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Annual
Report
To Shareholders
September 30, 2000
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TABLE OF CONTENTS
Letter from the Chairman and the Investment Advisor
Page 2
Performance Report
Page 4
Statements of Assets and Liabilities
Page 29
Statements of Operations
Page 37
Statements of Changes in Net Assets
Page 41
Schedules of Portfolio Investments
Page 49
Notes to Financial Statements
Page 91
Financial Highlights
Page 112
Independent Auditors' Report
Page 156
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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, 2000, a period that tested investors' fortitude, but that ultimately proved
profitable for many long-term shareholders that stayed true to their investment
plan.
This past year witnessed a number of significant and positive developments for
our fund family. First, in December 1999, we introduced the BB&T Intermediate
Corporate Bond Fund, which is designed to enable our shareholders to take
advantage of historically high yields that often are available in the corporate
sector of the fixed-income market.
In December, we also formally established four portfolio management teams, each
responsible for a specific segment of our fund family: fixed-income, balanced,
value equity and growth equity portfolios. In the nine months since this cross-
disciplinary team approach was initiated, we have already seen it achieve its
mission of pooling our managers' expertise and experience, to the benefit of
our shareholders.
The growth of our fund family was further augmented by the very recent launch
of the BB&T Equity Index Fund.+* The Fund invests in The Barclays S&P 500 Index
Master Portfolio, which invests in all, or a representative sample, of the
stocks that make up the S&P 500 Stock Index.
With the addition of the Intermediate Corporate Bond and Equity Index Funds,
our shareholders now have access to a broad array of investment choices,
spanning a wide expanse of the stock and bond universes.
Stocks: After a sharp climb, reality struck
As we wrote to you in our last report (for the six months ended March 31),
large-company growth stocks continued their seemingly unstoppable climb through
the second week in March. The technology, telecommunications and biotechnology
sectors, in particular, reached dizzying levels in an extraordinarily short
time. We believed valuations in many of these stocks were unsustainable, and we
were proven correct. Between March 10 and May 23, the Nasdaq Composite
Index,/2/ home to most technology issues, fell a stunning 37 percent. Other
major indices followed suit, though not as precipitously.
Over the next four months, the market staged a number of rally attempts, each
one compromised by investors' worries about corporate earnings, a slowing
economy and/or the prospect of still-higher interest rates.
In fact, it has been the Federal Reserve's (the "Fed") determination to stifle
inflationary pressures, through a long series of rate hikes, that helped weaken
the bull market. Higher rates generally spell trouble for companies and
threaten corporate profits.
Nonetheless, when the 12-month period had ended, despite the volatility, all of
the major indices finished higher for the fiscal year. Many investors who
steadfastly refused to buckle under and flee from stocks found themselves with
comfortable profits for the period--again proving the value of taking a long-
term perspective.
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+The performance of the Fund is expected to be lower than that of the S&P 500
Index because of Fund fees and expenses. Securities in which the Fund will
invest may involve substantial risk and may be subject to sudden and severe
price declines.
*For more complete information including charges, expenses and ongoing fees,
please call 1-800-228-1872 to receive a prospectus. Read the prospectus
carefully before investing or sending money.
/1/The S&P 500 Stock Index is an unmanaged index generally considered to be
representative of the performance of the stock market as a whole. Investors
cannot invest directly in an index, although they can invest in its underlying
securities.
/2/The Nasdaq Composite Index is a market capitalization price-only index that
tracks the performance of domestic common stocks traded on the regular Nasdaq
market, as well as National Market System-traded foreign common stock and
American Depositary Receipts (ADRs).
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Bonds: Holding up well, despite the Fed
Beginning in June 1999, the Fed raised short-term rates seven times through May
2000. While higher rates can make life difficult for stocks, bond prices can
absolutely fall apart under the weight of tighter credit.
Despite the pressure, fixed-income securities as a group did not suffer from
the Fed's actions. Bonds at the shorter end of the yield curve, the area most
affected by rising rates, did struggle. Longer-term securities, especially
those issued by the U.S. Treasury, actually did quite well for the year as a
whole--helped in large measure by the Treasury's announcement that it would buy
back long-term bonds.
Looking ahead: More positives than negatives
So where do we go from here? We understand that potential difficulty lies in
the sharp rise in oil prices and its trickle-down impact on consumer spending;
but we think oil prices are likely to come down. We see an economy that's
slowing from its previous white-hot level; yet, we believe economic growth will
continue at an acceptable pace, reducing the threat of a near-term recession.
We acknowledge that corporate earnings may be less robust going forward, but
overall, the earnings outlook remains solid.
At the same time, we feel that the valuation of many stocks, particularly in
the small- and mid-cap arenas, are compelling. Indeed, the market's underlying
fundamentals look healthier now than they did a year ago.
Overall, we are moderately optimistic about both stocks and bonds. Doubtless,
volatility will continue to cause some measure of confusion and anxiety from
time to time. We are confident that our proprietary risk-management techniques
and consistent investment discipline, coupled with effective diversification
across different sectors and asset classes, can help our shareholders profit in
the months and years to come.
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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BB&T International Equity Fund+
For the 12-month period ended September 30, 2000, the Fund produced a total
return of 4.75% (Class A shares without sales charge), compared to 3.18% for
its benchmark, the Morgan Stanley Capital International Europe, Australasia and
Far East (EAFE) Index.
A year of two very different halves
International markets certainly were not immune to the dynamic volatility that
roiled U.S. stocks. During the first half of our fiscal year, the technology,
media and telecommunication sectors--in which we held healthy weightings--
performed very well. Consequently, the Fund posted very strong performance
during those six months. However, during much of the second calendar quarter of
2000, actually starting in mid-March, the great bull market in technology fell
apart--not just in the United States, but around the world. As tech stocks
declined, money rotated into financial, health-care and domestic food
companies.
In response to what was happening, we took some money off the table, especially
in the telecom sector. We sold some of our shares in British Telecommunications
PLC (1.66% of the Fund's net assets), Telefonica SA (1.65%) and Vodafone Group
PLC (2.64%), among others. We used the proceeds mainly to buy attractively
priced, European financial stocks--such as Barclay PLC (1.87%), ING Groep NV
(2.00%), Fortis NV (1.57%) and Deutsche Bank AG (2.09%).*
Throughout the period, we gradually increased our weighting in Japanese stocks.
We believed, and still believe, that the economic numbers in Japan are getting
better. The country's economy has recovered from negative growth to an
annualized growth rate of four percent. We're beginning to see strong capital
investment numbers, but consumer demand is still weak. Therefore, while we
remain positive about our positions in Japan, we have not yet seen our optimism
reflected in stock prices. If consumer spending picks up, we anticipate being
rewarded by our growing allocation to Japanese securities.
As of September 30, 2000, approximately 48.9% of the Fund's holdings were
invested in Continental Europe, 14.0% in the United Kingdom, 22.8% in Japan,
1.5% in other Pacific Basin countries, 7.2% in the world's emerging markets and
5.6% in cash and cash equivalents.*
The Fund's top five equity holdings were Nokia OYJ (2.79% of the Fund's net
assets), Vodafone Group PLC (2.64%), Novartis AG (2.39%), Total Fina Elf SA
(2.32%) and Deutsche Bank AG (2.09%).*
Some positive indicators among the technology gloom
As the period ended, we were holding a bit more cash than usual. This was
because the world's equity markets are in generally difficult straits. The
pressure on American technology stocks remains, which has had a tangible effect
on international markets. Investors around the world also are concerned about
the amount of debt that telecom companies have incurred in building new
cellular infrastructures, and about higher-than-expected oil prices, which are
driving up the cost of doing business. All this uncertainty has driven stock
prices downward.
At the same time, a number of sectors continue to perform well: banking,
insurance, pharmaceuticals and consumer products. There has been a rotation
away from technology--back toward some of the forgotten, more traditional
businesses. This shows us that investors haven't abandoned stocks. We believe
that worldwide growth, while slowing, will be sustainable, and we remain
generally positive about long-term equity prospects going forward.
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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
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Average Annual Total Return
As of 9/30/00
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Inception Since
Class Date 1 Year Inception
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Class A Shares* 1/2/97 0.02% 7.47%
Class B Shares** 1/2/97 -0.09% 7.40%
Trust Shares 1/2/97 4.96% 9.12%
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* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge (maximum 5.00%).
[GRAPH]
Value of $10,000 Investment
Trust Class A Class B Morgan Stanley
Shares Shares* Shares** EAFE Index
------- ------- -------- --------------
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 12,864 13,293
9/30/2000 13,864 13,096 13,062 13,716
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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 Europe, Australia and Far East (EAFE)
Index, 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. Investors cannot invest directly in an
index, although they can invest in its underlying securities.
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BB&T Small Company Growth Fund+
For the 12-month period ended September 30, 2000, the Fund produced an
extraordinarily good performance of 54.34% (Class A shares without the sales
charge) for the fiscal year, compared to the Russell 2000 Index return of
23.39%.
Full speed ahead for six months, followed by caution and rotation
The first six months of the period were simply wonderful for the Fund, which
fired on all cylinders. We were very heavily weighted in technology and
biotechnology stocks; at one point, roughly 70% of the portfolio was invested
in these two sectors alone. With investors buying up shares of many tech and
biotech companies in something of a frenzy, the Fund realized very significant
gains during the first half of our fiscal year.
As a result of the March/April meltdown in tech prices, the market encountered
unusual volatility, as investor sentiment rotated swiftly and dramatically away
from sectors that had previously been highly prized. During much of the next
six months, in the small-cap arena that we inhabit, the only sector that
produced consistently decent performance was health care, with some biotech
issues leading the way. Consequently, as we took money out of technology, we
added to our biotech holdings.
Our decision to shift money into the biotech sector helped us preserve share
price. Two of our best performers in the last fiscal quarter of our period
included two biotech names: Millennium Pharmaceuticals, Inc. (1.55% of the
Fund's net assets), up 30% for the quarter; and Vertex Pharmaceuticals, Inc.
(2.97%), up 60%. Two other notable winners during the time were Calpine Corp.
(3.16%), up 58%; and Manugistics, Inc. (2.25%), up 109%.*
As of September 30, 2000, the top five equity holdings in the Fund were Calpine
Corp. (3.16%), Vertex Pharmaceuticals, Inc. (2.97%), Applied Micro Circuits
Corp. (2.68%), Titan Pharmaceuticals, Inc. (2.53%) and Manugistics Group, Inc.
(2.25%).*
A risky trail to navigate
Our focus on smaller companies normally leads us to concentrate on four
sectors: technology, health care (including biotech), consumer staples and what
we call commercial business services, which would include telecommunications.
As we entered the new fiscal year, however, our focus really narrowed. There
were few good growth stocks in the consumer area for us to buy.
Telecommunications pulled back. We were heavily weighted in technology stocks
early in the period, but with that sector performing less vigorously the last
six months, we trimmed our weighting to 30%-33% of the portfolio, which was as
low as we've been in some time. On the positive side, we are still bullish on
health care.*
Going forward, we see a fair amount of risk in the market. There is a lot of
uncertainty right now, which is why we believe investor sentiment has turned to
value stocks, at the expense of growth stocks. There is concern about earnings,
about the continued weakness of the Euro and its inflationary implications for
Europe, and rising global energy costs. There are many caution flags being
thrown.
Therefore, in our opinion, the market over the next six to 12 months could be
even more volatile than it was over the last year. We do not believe investors
should continue to expect 20%-25% returns each year; market performance could
very well go back to historical norms.
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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.
Some of the returns shown reflect a period of unusually favorable market
conditions, which may be difficult to repeat. A portion of the returns may be
due to investments in Initial Public Offerings (IPOs), private placement and/or
leveraging investment techniques.
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BB&T Small Company Growth Fund
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Average Annual Total Return
As of 9/30/00
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Inception Since
Class Date 1 Year 5 Year Inception
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Class A Shares* 12/7/94 47.42% 20.78% 25.43%
Class B Shares** 1/1/96/1/ 49.29% 20.93% 25.80%
Trust Shares 12/7/94 54.82% 22.21% 28.78%
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* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge (maximum 5.00%).
[GRAPH]
Value of $10,000 Investment
Trust Class A Class B Russell 2000
Shares Shares* Shares** Index
------- ------- -------- ------------
12/7/94 $10,000 $ 9,551 $10,000 $10,000
9/30/95 14,570 13,878 14,530 12,923
9/30/96 21,180 20,115 20,920 14,620
9/30/97 23,545 22,307 23,045 19,472
9/30/98 17,985 16,995 17,422 15,768
9/30/99 25,656 24,188 24,609 18,775
9/30/2000 39,720 37,331 37,623 23,166
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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 1/1/96 is based upon the historical performance of the
Class A Shares and is adjusted for the Class B Shares Contingent Deferred Sales
Charge (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. Investors cannot invest
directly in an index, although they can invest in its underlying securities.
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BB&T Large Company Growth Fund
We had an excellent year. Despite a great deal of volatility throughout the
period, the Fund produced outstanding returns--for the 12-month period ended
September 30, 2000, our total return of 30.08% (Class A shares without sales
charge) was well above historical norms, and far exceeded the S&P 500 Stock
Index return of 13.27%.
Performance was enhanced by one big quarter
One of the reasons long-term investors like to stay on course with their
investment strategy is that no one can predict exactly when stocks will rise.
Such was the case with our performance during the last year. The bulk of the
Fund's returns came during one, three-month period: the fourth calendar quarter
of 1999, when a lot of money poured into large-cap technology stocks and
Internet issues. It was to our benefit that we had built up an above- average
weighting in technology going into the rally. Many of our long-term positions
performed well for us, including Oracle Corp. (3.16% of the Fund's net assets),
EMC Corp. (3.46%), General Electric Co. (3.98%) and Sun Microsystems, Inc.
(3.89%). For that matter, these market leaders helped carry the Fund through
much of the entire 12-month period.*
Even though tech stocks hit a rough patch in mid-March, and continued their
spotty performance throughout the rest of our fiscal year, we held a 41%
allocation in technology at the end of September, compared to 29.5% for the S&P
500 Index. This is in spite of the fact that we have slowly trimmed back some
of our tech positions and put greater emphasis on the financial sector. Some of
the stocks to which we have rotated include State Street Corp. (1.15%), SEI
Investments Co. (1.14%) and Morgan Stanley Dean Witter & Co. (1.76%). We prefer
the major, money center banks and money management firms; we are not as
interested in regional banks.*
Nevertheless, we see some near-term weakness in technology; we expect the Fund
to continue to be overweighted in tech, and we have added Nortel Networks Corp.
(1.97%) and Corning, Inc. (2.96%) to the portfolio in recent months. We still
believe that technology, especially the higher-quality names we own, will
continue to do well in the long run.*
As of September 30, 2000, the top five equity holdings in the Fund were General
Electric Co., (3.98%), Sun Microsystems, Inc. (3.89%), Amgen, Inc. (3.63%), EMC
Corp. (3.46%) and Pfizer, Inc. (3.43%).*
We are guardedly optimistic
As we write this in early autumn, the economy appears to be slowing down. We
believe that interest rates will begin to decline after the first of the year.
This could certainly give a boost to stocks--many of which are trading well
below their 52-week highs. Over the next six to 12 months, we expect the
overall market to trend upwards, though not nearly as fast as it has in the
past. We are being very selective, and we feel comfortable with our key
allocations in health care, financials and technology.
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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
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Average Annual Total Return
As of 9/30/00
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Inception Since
Class Date 1 Year Inception
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Class A Shares* 10/3/97 24.26% 16.65%
Class B Shares** 10/3/97 25.22% 16.93%
Trust Shares 10/3/97 30.52% 18.75%
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* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge (maximum 5.00%).
[GRAPH]
Value of $10,000 Investment
Trust Class A Class B S&P 500
Shares Shares* Shares** Stock Index
------- ------- -------- -----------
10/3/97 $10,000 $ 9,550 $10,000 $10,000
9/98 9,767 9,309 9,687 10,905
9/99 12,810 12,188 12,590 13,935
9/00 16,720 15,854 15,969 15,784
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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. Investors cannot
invest directly in an index, although they can invest in its underlying
securities.
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BB&T Growth and Income Stock Fund
The market began to turn toward value
For the 12-month period ended September 30, 2000, the Fund produced a total
return of 5.69% (Class A shares without sales charge), compared to 13.27% for
its benchmark, the S&P 500 Stock Index.
Our value orientation drives us to focus on companies that possess strong
fundamentals, and which offer growth at what we consider reasonable prices. In
the early part of this fiscal year, our emphasis on value was a hindrance.
Investors continued to bid up the shares of a small handful of technology and
telecommunication stocks--many of which were priced at levels inconsistent with
our value approach. Eventually, the market turned favorable to value investing.
Beginning in March, when the tech-heavy Nasdaq Composite Index/1/ hit its peak
and then began a sharp decline, we saw a fairly dramatic shift in investor
sentiment away from most growth names and toward the type of value stocks we
favor. Investors reassessed the historically high valuations that had been
placed on a number of high-flying tech issues, and concluded that--with a
slower economy, rising energy prices and higher labor costs pushing profit
margins in the wrong direction--perhaps earnings growth would be compromised.
Earnings growth is what supports higher valuations, and with this growth in
doubt, investors moved away from many higher-valued companies.
In contrast, value stocks as a group did relatively well in the second half of
the period. The value sector had lagged through all of calendar year 1999, and
was ready to snap back when investors began to look around for new places to
put their money. Some of the larger, financial and consumer staples companies
we owned did well.
Throughout the period, we made some moderate changes to our portfolio: We
backed up the market cap and adjusted our sector weightings. This second step
was particularly productive. Our above-average weighting in utilities over the
last seven or eight months was very helpful, as utilities performed extremely
well in 2000, with many individual stocks up 40 percent and more. We also
profited from a healthy weighting in financial stocks, which did well as a
group over the last six months of the period.*
As of September 30, 2000, the top five equity holdings in the Fund were Johnson
and Johnson (3.11% of the Fund's net assets), J.P. Morgan & Co. (3.11%), SBC
Communications, Inc. (3.03%), Emerson Electric Co. (2.90%) and IBM Corp.
(2.79%).*
Our near-term outlook is good
With the market still reeling from high volatility and rapid sector rotation,
where do we go from here?
We believe the market climate right now is relatively conducive to further
improvement in the prices of value stocks. We feel that the market in general
is reasonably priced. However, we intend to continue to adhere to our value
style and, when stocks do not meet our value criteria, we will stay clear of
them.
We like our chances with the stocks we own--which represent financially strong,
seasoned companies that have been growing their earnings for some time and, in
our opinion, should continue to do so. We believe the continued growth to be
reflected in higher stock prices for these companies.
