195 $18,909,948 $39,537,873 $21,581,732
=========== =========== =========== ===========
</TABLE>
See notes to financial statements
-35-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Operations
For the Year Ended September 30, 1999
<TABLE>
<CAPTION>
Capital Manager Capital Manager Capital
Conservative Moderate Manager
Growth Fund Growth Fund Growth Fund
--------------- --------------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income from affiliates... $1,104,686 $ 681,705 $ 464,202
---------- ---------- ----------
Total Income................... 1,104,686 681,705 464,202
---------- ---------- ----------
EXPENSES:
Investment advisory fees.......... 78,146 65,321 61,374
Administration fees............... 15,629 13,070 12,274
Distribution fees--Class A........ 1,724 7,955 3,856
Distribution fees--Class B........ 349 536 221
Custodian fees.................... 9,088 8,845 8,833
Accounting fees................... 25,765 25,765 25,765
Organization costs................ 7,151 7,151 7,151
Transfer agent fees............... 30,913 31,142 31,376
Trustees' fees and expenses....... 946 875 811
Other............................. 15,147 13,757 13,098
---------- ---------- ----------
Gross Expenses................. 184,858 174,417 164,759
Expenses waived................ (63,455) (56,304) (51,033)
---------- ---------- ----------
Total Expenses................. 121,403 118,113 113,726
---------- ---------- ----------
Net Investment Income............. 983,283 563,592 350,476
---------- ---------- ----------
REALIZED/UNREALIZED GAINS ON IN-
VESTMENTS:
Net realized gains on investment
transactions with affiliates...... 217,601 183,576 227,172
Net realized gain distributions
from underlying funds............. 565,771 648,294 687,358
Net change in unrealized apprecia-
tion on investments............... 383,969 1,635,682 2,383,183
---------- ---------- ----------
Net realized/unrealized gains on
investments....................... 1,167,341 2,467,552 3,297,713
---------- ---------- ----------
Change in net assets resulting
from operations................... $2,150,624 $3,031,144 $3,648,189
========== ========== ==========
</TABLE>
See notes to financial statements
-36-
[LOGO OF BB&T FUNDS]
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
U.S. Treasury
Prime Money Market Fund Money Market Fund
---------------------------- ----------------------------
For the For the For the For the
Year ended Period ended Year ended Year ended
September 30, September 30, September 30, September 30,
1999 1998 (a)(b) 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVI-
TIES:
OPERATIONS:
Net investment income.. $ 2,724,242 $ 2,630,730 $ 13,438,125 $ 14,034,307
Net realized gains
(losses) on investment
transactions........... 3,555 (4,446) -- --
------------- ------------- ------------- -------------
Change in net assets re-
sulting from opera-
tions................... 2,727,797 2,626,284 13,438,125 14,034,307
------------- ------------- ------------- -------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment in-
come................... (152,033) (57,024) (1,737,810) (1,750,905)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment in-
come................... (117,652) (697) (61,245) (48,142)
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment in-
come................... (2,454,557) (2,573,009) (11,639,070) (12,235,260)
------------- ------------- ------------- -------------
Change in net assets
from shareholder distri-
butions................. (2,724,242) (2,630,730) (13,438,125) (14,034,307)
------------- ------------- ------------- -------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................. 172,392,196 200,254,241 587,978,397 487,187,835
Dividends reinvested... 154,204 48,575 4,508,381 4,337,585
Cost of shares re-
deemed................. (142,603,501) (158,966,524) (543,926,357) (513,879,583)
------------- ------------- ------------- -------------
Change in net assets
from capital transac-
tions................... 29,942,899 41,336,292 48,560,421 (22,354,163)
------------- ------------- ------------- -------------
Change in net assets.... 29,946,454 41,331,846 48,560,421 (22,354,163)
NET ASSETS:
Beginning of period.... 41,331,846 -- 278,529,096 300,883,259
------------- ------------- ------------- -------------
End of period.......... $ 71,278,300 $ 41,331,846 $ 327,089,517 $ 278,529,096
============= ============= ============= =============
SHARE TRANSACTIONS:
Issued................. 172,392,196 200,254,242 587,978,397 487,187,834
Reinvested............. 154,204 48,575 4,508,381 4,337,585
Redeemed............... (142,603,501) (158,966,524) (543,926,357) (513,879,582)
------------- ------------- ------------- -------------
Change in shares........ 29,942,899 41,336,293 48,560,421 (22,354,163)
============= ============= ============= =============
</TABLE>
- ----
(a) The Fund commenced operations on October 1, 1997.
(b) The Fund commenced offering Class B shares on September 2, 1998.
See notes to financial statements
-37-
[LOGO OF BB&T FUNDS]
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Short-
Intermediate Intermediate U.S.
U.S. Government Government
Income Fund Bond Fund
---------------------------- ----------------------------
For the For the For the For the
Year ended Year ended Year ended Year ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVI-
TIES:
OPERATIONS:
Net investment income.... $ 8,728,816 $ 8,305,561 $ 10,358,648 $ 9,686,818
Net realized gains (loss-
es) on investment trans-
actions.................. 506,677 (29,919) 2,542,689 2,329,818
Net change in unrealized
appreciation/depreciation
on investments........... (7,407,066) 4,916,929 (17,109,843) 11,098,366
------------ ------------ ------------ ------------
Change in net assets re-
sulting from operations... 1,828,427 13,192,571 (4,208,506) 23,115,002
------------ ------------ ------------ ------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment in-
come..................... (227,380) (236,423) (189,135) (218,025)
From net realized gains
from investment transac-
tions.................... -- -- (45,700) --
In excess of net invest-
ment income.............. -- -- -- (217)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment in-
come..................... -- -- (83,767) (38,128)
From net realized gains
from investment transac-
tions.................... -- -- (15,100) --
In excess of net invest-
ment income.............. -- -- -- (25)
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment in-
come..................... (8,601,436) (8,069,138) (10,085,746) (9,522,727)
From net realized gains
from investment transac-
tions.................... -- -- (1,898,850) --
In excess of net invest-
ment income.............. -- -- -- (9,865)
------------ ------------ ------------ ------------
Change in net assets from
shareholder distribu-
tions..................... (8,828,816) (8,305,561) (12,318,298) (9,788,987)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares is-
sued..................... 53,751,017 73,721,908 93,711,669 77,526,507
Dividends reinvested..... 559,768 545,311 3,341,950 3,081,065
Cost of shares redeemed.. (37,203,799) (26,023,271) (53,254,932) (49,180,401)
------------ ------------ ------------ ------------
Change in net assets from
capital transactions...... 17,106,986 48,243,948 43,798,687 31,427,171
------------ ------------ ------------ ------------
Change in net assets...... 10,106,597 53,130,958 27,271,883 44,753,186
NET ASSETS:
Beginning of period...... 161,805,075 108,674,117 192,132,421 147,379,235
------------ ------------ ------------ ------------
End of period............ $171,911,672 $161,805,075 $219,404,304 $192,132,421
============ ============ ============ ============
SHARE TRANSACTIONS:
Issued................... 5,472,276 7,530,796 9,371,863 7,760,028
Reinvested............... 56,935 55,526 329,967 306,797
Redeemed................. (3,784,731) (2,646,733) (5,273,293) (4,876,621)
------------ ------------ ------------ ------------
Change in shares.......... 1,744,480 4,939,589 4,428,537 3,190,204
============ ============ ============ ============
</TABLE>
See notes to financial statements
-38-
[LOGO OF BB&T FUNDS]
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
North Carolina South Carolina
Intermediate Tax-Free Fund Intermediate Tax-Free Fund
---------------------------- ----------------------------
For the For the For the For the
Year ended Year ended Year ended Period ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVI-
TIES:
OPERATIONS:
Net investment income.... $ 3,412,964 $ 3,470,478 $ 709,461 $ 706,343
Net realized gains (loss-
es) on investment trans-
actions.................. (102,373) 618,990 1,730 114,696
Net change in unrealized
appreciation/depreciation
on investments........... (4,541,542) 1,532,666 (1,074,450) 712,599
------------ ------------ ------------ ------------
Change in net assets re-
sulting from operations... (1,230,951) 5,622,134 (363,259) 1,533,638
------------ ------------ ------------ ------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment in-
come..................... (532,706) (402,433) (26,968) (7,750)
From net realized gains
from investment transac-
tions.................... (60,954) -- (1,845) --
In excess of net realized
gains from investment
transactions............. (24,537) -- (543) --
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment in-
come..................... (2,880,258) (3,068,045) (682,493) (698,593)
From net realized gains
from investment transac-
tions.................... (361,508) -- (110,141) (4,440)
In excess of net realized
gains from investment
transactions............. (145,523) -- (32,411) --
------------ ------------ ------------ ------------
Change in net assets from
shareholder distribu-
tions..................... (4,005,486) (3,470,478) (854,401) (710,783)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares is-
sued..................... 26,407,580 35,765,794 4,262,509 25,741,437
Dividends reinvested..... 508,644 364,565 21,108 9,639
Cost of shares redeemed.. (22,618,365) (23,775,790) (4,149,815) (8,034,967)
------------ ------------ ------------ ------------
Change in net assets from
capital transactions...... 4,297,859 12,354,569 133,802 17,716,109
------------ ------------ ------------ ------------
Change in net assets...... (938,578) 14,506,225 (1,083,858) 18,538,964
NET ASSETS:
Beginning of period...... 85,046,071 70,539,846 18,538,964 --
------------ ------------ ------------ ------------
End of period............ $ 84,107,493 $ 85,046,071 $ 17,455,106 $ 18,538,964
============ ============ ============ ============
SHARE TRANSACTIONS:
Issued................... 2,588,527 3,473,673 422,672 2,562,664
Reinvested............... 49,458 35,317 2,086 951
Redeemed................. (2,211,670) (2,295,775) (414,297) (783,050)
------------ ------------ ------------ ------------
Change in shares.......... 426,315 1,213,215 10,461 1,780,565
============ ============ ============ ============
</TABLE>
- ----
(a) For the period from October 20, 1997 (commencement of operations) through
September 30, 1998.
See notes to financial statements
-39-
[LOGO OF BB&T FUNDS]
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Virginia
Intermediate Tax- Growth and Income
Free Fund Stock Fund
----------------- ----------------------------
For the For the For the
Period ended Year ended Year ended
September 30, September 30, September 30,
1999 (a) 1999 1998
----------------- ------------- -------------
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.......... $ 1,263,469 $ 6,625,392 $ 5,652,299
Net realized gains (losses) on
investment transactions........ (191,046) 37,465,613 21,641,916
Net change in unrealized
appreciation/depreciation on
investments.................... (2,572,782) 7,984,149 (29,688,415)
----------- ------------- ------------
Change in net assets resulting
from operations................. (1,500,359) 52,075,154 (2,394,200)
----------- ------------- ------------
DISTRIBUTIONS TO CLASS A SHARE-
HOLDERS:
From net investment income..... (469) (515,715) (469,768)
From net realized gains from
investment transactions........ -- (1,704,986) (2,344,787)
DISTRIBUTIONS TO CLASS B SHARE-
HOLDERS:
From net investment income..... -- (208,234) (125,661)
From net realized gains from
investment transactions........ -- (1,455,060) (1,273,210)
DISTRIBUTIONS TO TRUST CLASS
SHAREHOLDERS:
From net investment income..... (1,263,000) (5,901,443) (5,052,761)
From net realized gains from
investment transactions........ -- (15,578,825) (20,939,456)
----------- ------------- ------------
Change in net assets from share-
holder distributions............ (1,263,469) (25,364,263) (30,205,643)
----------- ------------- ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued.... 85,191,871 107,370,335 164,375,541
Dividends reinvested........... 219 12,926,508 15,611,037
Cost of shares redeemed........ (3,000,806) (111,377,616) (86,854,516)
----------- ------------- ------------
Change in net assets from capi-
tal transactions................ 82,191,284 8,919,227 93,132,062
----------- ------------- ------------
Change in net assets............ 79,427,456 35,630,118 60,532,219
NET ASSETS:
Beginning of period............ -- 420,885,083 360,352,864
----------- ------------- ------------
End of period.................. $79,427,456 $ 456,515,201 $420,885,083
=========== ============= ============
SHARE TRANSACTIONS:
Issued......................... 7,585,174 5,279,265 8,269,791
Reinvested..................... 20 634,868 807,285
Redeemed....................... (271,258) (5,391,287) (4,346,118)
----------- ------------- ------------
Change in shares................ 7,313,936 522,846 4,730,958
=========== ============= ============
</TABLE>
- ----
(a) For the period from May 17, 1999 (commencement of operations) through
September 30, 1999.
See notes to financial statements
-40-
[LOGO OF BB&T FUNDS]
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Balanced Large Company
Fund Growth Fund
---------------------------- ----------------------------
For the For the For the For the
Year ended Year ended Year ended Period ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVI-
TIES:
OPERATIONS:
Net investment income
(loss)................... $ 4,153,838 $ 3,997,983 $ (162,867) $ 190,518
Net realized gains on in-
vestment transactions.... 9,253,980 5,078,608 6,107,190 4,017,265
Net change in unrealized
appreciation/depreciation
on investments........... (2,071,623) (685,286) 12,965,625 (5,752,976)
------------ ------------ ------------ -----------
Change in net assets re-
sulting from operations... 11,336,195 8,391,305 18,909,948 (1,545,193)
------------ ------------ ------------ -----------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment in-
come..................... (540,324) (610,172) -- (1,120)
From net realized gains
from investment transac-
tions.................... (1,111,931) (488,936) (124,106) (1,053)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment in-
come..................... (342,755) (227,269) -- (382)
From net realized gains
from investment transac-
tions.................... (856,840) (195,167) (279,203) (2,298)
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment in-
come..................... (3,286,351) (3,171,488) -- (189,016)
From net realized gains
from investment transac-
tions.................... (5,781,527) (2,542,690) (3,203,980) (471,004)
In excess of net invest-
ment income.............. -- -- (24,125) --
------------ ------------ ------------ -----------
Change in net assets from
shareholder distribu-
tions..................... (11,919,728) (7,235,722) (3,631,414) (664,873)
------------ ------------ ------------ -----------
CAPITAL TRANSACTIONS:
Proceeds from shares is-
sued..................... 33,795,452 53,945,233 53,970,032 95,063,688
Dividends reinvested..... 9,175,126 5,439,685 460,407 13,188
Cost of shares redeemed.. (25,364,362) (26,585,285) (17,771,061) (35,969,006)
------------ ------------ ------------ -----------
Change in net assets from
capital transactions...... 17,606,216 32,799,633 36,659,378 59,107,870
------------ ------------ ------------ -----------
Change in net assets...... 17,022,683 33,955,216 51,937,912 56,897,804
NET ASSETS:
Beginning of period...... 146,072,836 112,117,620 56,897,804 --
------------ ------------ ------------ -----------
End of period............ $163,095,519 $146,072,836 $108,835,716 $56,897,804
============ ============ ============ ===========
SHARE TRANSACTIONS:
Issued................... 2,354,356 3,856,203 4,658,383 9,532,115
Reinvested............... 640,132 394,306 43,579 1,324
Redeemed................. (1,762,439) (1,905,688) (1,519,232) (3,623,392)
------------ ------------ ------------ -----------
Change in shares.......... 1,232,049 2,344,821 3,182,730 5,910,047
============ ============ ============ ===========
</TABLE>
- ----
(a) For the period from October 3, 1997 (commencement of operations) through
September 30, 1998.
See notes to financial statements
-41-
[LOGO OF BB&T FUNDS]
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Small Company International
Growth Fund Equity Fund
---------------------------- ----------------------------
For the For the For the For the
Year ended Year ended Year ended Year ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVI-
TIES:
OPERATIONS:
Net investment income
(loss)................... $ (1,196,306) $ (1,111,591) $ 139,281 $ 333,237
Net realized gains (loss-
es) on foreign currency
transactions, futures
transactions and invest-
ments.................... 12,616,268 (671,786) 4,835,636 1,651,855
Net change in unrealized
appreciation/depreciation
on foreign currency
transactions, futures
transactions and
investments.............. 28,117,911 (21,630,763) 16,606,815 (9,954,036)
------------- ------------ ------------ -----------
Change in net assets re-
sulting from operations... 39,537,873 (23,414,140) 21,581,732 (7,968,944)
------------- ------------ ------------ -----------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment in-
come..................... -- -- (4,037) (3,734)
From net realized gains
from investment transac-
tions.................... -- -- (22,804) (18,552)
In excess of net invest-
ment income.............. -- -- -- (1,175)
In excess of net realized
gains from investment
transactions............. -- (166,425) -- --
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment in-
come..................... -- -- (2,136) --
From net realized gains
from investment transac-
tions.................... -- -- (34,567) (29,878)
In excess of net invest-
ment income.............. -- -- -- (2,052)
In excess of net realized
gains from investment
transactions............. -- (128,891) -- --
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment in-
come..................... -- -- (273,843) (342,214)
From net realized gains
from investment transac-
tions.................... -- -- (1,288,928) (1,229,598)
In excess of net invest-
ment income.............. -- -- -- (17,843)
In excess of net realized
gains from investment
transactions............. -- (933,116) -- --
------------- ------------ ------------ -----------
Change in net assets from
shareholder distribu-
tions..................... -- (1,228,432) (1,626,315) (1,645,046)
------------- ------------ ------------ -----------
CAPITAL TRANSACTIONS:
Proceeds from shares is-
sued..................... 111,811,018 90,705,910 26,053,178 37,976,546
Dividends reinvested..... -- 743,235 481,380 576,374
Cost of shares redeemed.. (106,478,404) (63,766,251) (18,352,844) (9,730,326)
------------- ------------ ------------ -----------
Change in net assets from
capital transactions...... 5,332,614 27,682,894 8,181,714 28,822,594
------------- ------------ ------------ -----------
Change in net assets...... 44,870,487 3,040,322 28,137,131 19,208,604
NET ASSETS:
Beginning of period...... 83,245,041 80,204,719 73,593,669 54,385,065
------------- ------------ ------------ -----------
End of period............ $ 128,115,528 $ 83,245,041 $101,730,800 $73,593,669
============= ============ ============ ===========
SHARE TRANSACTIONS:
Issued................... 5,271,001 4,350,347 2,194,713 3,389,581
Reinvested............... -- 35,920 44,009 53,679
Redeemed................. (4,899,093) (3,081,871) (1,534,370) (868,492)
------------- ------------ ------------ -----------
Change in shares.......... 371,908 1,304,396 704,352 2,574,768
============= ============ ============ ===========
</TABLE>
See notes to financial statements
-42-
[LOGO OF BB&T FUNDS]
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Capital Manager Capital Manager
Conservative Moderate Growth
Growth Fund Fund
--------------------------- ---------------------------
For the For the For the For the
Year ended Period ended Year ended Period ended
September 30, September 30, September 30, September 30,
1999 (b) 1998 (a) 1999 (b) 1998 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVI-
TIES:
OPERATIONS:
Net investment income.... $ 983,283 $ 706,230 $ 563,592 $ 498,721
Net realized gains on in-
vestment transactions
with affiliates.......... 217,601 17,727 183,576 31,966
Net realized gain distri-
butions from underlying
funds.................... 565,771 351,578 648,294 528,051
Net change in unrealized
appreciation/depreciation
on investments........... 383,969 (204,510) 1,635,682 (942,698)
----------- ----------- ----------- -----------
Change in net assets re-
sulting from operations... 2,150,624 871,025 3,031,144 116,040
----------- ----------- ----------- -----------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment in-
come..................... (12,382) (1,053) (34,980) (5,356)
From net realized gains
from investment transac-
tions.................... (2,027) -- (36,656) --
In excess of net invest-
ment income.............. (24) -- (111) --
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment in-
come..................... (1,510) -- (1,852) --
In excess of net invest-
ment income.............. (3) -- (6) --
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment in-
come..................... (1,008,395) (705,177) (595,561) (493,365)
From net realized gains
from investment transac-
tions.................... (400,054) -- (540,033) --
In excess of net invest-
ment income.............. (1,977) -- (1,887) --
----------- ----------- ----------- -----------
Change in net assets from
shareholder distribu-
tions..................... (1,426,372) (706,230) (1,211,086) (498,721)
----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares is-
sued..................... 10,867,721 23,734,446 4,433,451 23,215,874
Dividends reinvested..... 128,560 319 82,152 310
Cost of shares redeemed.. (2,380,373) (7,488) (531,734) (5,833)
----------- ----------- ----------- -----------
Change in net assets from
capital transactions...... 8,615,908 23,727,277 3,983,869 23,210,351
----------- ----------- ----------- -----------
Change in net assets...... 9,340,160 23,892,072 5,803,927 22,827,670
NET ASSETS:
Beginning of period...... 23,892,072 -- 22,827,670 --
----------- ----------- ----------- -----------
End of period............ $33,232,232 $23,892,072 $28,631,597 $22,827,670
=========== =========== =========== ===========
SHARE TRANSACTIONS:
Issued................... 1,027,813 2,369,887 412,779 2,316,995
Reinvested............... 12,124 31 7,780 30
Redeemed................. (224,173) (735) (49,525) (589)
----------- ----------- ----------- -----------
Change in shares.......... 815,764 2,369,183 371,034 2,316,436
=========== =========== =========== ===========
</TABLE>
- ----
(a) The Fund commenced offering Trust shares on October 2, 1997 and Class A
shares on January 29, 1998.
(b) The Fund commenced offering Class B shares on January 29, 1999.
See notes to financial statements
-43-
[LOGO OF BB&T FUNDS]
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Capital Manager Growth Fund
---------------------------
For the For the
Year ended Period ended
September 30, September 30,
1999 (b) 1998 (a)
------------- -------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income............................. $ 350,476 $ 344,249
Net realized gains on investment transactions with
affiliates........................................ 227,172 62,410
Net realized gain distributions from underlying
funds............................................. 687,358 663,214
Net change in unrealized appreciation/depreciation
on investments.................................... 2,383,183 (1,470,716)
----------- -----------
Change in net assets resulting from operations..... 3,648,189 (400,843)
----------- -----------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income........................ (12,677) (1,661)
From net realized gains from investment transac-
tions............................................. (15,042) --
In excess of net investment income................ (58) --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income........................ (535) --
In excess of net investment income................ (2) --
DISTRIBUTIONS TO TRUST CLASS SHAREHOLDERS:
From net investment income........................ (425,057) (342,588)
From net realized gains from investment transac-
tions............................................. (705,524) --
In excess of net investment income................ (1,942) --
----------- -----------
Change in net assets from shareholder distribu-
tions.............................................. (1,160,837) (344,249)
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued....................... 1,436,202 22,390,339
Dividends reinvested.............................. 31,021 1,147
Cost of shares redeemed........................... (384,265) --
----------- -----------
Change in net assets from capital transactions..... 1,082,958 22,391,486
----------- -----------
Change in net assets............................... 3,570,310 21,646,394
NET ASSETS:
Beginning of period............................... 21,646,394 --
----------- -----------
End of period..................................... $25,216,704 $21,646,394
=========== ===========
SHARE TRANSACTIONS:
Issued............................................ 133,028 2,237,201
Reinvested........................................ 2,941 109
Redeemed.......................................... (35,342) --
----------- -----------
Change in shares................................... 100,627 2,237,310
=========== ===========
</TABLE>
- ----
(a) The Fund commenced offering Trust shares on October 2, 1997 and Class A
shares on January 29, 1998.
(b) The Fund commenced offering Class B Shares on January 29, 1999.
See notes to financial statements.
-44-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Cash Flows
For the year ended September 30, 1999
<TABLE>
<CAPTION>
Short-
Intermediate Intermediate U.S.
U.S. Government Government Bond
Income Fund Fund
--------------- -----------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net investment income....................... $ 8,728,816 $ 10,358,648
Adjustments to reconcile net investment
income to net cash provided by (used in)
operating activities:
Cost of investment securities purchased... (221,802,807) (251,082,001)
Proceeds from disposition of investment
securities................................ 221,052,594 209,173,373
Cost of investments purchased with cash
collateral from securities lending........ (37,892,497) (55,963,750)
(Increase)/decrease in dividends and in-
terest receivable......................... 234,447 (116,904)
Increase in payable for return of collat-
eral received from securities lending..... 37,892,497 55,963,750
Increase in accrued expenses.............. 3,348 28,134
(Increase)/decrease in prepaid expenses... 1,344 (1,102)
Net amortization/accretion from invest-
ments..................................... (29,427) (14,757)
------------- -------------
Net cash provided by (used in) operating
activities.................................. 8,188,315 (31,654,609)
------------- -------------
Cash Flows from Financing Activities:
Proceeds from shares issued................. 37,227,091 93,711,669
Cost of shares redeemed..................... (37,203,799) (53,254,418)
Cash distributions paid..................... (8,211,607) (8,802,642)
------------- -------------
Net cash provided by (used in) financing
activities.................................. (8,188,315) 31,654,609
------------- -------------
Increase in cash............................. -- --
------------- -------------
Cash:
Beginning balance........................... -- --
------------- -------------
Ending balance.............................. $ -- $ --
============= =============
</TABLE>
Non-cash financing activities for the Short-Intermediate U.S. Government Income
Fund not included herein consist of reinvestment of dividends from net
investment income and converted common trust assets of $559,768 and $16,523,926
respectively.
Non-cash financing activities for the Intermediate U.S. Government Bond Fund
not included herein consist of reinvestment of dividends from net investment
income and distributions of net realized capital gains of $3,341,950.
See notes to financial statements
-45-
[LOGO OF BB&T FUNDS]
<PAGE>
PRIME MONEY MARKET FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ------------------------------------------------------ -----------
<C> <S> <C>
Certificate of Deposit (5.6%):
Banks (5.6%):
$3,000,000 Harris Trust & Savings Bank, 5.30%, 10/18/99.......... $ 3,000,000
1,000,000 NationsBank, 5.00%, 1/6/00............................ 999,949
-----------
Total Certificate of Deposit 3,999,949
-----------
Commercial Paper (65.0%):
Agricultural Services (4.1%):
3,000,000 Archer Daniels Midland Co., 5.36%, 2/14/00............ 2,939,253
-----------
Banks (8.3%):
3,000,000 Halifax PLC, 5.33%, 12/10/99.......................... 2,968,908
3,000,000 UBS Finance (Delaware) Inc, 5.38%, 12/23/99........... 2,962,788
-----------
5,931,696
-----------
Business Credit Institutions (7.0%):
3,000,000 CIT Group Holdings, Inc., 5.17%, 10/21/99............. 2,991,383
2,000,000 John Deere Capital Corp, 5.03%, 8/7/00................ 2,000,224
-----------
4,991,607
-----------
Financial Services (8.4%):
3,000,000 Corporate Asset Funding, Inc., 5.60%, 10/1/99 (b)..... 3,000,000
3,000,000 St. Michael Finance Ltd., 5.32%, 11/10/99............. 2,982,267
-----------
5,982,267
-----------
Insurance (4.2%):
3,000,000 American General Corp., 5.19%, 10/12/99............... 2,995,243
-----------
Leasing (2.7%):
2,000,000 HD Real Estate Funding Corp., 5.80%, 2/22/00 (b)...... 1,953,600
-----------
Manufacturing (4.5%):
3,179,000 Fortune Brands, Inc., 5.55%, 10/1/99.................. 3,179,000
-----------
Personal Credit Institution (4.2%):
3,000,000 Ford Motor Credit Co., 5.30%, 12/17/99................ 2,965,992
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- ------------------------------------------------------ -----------
<C> <S> <C>
Commercial Paper, continued:
Petroleum (9.0%):
$3,000,000 Koch Industries, 5.50%, 10/1/99 (b)................... $ 3,000,000
3,400,000 Shell Oil Co., 5.50%, 10/1/99......................... 3,399,999
-----------
6,399,999
-----------
Pharmaceuticals (4.2%):
3,000,000 Bayer Corp., 5.55%, 10/1/99 (b)....................... 3,000,000
-----------
Telecommunications (4.2%):
3,000,000 Bellsouth Capital Funding Corp., 5.29%, 11/15/99
(b)................................................... 2,980,163
-----------
Tobacco (4.2%):
3,000,000 UST Inc., 5.60%, 10/1/99.............................. 3,000,000
-----------
Total Commercial Paper......................................... 46,318,820
-----------
Variable Rate Notes (29.5%):
Banks (8.5%):
3,000,000 Key Bank, 5.42%*, 6/15/00............................. 2,998,756
3,000,000 SMM Trust 1999, 5.32%*, 4/5/00 (b).................... 3,000,000
-----------
5,998,756
-----------
Chemicals (4.2%):
3,000,000 Dow Chemical Co., 5.41%*, 3/15/00..................... 2,999,495
-----------
Financial Services (4.2%):
3,000,000 Merrill Lynch & Co., Inc., 5.85%*, 2/15/00............ 3,004,665
-----------
Petroleum (4.2%):
3,000,000 Texaco Capital, Inc., 5.19%*, 5/3/00.................. 2,998,264
-----------
Security Brokers & Dealers (4.2%):
3,000,000 Goldman Sachs, 5.51%*, 1/7/00......................... 3,001,508
-----------
Telecommunications (4.2%):
3,000,000 AT&T Corp., 5.27%*, 7/13/00........................... 2,999,062
-----------
Total Variable Rate Notes 21,001,750
-----------
Total Investments
(Amortized Cost $71,320,519) (a)--100.1% 71,320,519
Liabilities in excess of other assets--(0.1)% (42,219)
-----------
TOTAL NET ASSETS--100.0% $71,278,300
===========
</TABLE>
- ----
(a) Cost for federal income tax and financial reporting purposes are the same.
(b) Rule 144A, Section 4(2) or other security which is
restricted as to resale to institutional investors.
The board of trustees has deemed these securities
to be liquid.
* The rate reflected is the rate in effect at
September 30, 1999. The maturity date reflected is
the final maturity date.
PLC --Public Limited Company
See notes to financial statements
-46-
[LOGO OF BB&T FUNDS]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- --------------------------------------------------- ------------
<C> <S> <C>
U.S. Treasury Bills (3.8%):
$12,500,000 10/14/99........................................... $ 12,480,319
------------
Total U.S. Treasury Bills 12,480,319
------------
U.S. Treasury Notes (38.3%):
15,000,000 5.63%, 10/31/99.................................... 15,011,226
15,000,000 5.88%, 11/15/99.................................... 15,020,202
15,000,000 5.63%, 12/31/99.................................... 15,026,501
15,000,000 5.38%, 1/31/00..................................... 15,022,938
15,000,000 5.50%, 2/29/00..................................... 15,030,436
15,000,000 5.50%, 3/31/00..................................... 15,026,994
15,000,000 5.50%, 4/15/00..................................... 15,035,220
15,000,000 6.25%, 5/31/00..................................... 15,079,239
5,000,000 5.38%, 6/30/00..................................... 5,000,942
------------
Total U.S. Treasury Notes 125,253,698
------------
Repurchase Agreements (57.8%):
76,895,524 Bank of America
Repurchase Agreement, 5.28%, 10/1/99,
(Collateralized by $64,900,000 U.S. Treasury Bond,
10.00%, 5/15/10, market value--$76,906,801)........ 76,895,524
50,000,000 First Boston
Repurchase Agreement, 5.25%, 10/1/99,
(Collateralized by $49,139,000 U.S. Treasury Notes,
5.50%--8.50% 10/15/99--8/18/02 market value--
$50,219,830)....................................... 50,000,000
15,500,000 Goldman Sachs
Repurchase Agreement, 5.00%, 10/1/99,
(Collateralized by $15,500,000 U.S. Treasury Note,
5.00%, 9/30/01, market value--$15,502,153)......... 15,500,000
</TABLE>
- ----
(a) Cost for federal income tax and financial reporting
purposes are the same.
