<PAGE> 1
BB&T MUTUAL FUNDS GROUP
CLASS A AND B SHARES
Supplement dated February 9, 1999
to Prospectus dated February 1, 1999
Capitalized terms not defined in this Supplement have the meaning assigned
to them in the Prospectus.
The financial highlights for the North Carolina Intermediate Tax-Free Fund
on page 15 are deleted in their entirety and replaced as follows:
<TABLE>
<CAPTION>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
---------------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997 SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------ ------------------ ------------------ ------------------
CLASS A CLASS A CLASS A CLASS A
------- ------- ------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD... $ 10.27 $10.05 $10.15 $ 9.78
------- ------ ------ ------
INVESTMENT ACTIVITIES
Net investment income................. 0.42 0.40 0.36 0.36
Net realized and unrealized gains
(losses) on investments............. 0.25 0.22 (0.10) 0.37
------- ------ ------ ------
Total from Investment Activities.... 0.67 0.62 0.26 0.73
------- ------ ------ ------
DISTRIBUTIONS
Net investment income................. (0.42) (0.40) (0.36) (0.36)
Net realized gains.................... -- -- -- --
------- ------ ------ ------
Total Distributions................. (0.42) (0.40) (0.36) (0.36)
------- ------ ------ ------
NET ASSET VALUE, END OF PERIOD......... $ 10.52 $10.27 $10.05 $10.15
======= ====== ====== ======
Total Return (excludes sales charge)... 6.63% 6.28% 2.61% 7.61%
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)....... $11,592 $9,419 $9,261 $8,717
Ratio of expenses to average net
assets.............................. 0.96% 1.00% 1.11% 1.05%
Ratio of net investment income to
average net assets.................. 4.03% 3.94% 3.58% 3.63%
Ratio of expenses to average net
assets*............................. 1.48% 1.50% 1.61% 1.63%
Ratio of net investment income to
average net assets*................. 3.51% 3.44% 3.08% 3.05%
Portfolio turnover(d)................. 32.63% 16.98% 20.90% 9.38%
<CAPTION>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
------------------------------------------
OCTOBER 16, 1992
FOR THE YEAR ENDED TO
SEPTEMBER 30, 1994 SEPTEMBER 30, 1993(a)
------------------ ---------------------
CLASS A CLASS A
------- -------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD... $ 10.29 $ 10.00
------- -------
INVESTMENT ACTIVITIES
Net investment income................. 0.36 0.36
Net realized and unrealized gains
(losses) on investments............. (0.50) 0.29
------- -------
Total from Investment Activities.... (0.14) 0.65
------- -------
DISTRIBUTIONS
Net investment income................. (0.36) (0.36)
Net realized gains.................... (0.01) --
------- -------
Total Distributions................. (0.37) (0.36)
------- -------
NET ASSET VALUE, END OF PERIOD......... $ 9.78 $ 10.29
======= =======
Total Return (excludes sales charge)... (1.33)% 6.60%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, End of Period (000)....... $11,083 $13,695
Ratio of expenses to average net
assets.............................. 0.75% 0.43%(c)
Ratio of net investment income to
average net assets.................. 3.63% 3.80%(c)
Ratio of expenses to average net
assets*............................. 1.66% 1.77%(c)
Ratio of net investment income to
average net assets*................. 2.72% 2.45%(c)
Portfolio turnover(d)................. 0.56% 5.92%
</TABLE>
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* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT WITH THE PROSPECTUS
FOR FUTURE REFERENCE.