--------------------------------------------------------------------------------
/1/The Nasdaq Composite Index is a market-capitalization price-only index that
tracks the performance of domestic common stocks traded on the regular Nasdaq
market, as well as National Market System-traded foreign common stock and
American Depositary Receipts (ADR's).
*The composition of the Fund's holdings is subject to change.
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[GRAPH]
BB&T Growth and Income Stock Fund
===============================================================================
Average Annual Total Return
As of 9/30/00
-------------------------------------------------------------------------------
Inception Since
Class Date 1 Year 5 Year Inception
-------------------------------------------------------------------------------
Class A Shares* 10/9/92 0.95% 13.48% 13.33%
Class B Shares** 1/1/96/1/ 1.10% 13.55% 13.48%
Trust Shares 10/9/92 6.89% 14.78% 14.28%
===============================================================================
* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge (maximum 5.00%)
[GRAPH]
Value of $10,000 Investment
Trust Class A Class B S&P 500
Shares Shares* Shares** Stock Index
------- ------- -------- -----------
10/9/92 $10,000 $ 9,551 $10,000 $10,000
9/93 11,606 11,052 11,572 11,714
9/94 12,021 11,420 11,956 12,147
9/95 14,531 13,775 14,422 15,759
9/96 17,628 16,664 17,355 18,949
9/97 24,350 22,963 23,728 26,610
9/98 24,434 22,987 23,568 29,018
9/99 27,339 25,661 26,097 37,082
9/00 28,949 27,122 27,372 42,003
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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 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 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.
Investors cannot invest directly in an index, although they can invest in its
underlying securities.
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BB&T Balanced Fund
For the 12 months ended September 30, 2000, the Fund produced a total return of
1.74% (Class A shares without sales charge), compared to 13.27% for the S&P 500
Stock Index and 6.21% for the Lehman Brothers Intermediate Government Bond
Index, respectively.
Market volatility allowed us to increase the growth component of our portfolio
For roughly the first five months of the period, market leadership was
concentrated in a relatively small number of large-growth stocks, most of which
were in the technology sector. Because our value orientation normally steers us
away from these types of stocks, we did not fully participate in the overall
market's rapid ascent through the first half of March 2000; consequently, the
Fund's performance was hindered during this period.
However, from the middle of March through the end of our reporting period, the
type of value stocks we favor performed much better, relative to growth stocks.
In the second half of our fiscal year, we also took a long look at our
investment strategy and made a conscious decision to slowly "blend" in a more
growth-oriented component than in the past. We made that transition by
targeting attractive growth companies and gradually buying shares of their
stocks as they declined in price and became more attractive on a fundamental
basis. We purchased a group of leading growth issues--including Microsoft Corp.
(1.31% of the Fund's net assets), Cisco Systems, Inc. (0.35%) and Procter and
Gamble Co. (0.45%). By the end of the period, taking advantage of the market's
volatility, we had succeeded in achieving a more blended portfolio, so the Fund
was positioned to benefit on a long-term basis.*
Bonds added to the Fund's stability
On the fixed-income side of the portfolio, a lot of the volatility we saw in
stocks actually bolstered the position of many bonds. Despite the Fed's
activity on the short-end of the yield curve, many longer-term bonds--
especially in the Treasury market--did quite well during the period. Bonds, in
general, held up nicely when stocks were sinking; our fixed-income holdings
provided the moderating effect of a truly diversified portfolio.
We took steps to increase the average maturity and effective duration of our
bond holdings, and we adjusted our sector weightings, so the portfolio is more
reflective of the makeup of the total bond market.
As of September 30, 2000, approximately 60.3% of the portfolio's holdings were
invested in stocks, 39.0% in fixed-income holdings and 0.7% in cash and cash
equivalents. The Fund's top five equity holdings were General Electric Co.
(2.08%), Intel Corp. (1.32%), Microsoft Corp. (1.31%), IBM Corp. (1.29%) and
Exxon-Mobil Corp. (1.23%). The Fund's fixed-income holdings were invested in
U.S. Treasury, government agency, mortgage-backed and corporate securities. The
effective duration of the fixed-income portfolio was approximately 5.2 years;
the average credit quality was AAA.*
Greater opportunities could lie ahead
Looking forward, we are waiting for an even better opportunity to become more
aggressive in equities. We are watching for a couple of factors to come into
play: first, a more accommodating Fed; and second, the prospect of improving
earnings, not just with technology stocks, but with the broad spectrum of all
companies.
The economy has moderated recently--for example, gross domestic product for the
third calendar quarter came in at an unexpectedly modest 2.7% annual rate--and
this has dampened earnings growth for companies in a number of volatile
sectors, especially technology. But many other companies still look attractive
to us, as far as earnings growth is concerned.
Still, while we do not anticipate a recession, we would not be surprised to see
pockets of earnings problems, as high-growth companies adjust to a somewhat
different economic environment.
When people invest in a balanced fund such as ours, they are looking for a fund
that is diversified and balanced among different sectors in the stock and bond
markets, not focused on just one style or another. This investment philosophy
has held up well during the last 12 months, and we expect it to continue to do
so in the years ahead.
--------------------------------------------------------------------------------
*The composition of the Fund's holdings is subject to change.
-12-
[LOGO OF BB&T FUNDS]
<PAGE>
[GRAPH]
BB&T Balanced Fund*
===============================================================================
Average Annual Total Return
As of 9/30/00
-------------------------------------------------------------------------------
Inception Since
Class Date 1 Year 5 Year Inception
-------------------------------------------------------------------------------
Class A Shares* 7/1/93 -2.83% 8.90% 8.84%
Class B Shares** 1/1/96/1/ -2.68% 8.91% 8.94%
Trust Shares 7/1/93 1.92% 10.19% 9.76%
===============================================================================
* Reflects 4.60% maximum sales charge
** Reflects applicable deferred sales charge (maximum 5.00%)
[GRAPH]
Value of $10,000 Investment**
Lehman Bros.
Trust Class A Class B S&P 500 Int. Govt.
Shares Shares* Shares** Stock Index Bond Index
7/1/93 $10,000 $ 9,551 $10,000 $10,000 $10,000
9/93 10,274 9,826 10,288 10,257 10,211
9/94 10,231 9,763 10,222 10,637 10,058
9/95 12,095 11,521 12,062 13,800 11,124
9/96 13,637 12,953 13,447 16,593 11,691
9/97 16,652 15,771 16,258 23,302 12,606
9/98 17,847 16,858 17,260 25,410 13,942
9/99 19,276 18,160 18,437 32,471 14,051
9/00 19,646 18,475 18,605 36,780 14,924
--------------------------------------------------------------------------------
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 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
Fund's performance reflects the deduction of fees for these value-added
services. Investors cannot invest directly in an index, although they can
invest in its underlying securities.
-13-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T Capital Manager Funds
Conservative Growth Fund
Moderate Growth Fund
Growth Fund
Perhaps the greatest potential benefit of investing in the BB&T Capital Manager
Funds is that our portfolio managers take much of the guesswork out of
investing. Once they choose the Capital Manager Fund that fits their investment
temperament and goals, our shareholders don't have to worry about prevailing
market conditions, or what steps they should or should not take to reallocate
their holdings. Our portfolio managers take on that responsibility; to put it
simply, 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.
The year's returns: right on track
For the 12-month period, relative to each portfolio's risk characteristics, the
Funds performed exactly as we would have expected. The Growth Fund (the most
aggressive of the three portfolios) outperformed the Moderate Growth Fund,
which, in turn, did better than the Conservative Growth Fund.
A look at the three Fund's portfolio allocations among stocks, bonds and cash
is revealing (as of 9/30/00):*
<TABLE>
<CAPTION>
Common Stocks Bonds Cash/Cash Equivalents
------------- ----- ---------------------
<S> <C> <C> <C>
Conservative Growth Fund............. 48.0% 49.6% 2.4%
Moderate Growth Fund................. 64.3% 31.5% 4.2%
Growth Fund.......................... 75.7% 19.4% 4.9%
</TABLE>
While portfolio compositions changed throughout the period, the more aggressive
a particular Fund's objective, the greater its allocation to stock funds (each
of the three Funds invests in underlying BB&T Funds). Larger investments in
stock funds led to greater total returns for the period as a whole.
Much of that performance had to do with volatility, and our portfolio managers'
ability to successfully take advantage of volatile conditions. With so many
asset classes with which to work--from aggressive sectors such as
international, small-company and large-company stocks, to conservative sectors
such as short-intermediate bond and money market funds--we are able to
regularly "re-balance" these Funds back to their respective targets, and to use
market volatility to our advantage.
For example, when dramatic changes in the markets occur, we consider whether
there might be some attractive buying opportunities in the various asset
classes. When one of our underlying funds run up in price unusually quickly, we
consider locking in some profits for our shareholders by selling shares.
A case in point is a move we took around the end of the period. International
stocks had been doing very poorly, in part due to the falling value of the
Euro. Consequently, we decided to add to our positions in the BB&T
International Equity Fund. At the same time, we sold some bond fund holdings
and used the proceeds to buy shares in the BB&T Large Company Growth Fund; we
felt growth stocks had become more attractively valued.
Our investment discipline forces us to stay on plan, to rebalance the Funds'
targets when necessary and to avoid being caught up in the potentially
destructive emotional aspects of investing. This tactical asset shifting shows
up more quickly and effectively in the Capital Manager Funds than in some of
our other BB&T Funds.
-14-
[LOGO OF BB&T FUNDS]
<PAGE>
Positioned to take advantage of new opportunities
At the end of the period, each of the Funds was very close to its target
allocations for stocks, and it is possible that our equity weightings could
become somewhat above target in the months ahead. But in order to become more
aggressive, we need to see a couple of factors come into play: first, a more
accommodative Fed; and second, the prospect of improving earnings, not just
with technology stocks, but with the broad spectrum of all companies.
The economy has moderated recently--for example, gross domestic product for the
third calendar quarter came in at an unexpectedly modest 2.7% annual rate--and
this has dampened earnings growth for companies in a number of volatile
sectors, especially technology. However, many other companies still look
attractive to us, as far as earnings growth is concerned.
Historically, the fourth calendar quarter of the year--this year's October
swoon, notwithstanding--tends to be the best-performing period. We are leaning
toward a slightly bullish equity stance, which is based, to some extent, on
this seasonal trend.
*The composition of the Funds' holdings are subject to change.
-15-
[LOGO OF BB&T FUNDS]
<PAGE>
[GRAPH]
BB&T Capital Manager
Moderate Growth Fund
===============================================================================
Average Annual Total Return
As of 9/30/00
-------------------------------------------------------------------------------
Inception 1 Since
Class Date Year Inception
-------------------------------------------------------------------------------
Class A Shares* 1/29/96 6.36% 6.57%
Class B** 1/29/99 6.45% 4.65%
Trust Shares 10/2/97 11.63% 8.42%
===============================================================================
* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge (maximum 5.00%).
[GRAPH]
BB&T Capital Manager A Shares
Lehman Bros.
S&P 500 Int. U.S. Govt.
Moderate* Conservative* Growth* Stock Index Bond Index
--------- ------------- ------- ----------- ---------------
1/29/98 $ 9,550 $ 9,550 $ 9,550 $10,000 $10,000
9/98 9,611 9,894 9,370 10,484 10,681
9/99 10,867 10,704 10,945 13,398 10,764
9/00 12,100 11,676 12,479 15,176 11,432
--------------------------------------------------------------------------------
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 returns 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. Investors cannot invest directly in an index, although they can
invest in its underlying securities.
-16-
[LOGO OF BB&T FUNDS]
<PAGE>
[GRAPH]
BB&T Capital Manager
Conservative Growth Fund
===============================================================================
Average Annual Total Return
As of 9/30/00
-------------------------------------------------------------------------------
Inception 1 Since
Class Date Year Inception
-------------------------------------------------------------------------------
Class A Shares* 1/29/98 4.16% 5.31%
Class B** 1/29/99 4.31% 2.94%
Trust Shares 10/2/97 9.31% 7.23%
===============================================================================
* Reflects 4.50% maximum sales charge
** Reflects applicable deferred sales charge (maximum 5.00%)
[GRAPH]
BB&T Capitol Manager Trust Shares
Value of $10,000 Investment
Lehman Bros.
S&P 500 Int. Govt.
Moderate Conservative Growth Stock Index Bond Index
10/2/97 $10,000 $10,000 $10,000 $10,000 $10,000
9/98 10,068 10,395 9,828 10,905 11,059
9/99 10,129 10,059 10,187 13,935 11,145
9/00 10,787 10,495 11,135 15,784 11,837
[GRAPH]
BB&T Capitol Manager
Growth Fund
===============================================================================
Average Annual Total Return
As of 9/30/00
-------------------------------------------------------------------------------
Inception 1 Since
Class Date Year Inception
-------------------------------------------------------------------------------
Class A Shares* 1/29/98 8.67% 7.68%
Class B** 1/29/99 9.23% 6.65%
Trust Shares 10/2/97 14.28% 9.54%
===============================================================================
* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge (maximum 5.00%)
[GRAPH]
BB&T Capitol Manager B Shares
Value of $10,000 Investment
Lehman Bros.
S&P 500 Int. Govt.
Moderate Conservative Growth Stock Index Bond Index
1/29/99 $ 9,550 $ 9,550 $ 9,550 $10,000 $10,000
9/99 10,129 10,059 10,187 10,484 10,681
9/00 10,787 10,495 11,135 11,875 11,344
--------------------------------------------------------------------------------
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 returns 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 reflect the deduction of fees for these
services. Investors cannot invest directly in an index, although they can
invest in its underlying securities.
-17-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T North Carolina Intermediate Tax-Free Fund+
For the 12-month period ended September 30, 2000, the Fund produced a total
return of 5.04% (Class A shares without sales charge), compared to 4.79% and
5.42% for its benchmarks, the Lehman Brothers 5-Year General Obligation Index
and the Lehman Brothers 7-Year General Obligation Index.
The Fund followed the municipal market's positive trend
Municipal bonds in general, and our Fund in particular, did just what they were
supposed to do over the last year: provide a steady tax-free income with
limited market volatility. The market did offer some significant movement
throughout the year, as the Federal Reserve (the "Fed") aggressively raised
interest rates in an attempt to slow the economy down; but during the 12 months
ended September 30, 2000, yields remained relatively unchanged. Short-term
rates (on one- to two-year securities) rose 25 basis points (0.25%) due to Fed
actions, but long-term (30-year) yields were slightly lower for the period.
The municipal market benefited from a reduced supply of new issuances in 2000,
compared to 1999 and previous years; with supply low, the value of existing
bonds was enhanced. This resulted from state tax receipts running stronger than
expected (as did Federal tax receipts), a markedly lower volume of bond
refunding and an increase in rates during the first half of calendar year 2000,
when most bonds were issued.
The reduced supply was met with strong retail demand, as individual investors
realized tremendous gains in the stock market in 1999 and looked for ways to
reduce taxes going forward. The yield curve flattened over the period; the
best-performing segment of the municipal market was long-dated bonds.
As of September 30, 2000, 96.7% of the Fund's holdings were debt instruments
issued by government entities in the state of North Carolina. Approximately
77.2% was invested in general obligation bonds, 13.0% in revenue bonds, 6.5% in
certificates of participation and 3.3% in cash and cash equivalents. The
effective duration of the portfolio was 6.11 years, and the average credit
quality was Aaa.*
We are positioned for slower economic growth
The Fed appears to have completed its mission. There is still a continued risk
of inflation, but we appear much closer to the end of rate increases than to
the beginning. The fundamental backdrop for the bond market is positive, as
higher oil prices slow economic growth and serve as a de facto tax hike.
Another positive factor includes the strength of the dollar--which we believe
will slow growth, as our exports become much more expensive to our trading
partners.
On a relative basis, municipal bonds are very attractive compared to other
fixed-income alternatives for high-tax-bracket investors. In contrast to the
Treasury yield curve, the municipal curve is upward sloping and rewards
investors for extending duration. As a result, our average maturity and
duration are longer than average, and we are focused on high quality, non-
callable bonds, which we believe should outperform in a slowing economy.
--------------------------------------------------------------------------------
+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. Regional
investing may incur additional risk since investments are limited to one
geographical area.
*The composition of the Fund's holdings is subject to change.
-18-
[LOGO OF BB&T FUNDS]
<PAGE>
[GRAPH]
BB&T North Carolina Intermediate Tax-Free Fund
===============================================================================
Average Annual Total Return
As of 9/30/00
-------------------------------------------------------------------------------
Inception Since
Class Date 1 Year 5 Year Inception
-------------------------------------------------------------------------------
Class A Shares* 10/16/92 2.96% 3.40% 3.70%
Trust Shares 10/16/92 5.31% 3.94% 4.11%
===============================================================================
* Reflects 2.00% Maximum Sales Charge.
[GRAPH]
Value of $10,000 Investment
Lehman Bros. Lehman Bros.
5-Year General 7-Year General
Trust Shares Class A Shares* Oblig. Index Oblig. Index
------------ --------------- -------------- --------------
10/16/92 $10,000 $ 9,804 $10,000 $10,000
9/93 10,662 10,451 10,833 11,108
9/94 10,537 10,313 10,850 11,004
9/95 11,355 11,097 11,856 12,181
9/96 11,669 11,386 12,366 12,724
9/97 12,420 12,101 13,213 13,751
9/98 13,277 12,904 14,130 14,853
9/99 13,078 12,708 14,349 14,936
9/00 13,772 13,349 15,041 15,745
--------------------------------------------------------------------------------
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 and the
Lehman Brothers 7-Year General Obligation Index. These indices are unmanaged
and generally considered to be representative of the performance of tax-exempt
municipal securities with an average maturity of five and seven years,
respectively. These indices do not reflect the reduction 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. Investors
cannot invest directly in an index, although they can invest in its underlying
securities.
-19-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T South Carolina Intermediate Tax-Free Fund+
For the 12-month period ended September 30, 2000, the Fund produced a total
return of 5.10% (Class A shares without sales charge), compared to 4.79% and
5.43% for its benchmarks, the Lehman Brothers 5-Year General Obligation Index
and the Lehman Brothers 7-Year General Obligation Index.
The Fund followed the municipal market's positive trend
Municipal bonds in general, and our Fund in particular, did just what they were
supposed to do over the last year: provide a steady tax-free income with
limited market volatility. The market did offer some significant movement
throughout the year, as the Federal Reserve (the "Fed") aggressively raised
interest rates in an attempt to slow the economy down; but during the 12 months
ended September 30, 2000, yields remained relatively unchanged. Short-term
rates (on one- to two-year securities) rose 25 basis points (0.25%) due to Fed
actions, but long-term (30-year) yields were slightly lower for the period.
The municipal market benefited from a reduced supply of new issuances in 2000,
compared to 1999 and previous years; with supply low, the value of existing
bonds was enhanced. This resulted from state tax receipts running stronger than
expected (as did Federal tax receipts), a markedly lower volume of bond
refunding and an increase in rates during the first half of calendar year 2000,
when most bonds were issued.