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
--------- --------------------------------------------------- ------------
<C> <S> <C>
Repurchase Agreements, continued:
$15,500,000 Lehman Brothers
Repurchase Agreement, 5.30%, 10/1/99,
(Collateralized by $12,275,000 U.S. Treasury Bond,
10.375%, 11/15/12, market value--$15,502,282)...... $ 15,500,000
15,500,000 Merrill Lynch
Repurchase Agreement, 5.15%, 10/1/99,
(Collateralized by $15,830,000 U.S. Treasury Bond,
5.625%, 9/30/01, market value--$15,502,217)........ 15,500,000
15,500,000 Salomon/Smith Barney Repurchase Agreement,
5.00%, 10/1/99, (Collateralized by $16,000,000 U.S.
Treasury Note, 5.625%, 5/15/08, market value--
$15,502,153)....................................... 15,500,000
------------
Total Repurchase Agreements 188,895,524
------------
Total Investments
(Amortized Cost $326,629,541) (a)--99.9% 326,629,541
Other assets in excess of liabilities--0.1% 459,976
------------
TOTAL NET ASSETS--100.0% $327,089,517
============
</TABLE>
See notes to financial statements
-47-
[LOGO OF BB&T FUNDS]
<PAGE>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ---------------------------------------------------- ------------
<C> <S> <C>
Corporate Bonds (10.3%):
Banks (3.5%):
$ 3,000,000 NationsBank Corp., 6.13%, 7/15/04................... $ 2,897,241
3,000,000 SunTrust Banks, 7.38%, 7/1/02....................... 3,051,570
------------
5,948,811
------------
Financial Services (5.1%):
3,000,000 Associates Corp. NA, 5.80%, 4/20/04................. 2,881,674
3,000,000 Ford Motor Credit, 6.70%, 7/16/04................... 2,980,659
3,000,000 Sears Roebuck Acceptance, 6.00%, 3/20/03............ 2,897,253
------------
8,759,586
------------
Industrial Goods & Services (1.7%):
3,000,000 IBM Corp., 6.22%, 8/1/27, Putable 8/1/04 @ 100...... 2,963,280
------------
Total Corporate Bonds 17,671,677
------------
Pass-through Mortgage Securities (38.9%):
Federal Home Loan Mortgage Corp. (17.2%):
1,052,513 6.50%, 2/1/11, Pool # G10473........................ 1,039,775
1,387,294 6.00%, 3/1/11, Pool # E20228........................ 1,342,581
2,230,829 6.50%, 12/1/12, Gold Pool # E00523.................. 2,196,688
3,051,442 6.50%, 2/1/13, Pool #E00532......................... 2,998,795
4,150,519 6.50%, 5/1/13, Pool # E00548........................ 4,078,909
3,162,915 6.50%, 11/1/13, Pool # G10844....................... 3,114,509
5,000,000 6.00%, 8/15/14, Series 2103- TA, CMO................ 4,913,350
5,000,000 6.00%, 11/15/16, Series 2103- PY, CMO .............. 4,905,121
5,000,000 6.25%, 1/15/20, Series 1583- G, CMO................. 4,973,063
------------
29,562,791
------------
Federal National Mortgage Assoc. (21.7%):
1,009,346 7.00%, 6/1/08, Pool # 50751......................... 1,014,040
1,336,269 7.50%, 12/1/08, Pool # 190611....................... 1,358,533
1,532,981 6.00%, 3/1/09, Pool # 50986......................... 1,484,911
1,610,545 6.00%, 4/1/09, Pool # 190759........................ 1,560,043
5,000,000 6.25%, 7/18/13, Pool # 1998-36, CMO................. 4,984,707
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ---------------------------------------------------- ------------
<C> <S> <C>
Pass-through Mortgage Securities, continued:
Federal National Mortgage Assoc., continued:
$ 7,531,565 6.50%, 4/1/14, Pool # 323654........................ $ 7,402,073
4,930,548 7.00% 9/1/14, Pool # 323928......................... 4,934,173
5,000,000 6.00%, 7/25/19 Series 1999-27 CB, CMO............... 4,887,550
5,000,000 6.13%, 12/18/21,Series 1998-24 QE, CMO.............. 4,876,500
5,000,000 6.00%, 11/18/22, Series 1998-36, CMO................ 4,821,115
------------
37,323,645
------------
Total Pass-through Mortgage Securities 66,886,436
------------
U.S. Government Agencies (28.6%):
Federal Home Loan Bank (7.4%):
3,000,000 6.17%, 3/8/01....................................... 3,006,369
10,000,000 5.25%, 4/25/02(b)................................... 9,789,010
------------
12,795,379
------------
Federal Home Loan Mortgage Corp. (13.5%):
3,000,000 0.00%, 10/7/99*..................................... 2,997,414
11,000,000 4.75%, 12/14/01..................................... 10,705,563
9,500,000 6.30%, 6/1/04, Callable 6/1/01 @ 100(b)............. 9,334,539
------------
23,037,516
------------
Federal National Mortgage Assoc. (7.7%):
3,000,000 0.00%, 11/5/99*..................................... 2,984,979
3,000,000 0.00%, 1/19/00*..................................... 2,952,057
4,000,000 4.63%, 10/15/01(b).................................. 3,892,472
3,500,000 5.38%, 3/15/02...................................... 3,441,347
------------
13,270,855
------------
Total U.S. Government Agencies 49,103,750
------------
U.S. Treasury Notes (19.6%):
5,000,000 5.88%, 2/15/00...................................... 5,014,065
12,500,000 6.75%, 4/30/00(b)................................... 12,605,475
3,000,000 6.00%, 8/15/00...................................... 3,015,000
6,000,000 5.63%, 2/28/01...................................... 6,001,878
2,000,000 6.50%, 5/31/01...................................... 2,026,250
5,000,000 5.88%, 11/30/01(b).................................. 5,021,875
------------
Total U.S. Treasury Notes 33,684,543
------------
</TABLE>
Continued
-48-
[LOGO OF BB&T FUNDS]
<PAGE>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- --------------------------------------------------- ------------
<C> <S> <C>
Investment Companies (2.0%):
3,513,502 Federated Government Obligations Fund.............. $ 3,513,502
------------
Total Investment Companies 3,513,502
------------
Short Term Securities Purchased with Securities Lending Collateral (22.0%):
Commercial Paper (2.9%):
$ 5,000,000 Tyco, 5.35%, 10/4/99............................... 4,955,417
------------
Investment Companies (4.0%):
6,937,080 AIM Liquid Asset Money Market Fund................. 6,937,080
------------
Repurchase Agreements (11.6%):
10,000,000 Lehman Brothers Triparty Agreement, 5.65%, 10/1/99,
(See Significant Accounting Policies, Lending
Portfolio Securities in the Notes to Financial
Statements for collateral description)............. 10,000,000
</TABLE>
- ----
(a) Represents cost for financial reporting purposes
and differs from cost basis for federal income tax
purposes by the amount of losses recognized for
financial reporting in excess of federal income tax
reporting of $28,847. Cost for federal income tax
purposes differs from market value by net
unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion................... $ 62,470
Unrealized deprecia-
tion................... (2,774,351)
-----------
Net unrealized depreci-
ation.................. $(2,711,881)
===========
</TABLE>
(b) All or part of this security has been loaned at
September 30, 1999.
CMO--Collateralized Mortgage Obligation.
* Represents Discount Note.
** The rate reflected is the rate in effect at
September 30, 1999. The maturity date reflected is
the final maturity date.
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- -------------------------------------------------- ------------
<C> <S> <C>
Short Term Securities Purchased with Securities Lending Collateral,
continued:
Repurchase Agreements, continued:
$10,000,000 Lehman Brothers Triparty Agreement, 5.80%,
10/1/99, (See Significant Accounting Policies,
Lending Portfolio Securities in the Notes to
Financial Statements for collateral description).. $ 10,000,000
------------
20,000,000
------------
Variable Rate Notes (3.5%):
6,000,000 General Motors Acceptance Corp., 5.76%**,
11/13/00.......................................... 6,000,000
------------
Total Short Term Securities Purchased with Securities Lending
Collateral 37,892,497
------------
Total Investments
(Cost $211,435,756) (a)--121.4% 208,752,405
Liabilities in excess of other assets--(21.4)% (36,840,733)
------------
TOTAL NET ASSETS --100.0% $171,911,672
============
</TABLE>
See notes to financial statements
-49-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ---------------------------------------------------- ------------
<C> <S> <C>
Corporate Bonds (15.3%):
Banks (2.3%):
$ 5,000,000 SunTrust Banks, 7.38%, 7/1/02....................... $ 5,085,950
------------
Consumer Goods & Services (1.2%):
3,000,000 Kimberly-Clark Corp., 6.25%, 7/15/18................ 2,717,214
------------
Financial Services (5.4%):
3,000,000 Ford Motor Credit, 6.70%, 7/16/04................... 2,980,659
5,000,000 Morgan Stanley Dean Witter, 6.38%, 8/1/02........... 4,958,590
4,000,000 Sears Roebuck Acceptance, 6.00%, 3/20/03............ 3,863,004
------------
11,802,253
------------
Industrial Goods & Services (1.8%):
4,000,000 IBM Corp., 6.22%, 8/1/27, Putable 8/1/04 @ 100...... 3,951,040
------------
Leisure Time Industries (2.3%):
5,000,000 The Walt Disney Co., 6.75%, 3/30/06................. 4,971,070
------------
Telecommunications (0.8%):
2,000,000 Lucent Technologies, 5.50%, 11/15/08................ 1,816,280
------------
Utilities--Telephone (1.5%):
3,500,000 AT&T Corp., 6.00%, 3/15/09.......................... 3,252,004
------------
Total Corporate Bonds 33,595,811
------------
Pass-through Mortgage Securities (38.3%):
Federal Home Loan Mortgage Corp (17.8):
1,145,470 7.50%, 7/1/07, Pool # E00108........................ 1,166,375
1,252,837 6.50%, 2/1/11, Pool # G10473........................ 1,237,673
1,387,294 6.00%, 3/1/11, Pool # E20228........................ 1,342,581
2,361,626 6.50%, 4/1/11, Pool # E20235........................ 2,329,182
2,974,439 6.50%, 12/1/12, Gold Pool # E00523.................. 2,928,917
4,150,519 6.50%, 5/1/13, Pool # E00548........................ 4,078,909
3,162,915 6.50%, 11/1/13, Pool # G10844....................... 3,114,509
5,000,000 6.00%, 8/15/14, Series 2103- TA, CMO................ 4,913,350
5,000,000 6.00%, 11/15/16, Series 2103- PY, CMO............... 4,905,121
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ---------------------------------------------------- ------------
<C> <S> <C>
Pass-through Mortgage Securities, continued:
Federal Home Loan Mortgage Corp., continued:
$ 5,000,000 6.25%, 1/15/20, Series 1583-G, CMO.................. $ 4,973,064
8,703,359 6.00%, 11/1/28, Series C00680....................... 8,123,901
------------
39,113,582
------------
Federal National Mortgage Assoc. (19.2%):
3,136,721 6.00%, 6/1/08, Pool # 124885........................ 3,053,722
1,874,500 7.00%, 6/1/08, Pool # 50751......................... 1,883,218
3,415,830 6.00%, 4/1/13, Pool #251656......................... 3,285,797
4,579,618 6.00%, 11/1/13, Pool #323363........................ 4,405,282
3,295,060 6.50%, 4/1/14, Pool # 323654........................ 3,238,407
4,930,548 7.00%, 9/1/14, Pool # 323928........................ 4,934,172
5,000,000 6.00%, 7/25/19, Series 1999-27 CB, CMO.............. 4,887,550
5,000,000 6.13%, 12/18/21, Series 1998-24 QE, CMO............. 4,876,500
5,000,000 6.00%, 11/18/22, Series 1998-36, CMO................ 4,821,115
2,312,299 7.00%, 4/1/24, Pool # 250005........................ 2,285,398
4,840,288 6.00%, 1/1/29, Pool # 252211........................ 4,515,548
------------
42,186,709
------------
Government National Mortgage Assoc. (1.3%):
2,802,069 7.00%, 8/15/23, Pool # 354627....................... 2,767,542
------------
Total Pass-through Mortgage Securities 84,067,833
------------
U.S. Government Agencies (15.9%):
Federal Home Loan Bank (4.4%):
5,000,000 5.13%, 9/15/03...................................... 4,795,360
2,000,000 6.79%, 2/5/07....................................... 2,021,880
3,000,000 5.84%, 7/14/08(b)................................... 2,831,886
------------
9,649,126
------------
Federal Home Loan Mortgage Corp. (6.7%):
6,000,000 6.30%, 6/1/04, Callable 6/1/01 @ 100(b)............. 5,895,498
4,000,000 5.75%, 3/15/09...................................... 3,738,316
5,000,000 6.63%, 9/15/09...................................... 4,973,875
------------
14,607,689
------------
</TABLE>
Continued
-50-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ---------------------------------------------------- ------------
<C> <S> <C>
U.S. Government Agencies, continued:
Federal National Mortgage Assoc. (4.8%):
$ 4,500,000 4.63%, 10/15/01(b).................................. $ 4,379,031
6,000,000 5.13%, 2/13/04(b)................................... 5,709,102
500,000 5.88%, 4/23/04, Callable 4/23/01 @ 100.............. 485,261
------------
10,573,394
------------
Total U.S. Government Agencies 34,830,209
------------
U.S. Treasury Bonds (5.0%):
6,000,000 7.50%, 11/15/16..................................... 6,643,128
5,000,000 5.25%, 11/15/28..................................... 4,334,375
------------
Total U.S. Treasury Bonds 10,977,503
------------
U.S. Treasury Notes (20.7%):
9,000,000 6.38%, 8/15/02...................................... 9,146,250
4,250,000 6.25%, 2/15/03...................................... 4,305,781
4,000,000 7.25%, 8/15/04(b)................................... 4,225,000
8,500,000 5.88%, 11/15/05..................................... 8,444,223
11,000,000 6.50%, 10/15/06(b).................................. 11,244,068
8,000,000 6.25%, 2/15/07(b)................................... 8,072,504
------------
Total U.S. Treasury Notes 45,437,826
------------
U.S. Treasury Inflation Indexed Notes (2.3%):
5,081,800 3.88%, 1/15/09(b)................................... 5,002,397
------------
Total U.S. Treasury Inflation Indexed Notes 5,002,397
------------
Investment Companies (2.0%):
4,402,535 Federated Government Obligations Fund............... 4,402,535
------------
Total Investment Companies 4,402,535
------------
Short Term Securities Purchased with Securities Lending
Collateral (25.5%):
Commercial Paper (6.8%):
10,000,000 CSX Corporation, 5.44%, 11/12/99.................... 9,909,333
5,000,000 Tyco, 5.35%, 10/4/99................................ 4,955,417
------------
14,864,750
------------
</TABLE>
- ----
(a) Represents cost for financial reporting purposes
and differs from cost basis for federal income tax
purposes by the amount of losses recognized for
financial reporting in excess of federal income tax
reporting of $54,223. Cost for federal income tax
purposes differs from market value by net
unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion................... $ 522,979
Unrealized deprecia-
tion................... (4,990,743)
-----------
Net unrealized depreci-
ation.................. $(4,467,764)
===========
</TABLE>
(b) All or part of this security has been loaned at
September 30, 1999.
CMO--Collateralized Mortgage Obligation.
* The rate reflected is the rate in effect at
September 30, 1999. The maturity date reflected is
the final maturity date.
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- -------------------------------------------------- ------------
<C> <S> <C>
Short Term Securities Purchased with Securities Lending
Collateral:
Investment Companies (4.1%):
9,099,000 AIM Liquid Asset Money Market Fund................ $ 9,099,000
------------
Repurchase Agreements (11.4%):
$10,000,000 Lehman Brothers Triparty Agreement, 5.65%,
10/1/99, (See Significant Accounting Policies,
Lending Portfolio Securities in the Notes to
Financial Statements for collateral description).. 10,000,000
15,000,000 Lehman Brothers Triparty Agreement, 5.80%,
10/1/99, (See Significant Accounting Policies,
Lending Portfolio Securities in the Notes to
Financial Statements for collateral description).. 15,000,000
------------
25,000,000
Variable Rate Notes (3.2%):
7,000,000 General Motors Acceptance Corp., 5.76%*,
11/13/00.......................................... 7,000,000
------------
Total Short Term Securities Purchased with Securities Lending
Collateral 55,963,750
------------
Total Investments
(Cost $278,691,405)(a)--125.0% 274,277,864
Liabilities in excess of other assets--(25.0)% (54,873,560)
------------
TOTAL NET ASSETS--100.0% $219,404,304
============
</TABLE>
See notes to financial statements
-51-
[LOGO OF BB&T FUNDS]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -----------
<C> <S> <C>
Municipal Bonds (97.8%):
Education Bonds (3.2%):
$ 500,000 Appalachian State University, North Carolina, 5.00%,
5/15/18, Callable 5/15/08 @ 102, MBIA................ $ 456,905
1,000,000 Johnston Financial Corporation, North Carolina,
5.50%, 8/1/10, Callable 8/1/09 @ 101, FSA............ 1,032,070
500,000 North Carolina, Educational Facilities, 5.00%,
10/1/17, Callable 10/1/06 @ 102...................... 458,810
250,000 University of North Carolina, University Revenues,
4.90%, 8/1/03, Callable 8/1/02 @ 102................. 254,708
500,000 University of North Carolina, University Revenues,
5.20%, 5/15/05....................................... 513,695
-----------
2,716,188
-----------
General Obligation Bonds (68.5%):
300,000 Asheville, North Carolina, 6.00%, 3/1/01............. 307,866
250,000 Asheville, North Carolina, 5.00%, 6/1/09, Callable
6/1/07 @ 101, MBIA................................... 249,793
500,000 Buncombe County, North Carolina, 5.00%, 3/1/01....... 506,355
500,000 Buncombe County, North Carolina, 5.00%, 3/1/03....... 510,205
350,000 Buncombe County, North Carolina, 5.10%, 3/1/04....... 358,740
500,000 Buncombe County, North Carolina, 5.80%, 2/1/05,
Callable 2/1/04 @ 100.5.............................. 525,160
1,000,000 Buncombe County, North Carolina, 5.10%, 3/1/07....... 1,018,500
500,000 Buncombe County, North Carolina, 5.30%, 3/1/08, FSA,
Callable 3/1/06 @ 102................................ 512,600
500,000 Burke County, North Carolina, 6.30%, 3/1/01, MBIA.... 515,005
400,000 Burlington, North Carolina, 5.10%, 2/1/07............ 407,072
500,000 Cabarrus County, North Carolina, 5.30%, 2/1/11,
Callable 2/1/07 @ 102, MBIA.......................... 505,915
1,500,000 Cabarrus County, North Carolina, 5.30%, 2/1/13,
Callable 2/1/07 @ 102, MBIA.......................... 1,493,640
500,000 Cary, North Carolina, 5.50%, 2/1/01.................. 509,220
500,000 Catawba County, North Carolina, 5.70%, 6/1/06,
Callable 6/1/04 @ 101................................ 524,390
1,000,000 Catawba County, North Carolina, 4.70%, 6/1/09........ 976,410
1,500,000 Charlotte, North Carolina, 5.25%, 2/1/06............. 1,547,144
250,000 Charlotte, North Carolina, 5.00%, 2/1/20, Callable
2/1/08 @ 102......................................... 227,948
500,000 Charlotte, North Carolina, Series A, 5.50%, 7/1/06,
Callable 7/1/02 @ 102................................ 519,370
1,000,000 Charlotte, North Carolina, Water & Sewer, 6.20%,
6/1/01............................................... 1,033,320
500,000 Chatham County, North Carolina, 5.40%, 4/1/11,
Callable 4/1/06 @ 102................................ 509,445
600,000 Cleveland County, North Carolina, 5.10%, 6/1/03,
FGIC................................................. 614,868
1,000,000 Craven County, North Carolina, 5.50%, 6/1/07,
Callable 6/1/06 @ 100.5, MBIA........................ 1,042,540
500,000 Craven County, North Carolina, 5.50%, 6/1/09,
Callable 6/1/06 @ 102, MBIA.......................... 519,725
1,000,000 Craven County, North Carolina, 5.50%, 6/1/16,
Callable 6/1/06 @ 102, MBIA.......................... 993,450
1,000,000 Cumberland County, North Carolina Hospital, 4.70%,
10/1/09.............................................. 930,760
500,000 Cumberland County, North Carolina, Certificate of
Participation, Civic Center Project-Series A, 5.80%,
12/1/03, AMBAC....................................... 526,365
400,000 Davidson County, North Carolina, Certificate of
Participation, 5.00%, 6/1/18, Callable 6/1/08 @ 101,
MBIA................................................. 364,620
500,000 Durham & Wake Counties, North Carolina, 5.75%,
4/1/02............................................... 518,350
500,000 Durham County, North Carolina, 5.40%, 2/1/02......... 513,415
250,000 Durham County, North Carolina, 5.20%, 3/1/03,
Callable 3/1/02 @ 100.5.............................. 256,120
500,000 Durham County, North Carolina, 5.00%, 2/1/05......... 510,050
340,000 Durham County, North Carolina, 5.20%, 3/1/05,
Callable 3/1/02 @ 101.5.............................. 349,411
500,000 Durham County, North Carolina, Certificate of
Participation, 5.00%, 5/1/14, Callable 5/1/08 @ 102.. 472,725
500,000 Fayetteville, North Carolina, 6.50%, 3/1/14, FGIC.... 515,675
500,000 Forsyth County, North Carolina, 6.20%, 3/1/04,
Callable 3/1/01 @ 101.5.............................. 521,395
1,000,000 Forsyth County, North Carolina, 5.20%, 6/1/02........ 1,025,450
</TABLE>
Continued
-52-
[LOGO OF BB&T FUNDS]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -----------
<C> <S> <C>
Municipal Bonds, continued:
General Obligation Bonds, continued:
$ 500,000 Forsyth County, North Carolina, 5.60%, 8/1/03,
Callable 8/1/02 @ 100.5.............................. $ 520,015
265,000 Forsyth County, North Carolina, 5.40%, 6/1/04,
Callable 6/1/02 @ 101................................ 273,676
500,000 Forsyth County, North Carolina, 5.10%, 8/1/04........ 514,190
500,000 Gaston County, North Carolina, 5.00%, 3/1/08,
Callable 3/1/06 @ 101, AMBAC......................... 503,395
1,000,000 Gaston County, North Carolina, 5.50%, 5/1/09,
Callable 5/1/07 @ 101, FGIC.......................... 1,039,980
500,000 Gaston County, North Carolina, 5.00%, 3/1/14, FGIC... 478,670
500,000 Goldsboro, North Carolina, 4.90%, 6/1/01............. 506,445
500,000 Greensboro, North Carolina, 5.40%, 4/1/02............ 514,115
500,000 Greensboro, North Carolina, 5.20%, 6/1/12, Callable
6/1/07@ 102.......................................... 498,310
700,000 Henderson County, North Carolina, 6.50%, 6/1/01...... 726,565
300,000 Hickory County, North Carolina, 6.50%, 5/1/01........ 310,842
500,000 Johnston County, North Carolina, 5.00%, 5/1/09,
Callable 5/1/07 @ 101, FGIC.......................... 500,735
500,000 Johnston County, North Carolina, 5.00%, 5/1/17,
Callable 5/1/07 @ 102, FGIC.......................... 462,470
500,000 Lincoln County, North Carolina, 4.70%, 6/1/01, FGIC.. 505,010
750,000 Lincoln County, North Carolina, 4.80%, 6/1/04, FGIC.. 760,283
500,000 Mecklenburg County, North Carolina, 5.75%, 3/1/03,
Callable 3/1/02 @ 100.5.............................. 518,375
1,000,000 Mecklenburg County, North Carolina, 5.40%, 4/1/03.... 1,032,790
500,000 Mecklenburg County, North Carolina, 4.80%, 3/1/10,
Callable 3/1/06 @ 102................................ 489,710
500,000 Mecklenburg County, North Carolina, 5.50%, 4/1/11,
Callable 4/1/04 @ 102................................ 513,735
625,000 New Hanover County, North Carolina, 5.30%, 5/1/09,
Callable 5/1/06 @ 101.5.............................. 639,113
500,000 New Hanover County, North Carolina, 5.30%, 5/1/13,
Callable 5/1/06 @ 102................................ 496,440
1,000,000 North Carolina State, 5.60%, 4/1/01.................. 1,022,520
250,000 North Carolina State, 6.10%, 3/1/03, Callable 3/1/02
@ 100.5.............................................. 261,705
1,500,000 North Carolina State, 5.10%, 3/1/05.................. 1,537,724
250,000 North Carolina State, 5.10%, 3/1/06.................. 255,895
2,000,000 North Carolina State, 5.25%, 3/1/07.................. 2,059,319
2,000,000 North Carolina State, 5.10%, 6/1/08, Callable 6/1/06
@ 101................................................ 2,032,079
1,000,000 North Carolina State, 5.10%, 6/1/09, Callable 6/1/06
@ 101.5.............................................. 1,011,500
1,000,000 North Carolina State, 5.10%, 6/1/10, Callable 6/1/06
@ 102................................................ 1,007,300
1,000,000 North Carolina State Highway, 5.00%, 5/1/09, Callable
5/1/07 @ 101......................................... 1,004,490
1,000,000 North Carolina State Highway, 5.00%, 5/1/11, Callable
5/1/07 @ 102......................................... 990,430
1,000,000 North Carolina State Highway, 5.00%, 5/1/13, Callable
5/1/07 @ 102......................................... 970,220
500,000 Onslow County, North Carolina, 5.30%, 5/1/05......... 516,800
500,000 Orange County, North Carolina, 5.10%, 6/1/00......... 504,650
500,000 Orange County, North Carolina, 5.10%, 6/1/06,
Callable 6/1/03 @ 101.5.............................. 511,015
500,000 Orange County, North Carolina, 5.10%, 6/1/07,
Callable 6/1/03 @ 102................................ 509,175
500,000 Rocky Mount, North Carolina, 6.10%, 5/1/03, Callable
5/1/02 @ 100.5....................................... 526,515
625,000 Rowan County, North Carolina, 5.50%, 4/1/04, MBIA.... 650,738
700,000 Rowan County, North Carolina, 5.50%, 4/1/05, MBIA.... 729,974
225,000 Rowan County, North Carolina, 5.50%, 2/1/07, Callable
2/1/06 @ 100.5, MBIA................................. 234,209
500,000 Stokes County, North Carolina, 5.00%, 6/1/13,
Callable 6/1/08 @ 102, FGIC.......................... 483,620
500,000 Surry County, North Carolina, 6.25%, 4/1/00, AMBAC... 506,370
500,000 Surry County, North Carolina, 6.25%, 4/1/01, AMBAC... 515,440
1,000,000 Union County, North Carolina, 5.30%, 3/1/13, Callable
3/1/09 @ 100.5, FGIC................................. 996,720
</TABLE>
Continued
-53-
[LOGO OF BB&T FUNDS]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -----------
<C> <S> <C>
Municipal Bonds, continued:
General Obligation Bonds, continued:
$ 500,000 Union County, North Carolina, 5.20%, 6/1/13, Callable
6/1/05 @ 102, MBIA................................... $ 493,710
500,000 Wake County, North Carolina, 4.90%, 2/1/11, Callable
2/1/04 @ 102......................................... 489,330
250,000 Wayne County, North Carolina, 4.80%, 4/1/02.......... 253,173
500,000 Wayne County, North Carolina, 4.80%, 4/1/03.......... 506,590
500,000 Wilkes County, North Carolina, 5.00%, 6/1/01, AMBAC.. 507,325
500,000 Wilkes County, North Carolina, 5.00%, 6/1/02, AMBAC.. 509,720
500,000 Wilkes County, North Carolina, 5.30%, 6/1/08,
Callable 6/1/03 @ 102................................ 512,890
850,000 Wilmington, North Carolina, 5.00%, 4/1/10, FGIC...... 849,312
350,000 Winston-Salem, North Carolina, 6.25%, 4/1/07,
Callable 4/1/02 @ 102................................ 372,754
-----------
57,571,093
-----------
Health Care Bonds (8.4%):
245,000 Charlotte-Mecklenberg Hospital Authority, North
Carolina, Health Care System Revenue, 5.70%, 1/1/01.. 249,692
200,000 Charlotte-Mecklenburg Hospital Authority, North
Carolina, Health Care System Revenue, 5.70%, 1/1/01.. 203,756
185,000 Charlotte-Mecklenburg Hospital Authority, North
Carolina, Health Care System Revenue, 5.90%, 1/1/02.. 191,479
110,000 Charlotte-Mecklenburg Hospital Authority, North
Carolina, Health Care System Revenue, 6.00%, 1/1/03,
Pre Refunded 1/1/02 @ 102............................ 116,086
190,000 Charlotte-Mecklenburg Hospital Authority, North
Carolina, Health Care System Revenue, 6.00%, 1/1/03,
Callable 1/1/02 @ 102................................ 198,928
1,000,000 Cumberland County North Carolina Hospital Authority,
4.30%, 10/1/05....................................... 957,380
1,000,000 New Hanover County Hospital, North Carolina, 5.25%,
10/1/12, Callable 10/1/09 @ 101...................... 987,950
500,000 North Carolina Medical Care Community, Hospital
Revenue, 5.10%, 11/1/09, Callable 11/1/07 @ 100,
AMBAC................................................ 502,940
1,000,000 North Carolina Medical Care Community, Hospital
Revenue, 5.00%, 10/1/10, Callable 10/1/07 @ 102,
MBIA................................................. 990,830
500,000 North Carolina Medical Care, Common Health Care
Revenue, 5.00%, 10/1/08.............................. 500,360
1,000,000 North Carolina, Medical Care, 5.00%, 6/1/17, Callable
6/1/08 @ 101......................................... 908,100
1,000,000 Pitt County, North Carolina, Memorial Hospital
Revenue, 5.50%, 12/1/15, Callable 12/1/05 @ 102...... 999,630
250,000 University of North Carolina, Chapel Hill Hospital
Revenue, 5.05%, 2/15/09, Callable 2/15/06 @ 102 ..... 249,985
-----------
7,057,116
-----------
Housing Bonds (1.6%):
1,000,000 Centennial Authority, North Carolina, Hotel Tax
Revenue Arena, 5.00%, 9/1/11, Callable 9/1/07 @ 102,
FSA.................................................. 973,700
250,000 Centennial Authority, North Carolina, Hotel Tax
Revenue Arena, 5.00%, 9/1/12, Callable 9/1/07 @ 102,
FSA.................................................. 242,355
115,000 North Carolina Housing Finance Agency, 6.35%, 9/1/04,
Callable 9/1/02 @ 102................................ 118,872
-----------
1,334,927
-----------
Misc. Materials & Commodities (1.2%):
1,000,000 Puerto Rico Finance Agency, 5.25%, 7/1/10, Callable
7/1/07 @ 101.5, FSA.................................. 1,022,130
-----------
Utility Bonds (14.9%):
500,000 Asheville, North Carolina, Water System Revenue,
5.30%, 8/1/09, Callable 8/1/06 @ 102, FGIC........... 510,575
1,500,000 Asheville, North Carolina, Water System Revenue,
5.63%, 8/1/16, Callable 8/1/06 @ 102, FGIC........... 1,503,495
1,500,000 Catawba County, North Carolina, 5.50%, 1/1/13,
Callable 1/1/13 @ 100, AMBAC......................... 1,529,414
600,000 Charlotte, North Carolina, Water & Sewer, 5.70%,
2/1/06, Callable 2/1/04 @ 101........................ 633,906
500,000 Charlotte, North Carolina, Water & Sewer, 5.60%,
5/1/17, Callable 5/1/06 @ 102........................ 532,870
</TABLE>
Continued
-54-
[LOGO OF BB&T FUNDS]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -----------
<C> <S> <C>
Municipal Bonds, continued:
Utility Bonds, continued:
$1,000,000 Charlotte, North Carolina, Water & Sewer, 5.60%,
5/1/21, Callable 5/1/06 @ 102........................ $ 1,065,740
1,000,000 Charlotte, North Carolina, Water & Sewer, 5.25%,
12/1/21, Callable 12/1/06 @ 102...................... 931,780
1,000,000 Durham, North Carolina, Water & Sewer, 5.00%, 6/1/14,
Callable 6/1/08 @ 101................................ 948,100
1,000,000 Gastonia, North Carolina, 5.00%, 5/1/10, MBIA........ 991,850
305,000 Gastonia, North Carolina, Comb Utilities Revenue,
5.00%, 5/1/08, MBIA.................................. 306,467
500,000 Lincolnton, North Carolina, Enterprise System
Revenue, Water & Sewer Improvement, 5.10%, 5/1/09,
Callable 11/1/06 @ 102, MBIA......................... 503,955
915,000 North Carolina State Clean Water, 5.00%, 6/1/13,
Callable 6/1/09 @ 102................................ 887,614
1,000,000 North Carolina, Eastern Power Agency, 5.00%, 1/1/17.. 926,780
325,000 North Carolina, Municipal Power Agency, No. 1,
Catawba Electric Revenue, 5.00%, 1/1/20.............. 298,945
1,025,000 Winston-Salem, North Carolina, Water & Sewer, 5.00%,
6/1/12, Callable 6/1/07 @ 102........................ 996,813
-----------
12,568,304
-----------
Total Municipal Bonds 82,269,758
-----------
Investment Companies (0.8%):
641,944 Federated Municipal Obligations Fund................. 641,944
-----------
Total Investment Companies 641,944
-----------
Total Investments (Cost $83,328,569)(a)--98.6% 82,911,702
Other assets in excess of liabilities--1.4% 1,195,791
-----------
TOTAL NET ASSETS--100.0% $84,107,493
===========
</TABLE>
- ----
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion................... $ 1,013,450
Unrealized deprecia-
tion................... (1,430,316)
-----------
Net unrealized depreci-
ation.................. $ (416,866)
===========
</TABLE>
AMBAC--AMBAC Indemnity Corporation.
FGIC--Insured by Financial Guaranty Insurance Corporation.
FSA--Insured by Financial Security Assurance.
MBIA--Insured by Municipal Bond Insurance Association.
See notes to financial statements
-55-
[LOGO OF BB&T FUNDS]
<PAGE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ -----------
<C> <S> <C>
Municipal Bonds (101.7%):
Education Bonds (20.7%):
$350,000 Beaufort County, South Carolina, School District,
6.75%, 3/1/00......................................... $ 354,344
250,000 Beaufort County, South Carolina, School District,
Series B, 5.00%, 3/1/06, Callable 3/1/04 @ 101........ 253,065
250,000 Beaufort County, South Carolina, School Improvements,
Series B, 5.00%, 2/1/07, SCSDE........................ 252,430
250,000 Cherokee County, South Carolina, School District No.
1, 5.00%, 3/1/01...................................... 253,108
500,000 Citadel Military College, South Carolina, 5.13%,
4/1/12, Callable 4/1/06 @ 102......................... 490,775
500,000 Dorchester County, South Carolina, School District,
5.15%, 7/1/08, Callable 7/1/03 @ 102.................. 505,165
250,000 Horry County, South Carolina, School District, Series
A, 5.10%, 3/1/09, Callable 3/1/05 @ 101............... 251,075
500,000 South Carolina, Educational Facilities Authority,
Private Nonprofit Institutions, Furman University,
Project Revenue, Series A, 5.50%, 10/1/16, Callable
10/1/06 @ 102, MBIA................................... 490,270
500,000 University of South Carolina, University Revenues,
5.65%, 6/1/12, Callable 6/1/06 @ 101, MBIA............ 510,239
250,000 York County, South Carolina, School District, Series
A, 5.00%, 3/1/10, Callable 3/1/06 @ 101, SCSDE........ 247,590
-----------
3,608,061
-----------
General Obligation Bonds (24.8%):
200,000 Charleston County, South Carolina, 5.50%, 6/1/06,
Callable 6/1/04 @102.................................. 208,824
500,000 Charleston County, South Carolina, 5.00%, 2/1/08,
Callable 2/1/05 @ 102................................. 502,405
500,000 Horry County, South Carolina, 7.00%, 3/1/05, FGIC..... 554,934
500,000 Horry County, South Carolina, 5.50%, 1/1/12, Callable
1/1/05 @ 100, FGIC.................................... 504,030
500,000 Lexington & Richland Counties, South Carolina, 5.15%,
3/1/07, MBIA.......................................... 509,545
500,000 South Carolina State, 5.75%, 3/1/01................... 511,475
500,000 South Carolina State, Capital Improvements, 5.00%,
10/01/08, Callable 10/01/07 @ 102..................... 505,055
250,000 South Carolina State, Public Service Authority
Revenue, 5.20%, 7/1/04, Callable 1/1/03 @ 102, MBIA... 256,965
500,000 South Carolina, State Highway, 5.63%, 7/1/09, Callable
7/1/06 @ 102.......................................... 524,420
250,000 South Carolina, State Institution, 5.00%, 4/1/13,
Callable 4/1/06 @ 102................................. 242,598
-----------
4,320,251
-----------
Health Care Bonds (13.2%):
500,000 Anderson County, South Carolina, Hospital, 5.25%,
2/1/12, Callable 2/1/03 @ 102, MBIA................... 490,185
500,000 Charleston County, South Carolina, 5.00%, 8/15/09,
FSA................................................... 494,220
235,000 Charleston County, South Carolina, Health Care
Services, Series A, 5.00%, 8/15/05, FSA............... 237,968
250,000 Charleston County, South Carolina, Health Care
Services, Series A, 5.00%, 8/15/12, Callable 8/15/09 @
101, FSA.............................................. 238,780
300,000 Charleston County, South Carolina, Hospital
Facilities, 5.50%, 10/1/19, Callable 10/1/02 @ 102,
MBIA.................................................. 299,679
250,000 Greenville Hospital System, South Carolina, Hospital
Facilities Revenue, Series A, 5.75%, 5/1/14, Callable
5/1/06 @ 102.......................................... 250,490
300,000 Lexington County, South Carolina, Health Services,
5.00%, 11/1/10, Callable 11/1/08 @ 102................ 289,347
-----------
2,300,669
-----------
Pollution Control Bonds (10.2%):
500,000 Charleston County, South Carolina, Solid Waste, 5.60%,
1/1/04................................................ 520,840
500,000 Darlington County, South Carolina, Pollution Control,
6.60%, 11/1/10, Callable 11/1/02 @ 103, MBIA.......... 540,115
500,000 Georgetown County, South Carolina, Pollution Control,
5.13%, 2/1/12......................................... 466,585
250,000 Oconee County, South Carolina, Pollution Revenue,
5.80%, 4/1/14, Callable 4/1/03 @ 102 (c).............. 252,105
-----------
1,779,645
-----------
</TABLE>
Continued
-56-
[LOGO OF BB&T FUNDS]
<PAGE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ -----------
<C> <S> <C>
Municipal Bonds, continued:
Transportation Bonds (8.7%):
$300,000 South Carolina State, State Highway, Series B, 5.63%,
7/1/13, Callable 1/1/06 @ 102......................... $ 306,729
700,000 South Carolina Transportation Infrastructure, 5.25%,
10/1/08, AMBAC........................................ 715,617
250,000 South Carolina, Highway Improvements, Series A, 5.00%,
10/1/07, MBIA......................................... 252,628
250,000 South Carolina, Highway Improvements, Series A, 5.00%,
10/1/08, MBIA......................................... 251,080
-----------
1,526,054
-----------
Utility Bonds (24.1%):
200,000 Camden, South Carolina, Public Utility Revenue, 5.50%,
3/1/22, Callable 3/1/07 @ 102......................... 193,490
250,000 Charleston, South Carolina, Waterworks & Sewer, 5.25%,
1/1/10, Callable 1/1/09 @ 101......................... 252,548
250,000 Charleston, South Carolina, Waterworks & Sewer, 5.13%,
1/1/12................................................ 246,960
500,000 Columbia, South Carolina, Waterworks & Sewer Systems,
5.70%, 2/1/10......................................... 525,059
500,000 Greenville, South Carolina, Waterworks, 5.30%, 2/1/14,
Callable 2/1/07 @ 102................................. 491,980
250,000 Myrtle Beach, South Carolina, Water & Sewer, 5.10%,
3/1/08, Callable 3/1/05 @ 102......................... 252,450
200,000 Piedmont, Municipal Power Revenue, 5.50%, 1/1/13,
MBIA(c)............................................... 203,566
500,000 South Carolina State Public Authority, Series A,
5.38%, 1/1/04, MBIA(b)................................ 515,945
500,000 South Carolina State Public Service, 5.50%, 1/1/09,
MBIA(b)............................................... 515,310
500,000 Western Region, South Carolina, Sewer Authority,
5.50%, 3/1/10, Callable 3/1/03 @ 102, FGIC............ 509,815
500,000 Winnsboro, South Carolina, Utility, 5.25%, 8/15/10,
MBIA.................................................. 506,585
-----------
4,213,708
-----------
Total Municipal Bonds 17,748,388
-----------
Investment Companies (3.4%):
589,371 Federated Municipal Obligations Fund(c)............... 589,371
-----------
Total Investment Companies 589,371
-----------
Total Investments (Cost $18,660,597)(a)--105.1% 18,337,759
Liabilities in excess of other assets--(5.1)% (882,653)
-----------
TOTAL NET ASSETS--100.0% $17,455,106
===========
</TABLE>
- ----
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.. $ 49,256
Unrealized depreciation.. (372,094)
---------
Net unrealized deprecia-
tion..................... $(322,838)
=========
</TABLE>
(b) Represents security purchased on a when-issued basis. At September 30,
1999, total cost of investments purchased on a when-issued basis was
$1,031,630.
(c) At September 30, 1999, all or part of this security was pledged as
collateral for securities purchased on a when-issued basis.
AMBAC--AMBAC Indemnity Corporation.
FGIC--Insured by Financial Guaranty Insurance Corporation
FSA--Insured by Financial Security Assurance
MBIA--Insured by Municipal Bond Insurance Association
SCSDE--South Carolina School District Enhancement
See notes to financial statements
-57-
[LOGO OF BB&T FUNDS]
<PAGE>
VIRGINIA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -----------
<C> <S> <C>
Municipal Bonds (98.7%):
Correctional Facility Improvements (3.1%):
$1,500,000 Big Stone Gap, 5.25%, 9/1/10, Callable 9/1/05 @ 102.. $ 1,502,820
1,000,000 Blue Ridge Regional Jail, 5.20%, 12/1/17, Callable
12/1/07 @ 102, MBIA.................................. 936,060
-----------
2,438,880
-----------
Education Bonds (18.8%):
770,000 Hampton Medical College Series 91A, 6.40%, 11/15/03,
Callable 11/15/01 @ 102.............................. 805,443
810,000 Hampton Medical College Series 91A, 6.50%, 11/15/04,
Callable 11/15/01 @ 102.............................. 854,842
330,000 Hampton Medical College Series 91B, 6.40%, 11/15/03,
Prerefunded 11/15/01 @ 102........................... 350,622
355,000 Hampton Medical College Series 91B, 6.50%, 11/15/04,
Prerefunded 11/15/01 @ 102........................... 377,898
1,000,000 Virginia College Building Authority, 5.25%, 8/1/13,
Callable 8/1/06 @ 102................................ 983,520
2,000,000 Virginia College Building Authority, 5.00%, 9/1/14,
Callable 9/1/07 @ 101................................ 1,887,340
1,000,000 Virginia Polytechnic Institute & State University,
5.50%, 6/1/16, Callable 6/1/06 @ 102................. 984,910
1,000,000 Virginia State Public School Authority, 6.13.%,
1/1/03, Callable 1/1/02 @ 102........................ 1,052,750
1,000,000 Virginia State Public School Authority, 6.25%,
1/1/04, Callable 1/1/02 @ 102........................ 1,055,760
1,125,000 Virginia State Public School Authority, 5.00%,
8/1/11, Callable 8/1/07 @ 101........................ 1,109,126
2,000,000 Virginia State Public School Authority, 5.00%,
8/1/13, Callable 8/1/05 @ 102........................ 1,928,239
1,050,000 Virginia University, 5.00%, 6/1/06................... 1,067,787
1,000,000 Virginia University, 5.00%, 6/1/08................... 1,007,630
1,500,000 Winchester Virginia Education Authority, 5.00%,
10/1/12, Callable 10/1/08 @ 102, MBIA................ 1,452,630
-----------
14,918,497
-----------
General Obligation Bonds (36.1%):
1,000,000 Arlington County, Virginia, 5.00%, 6/1/07............ 1,017,130
1,000,000 Arlington County, Virginia, 5.13%, 6/1/11, Callable
6/1/09 @ 100......................................... 1,002,570
1,000,000 Arlington County, Virginia, 5.00%, 10/1/12, Callable
10/1/08 @ 101........................................ 983,120
1,800,000 Arlington County, Virginia, 5.10%, 6/1/15, Callable
6/1/07 @ 101.5....................................... 1,735,326
1,000,000 City of Portsmouth, Virginia, 5.00%, 8/1/17, Callable
8/1/07 @ 101, FGIC................................... 921,130
1,155,000 Fairfax County, Virginia, 5.25%, 6/1/09, Callable
6/1/04 @ 102......................................... 1,175,051
3,000,000 Fairfax County, Virginia, 5.00%, 6/1/10, Callable
6/1/05 @ 102......................................... 2,992,440
1,100,000 Fairfax County, Virginia, 5.00%, 6/1/14, Callable
6/1/06 @ 102......................................... 1,053,580
1,000,000 Loudoun County, Virginia, 5.00%, 12/1/05............. 1,022,290
1,000,000 Newport News, Virginia, 5.00%, 1/15/07............... 1,011,500
1,000,000 Newport News, Virginia, 5.20%, 1/1/13, Callable
1/1/04 @ 102......................................... 984,130
1,000,000 Norfolk, Virginia, 5.00%, 7/1/02, FGIC............... 1,019,750
1,000,000 Norfolk, Virginia, 5.20%, 6/1/07, Callable 6/1/04 @
101.................................................. 1,017,100
1,500,000 Norfolk, Virginia, 5.00%, 7/1/14, Callable 7/1/08 @
101, FGIC............................................ 1,429,125
1,000,000 Petersburg, Virginia, 5.25%, 1/15/15, Callable
1/15/07 @ 102, FGIC.................................. 977,320
1,000,000 Prince William County, Virginia, 5.13%, 8/1/13,
Callable 8/1/05 @ 100................................ 979,180
1,500,000 Richmond, Virginia, Series B, 5.13%, 1/15/12,
Callable 1/15/06 @ 102, FGIC......................... 1,481,715
1,000,000 Roanoke, Virginia, 5.00%, 8/1/10, Callable 8/1/06 @
102.................................................. 994,150
1,000,000 Roanoke, Virginia, 5.00%, 8/1/12, Callable 8/1/09 @
102.................................................. 974,970
1,500,000 Suffolk, Virginia Public Improvement, 5.00%, 12/1/15,
Callable 12/1/07 @ 102, AMBAC........................ 1,418,700
1,500,000 Virginia Beach, 6.40%, 8/1/04, Prerefunded 8/1/01 @
102.................................................. 1,586,655
1,000,000 Virginia Beach, 5.25%, 8/1/06........................ 1,031,180
</TABLE>
Continued
-58-
[LOGO OF BB&T FUNDS]
<PAGE>
VIRGINIA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -----------
<C> <S> <C>
Municipal Bonds, continued:
General Obligation Bonds, continued:
$1,000,000 Virginia State, 5.00%, 6/1/10, Callable 6/1/07 @
100.................................................. $ 1,000,560
845,000 Washington DC, 7.25%, 6/1/01, Prerefunded 6/1/00 @
102, AMBAC........................................... 877,397
-----------
28,686,069
-----------
Health Care Bonds (9.0%):
250,000 Henrico County, Virginia Industrial Development
Authority, 5.40%, 8/15/02............................ 257,078
300,000 Henrico County, Virginia Industrial Development
Authority, 5.50%, 8/15/03, Callable 8/15/02 @ 102.... 310,866
270,000 Henrico County, Virginia Industrial Development
Authority, 5.60%, 8/15/04, Callable 8/15/02 @ 102.... 282,015
790,000 Henrico, Virginia, Bon Secour Industrial Development
Authority, 5.30%, 8/15/07, Callable 8/15/06 @ 102.... 805,737
1,000,000 Lynchburg, Virginia Industrial Development Authority,
Healthcare Facility, 5.38%, 1/1/13, Callable 1/1/08
@ 101................................................ 969,960
1,000,000 Norfolk, Virginia, Industrial Development Authority,
5.00%, 8/15/12, Callable 8/15/07 @ 102, MBIA......... 952,460
1,000,000 Virginia Beach Development Authority Health Care,
5.25%, 11/1/09, Callable 11/1/08 @ 101, MBIA......... 1,004,620
1,000,000 Virginia Beach Hospital Authority, 6.60%, 11/1/09,
Prerefunded 11/1/01 @ 102............................ 1,065,750
1,500,000 Winchester Hospital, Virginia, 5.25%, 1/1/06,
Callable 1/1/04 @ 102, AMBAC......................... 1,528,679
-----------
7,177,165
-----------
Housing Bonds (14.4%):
1,000,000 Chesapeake Court House Project, Virginia, 5.25%,
6/1/17, Callable 6/1/07 @ 102, MBIA.................. 939,620
500,000 Virginia Housing Development Authority, 5.60%,
11/1/06, Callable 5/1/05 @ 102....................... 509,745
1,000,000 Virginia Housing Development Authority Series 1,
5.70%, 7/1/00........................................ 1,010,120
2,245,000 Virginia Housing Development Authority Series 1,
5.90%, 7/1/02........................................ 2,295,580
540,000 Virginia Housing Development Authority Series D,
5.60%, 1/1/06, Callable 1/1/04 @ 102................. 546,901
1,000,000 Virginia Public Building Authority, 5.20%, 8/1/03,
Callable 8/1/02 @ 101................................ 1,027,180
1,500,000 Virginia Public Building Authority, 5.10%, 8/1/07,
Callable 8/1/05 @ 101................................ 1,524,105
1,525,000 Virginia State Building Authority, 5.63%, 8/1/02..... 1,578,726
1,000,000 Virginia State Building Authority, 5.38%, 8/1/07,
Callable 8/1/03 @ 101................................ 1,026,340
1,000,000 Virginia State Publishing Building Authority, 5.00%,
8/1/10, Callable 8/1/05 @ 101........................ 990,040
-----------
11,448,357
-----------
Misc. Materials & Commodities (1.3%):
1,000,000 Puerto Rico Finance Agency, 5.25%, 7/1/10, Callable
7/1/07 @ 101.5, FSA.................................. 1,022,130
-----------
Transportation Bonds (12.2%):
2,000,000 Chesapeake Bay Bridge & Tunnel, Virginia, 5.50%,
7/1/06, Callable 7/1/05 @ 102, FGIC.................. 2,089,160
750,000 Metropolitan Washington Airport, 7.10%, 10/1/01,
Callable 10/1/00 @ 102, FGIC......................... 785,348
1,000,000 Metropolitan Washington Airport, 6.40%, 10/1/04,
Callable 10/1/02 @ 102, MBIA......................... 1,066,230
1,350,000 Virginia Commonwealth, 5.13%, 5/15/19, Callable
5/15/07 @ 101........................................ 1,247,225
1,500,000 Virginia State Transportation Board, 5.13%, 5/15/13,
Callable 5/15/06 @ 101............................... 1,454,985
3,000,000 Virginia State Transportation Series A, 5.25%,
7/1/10, Callable 7/1/03 @ 102........................ 3,036,839
-----------
9,679,787
-----------
</TABLE>
Continued
-59-
[LOGO OF BB&T FUNDS]
<PAGE>
VIRGINIA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -----------
<C> <S> <C>
Municipal Bonds, continued:
Utility Bonds (3.8%):
$1,000,000 Fairfax County, Virginia, Water Authority, 5.00%,
4/1/21, Callable 4/1/17 @ 100........................ $ 912,710
1,200,000 Leesburg Utility System, Virginia, 5.13%, 7/1/17,
Callable 7/1/07 @ 102, MBIA.......................... 1,122,324
1,000,000 Spotsylvania County, Virginia, 5.25%, 6/1/13,
Callable 6/1/07 @ 102, MBIA.......................... 983,660
-----------
3,018,694
-----------
Total Municipal Bonds 78,389,579
-----------
Investment Companies (0.3%):
263,542 Federated Municipal Obligations Fund................. 263,542
-----------
Total Investment Companies 263,542
-----------
Total Investments (Cost $79,328,251)(a)--99.0% 78,653,121
Other assets in excess of liabilities--1.0% 774,335
-----------
TOTAL NET ASSETS--100.0% $79,427,456
===========
</TABLE>
- ----
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion................... $ 807,122
Unrealized deprecia-
tion................... (1,482,252)
-----------
Net unrealized depreci-
ation.................. $ (675,130)
===========
</TABLE>
AMBAC--AMBAC Indemnity Corp.
FGIC--Insured by Financial Guaranty Insurance Corp.
FSA--Insured by Financial Security Assurance
MBIA--Insured by Municipal Bond Insurance Association
See notes to financial statements
-60-
[LOGO OF BB&T FUNDS]
<PAGE>
GROWTH AND INCOME STOCK FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -------------
<C> <S> <C>
Common Stocks (95.8%):
Aerospace/Defense (5.2%):
191,600 Lockheed Martin Corp.(b)............................. $ 6,262,925
159,000 Parker Hannifin Corp.(b)............................. 7,125,188
106,700 Raytheon Co.-Class A................................. 5,174,950
104,000 Raytheon Co.-Class B(b).............................. 5,161,000
-------------
23,724,063
-------------
Apparel (0.6%):
93,200 V. F. Corp. ......................................... 2,889,200
-------------
Automobiles & Trucks (0.9%):
79,815 Ford Motor Co. ...................................... 4,005,715
-------------
Banking & Finance (6.1%):
79,560 J.P. Morgan & Co.(b)................................. 9,089,729
86,058 Old Kent Financial Corp. ............................ 3,194,903
235,200 Pacific Century Financial Corp. ..................... 4,806,900
135,000 U.S. Bancorp(b)...................................... 4,075,313
84,700 Wachovia Corp. ...................................... 6,659,538
-------------
27,826,383
-------------
Beverages (1.4%):
93,905 Anheuser-Busch Cos. ................................. 6,579,219
-------------
Business Equipment & Services (2.8%):
309,700 Harris Corp.(b)...................................... 8,555,463
72,300 Pitney Bowes, Inc. .................................. 4,405,781
-------------
12,961,244
-------------
Chemicals (1.1%):
178,000 Air Products & Chemicals, Inc. ...................... 5,173,125
-------------
Computer Software (3.6%):
89,000 Adobe Systems, Inc.(b)............................... 10,101,500
105,000 Computer Associates International, Inc.(b)........... 6,431,250
-------------
16,532,750
-------------
Computers (4.9%):
138,000 Hewlett-Packard Co.(b)............................... 12,696,000
79,800 IBM Corp.(b)......................................... 9,685,725
-------------
22,381,725
-------------
Consumer Goods & Services (3.7%):
240,100 American Greetings Corp.(b).......................... 6,182,575
203,000 Kimberly-Clark Corp. ................................ 10,657,500
-------------
16,840,075
-------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -------------
<C> <S> <C>
Common Stocks, continued:
Containers (0.8%):
153,725 Sonoco Products Co. ................................. $ 3,506,852
-------------
Electrical Equipment (2.3%):
164,370 Emerson Electric(b).................................. 10,386,129
-------------
Electronic Components (1.7%):
185,600 Avnet, Inc.(b)....................................... 7,795,200
-------------
Electronic Instruments (1.3%):
174,850 Tektronix, Inc. ..................................... 5,857,475
-------------
Engineering (0.8%):
87,000 Fluor Corp.(b)....................................... 3,501,750
-------------
Food & Related (5.6%):
251,000 Bob Evans Farms(b)................................... 5,114,125
223,800 Dole Food Co.(b)..................................... 4,252,200
507,400 SUPERVALU, Inc. ..................................... 11,067,662
215,000 Universal Foods Corp. ............................... 4,931,563
-------------
25,365,550
-------------
Forest & Paper Products (1.7%):
130,900 Weyerhaeuser Co.(b).................................. 7,543,113
-------------
Household--Major Appliances (1.2%):
84,200 Whirlpool Corp. ..................................... 5,499,313
-------------
Household Products/Wares (1.5%):
99,107 Unilever N.V. ....................................... 6,751,664
-------------
Insurance (6.1%):
113,000 Aetna Services, Inc.(b).............................. 5,565,250
112,762 AON Corp. ........................................... 3,333,527
199,400 Lincoln National Corp. .............................. 7,489,962
256,800 SAFECO Corp.(b)...................................... 7,190,399
163,000 St. Paul Cos., Inc.(b)............................... 4,482,500
-------------
28,061,638
-------------
Leisure Time Industries (1.3%):
284,525 Hasbro, Inc.(b)...................................... 6,099,505
-------------
Machinery & Equipment (1.1%):
158,500 Trinity Industries................................... 4,893,688
-------------
Manufacturing (0.8%):
49,000 Eastman Kodak Co. ................................... 3,696,438
-------------
Materials (1.3%):
84,700 Corning, Inc.(b)..................................... 5,807,244
-------------
</TABLE>
Continued
-61-
[LOGO OF BB&T FUNDS]
<PAGE>
GROWTH AND INCOME STOCK FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- -------------
<C> <S> <C>
Common Stocks, continued:
Media (2.9%):
224,000 Banta Corp. ......................................... $ 4,998,000
156,400 Media General, Inc. ................................. 8,015,500
-------------
13,013,500
-------------
Medical Equipment & Supplies (6.8%):
142,000 Bausch & Lomb(b)..................................... 9,363,124
144,300 Johnson & Johnson(b)................................. 13,257,562
291,000 Mallinckrodt, Inc. .................................. 8,784,563
-------------
31,405,249
-------------
Office Equipment & Services (0.4%):
40,000 Xerox Corp. ......................................... 1,677,500
-------------
Petroleum (5.0%):
140,000 Ashland, Inc.(b)..................................... 4,707,500
101,030 Chevron Corp. ....................................... 8,966,413
187,200 Phillips Petroleum Co. .............................. 9,126,000
-------------
22,799,913
-------------
Petroleum--International (1.2%):
93,600 Royal Dutch Petroleum Co.--NY Shares(b).............. 5,528,250
-------------
Pharmaceuticals (3.8%):
236,000 Abbott Laboratories(b)............................... 8,673,000
75,480 Bristol-Myers Squibb Co. ............................ 5,094,900
80,400 Schering-Plough Corp. ............................... 3,507,450
-------------
17,275,350
-------------
Publishing (1.0%):
110,000 Houghton Mifflin Co. ................................ 4,468,750
-------------
Railroad (0.5%):
56,000 CSX Corp.(b)......................................... 2,373,000
-------------
Retail (1.4%):
170,250 May Department Stores Co. ........................... 6,203,484
-------------
Retail--Food Stores (0.8%):
97,020 Albertson's, Inc. ................................... 3,838,354
-------------
Security Brokers & Dealers (1.4%):
237,762 Edwards (A.G.), Inc. ................................ 6,270,973
-------------
Telecommunications (0.6%):
55,500 BCE, Inc. ........................................... 2,764,594
-------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- --------------------------------------------------- -------------
<C> <S> <C>
Common Stocks, continued:
Tobacco (1.8%):
110,290 Philip Morris, Inc. ............................... $ 3,770,539
147,600 UST, Inc. ......................................... 4,455,675
-------------
8,226,214
-------------
Transportation--Marine (0.6%):
120,500 Alexander & Baldwin................................ 2,876,938
-------------
Utilities--Electric (2.2%):
298,500 New Century Energies, Inc. ........................ 9,981,094
-------------
Utilities--Gas & Pipeline (0.8%):
100,800 NICOR, Inc. ....................................... 3,748,500
-------------
Utilities--Telephone (6.8%):
254,122 AT&T Corp.(b)...................................... 11,054,307
254,400 SBC Communications, Inc. .......................... 12,990,299
136,400 Sprint Corp.(b).................................... 7,399,700
-------------
31,444,306
-------------
Total Common Stocks 437,575,027
-------------
U.S. Government Agencies (2.2%):
Federal Farm Credit Bank (2.2%):
$10,000,000 0.00%, 11/8/99*.................................... 9,945,400
-------------
Total U.S. Government Agencies 9,945,400
-------------
Investment Companies (2.2%):
9,817,335 Federated Government Obligation Fund............... 9,817,335
-------------
Total Investment Companies 9,817,335
-------------
Short Term Securities Purchased with Securities Lending Collateral (27.2%):
Commercial Paper (5.4%):
15,000,000 CSX Corporation, 5.44%, 11/12/99................... 14,864,000
10,000,000 Tyco, 5.35%, 10/4/99............................... 9,910,833
-------------
24,774,833
-------------
Investment Companies (2.5%):
11,287,870 AIM Liquid Asset Money Market Fund................. 11,287,870
-------------
</TABLE>
Continued
-62-
[LOGO OF BB&T FUNDS]
<PAGE>
GROWTH AND INCOME STOCK FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------- -------------
<C> <S> <C>
Short Term Securities Purchased with Securities Lending Collateral,
continued:
Repurchase Agreements (19.3%):
$50,000,000 Lehman Brothers Triparty Agreement, 5.65%,
10/1/99, (See Significant Accounting Policies,
Lending Portfolio Securities in the Notes to
Financial Statements for collateral
description)..................................... $ 50,000,000
38,000,000 Lehman Brothers Triparty Agreement, 5.80%,
10/1/99, (See Significant Accounting Policies,
Lending Portfolio Securities in the Notes to
Financial Statements for collateral
description)..................................... 38,000,000
-------------
88,000,000
-------------
Total Short Term Securities Purchased with Securities Lending
Collateral 124,062,703
-------------
Total Investments
(Cost $467,639,832)(a)--127.4% 581,400,465
Liabilities in excess of other assets--(27.4)% (124,885,264)
-------------
TOTAL NET ASSETS--100.0% $ 456,515,201
=============
</TABLE>
- ----
* Represents Discount Note.
(a) Represents cost for financial reporting purposes
and differs from cost basis for federal income tax
purposes by the amount of losses recognized for
financial reporting in excess of federal income tax
reporting of $6,000. Cost for federal income tax
purposes differs from market value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion................... $135,762,157
Unrealized deprecia-
tion................... (22,007,524)
------------
Net unrealized appreci-
ation.................. $113,754,633
============
</TABLE>
(b) All or part of this security has been loaned at
September 30, 1999.