The reduced supply was met with strong retail demand, as individual investors
realized tremendous gains in the stock market in 1999 and looked for ways to
reduce taxes going forward. The yield curve flattened over the period; the
best-performing segment of the municipal market was long-dated bonds.
As of September 30, 2000, 99% of the Fund's holdings were debt instruments
issued by government entities in the state of South Carolina. Approximately
66.6% was invested in general obligation bonds, 32.1% in revenue bonds and 1.3%
in cash and cash equivalents. The effective duration of our portfolio was 6.09
years, and the average credit quality was Aaa.*
We are positioned for slower economic growth
The Fed appears to have completed its mission. There is still a continued risk
of inflation, but we appear much closer to the end of rate increases than to
the beginning. The fundamental backdrop for the bond market is positive, as
higher oil prices slow economic growth and serve as a de facto tax hike.
Another positive factor includes the strength of the dollar--which we believe
will slow growth, as our exports become much more expensive to our trading
partners.
On a relative basis, municipal bonds are very attractive compared to other
fixed-income alternatives for high-tax-bracket investors. In contrast to the
Treasury yield curve, the municipal curve is upward sloping and rewards
investors for extending duration. As a result, our average maturity and
duration are longer than average, and we are focused on high-quality, non-
callable bonds, which we believe should outperform in a slowing economy.
--------------------------------------------------------------------------------
+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. Regional
investing may incur additional risk since investments are limited to one
geographical area.
*The composition of the Fund's holdings is subject to change.
-20-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T South Carolina Intermediate Tax-Free Fund
[GRAPH]
===============================================================================
Average Annual Total Return
As of 9/30/00
-------------------------------------------------------------------------------
Inception Since
Class Date 1 Year Inception
-------------------------------------------------------------------------------
Class A Shares* 10/20/97 3.00% 2.93%
Trust Shares 10/20/97 5.27% 3.75%
===============================================================================
* Reflects 2.00% Maximum Sales Charge.
[GRAPH]
Value of $10,000 Investment
Lehman Bros. Lehman Bros.
5-Year General 7-Year General
Trust Shares Class A Shares* Oblig. Index Oblig. Index
------------ --------------- -------------- --------------
10/20/97 $10,000 $ 9,800 $10,000 $10,000
9/98 10,802 10,579 10,629 10,801
9/99 10,588 10,358 10,794 10,861
9/00 11,146 10,886 11,314 11,450
--------------------------------------------------------------------------------
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 Obligations Index and the
Lehman Brothers 7-Year General Obligation Index. These indices are unmanaged
and generally considered to be representative of the performance of tax-exempt
municipal securities with an average maturity of five and seven years,
respectively. These indices 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. Investors
cannot invest directly in an index, although they can invest in its underlying
securities.
-21-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T Virginia Intermediate Tax-Free Fund+
For the 12-month period ended September 30, 2000, the Fund produced a total
return of 5.22% (Class A shares without sales charge), compared to 4.79% and
5.42% for its benchmarks, the Lehman Brothers 5-Year General Obligation Index
and the Lehman Brothers 7-Year General Obligation Index.
The Fund followed the municipal market's positive trend
Municipal bonds in general, and our Fund in particular, did just what they were
supposed to do over the last year: provide a steady tax-free income with
limited market volatility. The market did offer some significant movement
throughout the year, as the Federal Reserve (the "Fed") aggressively raised
interest rates in an attempt to slow the economy down; during the 12 months
ended September 30, 2000, yields remained relatively unchanged. Short-term
rates (on one- to two-year securities) rose 25 basis points (0.25%) due to Fed
actions, but long-term (30-year) yields were slightly lower for the period.
The municipal market benefited from a reduced supply of new issuances in 2000,
compared to 1999 and previous years; with supply low, the value of existing
bonds was enhanced. This resulted from state tax receipts running stronger than
expected (as did Federal tax receipts), a markedly lower volume of bond
refunding and an increase in rates during the first half of calendar year 2000,
when most bonds were issued.
The reduced supply was met with strong retail demand, as individual investors
realized tremendous gains in the stock market in 1999 and looked for ways to
reduce taxes going forward. The yield curve flattened over the period; the
best-performing segment of the municipal market was long-dated bonds.
As of September 30, 2000, 95% of the Fund's holdings were debt instruments
issued by government entities in Virginia, with 3% in District of Columbia
paper (the latter subject to Virginia State taxes). Approximately 57.7% was
invested in general obligation bonds, 40.8% in revenue bonds and 1.5% in cash
and cash equivalents. The effective duration of our portfolio was 5.88 years,
and the average credit quality was Aa1.*
We are positioned for slower economic growth
The Fed appears to have completed its mission. There is still a continued risk
of inflation, but we appear much closer to the end of rate increases than to
the beginning. The fundamental backdrop for the bond market is positive, as
higher oil prices slow economic growth and serve as a de facto tax hike.
Another positive factor includes the strength of the dollar--which we believe
will slow growth, as our exports become much more expensive to our trading
partners.
On a relative basis, municipal bonds are very attractive compared to other
fixed income alternatives for high-tax-bracket investors. In contrast to the
Treasury yield curve, the municipal curve is upward sloping and rewards
investors for extending duration. As a result, our average maturity and
duration are longer than average, and we are focused on high-quality, non-
callable bonds, which we believe should outperform in a slowing economy.
--------------------------------------------------------------------------------
+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. Regional
investing may incur additional risk, since investments are limited to one
geographical area.
*The composition of the Fund's holdings is subject to change.
-22-
[LOGO OF BB&T FUNDS]
<PAGE>
[GRAPH]
BB&T Virginia Intermediate Tax-Free Fund
===============================================================================
Average Annual Total Return
As of 9/30/00
-------------------------------------------------------------------------------
Inception 1 Since
Class Date Year Inception
-------------------------------------------------------------------------------
Class A Shares* 5/17/99 3.13% 1.76%
Trust Shares 5/17/99 5.35% 2.53%
===============================================================================
* Reflects 2.00% Maximum Sales Charge.
[GRAPH]
Value of $10,000 Investment
Lehman Brothers Lehman Brothers
5-Year General 7-Year General
Trust Shares Class A Shares* Oblig. Index Oblig. Index
5/17/99 $10,000 $ 9,800 $10,000 $10,000
9/99 9,823 9,735 9,976 10,056
9/00 10,349 10,243 10,457 10,601
--------------------------------------------------------------------------------
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 Obligations Index and the Lehman
Brothers 7-Year General Obligation Index. These indices are unmanaged and
generally considered to be representative of the performance of tax-exempt
municipal securities with an average maturity of five and seven years,
respectively. These indices 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. Investors
cannot invest directly in an index, although they can invest in its underlying
securities.
-23-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T Intermediate U.S. Government Bond Fund
BB&T Short-Intermediate U.S. Government Income Fund
For the 12 months ended September 30, 2000, the Intermediate U.S. Government
Bond Fund produced a 6.09% return (Class A shares without sales charge). The
Fund's benchmark, the Merrill Lynch 5-10-Year U.S. Government Bond Index,
produced a return of 6.85%.
For the 12-months ended September 30, 2000, the Short-Intermediate U.S.
Government Income Fund produced a 5.24% return (Class A shares without sales
charge). The Fund's benchmark, the Merrill Lynch 1-5-Year U.S. Government Bond
Index, produced a return of 5.88%.
Volatility unsettled the fixed-income markets
Bond yields were volatile over the last 12 months. In late 1999, yields rose
sharply in anticipation of further tightening by the Federal Reserve (the
"Fed"); the Fed was taking steps to reduce potential inflationary pressures
resulting from the economy's continued robustness and consumers' seemingly
insatiable desire for new goods and services.
In the first quarter of 2000, yields began to fall, spurred by the Treasury's
buy-back program. After another spike in yields midway through 2000, bond
yields again declined, as investors came to believe that the Fed's tightening
was most likely done for the near-term. The economy showed signs of a slowdown:
inflation remained relatively contained; productivity gains continued; and the
stock market's "wealth effect" eased.
The shape of the Treasury yield curve also changed dramatically over the past
year, moving from its traditionally upward sloping shape to a pronounced
inversion--where short rates were three quarters of a percentage point higher
than long-term yields. The steep inversion of the Treasury curve caused severe
damage to other "spread" sectors such as corporates, agencies and mortgages. As
the curve shape normalized late in the period, so did the market for non-
Treasury securities.
We actively took steps to profit from yield-curve volatility
Throughout the year, we took positions in long-dated Treasury securities to
capitalize on the yield-curve inversion, and we selectively overweighted spread
products, such as mortgages, which were cheap, based on the fundamentals.
As of September 30, 2000, the effective duration of the Intermediate U.S.
Government Bond Fund was 5.4 years. Approximately 40% of the portfolio was
invested in mortgage-backed securities, 32% in securities issued by the U.S.
Treasury, 14% in U.S. government agency securities, 13% in corporate debt and
1% in cash and cash equivalents. The portfolio's average credit quality was
AAA.*
As of September 30, 2000, the effective duration of the Short-Intermediate U.S.
Government Income Fund was 2.3 years. Approximately 38% of the portfolio was
invested in mortgage-backed securities, 29% in U.S. government agency
securities, 15% in securities issued by the U.S. Treasury, 15% in corporate
debt and 3% in asset-backed securities. The average credit quality of the
portfolio was AAA.*
We are prepared to take advantage of a normalized yield curve
While we believe that bond yields can move lower as the economy slows, our
near-term outlook for fixed-income securities is clouded, due to uncertainty
over the degree of the economic slowdown, a potential inflationary rise in
energy prices and uncertainty as to the future of fiscal policy. Given the
uncertainty over the direction of rates in the near term, we are neutral with
regard to our interest-sensitivity targets. We continue to be overweighted with
spread sectors such as mortgages, because we feel they present an opportunity
for outperformance as the yield-curve shape again normalizes.
--------------------------------------------------------------------------------
*The composition of the Fund's holdings is subject to change.
-24-
[LOGO OF BB&T FUNDS]
<PAGE>
[GRAPH]
BB&T Intermediate U.S. Government Bond Fund
Average Annual Total Return
As of 9/30/00
===============================================================================
Inception 1 5 Since
Class Date Year Year Inception
-------------------------------------------------------------------------------
Class A Shares* 10/9/92 1.29% 4.55% 5.03%
Class B Shares** 1/1/96/1/ 1.31% 4.49% 5.09%
Trust Shares 10/9/92 6.36% 5.71% 5.91%
===============================================================================
* Reflects 4.50% Maximum Sales Charge
** Reflects applicable deferred sales charge (maximum 5.00%)
[GRAPH]
Value of $10,000 Investment
Lehman Brothers Merrill Lynch
Trust Class A Class B Int. U.S. Govt. 5-10-Year U.S.
Shares Shares* Shares** Bond Index Government Index
10/9/92 $10,000 $ 9,551 $10,000 $10,000 $10,000
9/93 11,076 10,557 11,053 10,823 11,176
9/94 10,607 10,083 10,558 10,661 10,662
9/95 11,976 11,357 11,891 11,791 12,201
9/96 12,386 11,717 12,107 12,392 12,598
9/97 13,402 12,647 12,972 13,362 13,560
9/98 15,206 14,300 14,562 14,778 15,084
9/99 14,858 13,944 14,106 14,893 14,636
9/00 15,803 14,793 14,854 15,818 15,639
[GRAPH]
BB&T Short-Intermediate U.S. Government Income Fund
===============================================================================
Average Annual Total Return
As of 9/30/00
-------------------------------------------------------------------------------
Inception 1 5 Since
Class Date Year Year Inception
-------------------------------------------------------------------------------
Class A Shares** 11/30/92 3.11% 4.61% 4.72%
Trust Shares 11/30/92 5.62% 5.20% 5.24%
===============================================================================
** Reflects 2.00% Maximum Sales Charge.
[GRAPH]
Value of $10,000 Investment
Merrill Lynch Merrill Lynch
1-3-Year 1-5-Year
Government Government
Trust Shares Class A Shares** Bond Index Bond Index
------------ ---------------- ------------ ------------
11/30/92 $10,000 $ 9,804 $10,000 $10,000
9/93 10,801 10,569 10,579 10,626
9/94 10,622 10,373 10,702 10,618
9/95 11,579 11,280 11,588 11,561
9/96 12,083 11,741 12,238 12,100
9/97 12,848 12,454 12,937 12,381
9/98 13,974 13,511 13,963 13,745
9/99 14,121 13,640 14,420 14,054
9/00 14,915 14,355 15,255 14,880
--------------------------------------------------------------------------------
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 returns 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 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 Bond 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 Funds' performances reflect
the deduction of fees for these services. Investors cannot invest directly in
an index, although they can invest in its underlying securities.
-25-
[LOGO OF BB&T FUNDS]
<PAGE>
BB&T Intermediate Corporate Bond Fund
From the inception of the Fund on December 2, 1999, to September 30, 2000, the
Fund produced a return of 4.97% (Class A shares without sales charge). The
Fund's benchmark, the Lehman Brothers All Corporate Bond Index, produced a
5.24% for the same period.
Volatility unsettled the fixed-income markets
Bond yields were volatile over the last 12 months. In late 1999, yields rose
sharply in anticipation of further tightening by the Federal Reserve (the
"Fed"); the Fed was taking steps to reduce potential inflationary pressures
resulting from the economy's continued robustness and consumers' seemingly
insatiable desire for new goods and services.
In the first quarter of 2000, yields began to fall, spurred by the Treasury's
buy-back program. After another spike in yields midway through 2000, bond
yields again declined, as investors came to believe that the Fed's tightening
was most likely done for the near-term. The economy showed signs of a slowdown;
inflation remained relatively contained; productivity gains continued; and the
stock market's wealth effect eased.
The shape of the Treasury yield curve also changed dramatically over the past
year, moving from its traditionally upward sloping shape to a pronounced
inversion--where short rates were three quarters of a percentage point higher
than long-term yields. The steep inversion of the Treasury curve caused severe
damage to other "spread" sectors such as corporates, agencies and mortgages. As
the curve shape normalized late in the period, so did the market for non-
Treasury securities.
Positioning the Fund with a high-quality bias
The market for corporate securities experienced extreme dislocation over the
past year reacting both to technical issues surrounding the shape of the yield
curve, as well as to deteriorating fundamentals and higher event risk.
In anticipation of a more challenging period for corporate credits, we have
structured the portfolio with a higher quality bias. We are focusing on
corporate exposure in more risk-adverse sectors and companies and incorporating
assets like U.S. government agencies and mortgages to improve overall credit
quality.
As of September 30, 2000, the Fund's effective duration was 5.5 years.
Approximately 80% of the portfolio was invested in corporate obligations, 8% in
U.S. Treasury securities, 7% in mortgage-backed securities, 3% in U.S.
government agency debt and 2% in cash and cash equivalents. The Fund's average
credit quality was AA3, with none of the issues we hold currently rated below
investment grade.*
We are prepared to take advantage of a normalized yield curve
While we believe that bond yields can move lower as the economy slows, our
near-term outlook for fixed-income securities is clouded, due to uncertainty
over the degree of the economic slowdown, a potential inflationary rise in
energy prices and uncertainty as to the future of fiscal policy. Given the
uncertainty over the direction of rates in the near term, we are neutral with
regard to our interest-sensitivity targets.
While we are concerned that fundamental credit quality may continue to
deteriorate, current spreads (yield compensation above the U.S. Treasury curve)
in some sectors reflect an overly negative outlook and represent good value for
patient investors. Therefore, we feel that spread sectors, such as the
investment-grade corporate securities that make up the bulk of our portfolio,
could present an opportunity for outperformance as the yield-curve shape again
normalizes.
--------------------------------------------------------------------------------
*The composition of the Fund's holdings is subject to change.
-26-
[LOGO OF BB&T FUNDS]
<PAGE>
[GRAPH]
BB&T Intermediate Corporate Bond Fund
===============================================================================
Aggregate Total Return
As of 9/30/00
-------------------------------------------------------------------------------
Inception Since
Class Date Inception
-------------------------------------------------------------------------------
Class A Shares* 12/2/99 0.25%
Class B Shares** 12/2/99 -0.58%
Trust Shares 12/2/99 5.13%
===============================================================================
* Reflects 4.50% maximum sales charge.
** Reflects applicable deferred sales charge (maximum 5.00%).
[GRAPH]
Value of $10,000 Investment
Lehman Brothers All
Trust Shares Class A Shares* Class B Shares** Corporate Bond Index
------------ --------------- ---------------- --------------------
12/2/99 $10,000 $ 9,551 $10,000 $10,000
4/00 9,992 9,549 9,965 10,001
9/00 10,513 10,025 9,942 10,524
--------------------------------------------------------------------------------
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 Intermediate Corporate Bond Fund is measured
against the Lehman Brothers All Corporate Bond Index, an unmanaged index
generally representative of all publicly issued, fixed-rate, non-convertible,
investment-grade, domestic corporate debt. The index 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. Investors cannot invest directly in an
index, although they can invest in its underlying securities.
-27-
[LOGO OF BB&T FUNDS]
<PAGE>
The BB&T Prime Money Market Fund+
The BB&T U.S. Treasury Money Market Fund+
Throughout the year, we, along with most investors in the equity and fixed-
income markets, paid close attention to the actions, and the expressed
sentiments, of the Federal Reserve (the "Fed"). In its current effort to
preemptively restrain inflationary pressures, the Fed has raised the Fed Funds
rate--the short-term rate banks charge one another for overnight loans--seven
times, beginning in June 1999. The latest increase was a 50 basis point (0.50%)
rise in May, which brought the rate up to 6.50%.
However, while equity and fixed-income investors shudder at the prospect of
rising interest rates, money market funds generally welcome rate increases.
That is because our primary objective is to provide you with high current
income, consistent with safety of principal. With short-term rates rising
throughout the period, our Funds' yields were historically attractive,
especially considering the fact that inflation remained under control.
The BB&T Prime Money Market Fund kept its average maturity relatively short
throughout much of the period, but began increasing its maturity in the last
several months. Believing that the Fed is done raising rates for the rest of
the year, we decided to lock in some additional income available further out on
the yield curve.
As of September 30, 2000, approximately 52.0% of the Prime Money Market Fund's
portfolio was invested in commercial paper, 17.1% in variable rate notes, 12.7%
in corporate bonds, 13.9% in repurchase agreements and 4.3% in certificates of
deposit. The average maturity of the Fund's holdings was 54 days, and the
average credit quality was A1+.*
The BB&T U.S. Treasury Money Market Fund committed a large allocation of its
portfolio to overnight repurchase agreements, where we found the potential for
higher yields. As a result, the Fund's average maturity was in the neighborhood
of 40 days for much of the period.