See notes to financial statements
-63-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks (55.8%):
Aerospace/Defense (1.7%):
24,500 Lockheed Martin Corp. ................................ $ 800,844
26,300 Parker Hannifin Corp.(c).............................. 1,178,569
4,500 Raytheon Co.--Class A................................. 218,250
10,000 Raytheon Co.--Class B................................. 496,250
------------
2,693,913
------------
Apparel (0.6%):
32,000 V. F. Corp. .......................................... 992,000
------------
Automobiles & Trucks (0.8%):
26,000 Ford Motor Co. ....................................... 1,304,875
------------
Banking & Finance (2.9%):
35,000 Bank One Corp. ....................................... 1,218,438
14,300 J.P. Morgan & Co. .................................... 1,633,775
24,000 Wachovia Corp. ....................................... 1,887,000
------------
4,739,213
------------
Beverages (1.5%):
34,000 Anheuser-Busch Cos. .................................. 2,382,125
------------
Business Equipment & Services (0.9%):
52,000 Harris Corp. ......................................... 1,436,500
------------
Chemicals (0.9%):
25,000 Air Products & Chemicals, Inc. ....................... 726,563
21,000 Vulcan Materials Co. ................................. 769,125
------------
1,495,688
------------
Chemicals--Plastics (0.2%):
17,900 Schulman (A.), Inc. .................................. 309,894
------------
Computer Software (2.1%):
26,000 Adobe Systems, Inc. .................................. 2,950,999
3,750 Computer Associates International, Inc. .............. 229,688
3,000 Computer Sciences Corp.(b)............................ 210,938
------------
3,391,625
------------
Computers (3.4%):
3,750 Electronic Data Systems Corp. ........................ 198,516
27,000 Hewlett-Packard Co. .................................. 2,484,000
25,600 IBM Corp. ............................................ 3,107,199
------------
5,789,715
------------
Containers (0.4%):
30,000 Sonoco Products Co. .................................. 684,375
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Diversified Products (0.2%):
5,000 E.I. duPont de Nemours Co. ........................... $ 304,375
------------
Electrical & Electronic (1.3%):
18,500 Honeywell, Inc. ...................................... 2,059,281
------------
Electrical Equipment (0.6%):
16,300 Emerson Electric...................................... 1,029,956
------------
Electronic Components (1.7%):
34,000 Avnet, Inc. .......................................... 1,428,000
18,000 Intel Corp. .......................................... 1,337,625
------------
2,765,625
------------
Electronic Instruments (1.1%):
54,000 Tektronix, Inc. ...................................... 1,809,000
------------
Engineering (0.7%):
27,000 Fluor Corp. .......................................... 1,086,750
------------
Food & Related (3.2%):
28,000 Dean Foods Co.(c)..................................... 1,219,750
26,000 Dole Food Co. ........................................ 494,000
32,000 Sara Lee Corp. ....................................... 750,000
80,000 SUPERVALU, Inc. ...................................... 1,745,000
46,000 Universal Foods Corp. ................................ 1,055,125
------------
5,263,875
------------
Forest & Paper Products (0.8%):
23,000 Weyerhaeuser Co. ..................................... 1,325,375
------------
Health Care (0.3%):
20,000 Columbia HCA Healthcare Corp. ........................ 423,750
------------
Household--Major Appliances (1.1%):
27,000 Whirlpool Corp. ...................................... 1,763,438
------------
Household Products/Wares (0.4%):
8,482 Unilever N.V. ........................................ 577,836
------------
Insurance (4.6%):
12,500 Aetna Services, Inc. ................................. 615,625
27,000 Allstate Corp. ....................................... 673,313
27,500 American General Corp. ............................... 1,737,656
23,000 Cigna Corp. .......................................... 1,788,249
20,000 Lincoln National Corp. ............................... 751,250
22,500 SAFECO Corp. ......................................... 630,000
28,000 St. Paul Cos., Inc. .................................. 770,000
30,000 Torchmark Corp. ...................................... 776,250
------------
7,742,343
------------
</TABLE>
Continued
-64-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Machinery & Equipment (1.3%):
28,000 Ingersoll-Rand Co. ................................... $ 1,538,250
20,000 Trinity Industries.................................... 617,500
------------
2,155,750
------------
Media (0.6%):
14,000 Gannett Co., Inc. .................................... 968,625
------------
Medical Equipment & Supplies (2.7%):
13,000 Bausch & Lomb......................................... 857,188
21,500 Johnson & Johnson..................................... 1,975,312
50,000 Mallinckrodt, Inc. ................................... 1,509,375
------------
4,341,875
------------
Office Equipment & Services (0.9%):
35,000 Xerox Corp. .......................................... 1,467,813
------------
Petroleum (3.3%):
30,500 Ashland, Inc.(c)...................................... 1,025,563
12,000 Mobil Corp. .......................................... 1,208,999
23,500 Phillips Petroleum Co. ............................... 1,145,625
12,000 Schlumberger Ltd. .................................... 747,750
19,000 Texaco, Inc. ......................................... 1,199,375
------------
5,327,312
------------
Petroleum--International (0.8%):
22,000 Royal Dutch Petroleum Co.--NY Shares.................. 1,299,375
------------
Pharmaceuticals (3.1%):
45,500 Abbott Laboratories................................... 1,672,125
21,500 Bristol-Myers Squibb Co. ............................. 1,451,250
30,000 Merck & Co., Inc. .................................... 1,944,375
------------
5,067,750
------------
Railroad (0.6%):
22,000 CSX Corp.(c).......................................... 932,250
------------
Retail (1.8%):
20,000 Dayton Hudson Corp. .................................. 1,201,250
46,000 May Department Stores Co. ............................ 1,676,125
------------
2,877,375
------------
Retail--Drug Stores (0.2%):
20,000 Rite-Aid Corp. ....................................... 276,250
------------
Retail--Food Stores (0.9%):
37,000 Albertson's, Inc. .................................... 1,463,813
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued:
Security Brokers & Dealers (0.5%):
29,000 Edwards (A.G.), Inc. ................................ $ 764,875
------------
Tobacco (1.1%):
32,500 Philip Morris, Inc. ................................. 1,111,094
24,000 UST, Inc. ........................................... 724,500
------------
1,835,594
------------
Transportation--Marine (0.1%):
9,000 Alexander & Baldwin.................................. 214,875
------------
Utilities--Electric (1.3%):
18,000 FPL Group, Inc. ..................................... 906,750
40,000 Scana Corp. ......................................... 967,500
10,000 Western Resources, Inc. ............................. 213,750
------------
2,088,000
------------
Utilities--Gas & Pipeline (0.6%):
28,000 NICOR, Inc. ......................................... 1,041,250
------------
Utilities--Telephone (4.6%):
42,500 AT&T Corp. .......................................... 1,848,750
42,000 BellSouth Corp. ..................................... 1,890,000
39,000 SBC Communications, Inc. ............................ 1,991,436
36,000 Sprint Corp. ........................................ 1,953,000
------------
7,683,186
------------
Total Common Stocks 91,177,495
------------
Corporate Bonds (3.4%):
Banks (0.8%):
$1,250,000 Bank One Corp., 6.88%, 8/01/06....................... 1,237,828
------------
Financial Services (1.7%):
1,500,000 Ford Motor Credit, 6.70%, 7/16/04.................... 1,490,329
1,500,000 Sears Roebuck Acceptance, 6.00%, 3/20/03............. 1,448,627
------------
2,938,956
------------
Utilities--Telephone (0.9%):
1,500,000 AT&T Corp., 6.00%, 3/15/09........................... 1,393,716
------------
Total Corporate Bonds 5,570,500
------------
</TABLE>
Continued
-65-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ---------------------------------------------------- -------------
<C> <S> <C>
Pass-through Mortgage Securities (9.8%):
Federal Home Loan Mortgage Corp. (4.7%):
$ 404,110 7.50%, 7/1/07, Pool # E00108........................ $ 411,687
4,266,859 6.00%, 3/1/13, Pool #E000540........................ 4,112,185
1,344,984 6.00%, 6/1/13, Pool #E00553......................... 1,296,228
1,934,080 6.00%, 11/1/28, Series C00680....................... 1,803,529
-------------
7,623,629
-------------
Federal National Mortgage Assoc. (5.1%):
1,170,698 6.00%, 6/1/03, Pool # 250581........................ 1,136,666
4,707,228 6.50%, 4/1/14, Pool # 323654........................ 4,616,003
1,972,219 7.00% 9/1/14, Pool # 323928......................... 1,970,365
671,107 7.00%, 4/1/24, Pool # 250005........................ 664,181
-------------
8,387,215
-------------
Total Pass-through Mortgage Securities 16,010,844
-------------
U.S. Government Agencies (17.7%):
Federal Farm Credit Bank (1.8%):
3,000,000 5.92%, 12/29/04..................................... 2,920,539
-------------
Federal Home Loan Bank (3.8%):
2,000,000 5.13%, 9/15/03...................................... 1,918,144
1,500,000 5.84%, 7/14/08...................................... 1,415,943
3,000,000 5.80%, 9/2/08(c).................................... 2,821,491
-------------
6,155,578
-------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ----------------------------------------------------- ------------
<C> <S> <C>
U.S. Government Agencies, continued:
Federal Home Loan Mortgage Corp. (7.4%):
$3,000,000 5.00%, 1/15/04(c).................................... $ 2,846,676
6,500,000 6.30%, 6/1/04, Callable 6/1/01 @ 100(c).............. 6,386,790
3,000,000 5.75%, 4/15/08(c).................................... 2,819,748
------------
12,053,214
------------
Federal National Mortgage Assoc. (4.7%):
2,000,000 5.13%, 2/13/04(c).................................... 1,903,034
2,000,000 5.63%, 5/14/04(c).................................... 1,940,182
4,000,000 6.00%, 5/15/08(c).................................... 3,827,308
------------
7,670,524
------------
Total U.S. Government Agencies 28,799,855
------------
U.S. Treasury Notes (9.7%):
3,000,000 7.88%, 11/15/04(c)................................... 3,251,250
4,000,000 7.50%, 2/15/05(c).................................... 4,275,000
4,000,000 6.50%, 10/15/06(c)................................... 4,088,752
4,000,000 6.63%, 5/15/07(c).................................... 4,126,252
------------
Total U.S. Treasury Notes 15,741,254
------------
Investment Companies (3.2%):
5,193,565 Federated Government Obligations Fund................ 5,193,565
------------
Total Investment Companies 5,193,565
------------
</TABLE>
Continued
-66-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ---------------------------------------------- ------------
<C> <S> <C>
Short Term Securities Purchased with Securities Lending Collateral
(23.9%):
Investment Companies (4.9%):
7,937,050 AIM Liquid Asset Money Market Fund............ $ 7,937,050
------------
Repurchase Agreements (19.0%):
$25,000,000 Lehman Brothers Triparty Agreement, 5.65%,
10/1/99, (See Significant Accounting Policies,
Lending Portfolio Securities in the Notes to
Financial Statements for collateral
description).................................. 25,000,000
6,000,000 Lehman Brothers Triparty Agreement, 5.80%,
10/1/99, (See Significant Accounting Policies,
Lending Portfolio Securities in the Notes to
Financial Statements for collateral
description).................................. 6,000,000
------------
31,000,000
------------
Total Short Term Securities Purchased with Securities
Lending Collateral 38,937,050
------------
Total Investments
(Cost $184,008,146)(a)--123.5% 201,430,563
Liabilities in excess of other assets--
(23.5)% (38,335,044)
------------
TOTAL NET ASSETS--100.0% $163,095,519
============
</TABLE>
- ----
(a) Represents cost for financial reporting purposes
and differs from cost basis for federal income tax
purposes by the amount of losses recognized for
financial reporting in excess of federal income tax
reporting of $79,313. Cost for federal income tax
purposes differs from market value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion.................... $25,081,743
Unrealized deprecia-
tion.................... (7,738,639)
-----------
Net unrealized apprecia-
tion.................... $17,343,104
===========
</TABLE>
(b) Represents non-income producing securities.
(c) All or part of this security has been loaned at September 30, 1999.
See notes to financial statements
-67-
[LOGO OF BB&T FUNDS]
<PAGE>
LARGE COMPANY GROWTH FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ --------------------------------------------------------- ------------
<C> <S> <C>
Common Stocks (94.5%):
Advertising (1.5%):
20,000 Omnicom Group............................................ $ 1,583,750
------------
Banks (1.2%):
21,000 Mellon Bank Corp. ....................................... 708,750
10,000 State Street Corp. ...................................... 646,250
------------
1,355,000
------------
Beverages (0.7%):
15,000 Coca-Cola Co. ........................................... 720,938
------------
Biotechnology (1.6%):
22,000 Amgen, Inc.(b)........................................... 1,793,000
------------
Chemicals (0.9%):
28,000 Ecolab, Inc. ............................................ 955,500
------------
Commercial Services (1.2%):
38,000 Paychex, Inc. ........................................... 1,296,750
------------
Computer--Peripherals (1.4%):
19,000 Lexmark Intl. Group, Inc.(b)............................. 1,529,500
------------
Computer Software (9.7%):
36,000 Cisco Systems, Inc.(b)................................... 2,468,250
40,100 Microsoft Corp.(b)....................................... 3,631,555
44,000 Oracle Corp.(b).......................................... 2,002,000
40,000 Rational Software Corp,(b)............................... 1,171,250
7,500 Yahoo!, Inc.(b).......................................... 1,347,188
------------
10,620,243
------------
Computers (8.0%):
26,000 Dell Computer Corp.(b)................................... 1,087,125
30,000 EMC Corp.(b)............................................. 2,143,125
20,000 IBM Corp. ............................................... 2,427,500
33,200 Sun Microsystems, Inc.(b)................................ 3,087,599
------------
8,745,349
------------
Cosmetics/Personal Care (0.0%):
2,000 Avon Products, Inc. ..................................... 49,625
------------
Diversified Products (4.9%):
28,000 Colgate-Palmolive Co. ................................... 1,281,000
19,000 E.I. duPont de Nemours Co. .............................. 1,156,625
24,000 General Electric Co. .................................... 2,845,500
------------
5,283,125
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ --------------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued:
Electronic Components (8.8%):
40,000 Intel Corp. ............................................. $ 2,972,499
10,000 Jabil Circuit(b)......................................... 495,000
13,000 Johnson Controls, Inc. .................................. 862,063
20,000 KLA-Tencor Corp.(b)...................................... 1,300,000
20,000 Motorola, Inc. .......................................... 1,760,000
30,000 Solectron Corp.(b)....................................... 2,154,375
------------
9,543,937
------------
Electronics (1.9%):
16,000 Linear Technology Corp. ................................. 940,500
34,500 Symbol Technologies, Inc. ............................... 1,160,063
------------
2,100,563
------------
Financial Services (3.4%):
10,000 American Express Co. .................................... 1,346,250
30,000 Concord EFS, Inc.(b)..................................... 618,750
18,000 Federal Home Loan Mortgage Corp. ........................ 936,000
10,000 Providian Financial...................................... 791,875
------------
3,692,875
------------
Food & Related (0.7%):
23,000 Sysco Corp. ............................................. 806,438
------------
Household Products/Wares (1.6%):
17,000 Church & Dwight, Inc. ................................... 425,000
20,000 Clorox Co. .............................................. 765,000
6,000 Procter & Gamble Co. .................................... 562,500
------------
1,752,500
------------
Insurance (2.8%):
30,000 AFLAC, Inc. ............................................. 1,256,250
20,000 American International Group, Inc. ...................... 1,738,750
------------
2,995,000
------------
Internet Services (1.4%):
15,000 America Online, Inc.(b).................................. 1,560,000
------------
Leisure Time Industries (0.8%):
18,000 Harley-Davidson, Inc. ................................... 901,125
------------
Machinery & Equipment (1.8%):
25,000 Applied Materials, Inc.(b)............................... 1,946,875
------------
Manufacturing (1.6%):
17,000 Tyco International Ltd. ................................. 1,755,250
------------
Materials (1.6%):
25,000 Corning, Inc. ........................................... 1,714,063
------------
</TABLE>
Continued
-68-
[LOGO OF BB&T FUNDS]
<PAGE>
LARGE COMPANY GROWTH FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ --------------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued:
Media (1.0%):
5,000 Cablevision Systems Corp.(b)(c).......................... $ 363,750
10,000 Comcast Corp. ........................................... 398,750
5,000 Time Warner, Inc. ....................................... 303,750
------------
1,066,250
------------
Medical--Biotechnology (1.0%):
55,000 Quintiles Transnational Corp.(b)......................... 1,046,719
------------
Medical Equipment & Supplies (1.3%):
15,000 Johnson & Johnson........................................ 1,378,125
------------
Medical Instruments (3.4%):
16,000 Guidant Corp. ........................................... 858,000
40,000 Medtronic, Inc. ......................................... 1,420,000
15,000 Minimed, Inc.(b)......................................... 1,473,750
------------
3,751,750
------------
Office Equipment & Services (0.8%):
20,000 Xerox Corp. ............................................. 838,750
------------
Petroleum (1.7%):
20,000 Enron Corp. ............................................. 825,000
10,000 Mobil Corp. ............................................. 1,007,500
------------
1,832,500
------------
Pharmaceuticals (7.4%):
30,000 Bristol-Myers Squibb Co. ................................ 2,024,999
10,000 Cardinal Health, Inc. ................................... 545,000
30,000 Jones Pharma, Inc. ...................................... 989,063
40,600 Merck & Co., Inc.(c)..................................... 2,631,387
53,100 Pfizer, Inc. ............................................ 1,908,281
------------
8,098,730
------------
Restaurants (1.2%):
50,000 Outback Steakhouse, Inc.(b).............................. 1,273,438
------------
Retail (4.3%):
33,750 Gap, Inc. ............................................... 1,080,000
54,000 Wal-Mart Stores, Inc. ................................... 2,568,375
40,000 Walgreen Co. ............................................ 1,015,000
------------
4,663,375
------------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Retail--Apparel (0.8%):
21,000 Intimate Brands, Inc. ................................ $ 817,688
------------
Retail--General Merchandise (1.1%):
39,000 BJ'S Wholesale Club, Inc.(b).......................... 1,152,938
------------
Retail--Other Specialty (0.6%):
25,000 Starbucks Corp.(b).................................... 619,531
------------
Retail--Specialty Stores (1.0%):
16,000 Home Depot, Inc. ..................................... 1,098,000
------------
Telecommunication--Equipment (4.6%):
30,000 Lucent Technologies, Inc.(c).......................... 1,946,250
23,000 Nokia Corp.--ADR...................................... 2,065,688
20,000 Scientific Atlanta, Inc. ............................. 991,250
------------
5,003,188
------------
Utilities--Telephone (6.8%):
25,000 AT&T Corp. ........................................... 1,087,500
34,000 BellSouth Corp. ...................................... 1,530,000
18,000 CenturyTel, Inc. ..................................... 731,250
37,414 MCI Worldcom, Inc.(b)................................. 2,689,131
27,200 SBC Communications, Inc. ............................. 1,388,900
------------
7,426,781
------------
Total Common Stocks 102,769,169
------------
Depositary Receipts (0.8%):
7,000 S & P 500 Depositary Receipt.......................... 898,625
------------
Total Depositary Receipts 898,625
------------
Investment Companies (4.7%):
3,996,903 Federated Government Obligations Fund................. 3,996,903
1,147,173 Federated Short Term U.S. Government Fund............. 1,147,173
------------
Total Investment Companies 5,144,076
------------
</TABLE>
Continued
-69-
[LOGO OF BB&T FUNDS]
<PAGE>
LARGE COMPANY GROWTH FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ---------------------------------------------------- ------------
<C> <S> <C>
Short Term Securities Purchased with Securities Lending Collateral (4.2%):
Investment Companies (1.7%):
1,890,000 AIM Liquid Asset Money Market Fund.................. $ 1,890,000
------------
Repurchase Agreements (2.5%):
1,720,200 Lehman Brothers Triparty Agreement, 5.65%, 10/1/99,
(See Significant Accounting Policies, Lending
Portfolio Securities in the Notes to Financial
Statements for collateral description).............. 1,720,200
------------
1,000,000 Lehman Brothers Triparty Agreement, 5.80%, 10/1/99,
(See Significant Accounting Policies, Lending
Portfolio Securities in the Notes to Financial
Statements for collateral description).............. 1,000,000
------------
Total Short Term Securities Purchased with Securities Lending
Collateral 4,610,200
------------
Total Investments
(Cost $78,026,813)(a)--104.2% 113,422,070
Liabilities in excess of other assets--(4.2)% (4,586,354)
------------
TOTAL NET ASSETS--100.0% $108,835,716
============
</TABLE>
- ----
(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.................... $38,309,185
Unrealized deprecia-
tion.................... (2,913,928)
-----------
Net unrealized apprecia-
tion.................... $35,395,257
===========
</TABLE>
(b) Represents non-income producing securities.
(c) All or part of this security has been loaned at September 30, 1999.
ADR--American Depository Receipt.
See notes to financial statements
-70-
[LOGO OF BB&T FUNDS]
<PAGE>
SMALL COMPANY GROWTH FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks (90.7%):
Aerospace/Defense (0.3%):
27,300 Titan Corp.(b)........................................ $ 392,438
------------
Audio Products (0.8%):
20,200 Polycom, Inc.(b)...................................... 962,656
------------
Banks (0.9%):
31,900 Investors Financial Services Corp. ................... 1,096,563
------------
Commercial Services (3.1%):
4,900 Luminant Worldwide Corp.(b)(c)........................ 150,675
37,550 NCO Group, Inc.(b).................................... 1,764,850
55,900 Nielsen Media Research, Inc. ......................... 2,078,781
------------
3,994,306
------------
Computer Services (0.5%):
10,300 Factset Research Systems, Inc. ....................... 585,813
------------
Computer Software (8.9%):
27,123 Clarify, Inc.(b)...................................... 1,364,626
32,000 Dendrite International, Inc.(b)....................... 1,512,000
1,000 E.Piphany, Inc.(b).................................... 48,750
11,100 Macromedia, Inc.(b)................................... 453,713
43,500 Mercury Interactive Corp.(b).......................... 2,808,468
47,900 Peregrine Systems, Inc.(b)............................ 1,951,925
17,900 Sanchez Computer Associates(b)(c)..................... 628,738
35,100 VERITAS Software Corp.(b)............................. 2,665,405
------------
11,433,625
------------
Computers (2.7%):
34,000 Advanced Digital Information, Corp.(b)................ 945,625
20,000 Emulex Corp.(b)....................................... 1,717,500
2,600 Foundry Networks, Inc.(b)............................. 327,438
10,000 Visual Networks Inc.(b)............................... 424,375
------------
3,414,938
------------
Electrical & Electronic (4.1%):
30,700 Calpine Corp.(b)...................................... 2,611,419
36,500 Kmet Corp.(b)......................................... 1,166,859
33,000 Micrel, Inc.(b)....................................... 1,431,375
------------
5,209,653
------------
Electrical Equipment (0.7%):
25,200 DII Group, Inc.(b).................................... 886,725
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Electronic Components (10.0%):
25,800 Flextronics International Ltd.(b)..................... $ 1,501,238
12,000 Mips Technologies, Inc.(b)............................ 381,750
15,300 MRV Communications(b)................................. 362,419
13,900 PMC-Sierra, Inc.(b)................................... 1,285,750
22,200 QLogic Corp.(b)....................................... 1,551,225
18,600 Sandisk Corp.(b)...................................... 1,212,488
24,100 SDL, Inc.(b).......................................... 1,839,130
38,200 Semtech Corp.(b)...................................... 1,399,075
34,350 Transwitch Corp.(b)................................... 1,957,949
17,399 Vitesse Semiconductor Corp.(b)........................ 1,485,440
------------
12,976,464
------------
Electronic Components--Semiconductors (4.2%):
22,600 Alpha Industries, Inc.(b)............................. 1,274,781
52,000 Applied Micro Circuits Corp.(b)....................... 2,964,000
54,100 Cypress Semiconductor Corp.(b)........................ 1,163,150
------------
5,401,931
------------
Electronics (1.7%):
19,700 CTS Corp. ............................................ 1,132,749
5,993 Electro Scientific Industries, Inc.(b)................ 319,315
7,400 Optical Coating Laboratory, Inc. ..................... 681,263
------------
2,133,327
------------
Entertainment (3.8%):
34,900 Championship Auto Racing(b)........................... 907,400
63,700 Cinar Films, Inc.(b).................................. 1,926,925
46,800 Speedway Motorsports, Inc.(b)......................... 2,027,025
------------
4,861,350
------------
Health Care (0.8%):
6,700 Arthrocare Corp.(b)................................... 365,988
17,300 Cytyc Corp.(b)........................................ 669,293
------------
1,035,281
------------
Internet Services (0.2%):
2,100 Inktomi Corp.(b)...................................... 252,066
------------
Machinery & Equipment (0.9%):
12,000 Advanced Energy Industries(b)......................... 370,500
2,314 Brooks Automation, Inc.(b)............................ 40,640
22,292 Helix Technology Corp. ............................... 741,209
------------
1,152,349
------------
</TABLE>
Continued
-71-
[LOGO OF BB&T FUNDS]
<PAGE>
SMALL COMPANY GROWTH FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Media (3.5%):
3,100 Acme Communications, Inc.(b).......................... $ 96,100
23,400 Cumulus Media, Inc.(b)................................ 764,888
16,900 Emmis Communications Corp.(b)......................... 1,116,456
14,400 Insight Communications Co., Inc.(b)................... 412,200
30,200 Paxson Communications Corp.(b)........................ 369,950
27,300 Pegasus Communications Corp.(b)....................... 1,231,912
12,000 Radio One, Inc.(b).................................... 498,000
------------
4,489,506
------------
Medical--Biotechnology (3.3%):
12,100 Affymetrix, Inc.(b)................................... 1,191,094
38,000 Millennium Pharmaceuticals, Inc.(b)................... 2,469,999
12,981 Protein Design Labs, Inc.(b).......................... 468,939
2,925 Transkaryotic Therapies, Inc.(b)...................... 150,272
------------
4,280,304
------------
Medical--Hospital Management & Services (0.9%):
33,200 Medquist, Inc.(b)..................................... 1,110,125
------------
Medical Instruments (1.9%):
24,300 Minimed, Inc.(b)...................................... 2,387,475
------------
Oil & Gas Exploration Products & Services (1.6%):
19,100 Cal Dive International, Inc.(b)....................... 654,175
27,100 Oceaneering International, Inc.(b).................... 455,619
59,100 Rowan Cos., Inc.(b)................................... 960,375
------------
2,070,169
------------
Petroleum (3.3%):
29,600 Atwood Oceanics, Inc.(b).............................. 904,650
41,600 Forest Oil Corp.(b)................................... 709,800
14,200 Louis Dreyfus Natural Gas Corp.(b).................... 304,413
29,900 Marine Drilling Cos., Inc.(b)......................... 472,794
4,000 Spinnaker Exploration Co.(b).......................... 52,000
32,400 Stone Energy Corp.(b)................................. 1,648,349
15,400 Superior Energy Services, Inc.(b)..................... 97,213
------------
4,189,219
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Pharmaceuticals (5.6%):
36,600 Alkermes, Inc.(b)..................................... $ 1,054,538
53,200 Catalytica, Inc.(b)................................... 798,000
26,800 Chirex, Inc.(b)....................................... 691,775
19,800 King Pharmaceuticals, Inc.(b)......................... 693,000
13,600 Pharmacyclics, Inc.(b)................................ 555,900
22,800 QLT Photo Therapeutics, Inc.(b)....................... 1,742,774
59,000 Shire Pharmaceuticals Group PLC(b)(c)................. 1,699,938
------------
7,235,925
------------
Radio (0.9%):
33,700 Entercom Communications Corp.(b)...................... 1,213,200
------------
Restaurants (0.5%):
15,625 Papa John's International, Inc.(b).................... 644,531
------------
Retail--Apparel (2.3%):
15,000 Lands End, Inc.(b).................................... 990,000
67,850 Pacific Sunwear of California(b)...................... 1,901,920
------------
2,891,920
------------
Retail--General Merchandise (1.5%):
40,000 Cost Plus, Inc.(b).................................... 1,940,000
------------
Retail--Internet (1.2%):
32,427 Chemdex Corp.(b)...................................... 999,157
7,800 China.Com Corp.(b)(c)................................. 507,000
------------
1,506,157
------------
Retail--Other Specialty (0.5%):
26,076 Electronics Boutique Holdings Corp.(b)................ 671,457
------------
Retail--Specialty Stores (1.7%):
26,245 Linens 'N Things, Inc.(b)............................. 885,769
30,000 The Talbots, Inc. .................................... 1,348,125
------------
2,233,894
------------
Software & Computer Services (3.2%):
5,000 Bluestone Software, Inc.(b)........................... 115,625
12,400 Business Objectives S.A.(b)........................... 731,600
4,700 Cybersource Corp.(b).................................. 260,263
3,800 Engage Technologies, Inc.(b).......................... 143,213
700 Kana Communications, Inc.(b).......................... 34,913
2,000 Keynote Systems, Inc.(b).............................. 50,000
</TABLE>
Continued
-72-
[LOGO OF BB&T FUNDS]
<PAGE>
SMALL COMPANY GROWTH FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Software & Computer Services, continued:
7,500 Liquid Audio, Inc.(b)................................. $ 277,500
6,300 Netzero, Inc.(b)(c)................................... 163,800
32,400 Pinnacle Systems, Inc.(b)............................. 1,372,949
7,600 Proxicom, Inc.(b)..................................... 444,600
18,100 Tenfold Corp.(b)...................................... 479,650
------------
4,074,113
------------
Telecommunication--Equipment (7.4%):
12,400 American Mobile Satellite Corp.(b).................... 217,000
40,800 Antec Corp.(b)........................................ 2,167,499
13,600 Ditech Communications Corp.(b)........................ 714,000
23,400 Harmonic, Inc.(b)..................................... 3,061,012
75,500 Pinnacle Holdings, Inc.(b)............................ 1,972,438
21,800 RF Micro Devices, Inc.(b)............................. 997,350
43,000 Westell Technologies, Inc.(b)......................... 349,375
------------
9,478,674
------------
Telecommunications (6.7%):
27,500 Aerial Communications, Inc.(b)........................ 745,938
27,900 Allegiance Telecom, Inc.(b)........................... 1,468,237
43,300 Focal Communications Corp.(b)......................... 1,109,563
54,600 ITC Deltacom, Inc.(b)................................. 1,501,499
14,200 Mastec, Inc.(b)....................................... 418,013
31,500 Powertel, Inc.(b)..................................... 1,734,468
51,545 Price Communications Corp.(b)......................... 1,291,847
8,500 Winstar Communications, Inc.(b)....................... 332,031
------------
8,601,596
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
--------- --------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued:
Transportation Services (0.9%):
20,400 Circle International Group, Inc. .................. $ 416,925
24,600 Eagle USA Airfreight, Inc.(b)...................... 736,463
------------
1,153,388
------------
Utilities--Telephone (0.2%):
11,500 Time Warner Telecom, Inc.(b)....................... 240,063
------------
Total Common Stocks 116,201,201
------------
U.S. Government Agencies (8.4%):
Federal Home Loan Bank (8.4%):
$10,050,000 0.00%, 10/1/99*.................................... 10,048,593
750,000 0.00%, 11/17/99*(d)................................ 744,990
------------
Total U.S. Government Agencies 10,793,583
------------
Short Term Securities Purchased with Securities Lending Collateral (2.4%):
Investment Companies (2.4%):
3,024,600 AIM Liquid Asset Money Market Fund................. 3,024,600
------------
Total Short Term Securities Purchased with Securities Lending
Collateral 3,024,600
------------
Total Investments
(Cost $96,745,180)(a)--101.5% 130,019,384
Liabilities in excess of other assets--(1.5)% (1,903,856)
------------
TOTAL NET ASSETS--100.0% $128,115,528
============
</TABLE>
- ----
(a) Represents cost for financial reporting purposes
and differs from cost basis for federal income tax
purposes by the amount of losses recognized for
financial reporting in excess of federal income tax
reporting of $316,166. Cost for federal income tax
purposes differs from market value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion.................... $35,247,020
Unrealized deprecia-
tion.................... (2,288,982)
-----------
Net unrealized apprecia-
tion.................... $32,958,038
===========
</TABLE>
(b) Represents non-income producing securities.
(c) All or part of this security has been loaned at
September 30, 1999.
(d) Security has been deposited as initial margin on
open future contracts.
PLC--Public Limited Company
*Represents discount note
At September 30, 1999, the Fund's open long future
contracts were as follows:
<TABLE>
<CAPTION>
Number of Opening Contract Face Market
Contracts Type Amount Value
--------- -------------------- ---------- -----------
<C> <S> <C> <C>
Standard & Poor's
6 500, 12/17/99 $2,029,800 $ 1,947,300
</TABLE>
See notes to financial statements
-73-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks (93.3%):
Australia (1.2%):
Banks (0.5%):
31,000 National Australia Bank Ltd. ............................ $ 453,810
-----------
Food & Related (0.3%):
300,000 Goodman Fielder Ltd. .................................... 278,019
-----------
Metals--Diversified (0.2%):
91,000 North Ltd. .............................................. 193,014
-----------
Publishing (0.1%):
47,000 John Fairfax Holdings Ltd. .............................. 120,945
-----------
Telecommunications (0.1%):
24,000 Telstra Corporation Ltd. ................................ 124,396
-----------
1,170,184
-----------
Belgium (0.3%):
Photographic Equipment (0.3%):
15,000 AGFA-Gevaert NV(b)....................................... 300,487
-----------
Brazil (0.5%):
Telecommunications (0.5%):
43,000 Embratel Participacoes ADR............................... 491,813
-----------
Denmark (0.6%):
Telecommunications (0.6%):
10,000 Tele Danmark AS.......................................... 595,987
-----------
Finland (0.9%):
Communication Equipment (0.9%):
10,000 Nokia OYJ................................................ 895,657
-----------
France (12.0%):
Auto Parts (0.4%):
6,200 Valeo SA................................................. 448,670
-----------
Automobiles & Trucks (1.0%):
2,000 PSA Peugot Citroen....................................... 400,862
11,500 Renault SA............................................... 635,639
-----------
1,036,501
-----------
Banks (2.0%):
10,550 Banque Nationale de Paris................................ 842,111
17,714 Credit Lyonnais SA(b).................................... 520,869
4,150 Dexia France............................................. 618,759
-----------
1,981,739
-----------
Communication Equipment (0.8%):
9,525 France Telecom SA........................................ 835,868
-----------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ---------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
France, continued:
Diversified Products (1.9%):
4,500 Suez Lyonnaise des Eaux................................... $ 728,453
15,890 Vivendi (Ex-Gen Des Eaux)................................. 1,116,052
-----------
1,844,505
-----------
Energy (0.8%):
4,800 ELF Aquitaine............................................. 838,360
-----------
Food & Related (0.8%):
3,250 Groupe Danone............................................. 790,888
-----------
Insurance--Multiline (1.3%):
6,950 Axa....................................................... 879,320
13,300 CNP Assurances............................................ 391,786
-----------
1,271,106
-----------
Petroleum (1.0%):
8,150 Total SA-B................................................ 1,024,201
-----------
Pharmaceuticals (0.4%):
8,400 Rhone-Poulenc SA.......................................... 433,877
-----------
Retail--General Merchandise (0.7%):
4,700 Carrefour Supermarche..................................... 752,320
-----------
Telecommunications (0.9%):
7,000 Alcatel................................................... 964,668
-----------
12,222,703
-----------
Germany (8.1%):
Automobiles & Trucks (1.1%):
5,450 Daimlerchrysler AG........................................ 375,531
24,000 Man AG.................................................... 723,342
-----------
1,098,873
-----------
Banks (1.0%):
5,400 Bayerische Hypo-Und Vereinsbank........................... 315,152
9,760 Deutsche Bank AG.......................................... 653,282
-----------
968,434
-----------
Chemicals (1.1%):
10,200 BASF AG................................................... 434,516
15,850 Hoechst AG................................................ 690,396
-----------
1,124,912
-----------
Diversified Products (1.7%):
12,200 Siemens AG................................................ 1,007,597
15,000 VEBA AG................................................... 821,906
-----------
1,829,503
-----------
</TABLE>
Continued
-74-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
Germany, continued:
Insurance--Property & Casualty (0.7%):
2,445 Allianz AG............................................... $ 704,615
-----------
Machinery & Equipment (1.5%):
8,000 GEA AG................................................... 264,118
8,250 Mannesmann AG............................................ 1,317,924
-----------
1,582,042
-----------
Manufacturing (0.6%):
29,000 Thyssen Krupp AG(b)...................................... 582,177
-----------
Telecommunications (0.4%):
9,500 Deutsche Telekom......................................... 389,520
-----------
8,280,076
-----------
Great Britain (15.8%):
Aerospace/Defense (0.2%):
56,250 Rolls-Royce PLC.......................................... 195,003
-----------
Banks (2.5%):
22,000 Abbey National PLC....................................... 390,217
50,000 Bank of Ireland.......................................... 407,891
20,500 Barclays PLC............................................. 601,629
60,000 HSBC Holdings PLC........................................ 686,759
48,000 Lloyds TSB Group PLC..................................... 598,813
-----------
2,685,309
-----------
Building & Construction (0.6%):
185,000 Bryant Group PLC......................................... 382,369
24,000 Hanson PLC............................................... 185,178
-----------
567,547
-----------
Communication Equipment (0.7%):
48,000 British Telecommunications PLC........................... 720,947
-----------
Diversified Products (1.0%):
58,000 General Electric Co. PLC................................. 554,018
52,000 Granada Group PLC........................................ 447,463
-----------
1,001,481
-----------
Food & Related (0.6%):
69,000 Cadbury Schweppes PLC.................................... 479,545
14,000 Diageo PLC............................................... 143,527
-----------
623,072
-----------
Hotel Management & Related Services (0.2%):
112,000 Jarvis Hotels PLC........................................ 228,722
-----------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
Great Britain, continued:
Household--General Products (0.5%):
215,000 Limelight Group PLC...................................... $ 198,287
32,000 Unilever PLC............................................. 302,766
-----------
501,053
-----------
Insurance--Life (1.0%):
70,000 Legal & General Group PLC................................ 199,152
50,000 Norwich Union PLC........................................ 361,701
54,909 Royal & Sun Alliance Insurance Group PLC................. 429,088
-----------
989,941
-----------
Insurance--Multiline (0.3%):
25,000 Allied Zurich PLC........................................ 290,266
-----------
Manufacturing (0.5%):
100,000 Invensys PLC............................................. 484,189
-----------
Petroleum (1.9%):
110,000 British Petroleum Co. PLC................................ 2,001,808
-----------
Pharmaceuticals (2.0%):
14,000 AstraZeneca Group PLC.................................... 587,252
35,000 Glaxo Wellcome PLC....................................... 920,536
51,000 SmithKline Beecham PLC................................... 592,563
-----------
2,100,351
-----------
Real Estate (0.4%):
29,000 Land Securities PLC...................................... 391,633
-----------
Restaurants (0.3%):
21,000 Whitbread PLC............................................ 263,883
-----------
Retail--General Merchandise (0.5%):
45,000 Kingfisher PLC........................................... 486,536
-----------
Telecommunications (1.5%):
11,000 Cable & Wireless PLC..................................... 119,656
59,000 Vodafone Group PLC....................................... 1,396,292
-----------
1,515,948
-----------
Transportation (0.5%):
31,000 Peninsular and Oriential Steam Navigation Co............. 471,738
-----------
Utilities--Gas (0.6%):
100,000 BG PLC................................................... 578,062
-----------
16,097,489
-----------
</TABLE>
Continued
-75-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
Greece (0.0%):
Banks (0.0%):
3,200 National Bank of Greece GDR............................ $ 50,400
-----------
Hong Kong (3.9%):
Banks (0.4%):
90,000 Dao Heng Bank Group Ltd................................ 411,326
-----------
Chemicals (0.5%):
1,700,000 Yizheng Chemical Fibre Co.(b).......................... 503,375
-----------
Diversified Products (0.6%):
60,000 Hutchison Whampoa...................................... 558,090
-----------
Household--General Products (0.5%):
525,000 Guangdong Kelon Electrical Holdings.................... 527,192
-----------
Publishing (0.2%):
364,000 South China Morning Post............................... 243,680
-----------
Real Estate (1.0%):
17,000 Cheung Kong............................................ 141,711
122,000 Henderson Land Development............................. 563,858
426,000 New World China Land Ltd.(b)........................... 249,538
-----------
955,107
-----------
Steel (0.3%):
3,400,000 Maanshan Iron & Steel(b)............................... 297,648
-----------
Telecommunications (0.4%):
140,000 China Telecom(b)....................................... 431,667
-----------
3,928,085
-----------
Indonesia (0.2%):
Diversified Products (0.1%):
381,000 Astra International.................................... 112,867
-----------
Food & Related (0.1%):
130,000 Indofood Sukses Mak TBK(b)............................. 123,313
-----------
236,180
-----------
Italy (4.3%):
Banks (1.2%):
120,000 Banca Nazionale Lavoro Ord.(b)......................... 429,404
172,000 Credito Italiano SpA................................... 840,787
-----------
1,270,191
-----------
Computer Hardware (0.2%):
93,000 Tecnost SpA(b)......................................... 195,117
-----------
Insurance--Multiline (1.2%):
370,000 Instituto Nazionale Delle Assicurazioni................ 1,205,782
-----------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
Italy, continued:
Petroleum (0.9%):
150,000 ENI SpA.................................................. $ 940,919
-----------
Telecommunications (0.5%):
80,000 Telecom Italia Mobile SpA................................ 497,563
-----------
Utilities--Electric (0.3%):
26,600 ACEA SpA(b).............................................. 313,316
-----------
4,422,888
-----------
Japan (25.5%):
Automobiles & Trucks (1.1%):
31,000 Suzuki Motor Corp. ...................................... 503,434
19,000 Toyota Motor Corp. ...................................... 604,978
-----------
1,108,412
-----------
Banks (3.9%):
95,000 Daiwa Securities Co. Ltd. ............................... 865,528
74,000 Industrial Bank of Japan................................. 909,824
84,000 Sanwa Bank Ltd. ......................................... 1,124,294
68,000 Sumitomo Bank............................................ 1,021,915
-----------
3,921,561
-----------
Building & Construction (0.7%):
130,000 Nishimatsu Construction.................................. 702,097
-----------
Chemicals--Petroleum & Inorganic (1.6%):
88,000 Sekisui Chemical Co...................................... 496,756
28,000 Shin-Etsu Chemical Co. Ltd. ............................. 1,167,688
-----------
1,664,444
-----------
Data Processing (1.3%):
75,000 Ricoh Co. Ltd. .......................................... 1,303,224
-----------
Distribution/Wholesale (1.0%):
118,000 Mitsubishi Corp. ........................................ 975,328
-----------
Electrical Equipment (2.4%):
49,000 Matsushita Electric Industrial Co. Ltd. ................. 1,042,438
88,000 Sharp Corp. ............................................. 1,410,093
-----------
2,452,531
-----------
Electronic Components (3.6%):
80,000 Hitachi Ltd. ............................................ 886,661
8,000 Kyocera Corp. ........................................... 608,641
8,500 Mabuchi Motor Co. Ltd. .................................. 1,106,542
20,000 Minebea Co. Ltd. ........................................ 254,540
110,000 Toshiba Corp. ........................................... 819,317
-----------
3,675,701
-----------
</TABLE>
Continued
-76-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
Japan, continued:
Household--General Products (0.6%):
89,000 Asahi Glass Co. Ltd ..................................... $ 616,089
-----------
Industrial Hardware (0.6%):
85,000 NSK Ltd. ................................................ 616,343
-----------
Insurance--Property & Casualty (0.9%):
145,000 Sumitomo Marine & Fire................................... 926,111
-----------
Manufacturing (0.4%):
102,000 Mitsubishi Heavy Industries, Ltd. ....................... 392,799
-----------
Metals--Diversified (0.5%):
40,000 Tsubaki Nakashima Co. Ltd. .............................. 544,020
-----------
Real Estate (0.9%):
109,000 Mitsui Fudosan........................................... 874,320
-----------
Retail--General Merchandise (0.5%):
25,000 Marui Co. Ltd. .......................................... 466,812
-----------
Software (0.9%):
7,000 Trans Cosmos............................................. 874,451
-----------
Steel (0.7%):
290,000 Kawasaki Steel Corp. .................................... 672,792
-----------
Telecommunications (1.4%):
83 NTT Corp. ............................................... 1,021,258
20 NTT Mobile Communications................................ 394,489
-----------
1,415,747
-----------
Textiles (1.5%):
64,000 Kuraray Co. Ltd. ........................................ 750,206
169,000 Teijin Ltd. ............................................. 814,311
-----------
1,564,517
-----------
Tire & Rubber Products (0.5%):
19,000 Bridgestone Corp. ....................................... 531,809
-----------
Toys/Games/Hobbies (0.5%):
3,300 Nintendo Company Ltd. ................................... 526,305
-----------
25,825,413
-----------
Mexico (0.4%):
Real Estate (0.4%):
160,000 Corporacion GEO SA(b).................................... 401,445
-----------
Netherlands (6.6%):
Banks (0.7%):
14,000 ING Groep N.V. .......................................... 760,403
-----------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
Netherlands, continued:
Computer Hardware (0.9%):
6,200 Equant N.V.(b)........................................... $ 504,465
7,000 Getronics N.V. .......................................... 377,592
-----------
882,057
-----------
Electronic Components (1.0%):
11,270 Koninklijke Philips Electronics.......................... 1,134,230
-----------
Food & Related (1.0%):
30,000 Ahold N.V. .............................................. 987,246
-----------
Insurance--Multiline (0.5%):
15,750 Fortis N.V. ............................................. 509,079
-----------
Petroleum (0.8%):
14,250 Royal Dutch Petroleum.................................... 827,098
-----------
Publishing (0.8%):
23,000 VNU-Verenigde Nederalndse Uitgeversbedrijven............. 798,529
-----------
Retail--General Merchandise (0.9%):
16,400 Laurus N.V. ............................................. 377,262
17,000 Vendex N.V. ............................................. 488,830
-----------
866,092
-----------
6,764,734
-----------
Norway (0.3%):
Petroleum (0.3%):
14,100 Petroleum Geo-Services(b)................................ 264,639
-----------
Poland (0.1%):
Banks (0.1%):
10,400 Bank Handlowy Warszawie GDR.............................. 121,833
-----------
Portugal (0.3%):
Telecommunications (0.3%):
7,015 Portugal Telecom......................................... 291,963
-----------
Singapore (1.6%):
Airlines (0.1%):
14,000 Singapore Airlines Ltd. ................................. 136,668
-----------
Banks (0.8%):
42,357 DBS Bank Ltd. ........................................... 473,272
33,000 United Overseas Bank Ltd. ............................... 250,343
-----------
723,615
-----------
Engineering & Construction (0.1%):
130,000 Sembcorp Industries Ltd. ................................ 149,841
-----------
Health Care (0.3%):
146,000 Parkway Holdings Ltd. ................................... 266,162
-----------
</TABLE>
Continued
-77-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
Singapore, continued:
Publishing (0.2%):
12,000 Singapore Press Holdings................................. $ 189,125
-----------
Telecommunications (0.1%):
64,000 Singapore Telecommunications(b).......................... 116,674
-----------
1,582,085
-----------
South Africa (0.3%):
Insurance--Property & Casualty (0.3%):
154,000 Old Mutual PLC(b)........................................ 323,410
-----------
South Korea (0.9%):
Banks (0.5%):
27,000 Housing & Commercial Bank GDR............................ 521,594
-----------
Telecommunications (0.4%):
11,967 Korea Telecom Corp. ADR(b)............................... 442,779
-----------
964,373
-----------
Spain (3.0%):
Banks (1.3%):
32,800 Argentaria Corp. Bancaria De Espana SA................... 721,689
58,200 Banco Santander SA....................................... 601,849
-----------
1,323,538
-----------
Communication Equipment (1.0%):
62,850 Telefonica De Espana(b).................................. 1,006,027
-----------
Petroleum (0.4%):
20,500 Repsol SA................................................ 401,496
-----------
Utilities--Electric (0.3%):
15,000 Endesa SA................................................ 284,991
-----------
3,016,052
-----------
Sweden (1.0%):
Telecommunications (1.0%):
32,500 Ericsson LM.............................................. 1,006,982
-----------
Switzerland (4.6%):
Banks (1.1%):
2,180 Credit Suisse Group-Registered........................... 399,513
2,600 UBS AG-Registered........................................ 732,919
-----------
1,132,432
-----------
Building & Construction (0.7%):
526 Holderbank Financiere Glarus AG.......................... 683,187
-----------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ -------------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued:
Switzerland, continued:
Chemicals--Specialty (0.4%):
910 Clariant AG............................................. $ 412,375
------------
Food & Related (0.8%):
415 Nestle SA-Registered.................................... 779,901
------------
Pharmaceuticals (1.5%):
450 Novartis AG............................................. 667,544
73 Roche Holding AG-Genusss................................ 844,771
------------
1,512,315
------------
Software (0.1%):
2,685 Fantastic Corp.(b)...................................... 148,694
------------
4,668,904
------------
Thailand (0.9%):
Banks (0.1%):
59,000 Bangkok Bank-FOR REG.................................... 116,057
------------
Building & Construction (0.1%):
5,000 Siam Cement Co. Ltd.(b)................................. 104,096
------------
Energy (0.1%):
15,000 PTT Exploration & Prod--Foreign......................... 104,829
------------
Real Estate (0.3%):
490,000 Golden Land Property(b)................................. 191,576
59,000 Land & House Co. Ltd.(b)................................ 51,901
------------
243,477
------------
Telecommunications (0.1%):
216,000 Telecomasia Corporation(b).............................. 147,787
------------
Transportation (0.2%):
500,000 Bangkok Expressway Public Co.(b)........................ 216,866
------------
933,112
------------
Total Common Stocks 94,856,894
------------
Preferred Stocks (0.8%):
Germany (0.8%):
Machinery & Equipment (0.8%):
28,000 GEA AG.................................................. 833,461
------------
Total Preferred Stocks 833,461
------------
Total Investments
(Cost $85,420,018)(a)--94.1% 95,690,355
Other assets in excess of liabilities--5.9% 6,040,445
------------
TOTAL NET ASSETS--100.0% $101,730,800
============
</TABLE>
Continued
-78-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments, Continued
September 30, 1999
- ----
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of
$43,049. Cost for federal income tax purposes differs from market value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion.................... $14,846,980
Unrealized deprecia-
tion.................... (4,619,692)
-----------
Net unrealized apprecia-
tion.................... $10,227,288
===========
</TABLE>
(b) Represents non-income producing securities.
ADR--American Depository Receipt.
AG--Aktiengesellschaft (German Stock Co.).
GDR--Global Depository Receipt.
NV--Naamloze Vennootschap (Dutch Corp.)
PLC--Public Limited Company.
SA--Societe Anonyme (French Corp.).
SpA--Societa per Azioni (Italian Corp.).
At September 30, 1999, the International Equity Fund's open forward foreign
currency exchange contracts were as follows:
<TABLE>
<CAPTION>
Contract Market Unrealized
Delivery Contract Contract Value Value Appreciation/
Currency Date Price** Amount (U.S. Dollars) (U.S. Dollars) (Depreciation)
- -------- -------- -------- -------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Short Contracts:
British Pound.......... 10/4/99 .606796 $ 97,175 $160,144 $160,038 $ 106
Long Contracts:
British Pound.......... 10/4/99 .606796 $130,761 $215,493 $215,349 $(144)
</TABLE>
** Contract Price is in local currency.
See notes to financial statements
-79-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER CONSERVATIVE GROWTH FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ------------------------------------------------------- -----------
<C> <S> <C>
Investment Companies (100.5%):
478,322 BB&T Balanced Fund..................................... $ 6,600,847
178,414 BB&T Growth and Income Stock Fund...................... 3,504,045
825,061 BB&T Intermediate U.S. Government Bond Fund............ 8,019,594
161,525 BB&T International Equity Fund......................... 2,028,758
126,987 BB&T Large Company Growth Fund......................... 1,522,579
880,116 BB&T Short-Intermediate U.S. Government Income Fund.... 8,493,117
65,427 BB&T Small Company Growth Fund(b)...................... 1,652,038
1,591,561 BB&T U.S. Treasury Money Market Fund................... 1,591,561
-----------
Total Investment Companies 33,412,539
-----------
Total Investments in Affiliates
(Cost $33,233,080)(a)--100.5% 33,412,539
Liabilities in excess of other assets--(0.5)% (180,307)
-----------
TOTAL NET ASSETS--100.0% $33,232,232
===========
</TABLE>
- ----
(a) Represents cost for financial reporting purposes
and differs from cost basis for federal income tax
purposes by the amount of losses recognized for
financial reporting in excess of federal income tax
reporting of $24,026. Cost for federal income tax
purposes differs from market value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation... $ 704,959
Unrealized depreciation... (549,526)
---------
Net unrealized
appreciation.............. $ 155,433
=========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements
-80-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER MODERATE GROWTH FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ------------------------------------------------------ -----------
<C> <S> <C>
Investment Companies (100.3%):
309,266 BB&T Balanced Fund.................................... $ 4,267,872
322,618 BB&T Growth and Income Stock Fund..................... 6,336,211
472,953 BB&T Intermediate U.S. Government Bond Fund........... 4,597,103
231,782 BB&T International Equity Fund........................ 2,911,179
229,422 BB&T Large Company Growth Fund........................ 2,750,767
455,120 BB&T Short-Intermediate U.S. Government Income Fund... 4,391,909
78,940 BB&T Small Company Growth Fund(b)..................... 1,993,243
1,474,871 BB&T U.S. Treasury Money Market Fund.................. 1,474,871
-----------
Total Investment Companies..................................... 28,723,155
-----------
Total Investments in Affiliates
(Cost $28,030,171)(a)--100.3% 28,723,155
Liabilities in excess of other assets--(0.3)% (91,558)
-----------
TOTAL NET ASSETS--100.0% $28,631,597
===========
</TABLE>
- ----
(a) Represents cost for financial reporting purposes
and differs from cost basis for federal income tax
purposes by the amount of losses recognized for
financial reporting in excess of federal income tax
reporting of $30,855. Cost for federal income tax
purposes differs from market value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.. $1,055,900
Unrealized depreciation.. (393,771)
----------
Net unrealized
appreciation............. $ 662,129
==========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements
-81-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER GROWTH FUND
Schedule of Portfolio Investments
September 30, 1999
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ------------------------------------------------------ -----------
<C> <S> <C>
Investment Companies (100.3%):
91,220 BB&T Balanced Fund.................................... $ 1,258,836
433,635 BB&T Growth and Income Stock Fund..................... 8,516,599
397,100 BB&T Intermediate U.S. Government Bond Fund........... 3,859,807
246,129 BB&T International Equity Fund........................ 3,091,380
308,479 BB&T Large Company Growth Fund........................ 3,698,667
134,178 BB&T Short-Intermediate U.S. Government Income Fund... 1,294,816
89,781 BB&T Small Company Growth Fund(b)..................... 2,266,975
1,292,691 BB&T U.S. Treasury Money Market Fund.................. 1,292,691
-----------
Total Investment Companies 25,279,771
-----------
Total Investments in Affiliates
(Cost $24,367,304)(a)--100.3% 25,279,771
Liabilities in excess of other assets--(0.3)% (63,067)
-----------
TOTAL NET ASSETS--100.0% $25,216,704
===========
</TABLE>
- ----
(a) Represents cost for financial reporting purposes
and differs from cost basis for federal income tax
purposes by the amount of losses recognized for
financial reporting in excess of federal income tax
reporting of $28,638. Cost for federal income tax
purposes differs from market value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.. $1,287,669
Unrealized depreciation.. (403,840)
----------
Net unrealized
appreciation............. $ 883,829
==========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements
-82-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements
September 30, 1999
1. Organization:
The BB&T Funds ("The Funds") 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 Funds are authorized to issue an unlimited number of shares without par
value. The Funds offer 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 Virginia 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" and collectively as the
"Funds"). 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 Fund offers up to three classes of shares: Class A
Shares, Class B Shares, and Trust Shares. Class B Shares are currently only
offered in the Prime Money Market Fund, the U.S. Treasury Money Market Fund,
the Intermediate U.S. Government Bond 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. Class A Shares are offered with a front-end sales charge. 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. The contingent
deferred sales charges are as follows:
<TABLE>
<CAPTION>
Years Since Purchase Percent
-------------------- -------
<S> <C>
0-1............................... 5.00%
1-2............................... 4.00%
2-4............................... 3.00%
4-5............................... 2.00%
5-6............................... 1.00%
6 or more......................... none
</TABLE>
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 Funds 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 advisor to the Funds.
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
the preservation of capital through investment in obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities. The
North Carolina Intermediate Tax-Free Fund, South Carolina Intermediate Tax-
Free Fund
Continued
-83-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
and Virginia Intermediate Tax-Free Fund seek to produce a high level of
current interest income that is exempt from both federal and North Carolina,
South Carolina and Virginia state income tax, respectively. The Growth and
Income Stock Fund seeks capital growth, current income or both, primarily
through investments in stocks. The Balanced Fund seeks long-term capital
growth and current income through investment in a broadly diversified
portfolio of securities, including common stocks, preferred stocks and bonds.
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
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 diversified BB&T
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 Funds which invest primarily in equity
securities.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Funds 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 Funds, excluding the Money Market 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. Short-term
obligations that mature in 60 days or less are valued at amortized cost,
which approximates market value. 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 and 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
Continued
-84-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
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 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 a high
price volatility with respect to securities of issuers from developing
countries.
Continued
-85-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
Futures Contracts:
The Funds (except for the U.S. Treasury Money Market Fund) may engage in
transactions in financial futures contracts in order to manage the risk of
unanticipated changes in market values of securities held in the portfolio,
or which it intends to purchase. Such transactions may be considered trading
activity under generally accepted accounting principles. The expectation is
that any gain or loss on such transactions will be substantially offset by
any gain or loss on the securities in the underlying portfolio or on those
which are being considered for purchase. This investment involves, to varying
degrees, elements of market risk and risks in excess of the amount recognized
in the Statement of Assets and Liabilities. The face or contract amounts
reflect the extent of the involvement the Funds have in the particular
classes of instruments. Risks include an imperfect correlation between the
movements in the price of the instruments and the price of the underlying
securities and interest rates. Risks may also arise if there is an illiquid
secondary market for the instruments or due to the inability of
counterparties to perform under the terms of the contract.
Cash or securities are deposited with brokers in order to maintain a
position. Subsequent payments made or received daily by the Fund based on the
change in the market value of the position are recorded as a realized gain or
loss.
Futures contracts are valued at the settlement price established each day by
the board of trade or exchange on which they are traded.
To the extent that the Fund enters into futures contracts on an index or
group of securities, the Fund exposes itself to an indeterminate liability
and will be required to pay or receive a sum of money measured by the change
in the market value of the index or group of securities. Upon entering into a
futures contract, the Fund is required to deposit either cash or securities
in an amount ("initial margin") equal to a certain percentage of the contract
value with a broker. Subsequent payments ("variation margin") equal to
changes in the daily settlement price or last sale on the exchanges where
they trade are paid or received each day and are recorded as a gain or loss
on futures contracts.
The average market value of futures contracts held during the year ended
September 30, 1999 was as follows:
<TABLE>
<CAPTION>
Average
Fund Market Value
---- ------------
<S> <C>
Small Company Growth Fund....................................... $5,451,379
</TABLE>
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 discount. Dividend income is recorded on the ex-dividend date.
Gains or losses realized from sales of securities are determined by comparing
the identified cost of the security lot sold with the net sales proceeds.
Continued
-86-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
When-Issued and Forward Commitments:
The Funds, with the exception of the U.S. Treasury Money Market Fund, may
purchase securities on a "when-issued" basis. The Prime Money Market Fund,
the Large Company Growth Fund, the Small Company Growth Fund, and the
International Equity Fund may also purchase or sell securities on a forward
commitment basis. The Funds record when-issued securities on the trade date
and maintain security positions such that sufficient liquid assets will be
available to make payment for the securities purchased. The value of the
securities underlying when-issued or forward commitments to purchase
securities, and any subsequent fluctuation in their value, is taken into
account when determining the net asset value of the Funds commencing with the
date the funds agree to purchase the securities. The Funds do not accrue
interest or dividends on "when-issued" securities until the underlying
securities are received. The Funds purchased securities on a "when-issued"
basis during the year and the South Carolina Intermediate Tax-Free Fund held
two "when-issued" securities as of September 30, 1999.
Repurchase Agreements:
Each Fund may enter into repurchase agreements with member banks of the
Federal Deposit Insurance Corporation and with registered broker/dealers that
BB&T deems creditworthy under guidelines approved by the Board of Trustees,
subject to the seller's agreement to repurchase such securities at a mutually
agreed-upon date and price. The repurchase price generally equals the price
paid by the Fund plus interest negotiated on the basis of current short-term
rates, which may be more or less than the rate on the underlying portfolio
securities. The seller, under a repurchase agreement, is required to maintain
the value of collateral held pursuant to the agreement at not less than the
repurchase price (including accrued interest). Securities subject to
repurchase agreements are held by the Funds' custodian, another qualified
custodian or in the Federal Reserve/Treasury book-entry system. In the event
of counterparty default, the Fund has the right to use the collateral to
offset losses incurred. There is potential for loss to the Fund in the event
the Fund is delayed or prevented from exercising its rights to dispose of the
collateral securities, including the risk of a possible decline in the value
of the underlying securities during the period while the Fund seeks to assert
its rights.
Lending Portfolio Securities:
To generate additional income, each Fund, except the North Carolina
Intermediate Tax-Free Fund, South Carolina Intermediate Tax-Free Fund and the
Virginia Intermediate Tax-Free Fund, may lend up to 33 1/3% of its total
assets pursuant to agreements requiring that the loan be continuously secured
by collateral equal at all times to at least 100% of the market value plus
accrued interest on the securities lent. Collateral for such loans may
include cash, securities of the U.S. Government, or its agencies or
instrumentalities, or any combination there of. Each Fund continues to earn
interest and dividends on securities lent while simultaneously seeking to
earn interest on the investment collateral.
When cash is received as collateral for securities loaned, each Fund may
invest such cash in short-term U.S. Government securities, repurchase
agreements, or other short-term corporate securities. The cash or subsequent
short-term investments are recorded as assets of the Fund, offset by a
corresponding liability to
Continued
-87-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
repay the cash at the termination of the loan. In addition, the short-term
securities purchased with the cash collateral are included in the
accompanying schedules of portfolio investments. Fixed income securities
received as collateral are not recorded as assets or liabilities of the Fund
because the Fund does not have effective control of such securities.
There may be risks of delay in recovery of the securities or even loss of
rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers deemed by BB&T to
be of good standing and creditworthy under guidelines established by the
Board of Trustees and when, in the judgment of BB&T, the consideration which
can be earned currently from such securities loans justifies the attendant
risks. Loans are subject to termination by the Funds or the borrower at any
time, and are, therefore, not considered to be illiquid investments.
According to generally accepted accounting principles, a statement of cash
flows is presented if the Fund lent out, on average, more than 10% of net
assets during the year. Under this guideline, a statement of cash flows is
presented for the Short-Intermediate U.S. Government Income Fund and the
Intermediate U.S. Government Bond Fund. As of September 30, 1999, the
following Funds had securities with the following market values on loan:
<TABLE>
<CAPTION>
Market Value
Market Value of Loaned
of Collateral Securities
------------- ------------
<S> <C> <C>
Short-Intermediate U.S. Government Income
Fund.......................................... $ 37,892,497 $ 37,582,620
Intermediate U.S. Government Bond Fund......... 55,963,750 55,171,680
Growth and Income Stock Fund................... 124,062,703 121,526,394
Balanced Fund.................................. 38,937,050 37,550,724
Large Company Growth Fund...................... 4,610,200 4,558,994
Small Company Growth Fund...................... 3,024,600 3,047,400
</TABLE>
The Funds received cash collateral for securities loaned. This cash was
invested in commercial paper, variable rate notes, investment companies and
repurchase agreements at September 30, 1999.