As of September 30, 2000, approximately 59% of the U.S. Treasury Money Market
Fund's portfolio was invested in repurchase agreements and 41% in U.S. Treasury
securities. The average maturity of the Fund's holdings was 58 days, and the
average credit quality was AAA.*
--------------------------------------------------------------------------------
+ Investments in the BB&T Prime Money Market Fund and the BB&T U.S. Treasury
Money Market Fund are neither insured nor guaranteed by the Federal Deposit
Insurance Corporation or any government agency. Although the Funds seek to
preserve the value of your investments at a $1.00 per share, it is possible
to lose money by investing the Funds.
* The composition of the Fund's portfolio is subject to change.
Some of the fees of the BB&T Funds are currently be waived, resulting in higher
total returns than would occur if the full fees were charged.
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.
-28-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities
September 30, 2000
<TABLE>
<CAPTION>
Short-
Prime U.S. 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 $342,950,577;
$218,463,042;
$183,282,843;
$221,455,987,
respectively)........... $342,950,577 $218,463,042 $183,336,245 $222,704,960
Repurchase agreements,
at cost................. 55,143,000 339,434,674 3,456,713 11,374,871
------------ ------------ ------------ ------------
Total investments.... 398,093,577 557,897,716 186,792,958 234,079,831
------------ ------------ ------------ ------------
Cash.................... 506 -- -- --
Interest and dividends
receivable.............. 1,239,155 4,526,831 2,155,449 2,195,579
Receivable for
investments sold........ -- 17,000,000 -- --
Prepaid expenses and
other................... 887 4,688 2,429 2,898
------------ ------------ ------------ ------------
Total Assets......... 399,334,125 579,429,235 188,950,836 236,278,308
------------ ------------ ------------ ------------
LIABILITIES:
Dividends payable....... 1,888,571 2,672,599 802,116 881,244
Payable for capital
shares redeemed......... -- 44,816 -- --
Payable for collateral
received on loaned
securities.............. -- -- 14,433,119 47,494,505
Accrued expenses and
other payables:
Investment advisory
fees................... 98,535 141,422 71,974 77,740
Administration,
transfer agent and
fund accounting fees... 12,994 23,842 5,682 7,705
Distribution fees...... 107,047 58,645 677 2,417
Other.................. 33,186 65,738 5,397 7,379
------------ ------------ ------------ ------------
Total Liabilities.... 2,140,333 3,007,062 15,318,965 48,470,990
------------ ------------ ------------ ------------
NET ASSETS:
Capital................. 397,189,819 576,421,927 177,672,908 191,273,746
Undistributed net
investment income....... 4,810 246 25,938 158,652
Net realized losses on
investments............. (837) -- (4,120,377) (4,874,053)
Net unrealized
appreciation on
investments............. -- -- 53,402 1,248,973
------------ ------------ ------------ ------------
Net Assets........... $397,193,792 $576,422,173 $173,631,871 $187,807,318
============ ============ ============ ============
</TABLE>
Continued
-29-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities, Continued
September 30, 2000
<TABLE>
<CAPTION>
Short-
Prime U.S. 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................ $277,218,767 $170,379,958 $ 3,270,337 $ 2,578,530
Class B................ 41,643,561 10,425,188 -- 2,329,300
Trust Class............ 78,331,464 395,617,027 170,361,534 182,899,488
------------ ------------ ------------ ------------
Total................ $397,193,792 $576,422,173 $173,631,871 $187,807,318
============ ============ ============ ============
Outstanding units of
beneficial interest
(shares)
Class A................ 277,218,539 170,380,020 339,437 265,502
Class B................ 41,643,522 10,425,186 -- 240,474
Trust Class............ 78,332,569 395,616,814 17,672,803 18,803,987
------------ ------------ ------------ ------------
Total................ 397,194,630 576,422,020 18,012,240 19,309,963
============ ============ ============ ============
Net asset value
Class A--redemption
price per share........ $ 1.00 $ 1.00 $ 9.63 $ 9.71
Class B--offering
price per share*....... 1.00 1.00 -- 9.69
Trust Class--offering
and redemption price
per share.............. 1.00 1.00 9.64 9.73
============ ============ ============ ============
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 $ 9.83 $ 10.17
============ ============ ============ ============
</TABLE>
----
* Redemption price per share (Class B) varies by length of time shares are
held. (See note 1)
See notes to financial statements.
-30-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities
September 30, 2000
<TABLE>
<CAPTION>
Intermediate North Carolina South Carolina Virginia
Corporate Intermediate Intermediate Intermediate
Bond Fund Tax-Free Fund Tax-Free Fund Tax-Free Fund
------------ -------------- -------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $89,541,970;
$92,470,630;
$15,313,291;
$77,636,980,
respectively)........... $90,992,998 $93,741,626 $15,494,791 $78,607,635
Interest and dividends
receivable.............. 1,605,829 1,372,873 197,967 1,151,633
Receivable for
investments sold........ -- 2,111,180 -- --
Prepaid expenses and
other................... 600 1,234 4,578 1,186
----------- ----------- ----------- -----------
Total Assets......... 92,599,427 97,226,913 15,697,336 79,760,454
----------- ----------- ----------- -----------
LIABILITIES:
Dividends payable....... 464,380 311,993 54,965 268,646
Payable for investments
purchased............... 499,905 3,956,185 -- 1,548,465
Payable for collateral
received on loaned
securities.............. 2,124,507 -- -- --
Accrued expenses and
other payables:
Investment advisory
fees................... 32,749 38,178 5,187 32,061
Administration,
transfer agent and
fund accounting fees... 3,653 3,048 388 2,564
Distribution fees...... 102 1,397 154 23
Other.................. 66,258 3,400 -- 2,202
----------- ----------- ----------- -----------
Total Liabilities.... 3,191,554 4,314,201 60,694 1,853,961
----------- ----------- ----------- -----------
NET ASSETS:
Capital................. 88,667,747 92,656,121 15,833,565 78,056,428
Undistributed net
investment income....... 25,488 41,099 2,798 25,523
Net realized losses on
investments............. (736,390) (1,055,504) (381,221) (1,146,113)
Net unrealized
appreciation on
investments............. 1,451,028 1,270,996 181,500 970,655
----------- ----------- ----------- -----------
Net Assets........... $89,407,873 $92,912,712 $15,636,642 $77,906,493
=========== =========== =========== ===========
</TABLE>
Continued
-31-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities, Continued
September 30, 2000
<TABLE>
<CAPTION>
Intermediate North Carolina South Carolina Virginia
Corporate Intermediate Intermediate Intermediate
Bond Fund Tax-Free Fund Tax-Free Fund Tax-Free Fund
------------ -------------- -------------- -------------
<S> <C> <C> <C> <C>
Net Assets
Class A................ $ 236,129 $11,403,092 $ 1,250,732 $ 179,681
Class B................ 70,479 -- -- --
Trust Class............ 89,101,265 81,509,620 14,385,910 77,726,812
----------- ----------- ----------- -----------
Total................ $89,407,873 $92,912,712 $15,636,642 $77,906,493
=========== =========== =========== ===========
Outstanding units of
beneficial interest
(shares)
Class A................ 23,650 1,143,348 126,379 16,390
Class B................ 7,061 -- -- --
Trust Class............ 8,928,761 8,170,856 1,462,445 7,091,784
----------- ----------- ----------- -----------
Total................ 8,959,472 9,314,204 1,588,824 7,108,174
=========== =========== =========== ===========
Net asset value
Class A--redemption
price per share........ $ 9.98 $ 9.97 $ 9.90 $ 10.96
Class B--offering
price per share*....... 9.98 -- -- --
Trust Class--offering
and redemption price
per share.............. 9.98 9.98 9.84 10.96
=========== =========== =========== ===========
Maximum Sales Charge--
Class A................. 4.50% 2.00% 2.00% 2.00%
=========== =========== =========== ===========
Maximum Offering Price
(100%/(100%-Maximum
Sales Charge) of net
asset value adjusted to
the nearest cent) per
share--Class A.......... $ 10.45 $ 10.17 $ 10.10 $ 11.18
=========== =========== =========== ===========
</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 Assets and Liabilities
September 30, 2000
<TABLE>
<CAPTION>
Growth and Large Company Small Company
Income Stock Balanced Growth Growth
Fund Fund Fund Fund
------------ ------------ ------------- -------------
ASSETS:
<S> <C> <C> <C> <C>
Investments, at value
(Cost $346,202,657;
$131,286,022;
$165,644,658;
$219,711,639,
respectively)........... $454,531,777 $141,482,995 $219,045,744 $279,237,251
Cash.................... -- -- -- 64,937
Interest and dividends
receivable.............. 724,153 797,688 111,876 2,909
Receivable for capital
shares issued........... 2,025 -- 1,584 2,584
Receivable for
investments sold........ 1,189,891 -- -- 3,320,806
Prepaid expenses and
other................... 3,633 6,676 1,309 1,596
------------ ------------ ------------ ------------
Total Assets......... 456,451,479 142,287,359 219,160,513 282,630,083
------------ ------------ ------------ ------------
LIABILITIES:
Dividends payable....... 331,167 223,637 -- --
Payable for capital
shares redeemed......... -- -- -- 19,144
Payable for collateral
received on loaned
securities.............. 52,740,013 5,983,393 33,153,432 31,963,508
Variation margin
payable................. -- -- -- 278,750
Payable for investments
purchased............... 478,700 -- -- 2,687,566
Accrued expenses and
other payables:
Investment advisory
fees................... 199,551 67,732 94,909 192,595
Administration,
transfer agent and
fund accounting fees... 16,430 5,574 7,679 9,689
Distribution fees...... 36,570 19,418 25,790 20,815
Other.................. -- -- 12,446 20,351
------------ ------------ ------------ ------------
Total Liabilities.... 53,802,431 6,299,754 33,294,256 35,192,418
------------ ------------ ------------ ------------
NET ASSETS:
Capital................. 277,373,350 120,675,398 119,506,509 146,167,880
Undistributed
(distributions in excess
of) net investment
income.................. 5,539 1,239 (7,442) --
Accumulated
undistributed net
realized gains on
investments............. 16,941,039 5,113,995 12,966,104 42,261,048
Net unrealized
appreciation on futures
and investments......... 108,329,120 10,196,973 53,401,086 59,008,737
------------ ------------ ------------ ------------
Net Assets........... $402,649,048 $135,987,605 $185,866,257 $247,437,665
============ ============ ============ ============
</TABLE>
Continued
-33-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities, Continued
September 30, 2000
<TABLE>
<CAPTION>
Growth and Large Company Small Company
Income Stock Balanced Growth Growth
Fund Fund Fund Fund
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Net Assets
Class A................ $ 33,004,151 $ 17,726,143 $ 13,156,441 $ 28,935,721
Class B................ 36,077,534 18,858,782 27,171,696 20,707,179
Trust Class............ 333,567,363 99,402,680 145,538,120 197,794,765
------------ ------------ ------------ ------------
Total................ $402,649,048 $135,987,605 $185,866,257 $247,437,665
============ ============ ============ ============
Outstanding units of
beneficial interest
(shares)
Class A................ 1,777,585 1,348,405 891,790 829,851
Class B................ 1,953,538 1,443,672 1,878,204 617,523
Trust Class............ 17,933,313 7,582,080 9,806,214 5,573,553
------------ ------------ ------------ ------------
Total................ 21,664,436 10,374,157 12,576,208 7,020,927
============ ============ ============ ============
Net asset value
Class A--redemption
price per share........ $ 18.57 $ 13.15 $ 14.75 $ 34.87
Class B--offering
price per share*....... 18.47 13.06 14.47 33.53
Trust Class--offering
and redemption price
per share.............. 18.60 13.11 14.84 35.49
============ ============ ============ ============
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.......... $ 19.45 $ 13.77 $ 15.45 $ 36.51
============ ============ ============ ============
</TABLE>
----
* Redemption price per share (Class B) varies by length of time shares are
held. (See note 1)
See notes to financial statements.
-34-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities
September 30, 2000
<TABLE>
<CAPTION>
International Capital Manager Capital Manager Capital
Equity Conservative Moderate Growth Manager
Fund Growth Fund Fund Growth Fund
------------- --------------- --------------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $122,831,201; $0;
$0; $0, respectively)... $115,891,968 $ -- $ -- $ --
Investments in
affiliates, at value
(Cost $0; $32,253,712;
$29,444,607;
$28,318,830,
respectively)........... -- 32,436,002 30,606,019 30,238,012
Cash.................... 7,157,478 -- -- --
Interest and dividends
receivable.............. 174,308 96,429 65,327 45,581
Receivable for capital
shares issued........... 1,836,020 -- -- --
Foreign currency, at
value (Cost $3,135,560;
$0; $0; $0,
respectively)........... 3,138,827 -- -- --
Reclaim receivable...... 103,683 -- -- --
Prepaid expenses and
other................... 1,338 8,721 384 11,120
------------ ----------- ----------- -----------
Total Assets......... 128,303,622 32,541,152 30,671,730 30,294,713
------------ ----------- ----------- -----------
LIABILITIES:
Dividends payable....... -- 284,839 183,238 151,158
Payable for investments
purchased............... 2,276,070 -- -- --
Accrued expenses and
other payables:
Investment advisory
fees................... 103,981 4,058 3,800 3,743
Administration,
transfer agent and
fund accounting fees... 5,102 797 752 742
Distribution fees...... 3,817 183 690 1,865
Other.................. 46,378 -- 8,268 --
------------ ----------- ----------- -----------
Total Liabilities.... 2,435,348 289,877 196,748 157,508
------------ ----------- ----------- -----------
NET ASSETS:
Capital................. 112,407,154 30,406,923 27,435,291 26,317,660
Undistributed
(distributions in
excess) of net
investment income....... (2,812) (7,157) (7,155) (7,189)
Accumulated
undistributed net
realized gains on
foreign currency
transactions and
investments............. 20,405,523 1,669,219 1,885,434 1,907,552
Net unrealized
appreciation
(depreciation) on
foreign currency
transactions and
investments............. (6,941,591) 182,290 1,161,412 1,919,182
------------ ----------- ----------- -----------
Net Assets........... $125,868,274 $32,251,275 $30,474,982 $30,137,205
============ =========== =========== ===========
</TABLE>
Continued
-35-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Assets and Liabilities, Continued
September 30, 2000
<TABLE>
<CAPTION>
International Capital Manager Capital Manager Capital
Equity Conservative Moderate Growth Manager
Fund Growth Fund Fund Growth Fund
------------- --------------- --------------- -----------
<S> <C> <C> <C> <C>
Net Assets..............
Class A................ $ 2,681,047 $ 292,931 $ 1,317,575 $ 1,605,621
Class B................ 3,861,261 150,346 541,797 1,993,448
Trust Class............ 119,325,966 31,807,998 28,615,610 26,538,136
------------ ----------- ----------- -----------
Total................ $125,868,274 $32,251,275 $30,474,982 $30,137,205
============ =========== =========== ===========
Outstanding units of
beneficial interest
(shares)
Class A................ 214,706 27,358 117,113 137,737
Class B................ 315,481 14,039 48,330 171,227
Trust Class............ 9,468,110 2,958,181 2,543,073 2,276,494
------------ ----------- ----------- -----------
Total................ 9,998,297 2,999,578 2,708,516 2,585,458
============ =========== =========== ===========
Net asset value
Class A--redemption
price per share........ $ 12.49 $ 10.71 $ 11.25 $ 11.66
Class B--offering
price per share*....... 12.24 10.71 11.21 11.64
Trust Class--offering
and redemption price
per share.............. 12.60 10.75 11.25 11.66
============ =========== =========== ===========
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.......... $ 13.08 $ 11.21 $ 11.78 $ 12.21
============ =========== =========== ===========
</TABLE>
----
* Redemption price per share (Class B) varies by length of time shares are
held. (See note 1)
See notes to financial statements.
-36-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Operations
For the Year Ended September 30, 2000
<TABLE>
<CAPTION>
Short-
Prime U.S. Treasury Intermediate Intermediate U.S.
Money Market Money Market U.S. Government Government Bond
Fund Fund Income Fund Fund
------------ ------------- --------------- -----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income.......... $10,085,864 $24,694,559 $11,264,251 $12,200,204
Dividend income.......... 33,903 -- 169,630 192,384
Income from securities
lending.................. -- 36,963 65,641 60,800
----------- ----------- ----------- -----------
Total Income.......... 10,119,767 24,731,522 11,499,522 12,453,388
----------- ----------- ----------- -----------
EXPENSES:
Investment advisory
fees..................... 627,568 1,672,668 1,099,047 1,142,722
Administration, transfer
agent and fund accounting
fees..................... 435,529 1,119,443 476,467 543,912
Distribution fees--Class
A........................ 344,962 385,669 20,703 15,387
Distribution fees--Class
B........................ 199,959 66,354 -- 23,791
Custodian fees........... 19,260 19,019 9,668 10,649
Trustees' fees and
expenses................. 3,576 13,926 6,396 6,750
Other.................... 132,510 221,178 76,574 76,622
----------- ----------- ----------- -----------
Gross Expenses........ 1,763,364 3,498,257 1,688,855 1,819,833
----------- ----------- ----------- -----------
Expenses Waived....... (326,810) (536,662) (281,705) (198,144)
----------- ----------- ----------- -----------
Total Expenses........ 1,436,554 2,961,595 1,407,150 1,621,689
----------- ----------- ----------- -----------
Net Investment Income.... 8,683,213 21,769,927 10,092,372 10,831,699
----------- ----------- ----------- -----------
REALIZED/UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gains
(losses) on investment
transactions............. 54 -- (2,920,593) (4,732,828)
Net change in unrealized
appreciation/depreciation
on investments........... -- -- 2,736,753 5,662,514
----------- ----------- ----------- -----------
Net realized/unrealized
gains (losses) on
investments.............. 54 -- (183,840) 929,686
----------- ----------- ----------- -----------
Change in net assets
resulting from
operations............... $ 8,683,267 $21,769,927 $ 9,908,532 $11,761,385
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
-37-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Operations
For the Year Ended September 30, 2000
<TABLE>
<CAPTION>
Intermediate North Carolina South Carolina Virginia
Corporate Bond Intermediate Intermediate Intermediate
Fund (a) Tax-Free Fund Tax-Free Fund Tax-Free Fund
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income.......... $4,059,137 $4,328,357 $ 792,492 $3,907,071
Dividend income.......... 154,041 84,439 16,217 57,939
Income from securities
lending.................. 1,636 -- -- --
---------- ---------- --------- ----------
Total Income.......... 4,214,814 4,412,796 808,709 3,965,010
---------- ---------- --------- ----------
EXPENSES:
Investment advisory
fees..................... 356,776 522,455 99,670 467,948
Administration, transfer
agent and fund accounting
fees..................... 217,058 262,377 88,172 203,543
Distribution fees--Class
A........................ 638 59,493 5,799 514
Distribution fees--Class
B........................ 272 -- -- --
Custodian fees........... 13,213 9,280 7,194 4,403
Trustees' fees and
expenses................. 2,010 3,018 575 2,757
Other.................... 71,693 41,870 6,993 55,185
---------- ---------- --------- ----------
Gross Expenses........ 661,660 898,493 208,403 734,350
Expenses waived....... (215,928) (185,663) (81,317) (124,472)
---------- ---------- --------- ----------
Total Expenses........ 445,732 712,830 127,086 609,878
---------- ---------- --------- ----------
Net Investment Income.... 3,769,082 3,699,966 681,623 3,355,132
---------- ---------- --------- ----------
REALIZED/UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized losses on
investments.............. (713,070) (868,485) (346,477) (932,244)
Net change in unrealized
appreciation/depreciation
on investments........... 1,451,028 1,687,863 504,338 1,645,785
---------- ---------- --------- ----------
Net realized/unrealized
gains on investments..... 737,958 819,378 157,861 713,541
---------- ---------- --------- ----------
Change in net assets
resulting from
operations............... $4,507,040 $4,519,344 $ 839,484 $4,068,673
========== ========== ========= ==========
</TABLE>
----
(a) For the period from December 2, 1999 (commencement of operations) through
September 30, 2000.