As disclosed in the schedules of portfolio investments, the following Funds
invested cash collateral in a Lehman Brothers Tri-Party Repurchase Agreement
with interest rate of 5.65% and a maturity date of 10/1/99 which was
collaterialized by the following securities:
Short-Intermediate U.S. Government Income Fund
<TABLE>
<CAPTION>
Market
Principal Description Value
--------- ----------- -----------
<C> <S> <C>
$116,990,000 GNR 1999-18 SA, 2.93%, 5/16/29 $ 9,239,389
32,910,000 GNR 1996-16 S, 3.19%, 1/16/10 954,894
Intermediate U.S. Government Bond Fund
<CAPTION>
Market
Principal Description Value
--------- ----------- -----------
<C> <S> <C>
$10,200,000 Apreco, Inc., 0.00%, 12/10/99 $10,200,000
</TABLE>
Continued
-88-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
Growth and Income Stock Fund
<TABLE>
<CAPTION>
Principal Description Market Value
--------- ----------- ------------
<C> <S> <C>
$ 53,685,000 GNR 1999-29 SC, 2.85%, 7/16/28 $51,001,287
Balanced Fund
<CAPTION>
Principal Description Market Value
--------- ----------- ------------
<C> <S> <C>
$ 30,000 Concentric LTD, 0.00%, 5/13/04 $ 30,000
579,312,156 PTAIO GMAC EXCESS, .77%, 6/1/20 7,361
12,600,000 Polaris Commercial Loan Master, .001%, 6/1/06 12,222,000
3,000,000 Residential Reinsurance, 0.00%, 6/1/00 2,985,000
2,137,400 RMSC 1993-6B D2, 0.00%, 12/29/31 193,250
243,400 SAMI 1998-7 B4, .001%, 6/25/28 220,413
243,400 SAMI 1998-7 B5, 0.00%, 6/25/28 147,393
10,000,000 SASC 1993-C1 D, 6.60%, 10/25/24 9,693,981
Large Company Growth Fund
<CAPTION>
Principal Description Market Value
--------- ----------- ------------
<C> <S> <C>
$ 1,755,000 Concentric LTD, 0.00%, 5/13/04 $ 1,755,000
As disclosed in the schedules of portfolio investments, the following Funds
invested cash collateral in a Lehman Brothers Tri-Party Repurchase Agreement
with interest rate of 5.80% and a maturity date of 10/1/99 which was
collateralized by the following securities:
Short-Intermediate U.S. Government Income Fund
<CAPTION>
Principal Description Market Value
--------- ----------- ------------
<C> <S> <C>
$ 83,090,000 GNR 1996-16 S, 3.19%, 1/16/10 $ 2,410,884
18,107,000 FHR 208 AC, 0.00%, 6/15/03 7,786,492
Intermediate U.S. Government Bond Fund
<CAPTION>
Principal Description Market Value
--------- ----------- ------------
<C> <S> <C>
$ 15,300,000 Apreco, Inc., 0.00%, 12/10/99 $15,300,000
Growth and Income Stock Fund
<CAPTION>
Principal Description Market Value
--------- ----------- ------------
<C> <S> <C>
$ 4,825,000 Apreco, Inc., 0.00%, 12/10/99 $ 4,825,000
33,935,000 Moriarty Limited, 0.00%, 11/17/99 33,935,000
</TABLE>
Continued
-89-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
Balanced Fund
<TABLE>
<CAPTION>
Principal Description Market Value
--------- ----------- ------------
<C> <S> <C>
$15,000,000 CSB 1988-2 A, 0.00%, 3/1/18 $1,085,031
53,682,839 CSB 1988-3 A1, .001%, 3/1/18 983,446
4,000,000 CSB 1988-5 A, 0.00%, 6/1/18 335,827
10,026,189 CSB 1988-5 A, 0.00%, 6/1/18 1,548,819
2,581,000 Residential Accredit Loans, Inc., 6.50%, 11/28/28 1,585,639
865,000 RAST, 6.75%, 8/25/28 581,264
Large Company Growth Fund
<CAPTION>
Principal Description Market Value
--------- ----------- ------------
<C> <S> <C>
$ 1,520,000 RAST 1988-A8 BID, 6.75%, 8/25/28 $1,021,412
</TABLE>
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, South Carolina
Intermediate Tax-Free Fund and the Virginia 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.
The amount of dividends from net investment income and of distributions from
net realized gains are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting principles.
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 reclassification.
Dividends and distributions to shareholders which exceed net investment
income and net realized capital 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 distributions of capital.
Continued
-90-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
As of September 30, 1999, the following reclassifications have been made to
increase (decrease) such accounts with offsetting adjustments made to
capital:
<TABLE>
<CAPTION>
Accumulated
Undistributed Net
(Distributions in Realized Gain/(Loss)
excess of) on Investments and
Undistributed Net Foreign Currency
Investment Income Transactions
----------------- --------------------
<S> <C> <C>
Short-Intermediate U.S. Government
Income Fund........................ $ 102,745 $(102,745)
Intermediate U.S. Government Bond
Fund............................... 167,830 (167,830)
North Carolina Intermediate Tax-Free
Fund............................... 3,390 (3,390)
Virginia Intermediate Tax-Free
Fund............................... 2,700 (2,700)
Balanced............................ 24,662 (24,662)
Large Company Growth Fund........... 156,265 (1,302)
Small Company Growth Fund........... 1,201,101 --
International Equity Fund........... (278,063) 278,063
</TABLE>
Federal Income Taxes:
It is the policy of the Funds to qualify or continue to qualify as a
regulated investment company by complying with the provisions available to
certain investment companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of net investment income and
net realized capital gains sufficient to relieve it from all, or
substantially all, federal income taxes.
Other:
Expenses that are directly related to one of the Funds are charged directly
to that Fund. Other operating expenses for the Funds are prorated to the
Funds on the basis of relative net assets. All expenses in connection with
the Funds' organization and registration under the 1940 Act and the
Securities Act of 1933 (with the exception of the Virginia Intermediate Tax-
Free Fund) were paid by the respective Fund. Such expenses were capitalized
and amortized over a period of two years commencing with the initial public
offering.
On June 30, 1998 the Funds adopted Statement of Position (SOP) 98-5,
"Reporting on the Costs of Start-Up Activities." Under the provisions of SOP
98-5, costs associated with organizing a fund which commences operating
subsequent to June 30, 1998, must be expensed as incurred and may not be
amortized over future periods. Accordingly, costs incurred in connection with
the organization of the Virginia Intermediate Tax-Free Fund were paid by
BISYS Fund Services.
Continued
-91-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
3. Purchases and Sales of Securities:
Purchases and sales of securities (excluding short-term securities) for the
year ended September 30, 1999 are as follows:
<TABLE>
<CAPTION>
Purchases Sales
------------ ------------
<S> <C> <C>
Short-Intermediate U.S. Government Income Fund.... $154,380,305 $168,030,544
Intermediate U.S. Government Bond Fund............ 180,420,563 142,243,398
North Carolina Intermediate Tax-Free Fund......... 36,337,222 32,438,931
South Carolina Intermediate Tax-Free Fund......... 13,670,789 12,877,356
Virginia Intermediate Tax-Free Fund (a)........... 23,231,089 21,265,421
Growth and Income Stock Fund...................... 61,938,770 87,028,900
Balanced Fund..................................... 64,597,128 56,731,007
Large Company Growth Fund......................... 65,865,476 56,554,768
Small Company Growth Fund......................... 187,006,325 180,725,730
International Equity Fund......................... 78,447,023 70,892,366
Capital Manager Conservative Growth Fund.......... 13,356,980 4,855,100
Capital Manager Moderate Growth Fund.............. 8,096,900 4,272,000
Captial Manager Growth Fund....................... 4,985,900 4,151,000
</TABLE>
----
(a) For the period from May 17, 1999 (commencement of operations) to
September 30, 1999.
4. Related Party Transactions:
Investment advisory services are provided to the Funds 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, BlackRock Financial
Management, Inc., 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 Funds' Board of Trustees and BB&T. For its
services, BlackRock Financial Management, Inc. is entitled to a fee, 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
net assets in excess of $100 million.
Pursuant to a Sub-Advisory agreement with BB&T, BlackRock International, Ltd.
serves as the Sub-Advisor to the International Equity Fund. Under the
agreement, BlackRock International, Ltd. manages the International Equity
Fund subject to the general supervision of the Funds' Board of Trustees and
BB&T. For its services, BlackRock International, Ltd. is entitled to a fee,
payable by BB&T, at the following annual rates as a percentage of the
International Equity 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, BlackRock Institutional Management Corporation serves as
the Sub-Advisor to the Prime Money Market Fund. Under the agreement,
BlackRock Institutional
Continued
-92-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
Management Corporation manages the Prime Money Market Fund subject to the
general supervision of the Funds' Board of Trustees and BB&T. For its
services, BlackRock Institutional Management Corporation is entitled to a
fee, payable by BB&T, at 0.09% of the Prime Money Market Fund's average daily
net assets.
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 with the exception of the Funds of Funds which are
charged a fee of 0.05% of the average daily net assets. BISYS Ohio serves the
Funds as transfer agent and 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 advisor, 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 year ended
September 30, 1999, BISYS received $2,042,607 from commissions earned on
sales of shares of the Funds' variable net asset value funds, of which
$1,380,984 was allowed to affiliated broker/dealers of the Funds.
BB&T, BISYS, and BISYS Ohio may voluntarily reduce or reimburse fees to
assist the Funds in maintaining competitive expense ratios. BB&T reimbursed
the Prime Money Market Fund and the South Carolina Intermediate Tax-Free Fund
$127 and $5,586, respectively.
Continued
-93-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
Information regarding these transactions is as follows for the year ended
September 30, 1999:
<TABLE>
<CAPTION>
Distribution Distribution Fund
Investment Advisory Administration Fees Fees Accounting
Fees Fees Class A Class B Fees
--------------------- -------------- ------------ ------------ ----------
As a
Percentage Voluntary Voluntary Voluntary Voluntary Voluntary
of Average Fee Fee Fee Fee Fee
Net Assets Reductions Reductions Reductions Reductions Reductions
---------- ---------- -------------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Prime Money Market
Fund.................... .40% $ 120,995 $ 83,812 $ 8,759 $ -- $ --
U.S. Treasury Money
Market Fund............. .40% 318,377 142,194 108,490 -- --
Short-Intermediate U.S.
Government Income Fund.. .60% 165,331 82,636 11,132 -- --
Intermediate U.S.
Government Bond Fund.... .60% 197,720 147 9,453 37 --
North Carolina
Intermediate Tax-Free
Fund.................... .60% 83,853 41,928 47,243 -- 20,002
South Carolina
Intermediate Tax-Free
Fund.................... .60% 55,186 27,597 2,541 -- 20,002
Virginia Intermediate
Tax-Free Fund (a)....... .60% 30,149 15,126 40 7,460
Growth and Income Stock
Fund.................... .74% 1,162,144 260 106,041 200 --
Balanced Fund........... .74% 393,747 98 55,630 187 --
Large Company Growth
Fund.................... .74% 215,095 283 9,839 -- --
Small Company Growth
Fund.................... 1.00% 1,227 244 28,100 67 --
International Equity
Fund.................... 1.00% 770 -- 4,083 -- --
Capital Manager
Conservative Growth
Fund.................... .25% 62,521 4 865 65 --
Capital Manager Moderate
Growth Fund............. .25% 52,251 -- 3,981 72 --
Capital Manager Growth
Fund ................... .25% 49,100 -- 1,933 -- --
</TABLE>
----
(a) For the period May 17, 1999 (commencement of operations) to September 30,
1999.
5. Concentration of Credit Risk
The North Carolina Intermediate Tax-Free Fund, the South Carolina
Intermediate Tax-Free Fund and the Virginia Intermediate Tax-Free Fund invest
primarily in debt instruments of municipal issuers in the respective states.
The issuers' abilities to meet their obligations may be affected by economic
developments in a specific state or region.
Continued
-94-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
6. Capital Share Transactions:
Transactions in capital shares for the Funds were as follows:
<TABLE>
<CAPTION>
Prime U.S. Treasury
Money Market Money Market
Fund Fund
---------------------------- ----------------------------
For the For the For the For the
year ended period ended year ended year ended
September 30, September 30, September 30, September 30,
1999 1998(a)(b) 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 8,840,718 $ 6,606,837 $ 126,910,127 $ 88,087,627
Dividends reinvested... 144,220 45,693 1,741,054 1,697,458
Cost of shares re-
deemed................. (6,852,933) (3,390,007) (127,887,932) (80,848,886)
------------- ------------- ------------- -------------
Change in net assets
from Class A Share
transactions........... $ 2,132,005 $ 3,262,523 $ 763,249 $ 8,936,199
============= ============= ============= =============
Class B Shares:
Proceeds from shares
issued................. $ 14,771,996 $ 300,010 $ 2,908,678 $ 1,533,442
Dividends reinvested... 9,984 -- 44,123 48,607
Cost of shares re-
deemed................. (5,690,911) -- (1,943,945) (1,828,809)
------------- ------------- ------------- -------------
Change in net assets
from Class B Share
transactions........... $ 9,091,069 $ 300,010 $ 1,008,856 $ (246,760)
============= ============= ============= =============
Trust Class Shares:
Proceeds from shares
issued................. $ 148,779,482 $ 193,347,394 $ 458,159,592 $ 397,566,766
Dividends reinvested... -- 2,882 2,723,204 2,591,520
Cost of shares re-
deemed................. (130,059,657) (155,576,517) (414,094,480) (431,201,888)
------------- ------------- ------------- -------------
Change in net assets
from Trust Share trans-
actions................ $ 18,719,825 $ 37,773,759 $ 46,788,316 $ (31,043,602)
============= ============= ============= =============
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 8,840,718 6,606,838 126,910,127 88,087,627
Reinvested............. 144,220 45,693 1,741,054 1,697,458
Redeemed............... (6,852,933) (3,390,007) (127,887,933) (80,848,885)
------------- ------------- ------------- -------------
Change in Class A
Shares................. 2,132,005 3,262,524 763,248 8,936,200
============= ============= ============= =============
Class B Shares:
Issued................. 14,771,996 300,010 2,908,677 1,533,441
Reinvested............. 9,984 -- 44,123 48,607
Redeemed............... (5,690,911) -- (1,943,944) (1,828,809)
------------- ------------- ------------- -------------
Change in Class B
Shares................. 9,091,069 300,010 1,008,856 (246,761)
============= ============= ============= =============
Trust Class Shares:
Issued................. 148,779,482 193,347,394 458,159,592 397,566,766
Reinvested............. -- 2,882 2,723,204 2,591,520
Redeemed............... (130,059,657) (155,576,517) (414,094,480) (431,201,888)
------------- ------------- ------------- -------------
Change in Trust
Shares................. 18,719,825 37,773,759 46,788,316 (31,043,602)
============= ============= ============= =============
</TABLE>
- ----
(a) The Fund commenced operations on October 1, 1997.
(b) The Fund commenced offering Class B shares on September 2, 1998.
Continued
-95-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
<TABLE>
<CAPTION>
Short-
Intermediate Intermediate U.S.
U.S. Government Government
Income Fund Bond Fund
---------------------------- ----------------------------
For the For the For the For the
Year ended Year ended Year ended Year ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 1,289,374 $ 192,328 $ 1,339,933 $ 950,380
Dividends reinvested... 172,172 177,946 188,814 164,571
Cost of shares re-
deemed................. (1,121,205) (1,181,875) (2,452,023) (1,072,325)
------------ ------------ ------------ ------------
Change in net assets
from Class A Share
transactions........... $ 340,341 $ (811,601) $ (923,276) $ 42,626
============ ============ ============ ============
Class B Shares:
Proceeds from shares
issued................. -- -- $ 1,856,430 $ 694,364
Dividends reinvested... -- -- 81,359 31,042
Cost of shares re-
deemed................. -- -- (413,844) (107,776)
------------ ------------ ------------ ------------
Change in net assets
from Class B Share
transactions........... -- -- $ 1,523,945 $ 617,630
============ ============ ============ ============
Trust Class Shares:
Proceeds from shares
issued................. $ 52,461,643 $ 73,529,580 $ 90,515,306 $ 75,881,763
Dividends reinvested... 387,596 367,365 3,071,777 2,885,452
Cost of shares re-
deemed................. (36,082,594) (24,841,396) (50,389,065) (48,000,300)
------------ ------------ ------------ ------------
Change in net assets
from Trust Share trans-
actions................ $ 16,766,645 $ 49,055,549 $ 43,198,018 $ 30,766,915
============ ============ ============ ============
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 132,382 19,489 131,719 93,931
Reinvested............. 17,513 18,128 18,588 16,400
Redeemed............... (115,052) (120,560) (240,944) (106,747)
------------ ------------ ------------ ------------
Change in Class A
Shares................. 34,843 (82,943) (90,637) 3,584
============ ============ ============ ============
Class B Shares:
Issued................. -- -- 186,307 68,849
Reinvested............. -- -- 8,085 3,099
Redeemed............... -- -- (42,205) (10,797)
------------ ------------ ------------ ------------
Change in Class B
Shares................. -- -- 152,187 61,151
============ ============ ============ ============
Trust Class Shares:
Issued................. 5,339,894 7,511,307 9,053,837 7,597,248
Reinvested............. 39,422 37,398 303,294 287,298
Redeemed............... (3,669,679) (2,526,173) (4,990,144) (4,759,077)
------------ ------------ ------------ ------------
Change in Trust
Shares................. 1,709,637 5,022,532 4,366,987 3,125,469
============ ============ ============ ============
</TABLE>
Continued
-96-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
<TABLE>
<CAPTION>
North Carolina South Carolina
Intermediate Tax-Free Fund Intermediate Tax-Free Fund
---------------------------- ---------------------------
For the For the For the For the
year ended year ended year ended period ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998(a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 8,174,924 $ 3,137,339 $ 1,082,689 $ 291,303
Dividends reinvested... 508,644 327,585 21,108 3,952
Cost of shares re-
deemed................. (5,695,033) (1,548,708) (190,511) (5,000)
------------ ------------ ----------- -----------
Change in net assets
from Class A Share
transactions........... $ 2,988,535 $ 1,916,216 $ 913,286 $ 290,255
============ ============ =========== ===========
Trust Class Shares:
Proceeds from shares
issued................. $ 18,232,656 $ 32,628,455 $ 3,179,820 $25,450,134
Dividends reinvested... -- 36,980 -- 5,687
Cost of shares re-
deemed................. (16,923,332) (22,227,082) (3,959,304) (8,029,967)
------------ ------------ ----------- -----------
Change in net assets
from Trust Share trans-
actions................ $ 1,309,324 $ 10,438,353 $ (779,484) $17,425,854
============ ============ =========== ===========
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 797,867 302,092 106,752 28,435
Reinvested............. 49,458 31,718 2,086 385
Redeemed............... (565,397) (149,421) (18,833) (489)
------------ ------------ ----------- -----------
Change in Class A
Shares................. 281,928 184,389 90,005 28,331
============ ============ =========== ===========
Trust Class Shares:
Issued................. 1,790,660 3,171,581 315,919 2,534,229
Reinvested............. -- 3,599 -- 566
Redeemed............... (1,646,273) (2,146,354) (395,464) (782,561)
------------ ------------ ----------- -----------
Change in Trust
Shares................. 144,387 1,028,826 (79,545) 1,752,234
============ ============ =========== ===========
</TABLE>
- ----
(a) For the period from October 20, 1997 (commencement of operations) through
September 30, 1998.
Continued
-97-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
<TABLE>
<CAPTION>
Virginia
Intermediate Growth and Income
Tax-Free Fund Stock Fund
------------- ----------------------------
For the For the For the
period ended year ended year ended
September 30, September 30, September 30,
1999(a) 1999 1998
------------- ------------- -------------
<S> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued......... $ 75,507 $ 6,320,172 $ 11,309,607
Dividends reinvested................ 219 2,181,851 2,764,969
Cost of shares redeemed............. -- (12,271,770) (5,601,439)
------------ ------------ ------------
Change in net assets from Class A
Share transactions.................. $ 75,726 $ (3,769,747) $ 8,473,137
============ ============ ============
Class B Shares:
Proceeds from shares issued......... -- $ 8,325,365 $ 19,294,501
Dividends reinvested................ -- 1,656,594 1,383,073
Cost of shares redeemed............. -- (5,576,977) (2,045,175)
------------ ------------ ------------
Change in net assets from Class B
Share transactions.................. -- $ 4,404,982 $ 18,632,399
============ ============ ============
Trust Class Shares:
Proceeds from shares issued......... $ 85,116,364 $ 92,724,798 $133,771,433
Dividends reinvested................ -- 9,088,063 11,462,995
Cost of shares redeemed............. (3,000,806) (93,528,869) (79,207,902)
------------ ------------ ------------
Change in net assets from Trust
Share transactions.................. $ 82,115,558 $ 8,283,992 $ 66,026,526
============ ============ ============
SHARE TRANSACTIONS:
Class A Shares:
Issued.............................. 6,838 305,936 557,701
Reinvested.......................... 20 107,276 143,264
Redeemed............................ -- (598,229) (282,239)
------------ ------------ ------------
Change in Class A Shares............ 6,858 (185,017) 418,726
============ ============ ============
Class B Shares:
Issued.............................. -- 405,101 956,590
Reinvested.......................... -- 81,928 72,036
Redeemed............................ -- (271,160) (104,546)
------------ ------------ ------------
Change in Class B Shares............ -- 215,869 924,080
============ ============ ============
Trust Class Shares:
Issued.............................. 7,578,336 4,568,228 6,755,500
Reinvested.......................... -- 445,664 591,985
Redeemed............................ (271,258) (4,521,898) (3,959,333)
------------ ------------ ------------
Change in Trust Shares.............. 7,307,078 491,994 3,388,152
============ ============ ============
</TABLE>
- ----
(a) For the period from May 17, 1999 (commencement of operations) through
September 30, 1999.
Continued
-98-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
<TABLE>
<CAPTION>
Balanced Large Company
Fund Growth Fund
---------------------------- ----------------------------
For the For the For the For the
year ended year ended year ended period ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998(a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 3,507,718 $ 7,590,706 $ 3,990,667 $ 2,203,499
Dividends reinvested... 1,612,593 1,073,391 123,138 2,142
Cost of shares
redeemed............... (5,876,168) (4,132,034) (694,002) (90,348)
------------ ------------ ------------ ------------
Change in net assets
from Class A Share
transactions........... $ (755,857) $ 4,532,063 $ 3,419,803 $ 2,115,293
============ ============ ============ ============
Class B Shares:
Proceeds from shares
issued................. $ 8,086,591 $ 9,624,926 $ 7,867,231 $ 4,439,304
Dividends reinvested... 1,179,731 407,643 275,410 2,680
Cost of shares
redeemed............... (2,574,249) (1,109,354) (998,677) (119,504)
------------ ------------ ------------ ------------
Change in net assets
from Class B Share
transactions........... $ 6,692,073 $ 8,923,215 $ 7,143,964 $ 4,322,480
============ ============ ============ ============
Trust Class Shares:
Proceeds from shares
issued................. $ 22,201,143 $ 36,729,601 $ 42,112,134 $ 88,420,885
Dividends reinvested... 6,382,802 3,958,651 61,859 8,366
Cost of shares
redeemed............... (16,913,945) (21,343,897) (16,078,382) (35,759,154)
------------ ------------ ------------ ------------
Change in net assets
from Trust Share
transactions........... $ 11,670,000 $ 19,344,355 $ 26,095,611 $ 52,670,097
============ ============ ============ ============
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 242,216 542,438 342,286 210,050
Reinvested............. 112,288 77,637 11,626 210
Redeemed............... (408,749) (297,325) (61,035) (8,713)
------------ ------------ ------------ ------------
Change in Class A
Shares................. (54,245) 322,750 292,877 201,547
============ ============ ============ ============
Class B Shares:
Issued................. 564,554 684,576 683,822 427,380
Reinvested............. 82,552 29,651 26,129 272
Redeemed............... (179,654) (79,403) (86,488) (11,650)
------------ ------------ ------------ ------------
Change in Class B
Shares................. 467,452 634,824 623,463 416,002
============ ============ ============ ============
Trust Class Shares:
Issued................. 1,547,586 2,629,189 3,632,275 8,894,685
Reinvested............. 445,292 287,018 5,824 842
Redeemed............... (1,174,036) (1,528,960) (1,371,709) (3,603,029)
------------ ------------ ------------ ------------
Change in Trust
Shares................. 818,842 1,387,247 2,266,390 5,292,498
============ ============ ============ ============
</TABLE>
- ----
(a) For the period from October 3, 1997 (commencement of operations) through
September 30, 1998.
Continued
-99-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
<TABLE>
<CAPTION>
Small Company International
Growth Fund Equity Fund
---------------------------- ----------------------------
For the For the For the For the
year ended year ended year ended year ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 77,265,660 $ 38,525,136 $ 559,154 $ 722,522
Dividends reinvested... -- 166,111 26,800 21,801
Cost of shares re-
deemed................. (80,169,893) (38,915,077) (344,011) (72,663)
------------ ------------ ------------ -----------
Change in net assets
from Class A Share
transactions........... $ (2,904,233) $ (223,830) $ 241,943 $ 671,660
============ ============ ============ ===========
Class B Shares:
Proceeds from shares
issued................. $ 1,586,635 $ 3,614,978 $ 498,182 $ 1,222,446
Dividends reinvested... -- 128,534 36,730 31,847
Cost of shares re-
deemed................. (2,571,977) (1,255,729) (560,459) (225,132)
------------ ------------ ------------ -----------
Change in net assets
from Class B Share
transactions........... $ (985,342) $ 2,487,783 $ (25,547) $ 1,029,161
============ ============ ============ ===========
Trust Class Shares:
Proceeds from shares
issued................. $ 32,958,723 $ 48,565,796 $ 24,995,842 $36,031,578
Dividends reinvested... -- 448,590 417,850 522,726
Cost of shares re-
deemed................. (23,736,534) (23,595,445) (17,448,374) (9,432,531)
------------ ------------ ------------ -----------
Change in net assets
from Trust Share trans-
actions................ $ 9,222,189 $ 25,418,941 $ 7,965,318 $27,121,773
============ ============ ============ ===========
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 3,592,160 1,884,457 48,478 63,018
Reinvested............. -- 8,052 2,462 2,033
Redeemed............... (3,677,582) (1,895,528) (30,905) (6,464)
------------ ------------ ------------ -----------
Change in Class A
Shares................. (85,422) (3,019) 20,035 58,587
============ ============ ============ ===========
Class B Shares:
Issued................. 77,396 172,660 43,393 108,028
Reinvested............. -- 6,322 3,408 3,026
Redeemed............... (123,241) (61,803) (49,342) (20,736)
------------ ------------ ------------ -----------
Change in Class B
Shares................. (45,845) 117,179 (2,541) 90,318
============ ============ ============ ===========
Trust Class Shares:
Issued................. 1,601,445 2,293,230 2,102,842 3,218,535
Reinvested............. -- 21,546 38,139 48,620
Redeemed............... (1,098,270) (1,124,540) (1,454,123) (841,292)
------------ ------------ ------------ -----------
Change in Trust
Shares................. 503,175 1,190,236 686,858 2,425,863
============ ============ ============ ===========
</TABLE>
Continued
-100-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
<TABLE>
<CAPTION>
Capital Manager Capital Manager
Conservative Moderate Growth
Growth Fund Fund
--------------------------- ---------------------------
For the For the For the For the
year ended period ended year ended period ended
September 30, September 30, September 30, September 30,
1999(b) 1998(a) 1999(b) 1998(a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 409,402 $ 120,882 $ 666,015 $ 1,214,302
Dividends reinvested... 10,103 294 67,177 292
Cost of shares re-
deemed................. (6,750) -- (342,290) (5,833)
----------- ----------- ---------- -----------
Change in net assets
from Class A Share
transactions........... $ 412,755 $ 121,176 $ 390,902 $ 1,208,761
=========== =========== ========== ===========
Class B Shares:
Proceeds from shares
issued................. $ 112,121 -- $ 196,189 --
Dividends reinvested... 902 -- 1,271 --
Cost of shares re-
deemed................. (1,253) -- (5) --
----------- ----------- ---------- -----------
Change in net assets
from Class B Share
transactions........... $ 111,770 -- $ 197,455 --
=========== =========== ========== ===========
Trust Class Shares:
Proceeds from shares
issued................. $10,346,198 $23,613,564 $3,571,247 $22,001,572
Dividends reinvested... 117,555 25 13,704 18
Cost of shares re-
deemed................. (2,372,370) (7,488) (189,439) --
----------- ----------- ---------- -----------
Change in net assets
from Trust Share trans-
actions................ $ 8,091,383 $23,606,101 $3,395,512 $22,001,590
=========== =========== ========== ===========
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 39,088 11,769 62,893 116,838
Reinvested............. 963 28 6,391 28
Redeemed............... (637) -- (32,057) (589)
----------- ----------- ---------- -----------
Change in Class A
Shares................. 39,414 11,797 37,227 116,277
=========== =========== ========== ===========
Class B Shares:
Issued................. 10,615 -- 18,381 --
Reinvested............. 84 -- 117 --
Redeemed............... (117) -- -- --
----------- ----------- ---------- -----------
Change in Class B
Shares................. 10,582 -- 18,498 --
=========== =========== ========== ===========
Trust Class Shares:
Issued................. 978,110 2,358,118 331,505 2,200,157
Reinvested............. 11,077 3 1,272 2
Redeemed............... (223,419) (735) (17,468) --
----------- ----------- ---------- -----------
Change in Trust
Shares................. 765,768 2,357,386 315,309 2,200,159
=========== =========== ========== ===========
</TABLE>
- ----
(a) The Fund commenced offering Trust Shares on October 2, 1997 and Class A
Shares on January 29, 1998.
(b) The Fund commenced offering Class B Shares on January 29, 1999.
Continued
-101-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
<TABLE>
<CAPTION>
Capital Manager
Growth Fund
---------------------------
For the For the
year ended period ended
September 30, September 30,
1999(b) 1998(a)
------------- -------------
<S> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued....................... $ 959,556 $ 298,699
Dividends reinvested.............................. 28,038 979
Cost of shares redeemed........................... (310,922) --
--------- -----------
Change in net assets from Class A Share transac-
tions............................................. $ 676,672 $ 299,678
========= ===========
Class B Shares:
Proceeds from shares issued....................... $ 176,179 --
Dividends reinvested.............................. 142 --
Cost of shares redeemed........................... (7,686) --
--------- -----------
Change in net assets from Class B Share transac-
tions............................................. $ 168,635 --
========= ===========
Trust Class Shares:
Proceeds from shares issued....................... $ 300,467 $22,091,640
Dividends reinvested.............................. 2,841 168
Cost of shares redeemed........................... (65,657) --
--------- -----------
Change in net assets from Trust Share transac-
tions............................................. $ 237,651 $22,091,808
========= ===========
SHARE TRANSACTIONS:
Class A Shares:
Issued............................................ 89,234 28,479
Reinvested........................................ 2,662 93
Redeemed.......................................... (28,686) --
--------- -----------
Change in Class A Shares.......................... 63,210 28,572
========= ===========
Class B Shares:
Issued............................................ 15,856 --
Reinvested........................................ 13 --
Redeemed.......................................... (716) --
--------- -----------
Change in Class B Shares.......................... 15,153 --
========= ===========
Trust Class Shares:
Issued............................................ 27,938 2,208,722
Reinvested........................................ 266 16
Redeemed.......................................... (5,940) --
--------- -----------
Change in Trust Shares............................ 22,264 2,208,738
========= ===========
</TABLE>
- ----
(a) The Fund commenced offering Trust Shares on October 2, 1997 and Class A
Shares on January 29, 1998.
(b) The Fund commenced offering Class B Shares on January 29, 1999.
Continued
-102-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
7. Federal Income Taxes:
At September 30, 1999 the following Funds had net capital loss carryforwards
to offset future net capital gains, if any, to the extent provided by the
Treasury regulations:
<TABLE>
<CAPTION>
Amount Expires
-------- -------
<S> <C> <C>
Prime Money Market Fund..................................... $ 891 2007
Short-Intermediate U.S. Government Income Fund.............. 453,923 2004
Short-Intermediate U.S. Government Income Fund.............. 126,693 2005
Short-Intermediate U.S. Government Income Fund.............. 20,229 2006
</TABLE>
It is the intent of the Funds to use these carryforwards to offset future
capital gains.
During the fiscal year ended September 30, 1999, the Funds declared long-term
capital gain distributions as follows:
<TABLE>
<CAPTION>
Amount
-----------
<S> <C>
Intermediate U.S. Government Bond Fund.......................... $ 1,959,650
North Carolina Intermediate Tax-Free Fund....................... 592,522
South Carolina Intermediate Tax-Free Fund....................... 44,180
Growth and Income Stock Fund.................................... 18,738,871
Balanced Fund................................................... 6,906,442
Large Company Growth Fund....................................... 3,608,591
International Equity Fund....................................... 1,147,118
Capital Manager Conservative Growth Fund........................ 381,696
Capital Manager Moderate Growth................................. 534,394
Capital Manager Growth Fund..................................... 652,815
</TABLE>
For corporate shareholders, the following percentage of the total ordinary
income distributions paid during the fiscal year ended September 30, 1999
qualify for the corporate dividends received deduction for the following
funds:
<TABLE>
<CAPTION>
(Unaudited)
Percentage
-----------
<S> <C>
Growth and Income Stock Fund..................................... 100.00%
Balanced Fund.................................................... 41.53%
Capital Manager Conservative Growth Fund......................... 2.36%
Capital Manager Moderate Growth.................................. 2.89%
Capital Manager Growth Fund...................................... 2.22%
</TABLE>
Continued
-103-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
During the fiscal year ended September 30, 1999, the following funds declared
tax-exempt income distributions:
<TABLE>
<CAPTION>
(Unaudited)
Tax-Exempt
Distribution
------------
<S> <C>
North Carolina Intermediate Tax-Free Fund....................... $3,391,889
South Carolina Intermediate Tax-Free Fund....................... 708,587
Virginia Intermediate Tax-Free Fund (a)......................... 986,607
</TABLE>
Capital and foreign currency losses incurred after October 31st, within a
Fund's fiscal year, are deemed to arise on the first business day of the
following fiscal year for tax purposes. The following Funds have incurred and
will elect to defer such capital losses and foreign currency losses:
<TABLE>
<CAPTION>
(Unaudited)
Post-October
Losses
------------
<S> <C>
Short-Intermediate U.S. Government Income Fund.................. $578,960
North Carolina Intermediate Tax-Free Fund....................... 177,604
South Carolina Intermediate Tax-Free Fund....................... 32,954
Virginia Intermediate Tax-Free Fund (a)......................... 191,046
International Equity Fund....................................... 97,857
</TABLE>
----
(a)For the period from May 17, 1999 (commencement of operations) to September
30, 1999.
8. Conversion of Common Trust Funds:
On May 17, 1999, the BB&T Virginia Intermediate Tax-Free Fund issued Trust
shares in a tax-free conversion to acquire the assets and liabilities of the
Piedmont Tax Exempt Income Fund. The following is a summary of the Trust
shares issued, net assets acquired, net asset value per share and unrealized
appreciation as of the date acquired:
<TABLE>
<S> <C>
Trust Shares.................................................... 7,361,022
Net assets of Mutual Fund before the acquisition................ $ 0
Net assets acquired............................................. $82,712,143
Net asset value of shares issued................................ $ 11.24
Unrealized appreciation......................................... $ 1,897,652
</TABLE>
On April 1, 1999, the BB&T Short-Intermediate U.S. Government Income Fund
issued Trust shares in a tax-free conversion to acquire the assets and
liabilities of the Piedmont Bond & Mortgage Fund. The following is a summary
of the Trust shares issued, net assets acquired, net asset value per share
and unrealized appreciation as the date acquired:
<TABLE>
<S> <C>
Trust Shares................................................... 1,679,221
Net assets of Mutual Fund before the acquisition............... $159,119,710
Net assets acquired............................................ $ 16,523,926
Net asset value of shares issued............................... $ 9.84
Unrealized appreciation........................................ $ 30,580
</TABLE>
Continued
-104-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 1999
On April 1, 1999, the BB&T Growth and Income Stock Fund and the BB&T Large
Company Growth Fund issued Trust shares in a tax-free conversion to acquire the
assets and liabilities of the Piedmont Common Stock Fund. The following is a
summary of the Trust shares issued, net assets acquired, net asset value per
share and unrealized appreciation as the date acquired:
<TABLE>
<S> <C>
Growth and Income Stock Fund
Trust Shares................................................. 1,118,347
Net assets of Mutual Fund before the acquisition............. $445,470,130
Net assets acquired.......................................... $ 21,964,335
Net asset value of shares issued............................. $ 19.64
Unrealized appreciation...................................... $ 4,423,791
</TABLE>
<TABLE>
<S> <C>
Large Company Growth Fund
Trust Shares.................................................. 1,850,407
Net assets of Mutual Fund before the acquisition.............. $79,379,317
Net assets acquired........................................... $21,964,335
Net asset value of shares issued.............................. $ 11.87
Unrealized appreciation....................................... $15,103,252
</TABLE>
Continued
-105-
[LOGO OF BB&T FUNDS]
<PAGE>
PRIME MONEY MARKET FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the October 1,
year ended 1997 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period............... $ 1.000 $ 1.000
------- -------
Investment Activities
Net investment income............................. 0.043 0.048
------- -------
Total from Investment Activities................. 0.043 0.048
------- -------
Distributions
Net investment income............................. (0.043) (0.048)
------- -------
Total Distributions.............................. (0.043) (0.048)
------- -------
Net Asset Value, End of Period..................... $ 1.000 $ 1.000
======= =======
Total Return....................................... 4.42% 4.93%
Ratios/Supplementary Data:
Net Assets, End of Period (000)................... $ 5,395 $ 3,262
Ratio of expenses to average net assets........... 0.80% 0.83%
Ratio of net investment income to average net as-
sets.............................................. 4.34% 4.83%
Ratio of expenses to average net assets*.......... 1.39% 1.43%
Ratio of net investment income to average net as-
sets*............................................. 3.75% 4.23%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced or reimbursed. If
such fee reductions or reimbursements had not occurred, the ratios would
have been as indicated.
(a) Period from commencement of operations.
See notes to financial statements
-106-
[LOGO OF BB&T FUNDS]
<PAGE>
PRIME MONEY MARKET FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the September 2,
year ended 1998 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $ 1.000 $ 1.000
------- -------
Investment Activities
Net investment income............................ 0.036 0.003
------- -------
Total from Investment Activities................ 0.036 0.003
------- -------
Distributions
Net investment income............................ (0.036) (0.003)
------- -------
Total Distributions............................. (0.036) (0.003)
------- -------
Net Asset Value, End of Period.................... $ 1.000 $ 1.000
======= =======
Total Return (excludes redemption charge)......... 3.64% 0.32%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).................. $ 9,391 $ 300
Ratio of expenses to average net assets.......... 1.56% 1.64%(c)
Ratio of net investment income to average net as-
sets............................................. 3.58% 3.98%(c)
Ratio of expenses to average net assets*......... 1.89% 1.99%(c)
Ratio of net investment income to average net as-
sets*............................................ 3.25% 3.63%(c)
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced or reimbursed. If
such fee reductions or reimbursements had not occurred, the ratios would
have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
-107-
[LOGO OF BB&T FUNDS]
<PAGE>
PRIME MONEY MARKET FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the October 1,
year ended 1997 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period............... $ 1.000 $ 1.000
------- -------
Investment Activities
Net investment income............................. 0.046 0.051
------- -------
Total from Investment Activities................. 0.046 0.051
------- -------
Distributions
Net investment income............................. (0.046) (0.051)
------- -------
Total Distributions.............................. (0.046) (0.051)
------- -------
Net Asset Value, End of Period..................... $ 1.000 $ 1.000
======= =======
Total Return....................................... 4.69% 5.23%
Ratios/Supplementary Data:
Net Assets, End of Period (000)................... $56,492 $37,769
Ratio of expenses to average net assets........... 0.54% 0.55%
Ratio of net investment income to average net as-
sets.............................................. 4.57% 5.11%
Ratio of expenses to average net assets*.......... 0.88% 0.91%
Ratio of net investment income to average net as-
sets*............................................. 4.23% 4.75%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced or reimbursed. If
such fee reductions or reimbursements had not occurred, the ratios would
have been as indicated.
(a) Period from commencement of operations.
See notes to financial statements
-108-
[LOGO OF BB&T FUNDS]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended September 30,
-------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Pe-
riod.............................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- -------
Investment Activities
Net investment income............ 0.040 0.046 0.044 0.044 0.047
------- ------- ------- ------- -------
Total from Investment Activi-
ties............................ 0.040 0.046 0.044 0.044 0.047
------- ------- ------- ------- -------
Distributions
Net investment income............ (0.040) (0.046) (0.044) (0.044) (0.047)
------- ------- ------- ------- -------
Total Distributions............. (0.040) (0.046) (0.044) (0.044) (0.047)
------- ------- ------- ------- -------
Net Asset Value, End of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= =======
Total Return...................... 4.08% 4.75% 4.50% 4.49% 4.81%
Ratios/Supplementary Data:
Net Assets, End of Period (000).. $42,241 $41,478 $32,541 $27,931 $13,948
Ratio of expenses to average net
assets........................... 0.84% 0.86% 0.95% 0.99% 0.98%
Ratio of net investment income to
average net assets............... 4.00% 4.65% 4.41% 4.37% 4.81%
Ratio of expenses to average net
assets*.......................... 1.23% 1.26% 1.25% 1.25% 1.24%
Ratio of net investment income to
average net assets*.............. 3.61% 4.25% 4.11% 4.11% 4.55%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
See notes to financial statements
-109-
[LOGO OF BB&T FUNDS]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the For the January 1,
year ended year ended year ended 1996 to
September 30, September 30, September 30, September 30,
1999 1998 1997 1996 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period.......... $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- -------
Investment Activities
Net investment income.. 0.033 0.039 0.036 0.025
------- ------- ------- -------
Total from Investment
Activities............ 0.033 0.039 0.036 0.025
------- ------- ------- -------
Distributions
Net investment income.. (0.033) (0.039) (0.036) (0.025)
------- ------- ------- -------
Total Distributions... (0.033) (0.039) (0.036) (0.025)
------- ------- ------- -------
Net Asset Value, End of
Period.................. $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= =======
Total Return (excludes
redemption charge)...... 3.31% 3.97% 3.67% 2.53%(b)
Ratios/Supplementary Da-
ta:
Net Assets, End of Pe-
riod (000)............. $ 2,264 $ 1,255 $ 1,502 $ 1,305
Ratio of expenses to
average net assets..... 1.59% 1.61% 1.75% 1.75%(c)
Ratio of net investment
income to average net
assets................. 3.25% 3.90% 3.61% 3.55%(c)
Ratio of expenses to
average net assets*.... 1.73% 1.76% ** **
Ratio of net investment
income to average net
assets*................ 3.11% 3.75% ** **
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
** There were no voluntary fee reductions during this period.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
-110-
[LOGO OF BB&T FUNDS]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended September 30,
------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period....................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Investment Activities
Net investment income....... 0.043 0.049 0.046 0.046 0.050
-------- -------- -------- -------- --------
Total from Investment Ac-
tivities................... 0.043 0.049 0.046 0.046 0.050
-------- -------- -------- -------- --------
Distributions
Net investment income....... (0.043) (0.049) (0.046) (0.046) (0.050)
-------- -------- -------- -------- --------
Total Distributions........ (0.043) (0.049) (0.046) (0.046) (0.050)
-------- -------- -------- -------- --------
Net Asset Value, End of Peri-
od........................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return................. 4.34% 5.01% 4.71% 4.74% 5.07%
Ratios/Supplementary Data:
Net Assets, End of Period
(000)....................... $282,585 $235,796 $266,840 $205,974 $120,083
Ratio of expenses to average
net assets.................. 0.59% 0.61% 0.75% 0.75% 0.72%
Ratio of net investment in-
come to average net assets.. 4.26% 4.90% 4.61% 4.63% 4.97%
Ratio of expenses to average
net assets*................. 0.73% 0.76% 0.75% 0.75% 0.75%
Ratio of net investment in-
come to average net as-
sets*....................... 4.11% 4.75% 4.61% 4.63% 4.95%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
See notes to financial statements
-111-
[LOGO OF BB&T FUNDS]
<PAGE>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended September 30,
---------------------------------------
1999 1998 1997 1996 1995
------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.. $ 10.06 $ 9.76 $ 9.73 $ 9.88 $ 9.60
------- ------ ------ ------ ------
Investment Activities
Net investment income................ 0.50 0.51 0.54 0.55 0.53
Net realized and unrealized gain
(loss) on investments................ (0.41) 0.30 0.03 (0.15) 0.29
------- ------ ------ ------ ------
Total from Investment Activities.... 0.09 0.81 0.57 0.40 0.82
------- ------ ------ ------ ------
Distributions
Net investment income................ (0.50) (0.51) (0.54) (0.55) (0.54)
------- ------ ------ ------ ------
Total Distributions................. (0.50) (0.51) (0.54) (0.55) (0.54)
------- ------ ------ ------ ------
Net Asset Value, End of Period........ $ 9.65 $10.06 $ 9.76 $ 9.73 $ 9.88
======= ====== ====== ====== ======
Total Return (excludes sales charge).. 0.95% 8.50% 6.07% 4.09% 8.74%
Ratios/Supplementary Data:
Net Assets, End of Period (000)...... $ 4,626 $4,476 $5,151 $6,356 $7,102
Ratio of expenses to average net as-
sets................................. 1.02% 1.06% 1.11% 1.19% 1.17%
Ratio of net investment income to av-
erage net assets..................... 5.04% 5.15% 5.60% 5.55% 5.50%
Ratio of expenses to average net as-
sets*................................ 1.42% 1.44% 1.46% 1.54% 1.58%
Ratio of net investment income to av-
erage net assets*.................... 4.64% 4.77% 5.25% 5.20% 5.09%
Portfolio turnover(a)................ 99.99% 53.74% 87.99% 54.82% 106.81%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements
-112-
[LOGO OF BB&T FUNDS]
<PAGE>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended September 30,
----------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 10.07 $ 9.77 $ 9.74 $ 9.89 $ 9.61
-------- -------- -------- ------- -------
Investment Activities
Net investment income......... 0.53 0.53 0.57 0.57 0.56
Net realized and unrealized
gain (loss) on investments.... (0.42) 0.30 0.03 (0.15) 0.28
-------- -------- -------- ------- -------
Total from Investment Activi-
ties......................... 0.11 0.83 0.60 0.42 0.84
-------- -------- -------- ------- -------
Distributions
Net investment income......... (0.53) (0.53) (0.57) (0.57) (0.56)
-------- -------- -------- ------- -------
Total Distributions.......... (0.53) (0.53) (0.57) (0.57) (0.56)
-------- -------- -------- ------- -------
Net Asset Value, End of Peri-
od............................. $ 9.65 $ 10.07 $ 9.77 $ 9.74 $ 9.89
======== ======== ======== ======= =======
Total Return................... 1.10% 8.77% 6.33% 4.36% 9.01%
Ratios/Supplementary Data:
Net Assets, End of Period
(000)......................... $167,285 $157,329 $103,523 $62,621 $45,005
Ratio of expenses to average
net assets.................... 0.77% 0.81% 0.86% 0.93% 0.93%
Ratio of net investment income
to average net assets......... 5.29% 5.40% 5.85% 5.81% 5.78%
Ratio of expenses to average
net assets*................... 0.92% 0.94% 0.96% 1.03% 1.08%
Ratio of net investment income
to average net assets*........ 5.14% 5.27% 5.75% 5.71% 5.64%
Portfolio turnover(a)......... 99.99% 53.74% 87.99% 54.82% 106.81%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements
-113-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended September 30,
---------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.. $10.57 $ 9.84 $ 9.63 $ 9.88 $ 9.33
------ ------ ------ ------ ------
Investment Activities
Net investment income................ 0.50 0.51 0.53 0.56 0.59
Net realized and unrealized gain
(loss) on investments................ (0.76) 0.74 0.21 (0.25) 0.55
------ ------ ------ ------ ------
Total from Investment Activities.... (0.26) 1.25 0.74 0.31 1.14
------ ------ ------ ------ ------
Distributions
Net investment income................ (0.50) (0.52) (0.53) (0.56) (0.59)
Net realized gains................... (0.11) -- -- -- --
------ ------ ------ ------ ------
Total Distributions................. (0.61) (0.52) (0.53) (0.56) (0.59)
------ ------ ------ ------ ------
Net Asset Value, End of Period........ $ 9.70 $10.57 $ 9.84 $ 9.63 $ 9.88
====== ====== ====== ====== ======
Total Return (excludes sales charge).. (2.49%) 13.07% 7.93% 3.17% 12.63%
Ratios/Supplementary Data:
Net Assets, End of Period (000)...... $3,308 $4,562 $4,211 $3,659 $5,173
Ratio of expenses to average net as-
sets................................. 1.08% 1.09% 1.12% 1.13% 1.09%
Ratio of net investment income to av-
erage net assets..................... 5.00% 5.10% 5.49% 5.68% 6.22%
Ratio of expenses to average net as-
sets*................................ 1.43% 1.44% 1.47% 1.48% 1.50%
Ratio of net investment income to av-
erage net assets*.................... 4.65% 4.75% 5.14% 5.33% 5.81%
Portfolio turnover(a)................ 73.46% 60.98% 62.45% 76.29% 68.91%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements
-114-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the For the January 1,
year ended year ended year ended 1996 to
September 30, September 30, September 30, September 30,
1999 1998 1997 1996 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period.......... $10.54 $ 9.81 $ 9.60 $10.17
------ ------ ------ ------
Investment Activities
Net investment income.. 0.43 0.43 0.46 0.31
Net realized and
unrealized gain (loss)
on investments......... (0.75) 0.74 0.21 (0.57)
------ ------ ------ ------
Total from Investment
Activities............ (0.32) 1.17 0.67 (0.26)
------ ------ ------ ------
Distributions
Net investment income.. (0.43) (0.44) (0.46) (0.31)
Net realized gains..... (0.11) -- -- --
------ ------ ------ ------
Total Distributions... (0.54) (0.44) (0.46) (0.31)
------ ------ ------ ------
Net Asset Value, End of
Period.................. $ 9.68 $10.54 $ 9.81 $ 9.60
====== ====== ====== ======
Total Return (excludes
redemption charge)...... (3.13%) 12.26% 7.14% (2.48%)(b)
Ratios/Supplementary Da-
ta:
Net Assets, End of Pe-
riod (000)............. $2,679 $1,314 $ 623 $ 353
Ratio of expenses to
average net assets..... 1.83% 1.84% 1.87% 1.85%(c)
Ratio of net investment
income to average net
assets................. 4.28% 4.35% 4.74% 5.01%(c)
Ratio of expenses to
average net assets*.... 1.93% 1.94% 1.97% 1.95%(c)
Ratio of net investment
income to average net
assets*................ 4.18% 4.25% 4.64% 4.91%(c)
Portfolio turnover(d).. 73.46% 60.98% 62.45% 76.29%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-115-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended September 30,
------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period....................... $ 10.59 $ 9.85 $ 9.64 $ 9.89 $ 9.34
-------- -------- -------- -------- -------
Investment Activities
Net investment income....... 0.53 0.54 0.56 0.58 0.61
Net realized and unrealized
gain (loss) on investments.. (0.76) 0.75 0.21 (0.25) 0.55
-------- -------- -------- -------- -------
Total from Investment Ac-
tivities................... (0.23) 1.29 0.77 0.33 1.16
-------- -------- -------- -------- -------
Distributions
Net investment income....... (0.53) (0.55) (0.56) (0.58) (0.61)
Net realized gains.......... (0.11) -- -- -- --
-------- -------- -------- -------- -------
Total Distributions........ (0.64) (0.55) (0.56) (0.58) (0.61)
-------- -------- -------- -------- -------
Net Asset Value, End of Peri-
od........................... $ 9.72 $ 10.59 $ 9.85 $ 9.64 $ 9.89
======== ======== ======== ======== =======
Total Return................. (2.23%) 13.46% 8.20% 3.43% 12.91%
Ratios/Supplementary Data:
Net Assets, End of Period
(000)....................... $213,417 $186,256 $142,545 $119,633 $78,578
Ratio of expenses to average
net assets.................. 0.83% 0.84% 0.87% 0.87% 0.85%
Ratio of net investment in-
come to average net assets.. 5.26% 5.35% 5.74% 5.94% 6.43%
Ratio of expenses to average
net assets*................. 0.93% 0.94% 0.97% 0.97% 1.00%
Ratio of net investment in-
come to average net as-
sets*....................... 5.16% 5.25% 5.64% 5.84% 6.28%
Portfolio turnover(a)....... 73.46% 60.98% 62.45% 76.29% 68.91%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements
-116-
[LOGO OF BB&T FUNDS]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended September 30,
-----------------------------------------
1999 1998 1997 1996 1995
------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Peri-
od.................................. $ 10.52 $ 10.27 $10.05 $10.15 $ 9.78
------- ------- ------ ------ ------
Investment Activities
Net investment income.............. 0.40 0.42 0.40 0.36 0.36
Net realized and unrealized gain
(loss) on investments.............. (0.56) 0.25 0.22 (0.10) 0.37
------- ------- ------ ------ ------
Total from Investment Activities.. (0.16) 0.67 0.62 0.26 0.73
------- ------- ------ ------ ------
Distributions
Net investment income.............. (0.40) (0.42) (0.40) (0.36) (0.36)
Net realized gains................. (0.05) -- -- -- --
In excess of net realized gains.... (0.02) -- -- -- --
------- ------- ------ ------ ------
Total Distributions............... (0.47) (0.42) (0.40) (0.36) (0.36)
------- ------- ------ ------ ------
Net Asset Value, End of Period...... $ 9.89 $ 10.52 $10.27 $10.05 $10.15
======= ======= ====== ====== ======
Total Return (excludes sales
charge)............................. (1.53%) 6.63% 6.28% 2.61% 7.61%
Ratios/Supplementary Data:
Net Assets, End of Period (000).... $13,677 $11,592 $9,419 $9,261 $8,717
Ratio of expenses to average net
assets............................. 0.95% 0.96% 1.00% 1.11% 1.05%
Ratio of net investment income to
average net assets................. 3.95% 4.03% 3.94% 3.58% 3.63%
Ratio of expenses to average net
assets*............................ 1.47% 1.48% 1.50% 1.61% 1.63%
Ratio of net investment income to
average net assets*................ 3.44% 3.51% 3.44% 3.08% 3.05%
Portfolio turnover(a).............. 39.70% 32.63% 16.98% 20.90% 9.38%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements
-117-
[LOGO OF BB&T FUNDS]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended September 30,
--------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Pe-
riod............................. $ 10.53 $ 10.27 $ 10.05 $ 10.15 $ 9.78
------- ------- ------- ------- -------
Investment Activities
Net investment income........... 0.42 0.43 0.41 0.38 0.37
Net realized and unrealized gain
(loss) on investments........... (0.57) 0.26 0.22 (0.10) 0.37
------- ------- ------- ------- -------
Total from Investment Activi-
ties........................... (0.15) 0.69 0.63 0.28 0.74
------- ------- ------- ------- -------
Distributions
Net investment income........... (0.42) (0.43) (0.41) (0.38) (0.37)
Net realized gains.............. (0.05) -- -- -- --
In excess of net realized
gains........................... (0.02) -- -- -- --
------- ------- ------- ------- -------
Total Distributions............ (0.49) (0.43) (0.41) (0.38) (0.37)
------- ------- ------- ------- -------
Net Asset Value, End of Period... $ 9.89 $ 10.53 $ 10.27 $ 10.05 $ 10.15
======= ======= ======= ======= =======
Total Return..................... (1.47%) 6.90% 6.43% 2.77% 7.77%
Ratios/Supplementary Data:
Net Assets, End of Period
(000)........................... $70,430 $73,454 $61,120 $28,443 $28,091
Ratio of expenses to average net
assets.......................... 0.80% 0.81% 0.85% 0.96% 0.91%
Ratio of net investment income
to average net assets........... 4.09% 4.18% 4.13% 3.72% 3.78%
Ratio of expenses to average net
assets*......................... 0.98% 0.98% 1.00% 1.11% 1.13%
Ratio of net investment income
to average net assets*.......... 3.92% 4.01% 3.98% 3.57% 3.55%
Portfolio turnover(a)........... 39.70% 32.63% 16.98% 20.90% 9.38%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements
-118-
[LOGO OF BB&T FUNDS]
<PAGE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the October 20,
year ended 1997 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $10.47 $10.00
------ ------
Investment Activities
Net investment income............................ 0.38 0.31
Net realized and unrealized gain (loss) on in-
vestments........................................ (0.59) 0.47
------ ------
Total from Investment Activities................ (0.21) 0.78
------ ------
Distributions
Net investment income............................ (0.38) (0.31)
Net realized gains .............................. (0.06) --
In excess of net realized gains.................. (0.02) --
------ ------
Total Distributions............................. (0.46) (0.31)
------ ------
Net Asset Value, End of Period.................... $ 9.80 $10.47
====== ======
Total Return (excludes sales charge).............. (2.09%) 7.91%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).................. $1,160 $ 297
Ratio of expenses to average net assets.......... 0.97% 1.04%(c)
Ratio of net investment income to average net as-
sets............................................. 3.72% 3.85%(c)
Ratio of expenses to average net assets*......... 1.91% 1.97%(c)
Ratio of net investment income to average net as-
sets*............................................ 2.78% 2.78%(c)
Portfolio turnover(d)............................ 71.96% 58.80%(b)
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced or reimbursed. If
such fee reductions or reimbursements had not occurred, the ratios would
have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements
-119-
[LOGO OF BB&T FUNDS]
<PAGE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the October 20,
year ended 1997 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $ 10.41 $ 10.00
------- -------
Investment Activities
Net investment income............................ 0.39 0.38
Net realized and unrealized gain (loss) on in-
vestments........................................ (0.59) 0.41
------- -------
Total from Investment Activities................ (0.20) 0.79
------- -------
Distributions
Net investment income............................ (0.39) (0.38)
Net realized gains............................... (0.06) --
In excess of net realized gains.................. (0.02) --
------- -------
Total Distributions............................. (0.47) (0.38)
------- -------
Net Asset Value, End of Period.................... $ 9.74 $ 10.41
======= =======
Total Return...................................... (1.98%) 8.02%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).................. $16,295 $18,242
Ratio of expenses to average net assets.......... 0.82% 0.88%(c)
Ratio of net investment income to average net as-
sets............................................. 3.86% 3.88%(c)
Ratio of expenses to average net assets*......... 1.41% 1.39%(c)
Ratio of net investment income to average net as-
sets*............................................ 3.26% 3.37%(c)
Portfolio turnover(d)............................ 71.96% 58.80%(b)
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced or reimbursed. If
such fee reductions or reimbursements had not occurred, the ratios would
have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements
-120-
[LOGO OF BB&T FUNDS]
<PAGE>
VIRGINIA INTERMEDIATE TAX-FREE FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
May 17,
1999 to
September 30,
1999(d)
-------------
<S> <C>
Net Asset Value, Beginning of Period............................ $11.24
------
Investment Activities
Net investment income.......................................... 0.30
Net realized and unrealized loss on investments................ (0.38)
------
Total from Investment Activities.............................. (0.08)
------
Distributions
Net investment income.......................................... (0.30)
------
Total Distributions........................................... (0.30)
------
Net Asset Value, End of Period.................................. $10.86
======
Total Return (excludes sales charge)............................ (0.66%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)................................ $ 74
Ratio of expenses to average net assets........................ 1.00% (c)
Ratio of net investment income to average net assets........... 4.05% (c)
Ratio of expenses to average net assets*....................... 1.51% (c)
Ratio of net investment income to average net assets*.......... 3.53% (c)
Portfolio turnover(a).......................................... 27.05% (b)
</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) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
(b) Not annualized.
(c) Annualized.
(d) Period from commencement of operations.
See notes to financial statements
-121-
[LOGO OF BB&T FUNDS]
<PAGE>
VIRGINIA INTERMEDIATE TAX-FREE FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
May 17,
1999 to
September 30,
1999(d)
-------------
<S> <C>
Net Asset Value, Beginning of Period........................... $ 11.24
-------
Investment Activities
Net investment income......................................... 0.17
Net realized and unrealized loss on investments............... (0.38)
-------
Total from Investment Activities............................. (0.21)
-------
Distributions
Net investment income......................................... (0.17)
-------
Total Distributions.......................................... (0.17)
-------
Net Asset Value, End of Period................................. $ 10.86
=======
Total Return................................................... (1.77%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)............................... $79,353
Ratio of expenses to average net assets....................... 0.88% (c)
Ratio of net investment income to average net assets.......... 4.18% (c)
Ratio of expenses to average net assets*...................... 0.99% (c)
Ratio of net investment income to average net assets*......... 4.07% (c)
Portfolio turnover(a)......................................... 27.05% (b)
</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) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
(b) Not annualized.
(c) Annualized.
(d) Period from commencement of operations.
See notes to financial statements
-122-
[LOGO OF BB&T FUNDS]
<PAGE>
GROWTH AND INCOME STOCK FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended September 30,
-------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Pe-
riod.............................. $ 18.48 $ 19.98 $ 15.31 $ 12.97 $ 11.26
------- ------- ------- ------- -------
Investment Activities
Net investment income............ 0.25 0.23 0.26 0.26 0.25
Net realized and unrealized gain
(loss) on investments............ 1.93 (0.17) 5.30 2.43 1.98
------- ------- ------- ------- -------
Total from Investment Activi-
ties............................ 2.18 0.06 5.56 2.69 2.23
------- ------- ------- ------- -------
Distributions
Net investment income............ (0.25) (0.23) (0.26) (0.26) (0.25)
Net realized gains............... (0.81) (1.33) (0.63) (0.09) (0.12)
In excess of net realized gains.. -- -- -- -- (0.15)
------- ------- ------- ------- -------
Total Distributions............. (1.06) (1.56) (0.89) (0.35) (0.52)
------- ------- ------- ------- -------
Net Asset Value, End of Period.... $ 19.60 $ 18.48 $ 19.98 $ 15.31 $ 12.97
======= ======= ======= ======= =======
Total Return (excludes sales
charge)........................... 11.64% 0.10% 37.80% 20.97% 20.62%
Ratios/Supplementary Data:
Net Assets, End of Period (000).. $38,604 $39,817 $34,679 $18,949 $10,842
Ratio of expenses to average net
assets........................... 1.10% 1.10% 1.09% 1.11% 1.07%
Ratio of net investment income to
average net assets............... 1.22% 1.18% 1.52% 1.82% 2.15%
Ratio of expenses to average net
assets*.......................... 1.59% 1.59% 1.58% 1.60% 1.60%
Ratio of net investment income to
average net assets*.............. 0.73% 0.69% 1.03% 1.33% 1.62%
Portfolio turnover(a)............ 13.52% 13.17% 22.66% 19.82% 8.73%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements
-123-
[LOGO OF BB&T FUNDS]
<PAGE>
GROWTH AND INCOME STOCK FUND
Class B Shares
Financial Highlights
See notes to financial statements
<TABLE>
<CAPTION>
For the For the For the January 1,
year ended year ended year ended 1996 to
September 30, September 30, September 30, September 30,
1999 1998 1997 1996 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $ 18.42 $ 19.93 $ 15.29 $13.78
------- ------- ------- ------
Investment Activities
Net investment income.. 0.11 0.09 0.13 0.13
Net realized and
unrealized gain (loss)
on investments......... 1.90 (0.18) 5.28 1.52
------- ------- ------- ------
Total from Investment
Activities............ 2.01 (0.09) 5.41 1.65
------- ------- ------- ------
Distributions
Net investment income.. (0.11) (0.09) (0.14) (0.14)
Net realized gains..... (0.81) (1.33) (0.63) --
------- ------- ------- ------
Total Distributions... (0.92) (1.42) (0.77) (0.14)
------- ------- ------- ------
Net Asset Value, End of
Period.................. $ 19.51 $ 18.42 $ 19.93 $15.29
======= ======= ======= ======
Total Return (excludes
redemption charge)...... 10.73% (0.67%) 36.70% 12.01%(b)
Ratios/Supplementary Da-
ta:
Net Assets, End of
Period (000)........... $38,590 $32,455 $16,690 $3,880
Ratio of expenses to
average net assets..... 1.84% 1.85% 1.84% 1.85%(c)
Ratio of net investment
income to average net
assets................. 0.47% 0.43% 0.77% 1.13%(c)
Ratio of expenses to
average net assets*.... 2.08% 2.09% 2.08% 2.09%(c)
Ratio of net investment
income to average net
assets*................ 0.23% 0.19% 0.53% 0.89%(c)
Portfolio turnover(d).. 13.52% 13.17% 22.66% 19.82%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such 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.