See notes to financial statements.
-38-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Operations
For the Year Ended September 30, 2000
<TABLE>
<CAPTION>
Growth and Large Company Small Company
Income Balanced Growth Growth
Stock Fund Fund Fund Fund
----------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income........... $ 186,100 $ 3,838,140 $ 3,234 $ 1,785,515
Dividend income........... 15,545,803 1,710,532 1,244,211 44,197
Income from securities
lending................... 239,529 31,201 33,188 100,578
----------- ----------- ----------- -----------
Total Income........... 15,971,432 5,579,873 1,280,633 1,930,290
----------- ----------- ----------- -----------
EXPENSES:
Investment advisory fees.. 3,092,866 1,097,163 1,161,852 2,082,628
Administration, transfer
agent and fund accounting
fees...................... 1,319,492 534,038 575,834 716,544
Distribution fees--Class
A......................... 174,135 97,286 52,043 97,823
Distribution fees--Class
B......................... 363,445 200,583 216,127 181,056
Custodian fees............ 14,844 14,336 10,827 50,593
Trustees' fees and
expenses.................. 14,930 5,227 4,180 5,619
Other..................... 152,235 59,239 75,670 95,581
----------- ----------- ----------- -----------
Gross Expenses......... 5,131,947 2,007,872 2,096,533 3,229,844
Expenses waived........ (820,415) (310,031) (288,650) (48,911)
----------- ----------- ----------- -----------
Total Expenses......... 4,311,532 1,697,841 1,807,883 3,180,933
----------- ----------- ----------- -----------
Net Investment Income
(Loss).................... 11,659,900 3,882,032 (527,250) (1,250,643)
----------- ----------- ----------- -----------
REALIZED/UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gains on
futures and investments... 17,062,084 5,734,986 14,429,993 49,099,216
Net change in unrealized
appreciation/depreciation
on futures and
investments............... (5,431,513) (7,225,444) 18,005,829 25,707,083
----------- ----------- ----------- -----------
Net realized/unrealized
gains (losses) on
investments............... 11,630,571 (1,490,458) 32,435,822 74,806,299
----------- ----------- ----------- -----------
Change in net assets
resulting from
operations................ $23,290,471 $ 2,391,574 $31,908,572 $73,555,656
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
-39-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Operations
For the Year Ended September 30, 2000
<TABLE>
<CAPTION>
International Capital Manager Capital Manager Capital
Equity Conservative Moderate Growth Manager
Fund Growth Fund Fund Growth Fund
------------- --------------- --------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income.......... $ 2,045,984 $ -- $ -- $ --
Dividend income from
affiliates............... -- 1,395,804 1,051,371 840,536
Foreign tax withholding.. (220,503) -- -- --
------------ ---------- ---------- ----------
Total Income.......... 1,825,481 1,395,804 1,051,371 840,536
------------ ---------- ---------- ----------
EXPENSES:
Investment advisory
fees..................... 1,235,867 83,881 75,610 71,487
Administration, transfer
agent and fund accounting
fees..................... 431,379 93,965 104,341 92,016
Distribution fees--Class
A........................ 13,159 1,769 7,045 6,609
Distribution fees--Class
B........................ 34,376 1,325 3,457 10,568
Custodian fees........... 142,878 7,852 9,603 7,782
Trustees' fees and
expenses................. 3,945 1,029 1,080 828
Other.................... 56,406 16,246 16,924 12,416
------------ ---------- ---------- ----------
Gross Expenses........ 1,918,010 206,067 218,060 201,706
Expenses waived....... (6,580) (65,026) (61,384) (57,916)
------------ ---------- ---------- ----------
Total Expenses........ 1,911,430 141,041 156,676 143,790
------------ ---------- ---------- ----------
Net Investment Income
(Loss)................... (85,949) 1,254,763 894,695 696,746
------------ ---------- ---------- ----------
REALIZED/UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gains on
foreign currency and
investments.............. 20,735,065 -- -- --
Net realized gains on
investments with
affiliates............... -- 766,828 759,632 632,345
Net realized gain
distributions from
underlying funds......... -- 926,417 1,156,656 1,303,845
Net change in unrealized
appreciation/depreciation
on foreign currency and
investments.............. (17,219,058) 2,831 468,428 1,006,715
------------ ---------- ---------- ----------
Net realized/unrealized
gains on investments..... 3,516,007 1,696,076 2,384,716 2,942,905
------------ ---------- ---------- ----------
Change in net assets
resulting from
operations............... $ 3,430,058 $2,950,839 $3,279,411 $3,639,651
============ ========== ========== ==========
</TABLE>
See notes to financial statements.
-40-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements 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 Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- --------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.. $ 8,683,213 $ 2,724,242 $ 21,769,927 $ 13,438,125
Net realized gains on
investments............ 54 3,555 -- --
------------- ------------- --------------- -------------
Change in net assets
resulting from
operations.............. 8,683,267 2,727,797 21,769,927 13,438,125
------------- ------------- --------------- -------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income................. (3,918,108) (152,033) (3,943,650) (1,737,810)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment
income................. (951,275) (117,652) (293,771) (61,245)
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment
income................. (3,813,830) (2,454,557) (17,532,506) (11,639,070)
------------- ------------- --------------- -------------
Change in net assets
from shareholder
distributions........... (8,683,213) (2,724,242) (21,769,927) (13,438,125)
------------- ------------- --------------- -------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................. 603,068,625 172,392,196 1,268,279,919 587,978,397
Dividends reinvested... 2,751,172 154,204 7,918,408 4,508,381
Cost of shares
redeemed............... (279,904,359) (142,603,501) (1,026,865,671) (543,926,357)
------------- ------------- --------------- -------------
Change in net assets
from capital
transactions............ 325,915,438 29,942,899 249,332,656 48,560,421
------------- ------------- --------------- -------------
Change in net assets.... 325,915,492 29,946,454 249,332,656 48,560,421
NET ASSETS:
Beginning of period.... 71,278,300 41,331,846 327,089,517 278,529,096
------------- ------------- --------------- -------------
End of period.......... $ 397,193,792 $ 71,278,300 $ 576,422,173 $ 327,089,517
============= ============= =============== =============
SHARE TRANSACTIONS:
Issued................. 603,068,625 172,392,196 1,268,279,919 587,978,397
Reinvested............. 2,751,172 154,204 7,918,408 4,508,381
Redeemed............... (279,904,359) (142,603,501) (1,026,865,671) (543,926,357)
------------- ------------- --------------- -------------
Change in shares........ 325,915,438 29,942,899 249,332,656 48,560,421
============= ============= =============== =============
</TABLE>
See notes to financial statements.
-41-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Short-Intermediate Intermediate
U.S. Government U.S. 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,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.... $ 10,092,372 $ 8,728,816 $ 10,831,699 $ 10,358,648
Net realized gains
(losses) on investments.. (2,920,593) 506,677 (4,732,828) 2,542,689
Net change in unrealized
appreciation/depreciation
on investments........... 2,736,753 (7,407,066) 5,662,514 (17,109,843)
------------ ------------ ------------- ------------
Change in net assets
resulting from
operations................ 9,908,532 1,828,427 11,761,385 (4,208,506)
------------ ------------ ------------- ------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income................... (220,356) (227,380) (169,157) (189,135)
From net realized gains
from investments......... -- -- (8,879) (45,700)
In excess of net realized
gains from investments... -- -- (2,156) --
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment
income................... -- -- (112,770) (83,767)
From net realized gains
from investments......... -- -- (6,993) (15,100)
In excess of net realized
gains from investments... -- -- (1,699) --
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment
income................... (9,997,061) (8,601,436) (10,615,424) (10,085,746)
From net realized gains
from investments......... -- -- (520,884) (1,898,850)
In excess of net realized
gains from investments... -- -- (126,509) --
------------ ------------ ------------- ------------
Change in net assets from
shareholder
distributions............. (10,217,417) (8,828,816) (11,564,471) (12,318,298)
------------ ------------ ------------- ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................... 63,862,444 53,751,017 69,855,170 93,711,669
Dividends reinvested..... 541,620 559,768 2,828,601 3,341,950
Cost of shares redeemed.. (62,374,980) (37,203,799) (104,477,671) (53,254,932)
------------ ------------ ------------- ------------
Change in net assets from
capital transactions...... 2,029,084 17,106,986 (31,793,900) 43,798,687
------------ ------------ ------------- ------------
Change in net assets...... 1,720,199 10,106,597 (31,596,986) 27,271,883
NET ASSETS:
Beginning of period...... 171,911,672 161,805,075 219,404,304 192,132,421
------------ ------------ ------------- ------------
End of period............ $173,631,871 $171,911,672 $ 187,807,318 $219,404,304
============ ============ ============= ============
SHARE TRANSACTIONS:
Issued................... 6,682,351 5,472,276 7,320,995 9,371,863
Reinvested............... 56,719 56,935 295,135 329,967
Redeemed................. (6,535,353) (3,784,731) (10,882,404) (5,273,293)
------------ ------------ ------------- ------------
Change in shares.......... 203,717 1,744,480 (3,266,274) 4,428,537
============ ============ ============= ============
</TABLE>
See notes to financial statements.
-42-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Intermediate Corporate North Carolina
Bond Fund Intermediate Tax-Free Fund
---------------------- ----------------------------
For the For the For the
Period Ended September Year Ended Year Ended
30, September 30, September 30,
2000 (a) 2000 1999
---------------------- ------------- -------------
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income..... $ 3,769,082 $ 3,699,966 $ 3,412,964
Net realized losses on
investments............... (713,070) (868,485) (102,373)
Net change in unrealized
appreciation/depreciation
on investments............ 1,451,028 1,687,863 (4,541,542)
------------ ------------ ------------
Change in net assets
resulting from operations.. 4,507,040 4,519,344 (1,230,951)
------------ ------------ ------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income.................... (7,804) (490,454) (532,706)
From net realized gains
from investments.......... -- -- (60,954)
In excess of net realized
gains from investments.... -- (650) (24,537)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment
income.................... (1,465) -- --
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment
income.................... (3,759,816) (3,209,513) (2,880,258)
From net realized gains
from investments.......... -- -- (361,508)
In excess of net realized
gains from investments.... -- (3,505) (145,523)
------------ ------------ ------------
Change in net assets from
shareholder distributions.. (3,769,085) (3,704,122) (4,005,486)
------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued.................... 99,873,269 25,677,299 26,407,580
Dividends reinvested...... 1,987,177 412,504 508,644
Cost of shares redeemed... (13,190,528) (18,099,806) (22,618,365)
------------ ------------ ------------
Change in net assets from
capital transactions....... 88,669,918 7,989,997 4,297,859
------------ ------------ ------------
Change in net assets....... 89,407,873 8,805,219 (938,578)
NET ASSETS:
Beginning of period....... -- 84,107,493 85,046,071
------------ ------------ ------------
End of period............. $ 89,407,873 $ 92,912,712 $ 84,107,493
============ ============ ============
SHARE TRANSACTIONS:
Issued.................... 10,097,810 2,609,364 2,588,527
Reinvested................ 202,566 42,009 49,458
Redeemed.................. (1,340,904) (1,843,031) (2,211,670)
------------ ------------ ------------
Change in shares........... 8,959,472 808,342 426,315
============ ============ ============
</TABLE>
----
(a) For the period from December 2, 1999 (commencement of operations) through
September 30, 2000.
See notes to financial statements.
-43-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
South Carolina Virginia Intermediate
Intermediate Tax-Free Fund 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,
2000 1999 2000 1999 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.... $ 681,623 $ 709,461 $ 3,355,132 $ 1,263,469
Net realized gains
(losses) on investments.. (346,477) 1,730 (932,244) (191,046)
Net change in unrealized
appreciation/depreciation
on investments........... 504,338 (1,074,450) 1,645,785 (2,572,782)
----------- ----------- ------------ -----------
Change in net assets
resulting from
operations................ 839,484 (363,259) 4,068,673 (1,500,359)
----------- ----------- ------------ -----------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income................... (46,028) (26,968) (4,282) (469)
From net realized gains
from investments......... -- (1,845) -- --
In excess of net realized
gains from investments... -- (543) -- --
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment
income................... (635,595) (682,493) (3,350,850) (1,263,000)
From net realized gains
from investments......... -- (110,141) -- --
In excess of net realized
gains from investments... -- (32,411) -- --
----------- ----------- ------------ -----------
Change in net assets from
shareholder
distributions............. (681,623) (854,401) (3,355,132) (1,263,469)
----------- ----------- ------------ -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................... 1,686,232 4,262,509 10,073,171 85,191,871
Dividends reinvested..... 42,426 21,108 2,875 219
Cost of shares redeemed.. (3,704,983) (4,149,815) (12,310,550) (3,000,806)
----------- ----------- ------------ -----------
Change in net assets from
capital transactions...... (1,976,325) 133,802 (2,234,504) 82,191,284
----------- ----------- ------------ -----------
Change in net assets...... (1,818,464) (1,083,858) (1,520,963) 79,427,456
NET ASSETS:
Beginning of period...... 17,455,106 18,538,964 79,427,456 --
----------- ----------- ------------ -----------
End of period............ $15,636,642 $17,455,106 $ 77,906,493 $79,427,456
=========== =========== ============ ===========
SHARE TRANSACTIONS:
Issued................... 174,073 422,672 932,917 7,585,174
Reinvested............... 4,359 2,086 266 20
Redeemed................. (380,633) (414,297) (1,138,945) (271,258)
----------- ----------- ------------ -----------
Change in shares.......... (202,201) 10,461 (205,762) 7,313,936
=========== =========== ============ ===========
</TABLE>
----
(a) For the period from May 17, 1999 (commencement of operations) through
September 30, 1999.
See notes to financial statements.
-44-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Growth and Income Balanced
Stock Fund 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,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.... $ 11,659,900 $ 6,625,392 $ 3,882,032 $ 4,153,838
Net realized gains on
investments.............. 17,062,084 37,465,613 5,734,986 9,253,980
Net change in unrealized
appreciation/depreciation
on investments........... (5,431,513) 7,984,149 (7,225,444) (2,071,623)
------------- ------------- ------------ ------------
Change in net assets
resulting from
operations................ 23,290,471 52,075,154 2,391,574 11,336,195
------------- ------------- ------------ ------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income................... (915,558) (515,715) (493,115) (540,324)
From net realized gains
from investments......... (3,095,963) (1,704,986) (889,513) (1,111,931)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment
income................... (708,454) (208,234) (364,574) (342,755)
From net realized gains
from investments......... (3,107,786) (1,455,060) (912,904) (856,840)
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment
income................... (10,030,349) (5,901,443) (3,039,522) (3,286,351)
From net realized gains
from investments......... (30,471,495) (15,578,825) (5,067,849) (5,781,527)
------------- ------------- ------------ ------------
Change in net assets from
shareholder
distributions............. (48,329,605) (25,364,263) (10,767,477) (11,919,728)
------------- ------------- ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................... 76,163,401 107,370,335 18,512,419 33,795,452
Dividends reinvested..... 23,722,877 12,926,508 8,752,724 9,175,126
Cost of shares redeemed.. (128,713,297) (111,377,616) (45,997,154) (25,364,362)
------------- ------------- ------------ ------------
Change in net assets from
capital transactions...... (28,827,019) 8,919,227 (18,732,011) 17,606,216
------------- ------------- ------------ ------------
Change in net assets...... (53,866,153) 35,630,118 (27,107,914) 17,022,683
NET ASSETS:
Beginning of period...... 456,515,201 420,885,083 163,095,519 146,072,836
------------- ------------- ------------ ------------
End of period............ $ 402,649,048 $ 456,515,201 $135,987,605 $163,095,519
============= ============= ============ ============
SHARE TRANSACTIONS:
Issued................... 4,202,478 5,279,265 1,397,489 2,354,356
Reinvested............... 1,285,441 634,868 654,410 640,132
Redeemed................. (7,085,133) (5,391,287) (3,498,294) (1,762,439)
------------- ------------- ------------ ------------
Change in shares.......... (1,597,214) 522,846 (1,446,395) 1,232,049
============= ============= ============ ============
</TABLE>
See notes to financial statements.
-45-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Large Company Small Company
Growth Fund Growth 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,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment loss.... $ (527,250) $ (162,867) $ (1,250,643) $ (1,196,306)
Net realized gains on
futures and
investments............ 14,429,993 6,107,190 49,099,216 12,616,268
Net change in
unrealized appreciation
on futures and
investments............ 18,005,829 12,965,625 25,707,083 28,117,911
------------ ------------ ------------- -------------
Change in net assets
resulting from
operations.............. 31,908,572 18,909,948 73,555,656 39,537,873
------------ ------------ ------------- -------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net realized gains
from investments....... (386,187) (124,106) (1,678,289) --
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net realized gains
from investments....... (835,887) (279,203) (1,383,064) --
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net realized gains
from investments....... (5,750,383) (3,203,980) (12,786,728) --
In excess of net
investment income...... -- (24,125) -- --
------------ ------------ ------------- -------------
Change in net assets
from shareholder
distributions........... (6,972,457) (3,631,414) (15,848,081) --
------------ ------------ ------------- -------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................. 80,048,238 53,970,032 351,947,893 111,811,018
Dividends reinvested... 1,234,808 460,407 10,248,791 --
Cost of shares
redeemed............... (29,188,620) (17,771,061) (300,582,122) (106,478,404)
------------ ------------ ------------- -------------
Change in net assets
from capital
transactions............ 52,094,426 36,659,378 61,614,562 5,332,614
------------ ------------ ------------- -------------
Change in net assets.... 77,030,541 51,937,912 119,322,137 44,870,487
NET ASSETS:
Beginning of period.... 108,835,716 56,897,804 128,115,528 83,245,041
------------ ------------ ------------- -------------
End of period.......... $185,866,257 $108,835,716 $ 247,437,665 $ 128,115,528
============ ============ ============= =============
SHARE TRANSACTIONS:
Issued................. 5,373,722 4,658,383 10,316,550 5,271,001
Reinvested............. 91,792 43,579 349,884 --
Redeemed............... (1,982,083) (1,519,232) (8,744,446) (4,899,093)
------------ ------------ ------------- -------------
Change in shares........ 3,483,431 3,182,730 1,921,988 371,908
============ ============ ============= =============
</TABLE>
See notes to financial statements.
-46-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Capital Manager
International Conservative
Equity Fund Growth 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,
2000 1999 2000 1999 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income
(loss)................... $ (85,949) $ 139,281 $ 1,254,763 $ 983,283
Net realized gains on
foreign currency and
investments.............. 20,735,065 4,835,636 -- --
Net realized gains on
investments with
affiliates............... -- -- 766,828 217,601
Net realized gain
distributions from
underlying funds......... -- -- 926,417 565,771
Net change in unrealized
appreciation/depreciation
on foreign currency and
investments.............. (17,219,058) 16,606,815 2,831 383,969
------------ ------------ ----------- -----------
Change in net assets
resulting from
operations................ 3,430,058 21,581,732 2,950,839 2,150,624
------------ ------------ ----------- -----------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income................... -- (4,037) (12,855) (12,382)
From net realized gains
from investments......... (104,843) (22,804) (10,851) (2,027)
In excess of net
investment income........ -- -- (53) (24)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment
income................... -- (2,136) (3,910) (1,510)
From net realized gains
from investments......... (122,221) (34,567) (2,673) --
In excess of net
investment income........ -- -- (16) (3)
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment
income................... -- (273,843) (1,237,998) (1,008,395)
From net realized gains
from investments......... (4,989,751) (1,288,928) (722,850) (400,054)
In excess of net
investment income........ -- -- (5,084) (1,977)
------------ ------------ ----------- -----------
Change in net assets from
shareholder
distributions............. (5,216,815) (1,626,315) (1,996,290) (1,426,372)
------------ ------------ ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................... 68,944,407 26,053,178 5,158,594 10,867,721
Dividends reinvested..... 1,543,932 481,380 569,336 128,560
Cost of shares redeemed.. (44,564,108) (18,352,844) (7,663,436) (2,380,373)
------------ ------------ ----------- -----------
Change in net assets from
capital transactions...... 25,924,231 8,181,714 (1,935,506) 8,615,908
------------ ------------ ----------- -----------
Change in net assets...... 24,137,474 28,137,131 (980,957) 9,340,160
NET ASSETS:
Beginning of period...... 101,730,800 73,593,669 33,232,232 23,892,072
------------ ------------ ----------- -----------
End of period............ $125,868,274 $101,730,800 $32,251,275 $33,232,232
============ ============ =========== ===========
SHARE TRANSACTIONS:
Issued................... 5,043,242 2,194,713 480,737 1,027,813
Reinvested............... 112,934 44,009 53,498 12,124
Redeemed................. (3,259,918) (1,534,370) (719,604) (224,173)
------------ ------------ ----------- -----------
Change in shares.......... 1,896,258 704,352 (185,369) 815,764
============ ============ =========== ===========
</TABLE>
----
(a) The Fund commenced offering Class B shares on January 29, 1999.
See notes to financial statements.
-47-
[LOGO OF BB&T FUNDS]
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Capital Manager
Moderate Capital Manager
Growth Fund Growth 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,
2000 1999 (a) 2000 1999 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.. $ 894,695 $ 563,592 $ 696,746 $ 350,476
Net realized gains on
investments with
affiliates............. 759,632 183,576 632,345 227,172
Net realized gain
distributions from
underlying funds....... 1,156,656 648,294 1,303,845 687,358
Net change in
unrealized appreciation
on investments......... 468,428 1,635,682 1,006,715 2,383,183
----------- ----------- ----------- -----------
Change in net assets
resulting from
operations.............. 3,279,411 3,031,144 3,639,651 3,648,189
----------- ----------- ----------- -----------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS:
From net investment
income................. (36,513) (34,980) (30,523) (12,677)
From net realized gains
from investments....... (30,245) (36,656) (37,901) (15,042)
In excess of net
investment income...... (210) (111) (227) (58)
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS:
From net investment
income................. (8,499) (1,852) (19,638) (535)
From net realized gains
from investments....... (5,681) -- (10,483) --
In excess of net
investment income...... (49) (6) (146) (2)
DISTRIBUTIONS TO TRUST
CLASS SHAREHOLDERS:
From net investment
income................. (849,683) (595,561) (646,585) (425,057)
From net realized gains
from investments....... (742,081) (540,033) (812,805) (705,524)
In excess of net
investment income...... (4,892) (1,887) (4,814) (1,942)
----------- ----------- ----------- -----------
Change in net assets
from shareholder
distributions........... (1,677,853) (1,211,086) (1,563,122) (1,160,837)
----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................. 3,147,321 4,433,451 3,673,279 1,436,202
Dividends reinvested... 287,374 82,152 118,170 31,021
Cost of shares
redeemed............... (3,192,868) (531,734) (947,477) (384,265)
----------- ----------- ----------- -----------
Change in net assets
from capital
transactions............ 241,827 3,983,869 2,843,972 1,082,958
----------- ----------- ----------- -----------
Change in net assets.... 1,843,385 5,803,927 4,920,501 3,570,310
NET ASSETS:
Beginning of period.... 28,631,597 22,827,670 25,216,704 21,646,394
----------- ----------- ----------- -----------
End of period.......... $30,474,982 $28,631,597 $30,137,205 $25,216,704
=========== =========== =========== ===========
SHARE TRANSACTIONS:
Issued................. 283,702 412,779 318,118 133,028
Reinvested............. 25,814 7,780 10,305 2,941
Redeemed............... (288,470) (49,525) (80,902) (35,342)
----------- ----------- ----------- -----------
Change in shares........ 21,046 371,034 247,521 100,627
=========== =========== =========== ===========
</TABLE>
----
(a) The Fund commenced offering Class B shares on January 29, 1999.
See notes to financial statements.
-48-
[LOGO OF BB&T FUNDS]
<PAGE>
PRIME MONEY MARKET FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
----------- --------------------------------------------------- ------------
<C> <S> <C>
Certificates of Deposit (4.3%):
Banks (4.3%):
$17,000,000 Bank One,
6.86%, 1/12/01 (b)................................. $ 17,000,000
------------
Total Certificates of Deposit 17,000,000
------------
Commercial Paper (52.2%):
Appliances (0.8%):
3,200,000 Whirlpool Corp.,
6.67%, 10/30/00.................................... 3,182,806
------------
Asset Backed Securities (10.2%):
7,000,000 Park Avenue Receivables Corp.,
6.52%, 10/20/00 (b)................................ 6,975,912
14,610,000 Prefco-Preferred Receivables Funding Co., 6.52%,
10/10/00 (b)....................................... 14,586,186
19,000,000 Sheffield Receivables Corp.,
6.52%, 10/20/00 (b)................................ 18,934,619
------------
40,496,717
------------
Banks (5.0%):
19,600,000 Associates First Capital Corp.,
6.51%, 10/26/00.................................... 19,511,392
500,000 Beta Finance, Inc.,
6.49%, 3/8/01 (b).................................. 485,758
------------
19,997,150
------------
Business Services (2.5%):
10,000,000 Asset Securitization Cooperative
Corp., 6.66%, 10/10/00 (b)......................... 9,983,700
------------
Chemicals (1.4%):
1,500,000 Praxair, Inc.,
6.70%, 10/5/00..................................... 1,498,883
1,426,000 Rohm & Haas Co.,
6.67%, 10/11/00 (b)................................ 1,423,358
2,500,000 Rohm & Haas Co.,
6.64%, 11/16/00 (b)................................ 2,478,789
------------
5,401,030
------------
Financial Services (5.9%):
10,000,000 Amsterdam Funding Corp.,
6.52%, 10/2/00 (b)................................. 9,998,189
9,000,000 Amsterdam Funding Corp.,
6.52%, 10/26/00 (b)................................ 8,959,250
2,000,000 Goldman Sachs Group, Inc.,
6.50%, 2/20/01..................................... 1,948,722
</TABLE>
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
----------- --------------------------------------------------- ------------
<C> <S> <C>
Commercial Paper, continued:
Financial Services, continued:
$ 600,000 Sigma Finance, Inc.,
6.50%, 3/8/01 (b).................................. $ 582,883
2,000,000 Sigma Finance, Inc.,
6.49%, 3/9/01 (b).................................. 1,942,672
------------
23,431,716
------------
Grocery Stores (0.8%):
3,200,000 Safeway, Inc.,
6.79%, 10/4/00..................................... 3,198,189
------------
Mortgage Bankers and Brokers (3.7%):
15,000,000 Credit Suisse First Boston, Inc.,
6.48%, 3/20/01 (b)................................. 14,541,000
------------
Oil and Gas Extraction (0.0%):
100,000 Associates Corp. of North America, 6.51%, 1/24/01.. 97,920
------------
Operative Builders (0.8%):
3,000,000 Centex Corporation,
6.70%, 10/13/00.................................... 2,993,300
------------
Paper Products (0.8%):
1,000,000 Westvaco Corp.,
6.70%, 11/22/00.................................... 990,322
2,100,000 Westvaco Corp.,
6.65%, 11/2/00..................................... 2,087,587
------------
3,077,909
------------
Personal Credit Institutions (8.7%):
19,000,000 American General Finance Corp.,
6.51%, 11/22/00.................................... 18,821,337
15,800,000 Ford Motor Credit Co.,
6.51%, 10/19/00.................................... 15,748,571
------------
34,569,908
------------
Racing, Including Track Operation (0.5%):
2,000,000 Visteon Corp.,
6.75%, 10/11/00 (b)................................ 1,996,250
------------
Security Brokers & Dealers (9.5%):
19,000,000 Merrill Lynch & Co.,
6.51% 10/25/00..................................... 18,917,540
19,000,000 Salomon Smith Barney Holding, Inc., 6.52%,
10/25/00........................................... 18,917,413
------------
37,834,953
------------
</TABLE>
Continued
-49-
[LOGO OF BB&T FUNDS]
<PAGE>
PRIME MONEY MARKET FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
----------- ----------------------------------------------------- ------------
<C> <S> <C>
Commercial Paper, continued:
Trust Companies (1.6%):
$ 5,000,000 Monet Trust,
6.73%, 9/27/01 (c)................................... $ 5,000,000
1,500,000 New Center Asset Trust,
6.51%, 1/22/01....................................... 1,469,349
------------
6,469,349
------------
Total Commercial Paper 207,271,897
------------
Corporate Bonds (12.7%):
Banks (3.2%):
3,000,000 Bank of America,
6.87%, 1/17/01....................................... 3,000,000
1,000,000 Bank of America,
6.83%, 1/29/01....................................... 1,000,000
3,000,000 Bank of America,
6.82%, 2/1/01........................................ 3,000,000
1,000,000 Bank of America,
6.80%, 2/1/01........................................ 1,000,000
1,000,000 Bank of America,
6.75%, 2/5/01........................................ 1,000,000
1,000,000 Bank of America,
6.75%, 2/5/01........................................ 1,000,000
2,200,000 Bank One,
6.85%, 1/18/01....................................... 2,200,048
600,000 Bank One,
6.79%, 2/1/01........................................ 600,000
------------
12,800,048
------------
Financial Services (6.5%):
18,000,000 Beta Finance,
7.11%, 7/24/01....................................... 18,000,000
1,000,000 Beta Finance,
6.94%, 8/20/01....................................... 1,000,000
3,000,000 First Union National Bank,
6.68%, 3/1/01........................................ 3,000,000
1,000,000 Sigma Finance,
7.05%, 8/10/01....................................... 1,000,000
3,000,000 Wells Fargo & Co.,
6.59%, 9/14/01....................................... 3,000,000
------------
26,000,000
------------
Personal Credit Institutions (3.0%):
5,000,000 Americredit Automobile Receivables Trust,
6.73%, 9/7/01........................................ 5,000,000
</TABLE>
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
----------- --------------------------------------------------- ------------
<C> <S> <C>
Corporate Bonds, continued:
$ 5,000,000 First Security Auto Owner Trust,
6.66%, 9/17/01..................................... $ 5,000,000
2,000,000 General Motors Acceptance Corp., 6.64%, 10/2/00.... 1,999,631
------------
11,999,631
------------
Total Corporate Bonds 50,799,679
------------
Variable Rate Notes (17.1%):
Automotive Services (1.1%):
4,500,000 DAMASCUS-BISHOP Tube Co., 6.70%, 8/10/10*.......... 4,500,000
------------
Chemicals (0.5%):
2,000,000 Gulf Coast, Texas Ida, Nisseki Chemical Texas,
Inc.,
6.82%, 10/1/08*.................................... 2,000,000
------------
Educational Services (1.3%):
5,000,000 Seven Hills School, Series 2000,
6.70%, 8/3/20*..................................... 5,000,000
------------
Financial Services (5.5%):
2,000,000 Anchor Holdings, LLC,
6.70%, 7/15/25*.................................... 2,000,000
10,000,000 Morgan Stanley Dean Witter,
6.74%, 2/8/01*..................................... 10,000,169
10,000,000 Sigma Finance, Inc.,
6.71%, 7/17/01 (b)*................................ 9,998,832
------------
21,999,001
------------
Life Insurance (1.3%):
5,000,000 New York Life Insurance Company, 6.81%, 8/23/01*... 5,000,000
------------
Municipalities (3.0%):
5,000,000 Bartlett, Illinois, Redevelopment Project Series
2000, 6.61%, 1/1/20*............................... 5,000,000
7,100,000 Gainesville & Hall County, Georgia, Development
Authority, 6.65%, 10/1/18*......................... 7,100,000
------------
12,100,000
------------
Public Golf Courses (0.4%):
1,600,000 Indian Hills Country Club,
6.67%, 8/1/25*..................................... 1,600,000
------------
</TABLE>
Continued
-50-
[LOGO OF BB&T FUNDS]
<PAGE>
PRIME MONEY MARKET FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
----------- --------------------------------------------------- ------------
<C> <S> <C>
Variable Rate Notes, continued:
Special Purpose (0.9%):
$ 3,680,000 JW Harris Co., Inc.,
6.63%, 1/1/20*..................................... $ 3,680,000
------------
Specialty Hospitals, Psychiatric (1.8%):
7,000,000 Daphne Ala, Special Care Facilities, 6.67%,
8/15/23*........................................... 7,000,000
------------
Tires and Inner Tubes (0.5%):
2,000,000 Quality Synthetic Rubber Co.,
6.70%, 8/1/20*..................................... 2,000,000
------------
Utilities (0.8%):
3,000,000 National Rural Utilities,
6.69%, 1/24/01*.................................... 3,000,000
------------
Total Variable Rate Notes 67,879,001
------------
Repurchase Agreements (13.9%):
19,000,000 Bank of America Repurchase Agreement, 6.68%,
9/29/00, maturing 10/2/00, (Collateralized by
$19,276,709 principal amount FNMA, 5.00%--6.50%,
1/5/01--12/1/28; $4,692,149 principal amount FHLMC,
6.50%, 7/1/14; total market value--$19,380,000).... 19,000,000
</TABLE>
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
----------- -------------------------------------------------- ------------
<C> <S> <C>
Repurchase Agreements, continued:
$19,000,000 Barclays Capital Repurchase Agreement; 6.63%,
9/29/00, maturing 10/2/00; (Collateralized by
$8,826,260 principal amount FNMA, 4.75%--8.00%,
10/19/00--5/15/29; $6,271,045 principal amount
FHLB, 4.57%--7.26%, 10/16/00--9/10/13; $3,369,413
principal amount FHLMC, 4.75%--7.78%, 10/17/00--
3/15/10; $883,975 principal amount Federal Farm
Credit Systemwide Bond, 5.25%--8.00%, 10/1/01--
2/24/10; market value--$19,390,719)............... $ 19,000,000
17,143,000 Deutsche Bank Securities Repurchase Agreement,
6.65%, 9/29/00, maturing 10/2/00; (Collateralized
by $19,411,441 principal amount FNMA 5.50%--8.00%,
1/1/12--12/1/30; and $3,369,413 principal amount
FHLMC, 6.00%--8.00%, 8/1/09--9/1/30; total market
value--$17,495,550)............................... 17,143,000
------------
Total Repurchase Agreements 55,143,000
------------
Total Investments (Amortized Cost $398,093,577)(a)--100.2% 398,093,577
Liabilities in excess of other assets--(0.2)% (899,785)
------------
NET ASSETS--100.0% $397,193,792
============
</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 had deemed these
securities to be liquid.
(c) Illiquid security. Market value of illiquid securities is 2.51% of total
market value of securities held in the Fund.
* The rate reflected is the rate in effect at September 30, 2000. The maturity
date reflected is the final maturity date.
FHLB--Federal Home Loan Bank.
FNMA--Federal National Mortgage Association.
FHLMC--Federal Home Loan Mortgage Corporation.
LLC--Limited Liability Company.
See notes to financial statements.