-124-
<PAGE>
GROWTH AND INCOME STOCK FUND
Trust Shares
Financial Highlights
See notes to financial statements
<TABLE>
<CAPTION>
For the year ended September 30,
------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period....................... $ 18.52 $ 20.02 $ 15.34 $ 12.99 $ 11.28
-------- -------- -------- -------- --------
Investment Activities
Net investment income....... 0.30 0.28 0.30 0.29 0.28
Net realized and unrealized
gain (loss) on investments.. 1.93 (0.17) 5.31 2.44 1.98
-------- -------- -------- -------- --------
Total from Investment
Activities................. 2.23 0.11 5.61 2.73 2.26
-------- -------- -------- -------- --------
Distributions
Net investment income....... (0.30) (0.28) (0.30) (0.29) (0.28)
Net realized gains.......... (0.81) (1.33) (0.63) (0.09) (0.12)
In excess of net realized
gains....................... -- -- -- -- (0.15)
-------- -------- -------- -------- --------
Total Distributions........ (1.11) (1.61) (0.93) (0.38) (0.55)
-------- -------- -------- -------- --------
Net Asset Value, End of
Period....................... $ 19.64 $ 18.52 $ 20.02 $ 15.34 $ 12.99
======== ======== ======== ======== ========
Total Return................. 11.89% 0.35% 38.13% 21.31% 20.88%
Ratios/Supplementary Data:
Net Assets, End of Period
(000)....................... $379,321 $348,613 $308,984 $206,659 $145,603
Ratio of expenses to average
net assets.................. 0.84% 0.85% 0.84% 0.86% 0.82%
Ratio of net investment
income to average net
assets...................... 1.47% 1.43% 1.77% 2.07% 2.40%
Ratio of expenses to average
net assets*................. 1.09% 1.09% 1.08% 1.10% 1.10%
Ratio of net investment
income to average net
assets*..................... 1.23% 1.19% 1.53% 1.83% 2.11%
Portfolio turnover(a)....... 13.52% 13.17% 22.66% 19.82% 8.73%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
-125-
<PAGE>
BALANCED FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended September 30,
-------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Pe-
riod.............................. $ 13.82 $ 13.63 $ 11.96 $ 11.04 $ 9.76
------- ------- ------- ------- -------
Investment Activities
Net investment income............ 0.35 0.39 0.45 0.43 0.44
Net realized and unrealized gain
on investments................... 0.74 0.54 2.04 0.92 1.27
------- ------- ------- ------- -------
Total from Investment Activi-
ties............................ 1.09 0.93 2.49 1.35 1.71
------- ------- ------- ------- -------
Distributions
Net investment income............. (0.35) (0.39) (0.45) (0.43) (0.43)
Net realized gains................ (0.73) (0.35) (0.37) -- --
------- ------- ------- ------- -------
Total Distributions............. (1.08) (0.74) (0.82) (0.43) (0.43)
------- ------- ------- ------- -------
Net Asset Value, End of Period.... $ 13.83 $ 13.82 $ 13.63 $ 11.96 $ 11.04
======= ======= ======= ======= =======
Total Return (excludes sales
charge)........................... 7.72% 6.89% 21.76% 12.43% 18.00%
Ratios/Supplementary Data:
Net Assets, End of Period (000).. $21,207 $21,948 $17,234 $12,456 $ 9,257
Ratio of expenses to average net
assets........................... 1.15% 1.17% 1.18% 1.20% 1.17%
Ratio of net investment income to
average net assets............... 2.43% 2.75% 3.63% 3.78% 4.27%
Ratio of expenses to average net
assets*.......................... 1.64% 1.66% 1.67% 1.69% 1.71%
Ratio of net investment income to
average net assets*.............. 1.94% 2.26% 3.14% 3.29% 3.73%
Portfolio turnover(a)............ 35.98% 31.85% 27.07% 19.87% 23.68%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements
-126-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the For the January 1,
year ended year ended year ended 1996 to
September 30, September 30, September 30, September 30,
1999 1998 1997 1996 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period.......... $ 13.76 $ 13.57 $11.91 $11.54
------- ------- ------ ------
Investment Activities
Net investment income.. 0.26 0.28 0.36 0.27
Net realized and
unrealized gain on in-
vestments.............. 0.71 0.55 2.04 0.37
------- ------- ------ ------
Total from Investment
Activities............ 0.97 0.83 2.40 0.64
------- ------- ------ ------
Distributions
Net investment income.. (0.25) (0.29) (0.37) (0.27)
Net realized gains..... (0.73) (0.35) (0.37) --
------- ------- ------ ------
Total Distributions... (0.98) (0.64) (0.74) (0.27)
------- ------- ------ ------
Net Asset Value, End of
Period.................. $ 13.75 $ 13.76 $13.57 $11.91
======= ======= ====== ======
Total Return (excludes
redemption charge)...... 6.82% 6.16% 20.90% 5.67%(b)
Ratios/Supplementary Da-
ta:
Net Assets, End of Pe-
riod (000)............. $21,610 $15,183 $6,360 $2,339
Ratio of expenses to
average net assets..... 1.90% 1.92% 1.93% 1.95%(c)
Ratio of net investment
income to average net
assets................. 1.70% 1.98% 2.88% 3.13%(c)
Ratio of expenses to
average net assets*.... 2.14% 2.16% 2.17% 2.18%(c)
Ratio of net investment
income to average net
assets*................ 1.46% 1.74% 2.64% 2.90%(c)
Portfolio turnover(d).. 35.98% 31.85% 27.07% 19.87%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-127-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the year ended September 30,
---------------------------------------------
1999 1998 1997 1996 1995
-------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period.......................... $ 13.79 $ 13.60 $ 11.93 $ 11.01 $ 9.74
-------- -------- ------- ------- -------
Investment Activities
Net investment income.......... 0.39 0.42 0.49 0.46 0.46
Net realized and unrealized
gain on investments............ 0.74 0.54 2.04 0.92 1.27
-------- -------- ------- ------- -------
Total from Investment Activi-
ties.......................... 1.13 0.96 2.53 1.38 1.73
-------- -------- ------- ------- -------
Distributions
Net investment income.......... (0.39) (0.42) (0.49) (0.46) (0.46)
Net realized gains............. (0.73) (0.35) (0.37) -- --
-------- -------- ------- ------- -------
Total Distributions........... (1.12) (0.77) (0.86) (0.46) (0.46)
-------- -------- ------- ------- -------
Net Asset Value, End of Period.. $ 13.80 $ 13.79 $ 13.60 $ 11.93 $ 11.01
======== ======== ======= ======= =======
Total Return.................... 8.01% 7.18% 22.11% 12.74% 18.23%
Ratios/Supplementary Data:
Net Assets, End of Period
(000).......................... $120,278 $108,943 $88,524 $69,374 $49,794
Ratio of expenses to average
net assets..................... 0.90% 0.92% 0.93% 0.95% 0.92%
Ratio of net investment income
to average net assets.......... 2.69% 3.00% 3.88% 4.03% 4.51%
Ratio of expenses to average
net assets*.................... 1.14% 1.16% 1.17% 1.19% 1.21%
Ratio of net investment income
to average net assets*......... 2.45% 2.76% 3.64% 3.79% 4.22%
Portfolio turnover(a).......... 35.98% 31.85% 27.07% 19.87% 23.68%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such fee
reductions had not occurred, the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements
-128-
[LOGO OF BB&T FUNDS]
<PAGE>
LARGE COMPANY GROWTH FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the October 3,
year ended 1997 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $ 9.62 $10.00
------ ------
Investment Activities
Net investment loss............................. (0.04) --
Net realized and unrealized gain (loss) on in-
vestments....................................... 2.94 (0.25)
------ ------
Total from Investment Activities............... 2.90 (0.25)
------ ------
Distributions
Net investment income........................... -- (0.03)
Net realized gains.............................. (0.56) --
In excess of net realized gains................. -- (0.10)
------ ------
Total Distributions............................ (0.56) (0.13)
------ ------
Net Asset Value, End of Period................... $11.96 $ 9.62
====== ======
Total Return (excludes sales charge)............. 30.93% (2.54%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)................. $5,912 $1,938
Ratio of expenses to average net assets......... 1.22% 1.39% (c)
Ratio of net investment loss to average net as-
sets............................................ (0.34%) (0.04%)(c)
Ratio of expenses to average net assets*........ 1.71% 1.87% (c)
Ratio of net investment loss to average net as-
sets*........................................... (0.83%) (0.52%)(c)
Portfolio turnover(d)........................... 67.59% 108.36% (b)
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-129-
[LOGO OF BB&T FUNDS]
<PAGE>
LARGE COMPANY GROWTH FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the October 3,
year ended 1997 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $ 9.58 $ 10.00
------- -------
Investment Activities
Net investment loss............................. (0.12) (0.02)
Net realized and unrealized gain (loss) on
investments..................................... 2.92 (0.29)
------- -------
Total from Investment Activities................ 2.80 (0.31)
------- -------
Distributions
Net investment income........................... -- (0.01)
Net realized gains.............................. (0.56) --
In excess of net realized gains................. -- (0.10)
------- -------
Total Distributions............................. (0.56) (0.11)
------- -------
Net Asset Value, End of Period................... $ 11.82 $ 9.58
======= =======
Total Return (excludes redemption charge)........ 29.97% (3.13%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)................. $12,289 $ 3,985
Ratio of expenses to average net assets......... 1.97% 2.14% (c)
Ratio of net investment loss to average net
assets.......................................... (1.08%) (0.78%)(c)
Ratio of expenses to average net assets*........ 2.21% 2.37% (c)
Ratio of net investment loss to average net
assets*......................................... (1.32%) (1.01%)(c)
Portfolio turnover(d)........................... 67.59% 108.36% (b)
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-130-
[LOGO OF BB&T FUNDS]
<PAGE>
LARGE COMPANY GROWTH FUND
Trust Shares
Financial Highlights
See notes to financial statements
<TABLE>
<CAPTION>
For the October 3,
year ended 1997 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $ 9.63 $ 10.00
------- -------
Investment Activities
Net investment income (loss).................... (0.01) 0.04
Net realized and unrealized gain (loss) on in-
vestments....................................... 2.93 (0.27)
------- -------
Total from Investment Activities................ 2.92 (0.23)
------- -------
Distributions
Net investment income........................... -- (0.04)
Net realized gains.............................. (0.56) (0.10)
------- -------
Total Distributions............................. (0.56) (0.14)
------- -------
Net Asset Value, End of Period................... $ 11.99 $ 9.63
======= =======
Total Return..................................... 31.15% (2.33%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)................. $90,635 $50,975
Ratio of expenses to average net assets......... 0.98% 1.06% (c)
Ratio of net investment income (loss) to average
net assets...................................... (0.08%) 0.41% (c)
Ratio of expenses to average net assets*........ 1.22% 1.30% (c)
Ratio of net investment income (loss) to average
net assets*..................................... (0.32%) 0.17% (c)
Portfolio turnover(d)........................... 67.59% 108.36% (b)
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such 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.
-131-
<PAGE>
SMALL COMPANY GROWTH FUND
Class A Shares
Financial Highlights
See notes to financial statements
<TABLE>
<CAPTION>
December 7,
For the year ended September 30, 1994 to
----------------------------------------- September 30,
1999 1998 1997 1996 1995 (a)
-------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period.......... $ 17.50 $ 23.33 $ 21.06 $ 14.53 $10.00
-------- -------- -------- ------- ------
Investment Activities
Net investment loss.... (0.28) (0.29) (0.15) (0.20) (0.08)
Net realized and
unrealized gain (loss)
on investments......... 7.70 (5.23) 2.44 6.73 4.61
-------- -------- -------- ------- ------
Total from Investment
Activities............. 7.42 (5.52) 2.29 6.53 4.53
-------- -------- -------- ------- ------
Distributions
In excess of net real-
ized gains............. -- (0.31) (0.02) -- --
-------- -------- -------- ------- ------
Total Distributions.... -- (0.31) (0.02) -- --
-------- -------- -------- ------- ------
Net Asset Value, End of
Period.................. $ 24.92 $ 17.50 $ 23.33 $ 21.06 $14.53
======== ======== ======== ======= ======
Total Return (excludes
sales charge)........... 42.32% (23.81%) 10.90% 44.94% 45.30% (b)
Ratios/Supplementary Da-
ta:
Net Assets, End of Pe-
riod (000)............. $ 11,336 $ 9,456 $ 12,676 $ 7,413 $1,096
Ratio of expenses to
average net assets..... 1.80% 1.86% 1.89% 2.01% 2.50% (c)
Ratio of net investment
loss to average net as-
sets................... (1.23%) (1.36%) (1.29%) (1.26%) (1.56%)(c)
Ratio of expenses to
average net assets*.... 2.05% 2.11% 2.14% 2.26% 2.84% (c)
Ratio of net investment
loss to average net as-
sets*.................. (1.48%) (1.61%) (1.54%) (1.51%) (1.90%)(c)
Portfolio turnover(d).. 184.39% 157.44% 80.66% 71.62% 46.97% (b)
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such 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.
-132-
<PAGE>
SMALL COMPANY GROWTH FUND
Class B Shares
Financial Highlights
See notes to financial statements
<TABLE>
<CAPTION>
For the For the For the January 1,
year ended year ended year ended 1996 to
September 30, September 30, September 30, September 30,
1999 1998 1997 1996 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period.......... $ 17.13 $23.02 $20.92 $15.24
------- ------ ------ ------
Investment Activities
Net investment loss.... (0.41) (0.39) (0.20) (0.21)
Net realized and
unrealized gain (loss)
on investments......... 7.49 (5.19) 2.32 5.89
------- ------ ------ ------
Total from Investment
Activities............. 7.08 (5.58) 2.12 5.68
------- ------ ------ ------
Distributions
In excess of net real-
ized gains............. -- (0.31) (0.02) --
------- ------ ------ ------
Total Distributions.... -- (0.31) (0.02) --
------- ------ ------ ------
Net Asset Value, End of
Period.................. $ 24.21 $17.13 $23.02 $20.92
======= ====== ====== ======
Total Return (excludes
redemption charge)...... 41.25% (24.40%) 10.16% 37.27% (b)
Ratios/Supplementary Da-
ta:
Net Assets, End of Pe-
riod (000)............. $11,054 $8,609 $8,869 $3,200
Ratio of expenses to
average net assets..... 2.55% 2.61% 2.64% 2.72% (c)
Ratio of net investment
loss to average net as-
sets................... (1.98%) (2.11%) (2.04%) (2.01%)(c)
Portfolio turnover(d).. 184.39% 157.44% 80.66% 71.62%
</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.
-133-
<PAGE>
SMALL COMPANY GROWTH FUND
Trust Shares
Financial Highlights
See notes to financial statements
<TABLE>
<CAPTION>
December 7,
For the year ended September 30, 1994 to
-------------------------------------- September 30,
1999 1998 1997 1996 1995 (a)
-------- ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period.......... $ 17.69 $ 23.52 $ 21.18 $ 14.57 $ 10.00
-------- ------- ------- ------- -------
Investment Activities
Net investment loss.... (0.22) (0.20) (0.11) (0.17) (0.07)
Net realized and
unrealized gain (loss)
on investments......... 7.78 (5.32) 2.47 6.78 4.64
-------- ------- ------- ------- -------
Total from Investment
Activities............. 7.56 (5.52) 2.36 6.61 4.57
-------- ------- ------- ------- -------
Distributions
In excess of net real-
ized gains............. -- (0.31) (0.02) -- --
-------- ------- ------- ------- -------
Total Distributions.... -- (0.31) (0.02) -- --
-------- ------- ------- ------- -------
Net Asset Value, End of
Period.................. $ 25.25 $ 17.69 $ 23.52 $ 21.18 $ 14.57
======== ======= ======= ======= =======
Total Return............ 42.66% (23.62%) 11.17% 45.37% 45.70% (b)
Ratios/Supplementary Da-
ta:
Net Assets, End of Pe-
riod (000)............. $105,725 $65,180 $58,660 $36,373 $16,962
Ratio of expenses to
average net assets..... 1.54% 1.61% 1.64% 1.79% 2.33% (c)
Ratio of net investment
loss to average net as-
sets................... (0.98%) (1.11%) (1.04%) (1.00%) (1.34%)(c)
Ratio of expenses to
average net assets*.... 1.55% 1.61% 1.64% 1.79% 2.24% (c)
Ratio of net investment
loss to average net as-
sets*.................. (0.98%) (1.11%) (1.04%) (1.00%) (1.43%)(c)
Portfolio turnover(d).. 184.39% 157.44% 80.66% 71.62% 46.97% (b)
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such 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.
-134-
<PAGE>
INTERNATIONAL FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the January 2,
year ended year ended 1997 to
September 30, September 30, September 30,
1999 1998 1997 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Peri-
od................................. $ 9.91 $11.24 $10.00
------ ------ ------
Investment Activities
Net investment income (loss)...... (0.01) 0.03 0.03
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions............. 2.78 (1.09) 1.25
------ ------ ------
Total from Investment Activi-
ties............................. 2.77 (1.06) 1.28
------ ------ ------
Distributions
Net investment income............. (0.03) (0.03) (0.02)
Net realized gains................ (0.17) (0.23) --
In excess of net investment in-
come.............................. -- (0.01) (0.02)
------ ------ ------
Total Distributions.............. (0.20) (0.27) (0.04)
------ ------ ------
Net Asset Value, End of Period..... $12.48 $ 9.91 $11.24
====== ====== ======
Total Return (excludes sales
charge)............................ 28.33% (9.60%) 12.84% (b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)... $1,906 $1,314 $ 833
Ratio of expenses to average net
assets............................ 1.81% 1.75% 1.97% (c)
Ratio of net investment income
(loss) to average net assets...... (0.07%) 0.26% 0.14% (c)
Ratio of expenses to average net
assets*........................... 2.06% 2.01% 2.24% (c)
Ratio of net investment income
(loss) to average net assets*..... (0.32%) 0.00% (0.13%)(c)
Portfolio turnover(d)............. 82.00% 53.27% 41.45% (b)
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-135-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the January 2,
year ended year ended 1997 to
September 30, September 30, September 30,
1999 1998 1997 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Peri-
od................................. $ 9.85 $ 11.23 $10.00
------ ------- ------
Investment Activities
Net investment loss............... (0.10) (0.04) (0.01)
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions............. 2.77 (1.10) 1.26
------ ------- ------
Total from Investment Activi-
ties............................. 2.67 (1.14) 1.25
------ ------- ------
Distributions
Net investment income............. (0.01) -- --
Net realized gains................ (0.17) (0.23) --
In excess of net investment in-
come.............................. -- (0.01) (0.02)
------ ------- ------
Total Distributions.............. (0.18) (0.24) (0.02)
------ ------- ------
Net Asset Value, End of Period..... $12.34 $ 9.85 $11.23
====== ======= ======
Total Return (excludes redemption
charge)............................ 27.46% (10.29%) 12.51% (b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)... $2,378 $ 1,923 $1,179
Ratio of expenses to average net
assets............................ 2.56% 2.50% 2.69% (c)
Ratio of net investment loss to
average net assets................ (0.84%) (0.50%) (0.62%)(c)
Ratio of expenses to average net
assets*........................... 2.56% 2.51% 2.74% (c)
Ratio of net investment loss to
average net assets*............... (0.84%) (0.51%) (0.66%)(c)
Portfolio turnover(d)............. 82.00% 53.27% 41.45% (b)
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-136-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the January 2,
year ended year ended 1997 to
September 30, September 30, September 30,
1999 1998 1997 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Peri-
od.................................. $ 9.95 $ 11.28 $ 10.00
------- ------- -------
Investment Activities
Net investment income.............. 0.02 0.06 0.03
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions.............. 2.80 (1.10) 1.30
------- ------- -------
Total from Investment Activities.. 2.82 (1.04) 1.33
------- ------- -------
Distributions
Net investment income.............. (0.04) (0.06) (0.02)
Net realized gains................. (0.17) (0.23) --
In excess of net investment in-
come............................... -- -- (0.03)
------- ------- -------
Total Distributions............... (0.21) (0.29) (0.05)
------- ------- -------
Net Asset Value, End of Period...... $ 12.56 $ 9.95 $ 11.28
======= ======= =======
Total Return........................ 28.70% (9.45%) 13.34%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).... $97,447 $70,356 $52,373
Ratio of expenses to average net
assets............................. 1.56% 1.50% 1.79%(c)
Ratio of net investment income to
average net assets................. 0.18% 0.50% 0.32%(c)
Ratio of expenses to average net
assets*............................ 1.56% 1.51% 1.81%(c)
Ratio of net investment income to
average net assets*................ 0.18% 0.49% 0.30%(c)
Portfolio turnover(d).............. 82.00% 53.27% 41.45%
</TABLE>
- ----
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-137-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER CONSERVATIVE GROWTH FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the January 29,
year ended 1998 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $10.05 $10.09
------ ------
Investment Activities
Net investment income............................ 0.30 0.19
Net realized and unrealized gain (loss) on in-
vestments with affiliates........................ 0.52 (0.01)
------ ------
Total from Investment Activities................ 0.82 0.18
------ ------
Distributions
Net investment income............................ (0.31) (0.22)
Net realized gains............................... (0.17) --
------ ------
Total Distributions............................. (0.48) (0.22)
------ ------
Net Asset Value, End of Period.................... $10.39 $10.05
====== ======
Total Return (excludes sales charge).............. 8.19% 1.89%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).................. $ 532 $ 119
Ratio of expenses to average net assets.......... 0.62% 0.83%(c)
Ratio of net investment income to average net as-
sets............................................. 2.95% 2.91%(c)
Ratio of expenses to average net assets*......... 1.07% 1.33%(c)
Ratio of net investment income to average net as-
sets*............................................ 2.49% 2.41%(c)
Portfolio turnover(d)............................ 16.45% 4.28%
</TABLE>
- ----
The expense ratios noted do not include the effect of the expenses of the
underlying funds.
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-138-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER CONSERVATIVE GROWTH FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
January 29,
1999 to
September 30,
1999 (a)
-------------
<S> <C>
Net Asset Value, Beginning
of Period................. $10.54
------
Investment Activities
Net investment income.... 0.21
Net realized and
unrealized loss on in-
vestments with affili-
ates..................... (0.15)
------
Total from Investment
Activities.............. 0.06
------
Distributions
Net investment income.... (0.21)
------
Total Distributions..... (0.21)
------
Net Asset Value, End of
Period.................... $10.39
======
Total Return (excludes re-
demption charge).......... 0.59%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000).................... $ 110
Ratio of expenses to av-
erage net assets......... 1.35%(c)
Ratio of net investment
income to average net as-
sets..................... 3.92%(c)
Ratio of expenses to av-
erage net assets*........ 1.75%(c)
Ratio of net investment
income to average net as-
sets*.................... 3.52%(c)
Portfolio turnover(d).... 16.45%
</TABLE>
- ----
The expense ratios noted above do not include the effect of the expenses of the
underlying funds.
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-139-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER CONSERVATIVE GROWTH FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the October 2,
year ended 1997 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $ 10.08 $ 10.00
------- -------
Investment Activities
Net investment income............................ 0.32 0.32
Net realized and unrealized gain on investments
with affiliates.................................. 0.53 0.08
------- -------
Total from Investment Activities................ 0.85 0.40
------- -------
Distributions
Net investment income............................ (0.33) (0.32)
Net realized gains............................... (0.17) --
------- -------
Total Distributions............................. (0.50) (0.32)
------- -------
Net Asset Value, End of Period.................... $ 10.43 $ 10.08
======= =======
Total Return...................................... 8.47% 3.95%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).................. $32,590 $23,773
Ratio of expenses to average net assets.......... 0.38% 0.47%(c)
Ratio of net investment income to average net as-
sets............................................. 3.15% 3.12%(c)
Ratio of expenses to average net assets*......... 0.58% 0.67%(c)
Ratio of net investment income to average net as-
sets*............................................ 2.95% 2.92%(c)
Portfolio turnover(d)............................ 16.45% 4.28%
</TABLE>
- ----
The expense ratios noted above do not include the effect of the expenses of the
underlying funds.
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-140-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER MODERATE GROWTH FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the January 29,
year ended 1998 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $ 9.85 $10.01
------ ------
Investment Activities
Net investment income............................ 0.22 0.15
Net realized and unrealized gain (loss) on in-
vestments with affiliates........................ 1.06 (0.15)
------ ------
Total from Investment Activities................ 1.28 --
------ ------
Distributions
Net investment income............................ (0.23) (0.16)
Net realized gains............................... (0.25) --
------ ------
Total Distributions............................. (0.48) (0.16)
------ ------
Net Asset Value, End of Period.................... $10.65 $ 9.85
====== ======
Total Return (excludes sales charge).............. 13.07% 0.10%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).................. $1,635 $1,146
Ratio of expenses to average net assets.......... 0.68% 0.93%(c)
Ratio of net investment income to average net as-
sets............................................. 1.93% 1.93%(c)
Ratio of expenses to average net assets*......... 1.13% 1.39%(c)
Ratio of net investment income to average net as-
sets*............................................ 1.48% 1.47%(c)
Portfolio turnover(d)............................ 17.33% 4.85%
</TABLE>
- ----
The expense ratios noted above do not include the effect of the expenses of the
underlying funds.
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-141-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER MODERATE GROWTH FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
January 29,
1999 to
September 30,
1999 (a)
-------------
<S> <C>
Net Asset Value, Beginning of Period............................. $10.64
------
Investment Activities
Net investment income........................................... 0.14
------
Total from Investment Activities............................... 0.14
------
Distributions
Net investment income........................................... (0.14)
------
Total Distributions............................................. (0.14)
------
Net Asset Value, End of Period................................... $10.64
======
Total Return (excludes redemption charge)........................ 1.29%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)................................. $ 197
Ratio of expenses to average net assets......................... 1.47%(c)
Ratio of net investment income to average net assets............ 2.54%(c)
Ratio of expenses to average net assets*........................ 1.78%(c)
Ratio of net investment income to average net assets*........... 2.23%(c)
Portfolio turnover(d)........................................... 17.33%
</TABLE>
- ----
The expense ratios noted above do not include the effect of the expenses of the
underlying funds.
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-142-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER MODERATE GROWTH FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the October 2,
year ended 1997 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $ 9.85 $ 10.00
------- -------
Investment Activities
Net investment income............................ 0.25 0.23
Net realized and unrealized gain (loss) on in-
vestments with affiliates........................ 1.05 (0.16)
------- -------
Total from Investment Activities................ 1.30 0.07
------- -------
Distributions
Net investment income............................ (0.25) (0.22)
Net realized gains............................... (0.25) --
------- -------
Total Distributions............................. (0.50) (0.22)
------- -------
Net Asset Value, End of Period.................... $ 10.65 $ 9.85
======= =======
Total Return...................................... 13.34% 0.68%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).................. $26,800 $21,682
Ratio of expenses to average net assets.......... 0.43% 0.46%(c)
Ratio of net investment income to average net as-
sets............................................. 2.17% 2.21%(c)
Ratio of expenses to average net assets*......... 0.63% 0.66%(c)
Ratio of net investment income to average net as-
sets*............................................ 1.97% 2.01%(c)
Portfolio turnover(d)............................ 17.33% 4.85%
</TABLE>
- ----
The expense ratios noted above do not include the effect of the expenses of the
underlying funds.
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-143-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER GROWTH FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the January 29,
year ended 1998 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $ 9.67 $ 9.93
------ ------
Investment Activities
Net investment income........................... 0.15 0.10
Net realized and unrealized gain (loss) on in-
vestments with affiliates....................... 1.46 (0.26)
------ ------
Total from Investment Activities............... 1.61 (0.16)
------ ------
Distributions
Net investment income........................... (0.17) (0.10)
Net realized gains.............................. (0.32) --
------ ------
Total Distributions............................ (0.49) (0.10)
------ ------
Net Asset Value, End of Period................... $10.79 $ 9.67
====== ======
Total Return (excludes sales charge)............. 16.81% (1.45%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)................. $ 990 $ 276
Ratio of expenses to average net assets......... 0.69% 0.90% (c)
Ratio of net investment income to average net
assets.......................................... 1.24% 1.16% (c)
Ratio of expenses to average net assets*........ 1.14% 1.38% (c)
Ratio of net investment income to average net
assets*......................................... 0.78% 0.68% (c)
Portfolio turnover(d)........................... 17.93% 7.69%
</TABLE>
- ----
The expense ratios noted above do not include the effect of the expenses of the
underlying funds.
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-144-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER GROWTH FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
January 29,
1999 to
September 30,
1999 (a)
-------------
<S> <C>
Net Asset Value, Beginning
of Period................. $10.69
------
Investment Activities
Net investment income.... 0.10
Net realized and
unrealized gain on in-
vestments with affili-
ates..................... 0.10
------
Total from Investment
Activities.............. 0.20
------
Distributions
Net investment income.... (0.10)
------
Total Distributions..... (0.10)
------
Net Asset Value, End of
Period.................... $10.79
======
Total Return (excludes re-
demption charge).......... 1.87%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000).................... $ 163
Ratio of expenses to av-
erage net assets......... 1.94%(c)
Ratio of net investment
income to average net as-
sets..................... 1.16%(c)
Ratio of expenses to av-
erage net assets*........ 2.14%(c)
Ratio of net investment
income to average net as-
sets*.................... 0.96%(c)
Portfolio turnover(d).... 17.93%
</TABLE>
- ----
The expense ratios noted above do not include the effect of the expenses of the
underlying funds.
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-145-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER GROWTH FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the October 2,
year ended 1997 to
September 30, September 30,
1999 1998 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $ 9.68 $ 10.00
------- -------
Investment Activities
Net investment income........................... 0.17 0.16
Net realized and unrealized gain (loss) on in-
vestments with affiliates....................... 1.45 (0.32)
------- -------
Total from Investment Activities............... 1.62 (0.16)
------- -------
Distributions
Net investment income........................... (0.19) (0.16)
Net realized gains.............................. (0.32) --
------- -------
Total Distributions............................ (0.51) (0.16)
------- -------
Net Asset Value, End of Period................... $ 10.79 $ 9.68
======= =======
Total Return..................................... 16.96% (1.72%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)................. $24,063 $21,370
Ratio of expenses to average net assets......... 0.46% 0.47% (c)
Ratio of net investment income to average net
assets.......................................... 1.43% 1.53% (c)
Ratio of expenses to average net assets*........ 0.66% 0.67% (c)
Ratio of net investment income to average net
assets*......................................... 1.23% 1.33% (c)
Portfolio turnover(d)........................... 17.93% 7.69%
</TABLE>
- ----
The expense ratios noted above do not include the effect of the expenses of the
underlying funds.
* During the period, certain fees were voluntarily reduced. If such 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.
See notes to financial statements
-146-
[LOGO OF BB&T FUNDS]
<PAGE>
Independent Auditors' Report
The Shareholders and Board of Trustees of the
BB&T Funds:
We have audited the accompanying statements of assets and liabilities of the
BB&T Funds comprised of the Prime Money Market Fund, U.S. Treasury Money Market
Fund, Short-Intermediate U.S. Government Income Fund, Intermediate U.S.
Government Bond Fund, North Carolina Intermediate Tax-Free Fund, South Carolina
Intermediate Tax-Free Fund, Virginia Intermediate Tax-Free Fund, Growth and
Income Stock Fund, Balanced Fund, Large Company Growth Fund, Small Company
Growth Fund, International Equity Fund, Capital Manager Conservative Growth
Fund, Capital Manager Moderate Growth Fund and Capital Manager Growth Fund,
including the schedules of portfolio investments, as of September 30, 1999, and
the related statements of operations, statements of changes in net assets,
statements of cash flows and the financial highlights for each of the periods
indicated herein. These financial statements and the financial highlights are
the responsibility of the BB&T Funds' management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
September 30, 1999, by confirmation with the custodian, brokers and other
appropriate audit procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds comprising the BB&T Funds as of September 30, 1999,
the results of their operations and their cash flows, the changes in their net
assets and the financial highlights for each of the periods indicated herein,
in conformity with generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
November 12, 1999
-147-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T Funds
Sensible Investing for Generations/TM/
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
3435 Stelzer Road
Columbus, OH 43219
AUDITORS
KPMG LLP
Two Nationwide Plaza, Suite 1600
Columbus, OH 43215
September 30, 1999