-51-
[LOGO OF BB&T FUNDS]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
------------ -------------------------------------------------- ------------
<C> <S> <C>
U.S. Treasury Notes (37.9%):
$ 17,000,000 5.75%, 10/31/00................................... $ 16,993,451
17,000,000 5.63%, 11/30/00................................... 16,981,584
25,000,000 5.50%, 12/31/00................................... 24,944,981
35,000,000 5.25%, 1/31/01.................................... 34,871,233
35,000,000 5.38%, 2/15/01.................................... 34,852,015
35,000,000 6.38%, 3/31/01.................................... 34,982,585
35,000,000 6.25%, 4/30/01.................................... 34,978,411
20,000,000 5.25%, 5/31/01.................................... 19,858,782
------------
Total U.S. Treasury Notes 218,463,042
------------
Repurchase Agreements (58.9%):
64,735,119 Bank of America Repurchase Agreement, 6.48%,
9/29/00, maturing 10/2/00; (Collateralized by
$44,100,000 principal amount U.S. Treasury Bond,
11.25%, 2/15/15; market value--$66,150,000)....... 64,735,119
24,699,555 First Boston Repurchase Agreement, 6.45%, 9/29/00;
maturing 10/2/00; (Collateralized by $25,476,000
principal amount U.S. Treasury Note, 6.45%,
10/12/00-11/30/00; market value--$25,318,035)..... 24,699,555
25,000,000 Goldman Sachs Repurchase Agreement, 6.48%,
9/29/00; maturing 10/2/00; (Collateralized by
$19,483,000 principal amount U.S. Treasury Bond,
8.875%, 2/15/19; total market value--$25,501,291) 25,000,000
</TABLE>
<TABLE>
<CAPTION>
Principal Security Amortized
Amount Description Cost
------------ -------------------------------------------------- ------------
<C> <S> <C>
Repurchase Agreements, continued:
$ 25,000,000 Lehman Brothers Repurchase Agreement, 6.47%;
9/29/00; maturing 10/2/00; (Collateralized by
$18,190,000 principal amount U.S. Treasury Bond,
9.875%; 10/2/00; market value--$25,499,997)....... $ 25,000,000
100,000,000 Merrill Lynch Repurchase Agreement,
6.40%; 9/29/00; maturing 10/2/00; (Collateralized
by $95,665,000 principal amount U.S. Treasury
Note, 7.00%; 7/15/06; market value--
$102,002,806)..................................... 100,000,000
100,000,000 Salomon/Smith Barney Repurchase Agreement, 6.40%;
9/29/00; maturing 10/2/00; (Collateralized by
$92,770,000 principal amount U.S. Treasury Bonds,
7.875%; 11/15/04; market value--$102,047,000)..... 100,000,000
------------
Total Repurchase Agreements 339,434,674
------------
Total Investments
(Amortized Cost $557,897,716)(a)--96.8% 557,897,716
Other assets in excess of liabilities--3.2% 18,524,457
------------
NET ASSETS--100.0% $576,422,173
============
</TABLE>
----
(a) Cost for federal income tax and financial reporting purposes are the same.
See notes to financial statements.
-52-
[LOGO OF BB&T FUNDS]
<PAGE>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
----------- ---------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds (17.2%):
Banks (9.2%):
$ 3,000,000 Bank of America Corp.,
6.13%, 7/15/04...................................... $ 2,906,133
5,000,000 Inter-American Development Bank, 7.00%, 6/16/03..... 5,058,890
5,000,000 International Banking Reconstruction & Development,
6.38%, 7/21/05...................................... 4,959,945
3,000,000 SunTrust Banks,
7.38%, 7/1/02....................................... 3,019,386
-----------
15,944,354
-----------
Building/Construction Products (1.7%):
3,000,000 Vulcan Materials Co.,
5.75%, 4/1/04....................................... 2,874,069
-----------
Financial Services (4.6%):
3,000,000 Ford Motor Credit Co.,
7.50%, 3/15/05...................................... 3,016,119
5,000,000 MBNA Master Credit Card Trust,
6.40%, 1/18/05, Series 1999-I....................... 4,980,450
-----------
7,996,569
-----------
Investment Advisory Services (1.7%):
3,000,000 Duke Capital Corp.,
7.25%, 10/1/04...................................... 3,019,365
-----------
Total Corporate Bonds 29,834,357
-----------
Pass-through Mortgage Securities (38.0%):
Federal Home Loan Mortgage Corp. (15.3%):
1,182,133 6.00%, 3/1/11, Pool # E20228........................ 1,146,898
2,643,211 6.50%, 2/1/13, Pool # E00532........................ 2,595,478
3,647,456 6.50%, 5/1/13, Pool # E00548........................ 3,581,588
5,000,000 6.00%, 8/15/14, Series 2103--Class-TA, CMO.......... 4,910,900
5,000,000 6.00%, 11/15/16, Series 2103--Class-PY, CMO......... 4,916,846
4,454,204 6.25%, 1/15/20, Series 1583--Class-G, CMO........... 4,414,109
5,000,000 6.15%, 3/15/21, Series 2066--Class-PQ, CMO.......... 4,942,201
-----------
26,508,020
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
----------- ------------------------------------------------------ -----------
<C> <S> <C>
Pass-through Mortgage Securities, continued:
Federal National Mortgage Assoc. (22.7%):
$ 1,043,835 7.50%, 12/1/08, Pool # 190611......................... $ 1,056,198
1,261,113 6.00%, 3/1/09, Pool # 50986........................... 1,230,018
1,339,578 6.00%, 4/1/09, Pool # 190759.......................... 1,306,547
7,679,318 7.00%, 8/1/13, Pool # 251901.......................... 7,538,325
4,291,980 6.50%, 6/1/14, Pool # 323788.......................... 4,213,179
4,510,111 7.00%, 10/1/14, Pool # 323970......................... 4,489,021
5,000,000 6.00%, 7/25/19, Series 1999-27 Class-CB, CMO.......... 4,890,450
5,000,000 7.00%, 6/25/21, Series 1999-60 Class-PB, CMO.......... 5,002,350
5,000,000 6.13%, 12/18/21, Series 1998-24 Class-QE, CMO......... 4,875,200
5,000,000 6.00%, 11/18/22, Series 1998-36 Class-PN, CMO......... 4,834,500
-----------
39,435,788
-----------
Total Pass-through Mortgage Securities 65,943,808
-----------
U.S. Government Agencies (28.5%):
Federal Home Loan Bank (2.8%):
5,000,000 5.25%, 4/25/02........................................ 4,909,675
-----------
Federal Home Loan Mortgage Corp. (14.5%):
17,250,000 6.25%, 10/15/02....................................... 17,170,892
2,000,000 7.00%, 2/15/03........................................ 2,021,358
5,000,000 6.25%, 7/15/04........................................ 4,952,390
1,000,000 6.88%, 1/15/05........................................ 1,011,931
-----------
25,156,571
-----------
Federal National Mortgage Assoc. (8.3%):
12,000,000 6.63%, 1/15/02........................................ 12,019,608
2,500,000 6.63%, 9/15/09........................................ 2,477,210
-----------
14,496,818
-----------
Student Loan Marketing Association (2.9%):
5,000,000 6.63%*, 1/18/01....................................... 4,999,600
-----------
Total U.S. Government Agencies 49,562,664
-----------
U.S. Treasury Notes (15.0%):
3,500,000 6.50%, 5/31/01 (b).................................... 3,503,283
11,000,000 5.88%, 11/30/01 (b)................................... 10,951,875
9,500,000 6.50%, 2/28/02........................................ 9,544,536
2,000,000 6.25%, 2/15/03........................................ 2,011,876
-----------
Total U.S. Treasury Notes 26,011,570
-----------
</TABLE>
Continued
-53-
[LOGO OF BB&T FUNDS]
<PAGE>
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
----------- ---------------------------------------------------- ------------
<C> <S> <C>
Investment Companies (0.6%):
1,007,440 Dreyfus Government Cash Management Money Market
Fund................................................ $ 1,007,440
------------
Total Investment Companies 1,007,440
------------
Short Term Securities Purchased with Securities Lending
Collateral (8.3%):
Commercial Paper (3.0%):
Food Processing (1.3%):
$ 2,304,475 ConAgra, 6.68%, 11/2/00............................. 2,280,102
Diversified Manufacturing (1.2%):
2,150,844 Tyco, 6.75%, 10/13/00............................... 2,127,050
Railroad (0.5%):
811,943 CSX, 6.69%, 10/10/00................................ 803,343
------------
5,210,495
------------
Investment Companies (2.3%):
3,999,147 AIM Liquid Asset Money Market Fund.................. 3,999,147
------------
Repurchase Agreements (2.0%):
3,456,713 Lehman Brothers Triparty Agreement, 6.50%, 9/29/00,
maturing 10/2/00, (See Significant Accounting
Policies, Lending Portfolio Securities in the Notes
to Financial Statements for collateral
description)........................................ 3,456,713
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
----------- -------------------------------------------------- ------------
<C> <S> <C>
Short Term Securities Purchased with Securities Lending
Collateral, continued:
Variable Rate Notes (1.0%):
Financial Services (1.0%):
$ 768,158 Ford Motor Credit,
6.86%**, 4/11/02.................................. $ 768,158
998,606 General Motors Acceptance Corp., 7.09%**,
11/13/00.......................................... 998,606
------------
1,766,764
------------
Total Short Term Securities Purchased with Securities Lending
Collateral 14,433,119
------------
Total Investments
(Cost $186,739,556)(a)--107.6% 186,792,958
Liabilities in excess of other assets--(7.6)% (13,161,087)
------------
NET ASSETS--100.0% $173,631,871
============
</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
$112,757. Cost for federal income tax purposes differs from market value by
net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion.................. $ 976,945
Unrealized deprecia-
tion.................. (1,036,300)
-----------
Net unrealized depreci-
ation................. $ (59,355)
===========
</TABLE>
(b) All or part of this security has been loaned at September 30, 2000.
* Represents Discount Note.
** The rate reflected is the rate in effect at September 30, 2000. The maturity
date reflected is the final maturity date.
CMO--Collateralized Mortgage Obligation.
See notes to financial statements.
-54-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
----------- ---------------------------------------------------- ------------
<C> <S> <C>
Corporate Bonds (17.0%):
Banks (5.3%):
$ 5,000,000 International Banking Reconstruction & Development,
6.38%, 7/21/05...................................... $ 4,959,945
5,000,000 SunTrust Banks, 7.38%, 7/1/02....................... 5,032,310
------------
9,992,255
------------
Beverages (1.1%):
2,000,000 Anheuser-Busch Cos.,
7.50%, 3/15/12...................................... 2,041,360
------------
Building/Construction Products (1.5%):
3,000,000 Vulcan Materials Co.,
5.75%, 4/1/04....................................... 2,874,069
------------
Cosmetics/Personal Care (1.4%):
3,000,000 Kimberly-Clark Corp.,
6.25%, 7/15/18...................................... 2,693,052
------------
Financial Services (7.7%):
7,000,000 Fannie Mae, 7.25%, 1/15/10.......................... 7,218,659
3,000,000 Ford Motor Credit Co.,
7.50%, 3/15/05...................................... 3,016,119
4,000,000 Morgan Stanley Dean Witter,
7.75%, 6/15/05...................................... 4,118,328
------------
14,353,106
------------
Total Corporate Bonds 31,953,842
------------
Pass-through Mortgage Securities (40.4%):
Federal Home Loan Mortgage Corp. (18.8%):
2,593,496 6.00%, 6/1/08, Pool # 124885........................ 2,531,960
1,998,565 6.50%, 4/1/11, Pool # E20235........................ 1,971,975
3,031,214 6.00%, 4/1/13, Pool # 251656........................ 2,919,344
3,647,456 6.50%, 5/1/13, Pool # E00548........................ 3,581,588
5,000,000 6.00%, 8/15/14, Series 2103--Class-TA, CMO.......... 4,910,900
5,000,000 6.00%, 11/15/16, Series 2103--Class-PY, CMO......... 4,916,846
4,454,204 6.25%, 1/15/20, Series 1583--Class-G, CMO........... 4,414,109
5,000,000 6.15%, 3/15/21, Series 2066--Class-PQ, CMO.......... 4,942,199
5,000,000 7.00%, 8/15/23, Series 1644--Class-I................ 5,033,100
------------
35,222,021
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
----------- --------------------------------------------------- ------------
<C> <S> <C>
Pass-through Mortgage Securities, continued:
Federal National Mortgage Assoc. (18.2%):
$ 4,074,749 6.00%, 11/1/13, Pool # 323363...................... $ 3,924,366
4,291,980 6.50%, 6/1/14, Pool # 323788....................... 4,213,179
5,000,000 6.00%, 7/25/19, Series 1999-27 Class-CB, CMO....... 4,890,450
5,000,000 6.13%, 12/18/21, Series 1998-24 Class-QE, CMO...... 4,875,200
5,000,000 6.00%, 11/18/22, Series 1998-36 Class-PN, CMO...... 4,834,500
2,054,160 7.00%, 4/1/24, Pool #250005........................ 2,023,811
4,526,969 6.00%, 1/1/29, Pool # 252211....................... 4,241,036
5,039,695 7.50%, 10/1/29, Pool #252806....................... 5,034,112
------------
34,036,654
------------
Government National Mortgage Assoc. (3.4%):
2,491,700 7.00%, 8/15/23, Pool # 354627...................... 2,463,607
4,000,000 7.50%, 9/20/30, Pool # 2972........................ 3,992,341
------------
6,455,948
------------
Total Pass-through Mortgage Securities 75,714,623
------------
U.S. Government Agencies (10.0%):
Federal Home Loan Mortgage Corp. (1.1%):
2,000,000 7.00%, 2/15/03..................................... 2,021,358
------------
Federal National Mortgage Assoc. (8.9%):
17,000,000 6.63%, 9/15/09..................................... 16,845,028
------------
Total U.S. Government Agencies 18,866,386
------------
U.S. Treasury Bonds (20.6%):
15,000,000 7.50%, 11/15/16 (b)................................ 17,090,625
9,000,000 8.75%, 5/15/17 (b)................................. 11,432,817
11,000,000 5.50%, 8/15/28 (b)................................. 10,209,375
------------
Total U.S. Treasury Bonds 38,732,817
------------
U.S. Treasury Notes (10.5%):
13,750,000 6.63%, 5/15/07 (b)................................. 14,252,741
5,261,901 3.88%, 1/15/09 (b)................................. 5,217,506
250,000 6.50%, 2/15/10..................................... 260,313
------------
Total U.S. Treasury Notes 19,730,560
------------
Investment Companies (0.8%):
1,587,098 Dreyfus Government Cash Management Money Market
Fund............................................... 1,587,098
------------
Total Investment Companies 1,587,098
------------
</TABLE>
Continued
-55-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
----------- ---------------------------------------------------- ------------
<C> <S> <C>
Short Term Securities Purchased with Securities Lending
Collateral (25.3%):
Commercial Paper (9.1%):
Food Processing (4.0%):
$ 7,583,248 ConAgra, 6.68%, 11/2/00............................. $ 7,503,042
------------
Diversified Manufacturing (3.7%):
7,077,698 Tyco, 6.75%, 10/13/00............................... 6,999,401
------------
Railroad (1.4%):
2,671,831 CSX, 6.69%, 10/10/00................................ 2,643,529
------------
17,145,972
------------
Investment Companies (7.0%):
13,159,839 AIM Liquid Asset Money Market Fund.................. 13,159,839
------------
Repurchase Agreements (6.1%):
11,374,871 Lehman Brothers Triparty Agreement, 6.50%, 9/29/00,
maturing 10/2/00, (See Significant Accounting
Policies, Lending Portfolio Securities in the Notes
to Financial Statements for collateral
description)........................................ 11,374,871
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
----------- ---------------------------------------------- ------------
<C> <S> <C>
Short Term Securities Purchased with Securities Lending
Collateral, continued:
Variable Rate Notes (3.1%):
Financial Services (3.1%):
$ 2,527,749 Ford Motor Credit, 6.86%*, 4/11/02............ $ 2,527,749
3,286,074 General Motors Acceptance Corp., 7.09%*,
11/13/00...................................... 3,286,074
------------
5,813,823
------------
Total Short Term Securities Purchased with Securities
Lending Collateral 47,494,505
------------
Total Investments
(Cost $232,830,858)(a)--124.6% 234,079,831
Liabilities in excess of other assets--(24.6)% (46,272,513)
------------
NET ASSETS--100.0% $187,807,318
============
</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 for tax reporting of
$223,402. Cost for federal income tax purposes and differs from market
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized
appreciation........... $ 2,802,463
Unrealized
depreciation........... (1,776,892)
-----------
Net unrealized
appreciation........... $ 1,025,571
===========
</TABLE>
(b) All or part of this security has been loaned at September 30, 2000.
* The rate reflected is the rate in effect at September 30, 2000. The maturity
date reflected is the final maturity date.
CMO--Collateralized Mortgage Obligation.
See notes to financial statements.
-56-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE CORPORATE BOND FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds (80.1%):
Automobiles & Trucks (2.2%):
$2,000,000 DaimlerChrysler NA Holdings,
7.20%, 9/1/09.......................................... $ 1,951,440
-----------
Automotive--Finance (2.3%):
2,000,000 Ford Motor Credit Co.,
7.88%, 6/15/10......................................... 2,026,222
-----------
Banks (13.6%):
2,000,000 Bank of America Corp.,
7.80%, 2/15/10......................................... 2,058,436
2,000,000 Bank of New York,
7.30%, 12/1/09......................................... 1,993,338
2,000,000 Bank One Corp.,
7.63%, 8/1/05.......................................... 2,040,914
2,000,000 Inter-American Development Bank, 7.00%, 6/16/03........ 2,023,556
2,000,000 Mellon Bank NA,
6.50%, 8/1/05.......................................... 1,955,014
2,000,000 State Street Corp.,
7.65%, 6/15/10......................................... 2,043,936
-----------
12,115,194
-----------
Beverages (4.4%):
2,000,000 Anheuser-Busch Cos.,
7.50%, 3/15/12......................................... 2,041,360
2,000,000 Pepsi Bottling Holdings, Inc.,
5.38%, 2/17/04 (e)..................................... 1,904,204
-----------
3,945,564
-----------
Building/Construction Products (2.1%):
2,000,000 Vulcan Materials Co.,
5.75%, 4/1/04.......................................... 1,916,046
-----------
Cable Television (2.3%):
2,000,000 Comcast Corp.,
8.38%, 11/1/05......................................... 2,087,436
-----------
Chemicals (1.9%):
1,750,000 Dow Chemical Co.,
7.38%, 11/1/29......................................... 1,685,758
-----------
Computer Services (2.2%):
2,000,000 Electronic Data Systems, Inc.,
7.13%, 10/15/09........................................ 1,975,000
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued:
Computers (2.6%):
$2,250,000 Sun Microsystems, Inc.,
7.50%, 8/15/06......................................... $ 2,285,750
-----------
Cosmetics/Personal Care (1.0%):
1,000,000 Kimberly-Clark Corp.,
6.25%, 7/15/18......................................... 897,684
-----------
Electronic Computers (2.4%):
2,000,000 IBM Corp.,
8.38%, 11/1/19......................................... 2,189,190
-----------
Financial Services (14.7%):
2,000,000 AIG SunAmerica Global Financial,
7.60%, 6/15/05 (e)..................................... 2,054,558
1,000,000 Boeing Capital Corp.,
7.38%, 9/27/10......................................... 1,011,230
2,000,000 General Electric Capital Corp.,
8.13%, 5/15/12......................................... 2,167,911
2,000,000 Household Finance Corp.,
6.50%, 11/15/08........................................ 1,875,420
2,000,000 Lehman Brothers Holdings, Inc.,
7.75%, 1/15/05......................................... 2,031,988
2,000,000 Morgan Stanley Dean Witter,
7.75%, 6/15/05......................................... 2,059,164
2,000,000 National Rural Utilities Cooperative Finance Corp.,
6.13%, 5/15/05......................................... 1,928,856
-----------
13,129,127
-----------
Insurance (2.3%):
2,000,000 John Hancock Global Funding,
7.90%, 7/2/10 (e)...................................... 2,060,122
-----------
Multimedia (2.3%):
2,000,000 Viacom, Inc.,
7.70%, 7/30/10......................................... 2,040,582
-----------
Petroleum (4.6%):
2,000,000 Coastal Corp.,
7.50%, 8/15/06......................................... 2,019,740
2,000,000 Phillips Pete,
8.50%, 5/25/05......................................... 2,112,160
-----------
4,131,900
-----------
</TABLE>
Continued
-57-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE CORPORATE BOND FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued:
Pipelines (3.1%):
$1,000,000 El Paso Energy Corp.,
8.63%, 5/1/02.......................................... $ 1,019,715
1,765,000 Enron Corp.,
7.13%, 5/15/07......................................... 1,755,898
-----------
2,775,613
-----------
Retail (4.6%):
2,000,000 Lowe's Companies, Inc.,
8.25%, 6/1/10.......................................... 2,097,872
2,000,000 Target Corp.,
7.50%, 8/15/10......................................... 2,000,486
-----------
4,098,358
-----------
Telecommunication--Equipment (1.6%):
1,675,000 Motorola, Inc.,
6.50%, 11/15/28........................................ 1,456,748
-----------
Telephone--Integrated (5.4%):
500,000 Koninklijke KPN NV,
8.00%, 10/1/10 (c)(e).................................. 499,905
1,000,000 SBC Communications, Inc.,
6.13%, 2/15/08......................................... 923,960
1,500,000 Sprint Capital Corp.,
6.38%, 5/1/09.......................................... 1,372,551
2,000,000 Telefonica Europe,
7.75%, 9/15/10......................................... 2,012,158
-----------
4,808,574
-----------
Telephone--Local (2.3%):
2,000,000 GTE California, Inc.,
7.65%, 3/15/07......................................... 2,046,324
-----------
Transportation (2.2%):
2,000,000 Norfolk Southern Corp.,
6.95%, 5/1/02.......................................... 1,992,572
-----------
Total Corporate Bonds 71,615,204
-----------
Pass-through Mortgage Securities (2.8%):
Federal National Mortgage Assoc. (2.8%):
2,575,188 6.50%, 6/1/14, Pool # 323788........................... 2,527,908
-----------
Total Pass-through Mortgage Securities 2,527,908
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------- -----------
<C> <S> <C>
U.S. Government Agencies (6.6%):
Federal Home Loan Mortgage Corp. (2.9%):
$2,600,000 6.25%, 10/15/02........................................ $ 2,588,076
-----------
Federal National Mortgage Assoc. (3.7%):
3,298,173 7.00%, 3/1/15.......................................... 3,282,750
-----------
Total U.S. Government Agencies 5,870,826
-----------
U.S. Treasury Bonds (4.8%):
2,000,000 7.50%, 11/15/16........................................ 2,278,750
2,000,000 6.13%, 8/15/29 (b)..................................... 2,042,500
-----------
Total U.S. Treasury Bonds 4,321,250
-----------
U.S. Treasury Notes (2.8%):
950,000 5.88%, 11/15/04........................................ 949,110
500,000 6.63%, 5/15/07......................................... 518,282
1,000,000 5.75%, 8/15/10......................................... 995,937
-----------
Total U.S. Treasury Notes 2,463,329
-----------
Investment Companies (2.3%):
2,069,974 Dreyfus Cash Management Money Market Fund (d).......... 2,069,974
-----------
Total Investment Companies 2,069,974
-----------
Short Term Securities Purchased with Securities Lending Collateral
(2.4%):
Commercial Paper (0.8%):
Food Processing (0.4%):
339,211 ConAgra, 6.68%, 11/2/00................................ 335,623
-----------
Diversified Manufacturing (0.3%):
316,597 Tyco, 6.75%, 10/13/00.................................. 313,095
-----------
Railroad (0.1%):
119,515 CSX, 6.69%, 10/10/00................................... 118,249
-----------
766,967
-----------
Investment Companies (0.7%):
588,661 AIM Liquid Asset Money Market Fund..................... 588,661
-----------
</TABLE>
Continued
-58-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE CORPORATE BOND FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ---------------------------------------------------- -----------
<C> <S> <C>
Short Term Securities Purchased with Securities Lending
Collateral, continued:
Repurchase Agreements (0.6%):
$ 508,817 Lehman Brothers Triparty Agreement, 6.50%, 9/29/00,
maturing 10/2/00,
(See Significant Accounting Policies, Lending
Portfolio Securities in the Notes to Financial
Statements for collateral description).............. $ 508,817
-----------
Variable Rate Notes (0.3%):
Financial Services (0.3%):
113,070 Ford Motor Credit,
6.86%, 4/11/02*..................................... 113,070
146,991 General Motors Acceptance Corp., 7.09%, 11/13/00*... 146,992
-----------
260,062
-----------
Total Short Term Securities Purchased with Securities Lending
Collateral 2,124,507
-----------
Total Investments
(Cost $89,541,970)(a)--101.8% 90,992,998
Liabilities in excess of other assets--(1.8)% (1,585,125)
-----------
NET ASSETS--100.0% $89,407,873
===========
</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
$24,856. Cost for federal income tax purposes differs from market value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.. $1,521,009
Unrealized depreciation.. (94,837)
----------
Net unrealized
appreciation............. $1,426,172
==========
</TABLE>
(b) All or part of this security has been loaned at September 30, 2000.
(c) Represents security purchased on a when-issued basis. At September 30,
2000, total cost of investments purchased on a when-issued basis was
$499,905.
(d) At September 30, 2000, all or part of this security was pledged as
collateral for securities purchased on a when-issued basis.
(e) Rule 144A Security which is restricted as to resale to institutional
investors. The Board of Trustees had deemed these securities to be liquid.
* The rate reflected is the rate in effect at September 30, 2000. The maturity
date reflected is the final maturity date.
NV--Naamloze Vennootschap (Dutch Corp.).
See notes to financial statements.
-59-
[LOGO OF BB&T FUNDS]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Municipal Bonds (97.6%):
North Carolina (97.6%):
Education Bonds (1.1%):
$1,000,000 Johnston County, North Carolina, School & Museum
Project, 5.50%, 8/1/10, Callable 8/1/09 @ 101, FSA... $ 1,044,740
-----------
General Obligation Bonds (62.1%):
1,065,000 Bladen County, North Carolina, 5.60%, 5/1/11,
Callable 5/1/10 @ 100.5, FSA......................... 1,122,286
1,000,000 Buncombe County, North Carolina, 5.10%, 3/1/07....... 1,023,580
500,000 Burke County, North Carolina, 6.30%, 3/1/01, MBIA.... 504,040
1,650,000 Burlington, North Carolina, Public Improvement,
5.20%, 2/1/13, Callable 2/1/10 @ 101.5, AMBAC........ 1,663,349
1,000,000 Cabarrus County, North Carolina, 5.30%, 2/1/11,
Callable 2/1/07 @ 102, MBIA.......................... 1,026,680
1,500,000 Cabarrus County, North Carolina, 5.30%, 2/1/13,
Callable 2/1/07 @ 102, MBIA.......................... 1,518,885
1,090,000 Charlotte, North Carolina, 5.00%, 6/1/05............. 1,111,746
1,000,000 Charlotte, North Carolina, 5.00%, 2/1/08............. 1,019,000
1,460,000 Charlotte, North Carolina, 5.50%, 6/1/09............. 1,538,052
1,000,000 Charlotte, North Carolina, 5.50%, 6/1/14, Callable
6/1/10 @ 102......................................... 1,030,010
2,395,000 Charlotte, North Carolina, Certificate of
Participation, Equipment Acquisition, 5.25%, 3/1/04.. 2,442,157
1,085,000 Cumberland County, North Carolina, 5.50%, 3/1/03..... 1,111,094
1,055,000 Cumberland County, North Carolina, 5.50%, 3/1/09..... 1,106,368
1,000,000 Forsyth County, North Carolina, 5.20%, 6/1/02........ 1,013,180
1,000,000 Gaston County, North Carolina, 5.50%, 5/1/09,
Callable 5/1/07 @ 101, FGIC.......................... 1,050,190
700,000 Henderson County, North Carolina, 6.50%, 6/1/01...... 709,779
1,350,000 High Point, North Carolina, Public Improvement,
Series B, 5.40%, 6/1/07.............................. 1,405,850
1,350,000 High Point, North Carolina, Public Improvement,
Series B, 5.40%, 6/1/08.............................. 1,408,415
1,000,000 Johnston County, North Carolina, 5.50%, 3/1/12,
Callable 3/1/10 @ 101, FGIC.......................... 1,037,770
1,000,000 Mecklenburg County, North Carolina, Public
Improvement, 5.40%, 4/1/03........................... 1,023,240
1,000,000 Mecklenburg County, North Carolina, 5.00%, 4/1/07.... 1,020,010
2,000,000 Mecklenburg County, North Carolina, Public
Improvement, Series B, 5.00%, 2/1/04................. 2,033,040
2,000,000 Mecklenburg County, North Carolina, Public
Improvement, Series A, 5.00%, 2/1/06................. 2,039,260
1,000,000 Mecklenburg County, North Carolina, Public
Improvement, Series B, 5.00%, 2/1/09................. 1,017,670
1,075,000 New Hanover County, North Carolina, Public
Improvement, 5.30%, 11/1/02.......................... 1,094,060
1,340,000 New Hanover County, North Carolina, Public
Improvement, 5.30%, 11/1/03.......................... 1,371,704
1,500,000 New Hanover County, North Carolina, Public
Improvement, 5.30%, 11/1/08.......................... 1,557,870
1,500,000 North Carolina State, Series A, 5.10%, 3/1/05........ 1,534,470
2,000,000 North Carolina State, 5.10%, 6/1/08, Callable 6/1/06
@101................................................. 2,052,200
1,000,000 North Carolina State, 5.10%, 6/1/09, Callable 6/1/06
@ 101.5.............................................. 1,025,290
1,000,000 North Carolina State, 5.10%, 6/1/10, Callable 6/1/06
@ 102................................................ 1,022,150
1,000,000 North Carolina State Highway, Series A, 5.00%,
5/1/11, Callable 5/1/07 @ 102........................ 1,007,320
2,000,000 North Carolina State Public Improvement, Series A,
5.25%, 3/1/07........................................ 2,067,019
1,000,000 North Carolina State Public Improvement, Series A,
5.25%, 3/1/15, Callable 3/1/09 @ 102................. 996,950
1,300,000 Orange County, North Carolina, Public Improvement,
5.25%, 4/1/07........................................ 1,343,355
1,300,000 Orange County, North Carolina, Public Improvement,
5.25%, 4/1/08........................................ 1,344,785
1,125,000 Orange County, North Carolina, Public Improvement,
5.30%, 4/1/14, Callable 4/1/10 @ 102................. 1,134,731
1,265,000 Orange County, North Carolina, Public Improvement,
5.30%, 4/1/15, Callable 4/1/10 @ 102................. 1,266,771
1,000,000 Randolph County, North Carolina, Certificate of
Participation, 5.20%, 6/1/09, FSA.................... 1,023,050
1,750,000 Randolph County, North Carolina, Certificate of
Participation, 5.30%, 6/1/13, Callable 6/1/09 @ 101,
FSA.................................................. 1,758,803
1,090,000 Rocky Mount, North Carolina, 5.00%, 2/1/10, MBIA..... 1,102,088
</TABLE>
Continued
-60-
[LOGO OF BB&T FUNDS]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ -----------
<C> <S> <C>
Municipal Bonds, continued:
North Carolina, continued:
General Obligation Bonds, continued:
$ 500,000 Surry County, North Carolina, 6.25%, 4/1/01, AMBAC.... $ 504,700
1,000,000 Union County, North Carolina, Series B, 5.30%, 3/1/13,
Callable 3/1/09 @ 102, FGIC........................... 1,012,680
1,000,000 Wake County, North Carolina, 5.30%, 2/1/11, Callable
2/1/10 @ 100.5........................................ 1,032,070
1,500,000 Wake County, North Carolina, Public Improvement,
4.50%, 3/1/04......................................... 1,501,830
1,000,000 Wilmington, North Carolina, Series B, 5.00%, 4/1/08... 1,016,890
-----------
57,746,437
-----------
Health Care Bonds (12.1%):
200,000 Charlotte-Mecklenberg Hospital Authority, North
Carolina, Health Care System Revenue, 5.70%, 1/1/01... 200,596
245,000 Charlotte-Mecklenberg Hospital Authority, North
Carolina, Health Care System Revenue, 5.70%, 1/1/01... 245,786
185,000 Charlotte-Mecklenberg Hospital Authority, North
Carolina, Health Care System Revenue, 5.90%, 1/1/02... 188,226
110,000 Charlotte-Mecklenberg Hospital Authority, North
Carolina, Health Care System Revenue, 6.00%, 1/1/03... 114,133
190,000 Charlotte-Mecklenberg Hospital Authority, North
Carolina, Health Care System Revenue, 6.00%, 1/1/03,
Callable 1/1/02 @ 102................................. 195,539
2,250,000 Cumberland County, North Carolina, Hospital
Facilities, 4.30%, 10/1/05............................ 2,117,273
1,000,000 Cumberland County, North Carolina, Hospital
Facilities, 5.25%, 10/1/10, Callable 10/1/09 @ 101.... 977,200
1,000,000 New Hanover County, North Carolina, Regional Medical
Center Project, 5.25%, 10/1/12, Callable 10/1/09
@ 101................................................. 1,002,480
1,220,000 North Carolina Medical Care, Common Health Care
Revenue, Series A, 5.25%, 12/1/10, Callable 12/1/08
@ 101................................................. 1,242,045
1,325,000 North Carolina Medical Care, Common Health Revenue,
5.25%, 5/1/09, Callable 5/1/07 @ 100.................. 1,344,080
2,350,000 Pitt County, North Carolina, Memorial Hospital
Revenue, 5.50%, 12/1/15, Callable 12/1/05 @ 102....... 2,376,156
1,260,000 Pitt County, North Carolina, Memorial Hospital
Revenue, 5.25%, 12/1/21, Callable 12/1/05 @ 102....... 1,210,129
-----------
11,213,643
-----------
Transportation Bonds (1.6%):
1,385,000 Piedmont, North Carolina, Triad Airport Authority,
Series A, 6.38%, 7/1/16, Callable 7/1/09 @ 101, FSA... 1,499,373
-----------
Utility Bonds (20.7%):
1,500,000 Charlotte, North Carolina, Water & Sewer Systems,
5.60%, 5/1/17......................................... 1,594,095
1,000,000 Charlotte, North Carolina, Water & Sewer Systems,
5.60%, 5/1/21......................................... 1,062,730
1,000,000 Gastonia, North Carolina, Utilities System, 5.00%,
5/1/10, MBIA.......................................... 1,008,300
1,890,000 Guilford County, North Carolina, Water & Sewer, Series
A, 5.00%, 10/1/09 (b)................................. 1,918,747
2,000,000 Guilford County, North Carolina, Water & Sewer, Series
A, 5.00%, 10/1/07..................................... 2,036,660
1,530,000 North Carolina Eastern Municipal Power, Series A,
5.00%, 1/1/17......................................... 1,455,887
1,900,000 North Carolina Eastern Municipal Power, Series A,
6.00%, 1/1/26, Prerefunded 1/1/22 @ 100............... 2,003,303
2,000,000 North Carolina, Municipal Power Agency, No. 1, Catawba
Electric Revenue, 5.50%, 1/1/13....................... 2,074,820
1,500,000 North Carolina, Municipal Power Agency, No. 1, Catawba
Electric Revenue, 5.50%, 1/1/13....................... 1,557,420
1,635,000 North Carolina, Municipal Power Agency, No. 1, Catawba
Electric Revenue, 5.00%, 1/1/20....................... 1,540,366
1,905,000 Wake County, North Carolina, Waste Management Project,
5.00%, 2/1/05......................................... 1,937,537
1,000,000 Wilmington, North Carolina, Water & Sewer System,
5.60%, 6/1/15, Callable 6/1/10 @ 101, FSA............. 1,022,330
-----------
19,212,195
-----------
Total Municipal Bonds 90,716,388
-----------
</TABLE>
Continued
-61-
[LOGO OF BB&T FUNDS]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ -----------
<C> <S> <C>
Investment Companies (3.3%):
3,025,238 Dreyfus Tax-Exempt Cash Management Fund (c)........... $ 3,025,238
-----------
Total Investment Companies 3,025,238
-----------
Total Investments (Cost $92,470,630)(a)--100.9% 93,741,626
Liabilities in excess of other assets--(0.9)% (828,914)
-----------
NET ASSETS--100.0% $92,912,712
===========
</TABLE>
----
(a) Represents cost for federal income tax and financial reporting purposes
and differs from market value by net unrealized appreciation of securities
as follows:
<TABLE>
<S> <C>
Unrealized appreciation.. $1,409,294
Unrealized depreciation.. (138,298)
----------
Net unrealized
appreciation............. $1,270,996
==========
</TABLE>
(b) Represents security purchased on a when-issued basis. At September 30,
2000, total cost of investments purchased on a when-issued basis was
$1,917,445.
(c) At September 30, 2000, 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--Municipal Bond Insurance Association.
See notes to financial statements.
-62-
[LOGO OF BB&T FUNDS]
<PAGE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ -----------
<C> <S> <C>
Municipal Bonds (97.8%):
South Carolina (97.8%):
Education Bonds (44.4%):
$ 500,000 Beaufort County, South Carolina, School District,
Series C, 5.00%, 3/1/09............................... $ 507,535
750,000 Berkeley County, South Carolina, School District,
5.38%, 4/1/09, Callable 4/1/08 @ 102, SCSDE........... 780,885
500,000 Berkeley County, South Carolina, School District,
5.38%, 4/1/10, Callable 4/1/08 @ 102, SCSDE........... 520,185
500,000 Charleston County, South Carolina, School District,
4.00%, 2/1/04, SCSDE.................................. 488,670
500,000 Georgetown County, South Carolina, School District,
5.50%, 3/1/08, SCSDE.................................. 524,160
500,000 Georgetown County, South Carolina, School District,
5.50%, 3/1/10......................................... 524,710
500,000 Greenville County, South Carolina, School District,
4.20%, 3/1/03, SCSDE.................................. 496,420
500,000 Lancaster County, South Carolina, School District,
5.00%, 3/1/11, Callable 3/1/10 @ 101, SCSDE........... 498,375
500,000 Lexington & Richland Counties, South Carolina, School
District, 5.15%, 3/1/07, MBIA, SCSDE.................. 511,215
500,000 South Carolina, State School Facilities, Series A,
5.75%, 1/1/10......................................... 534,735
500,000 Spartanburg County, South Carolina, School District,
5.25%, 5/1/10, SCSDE.................................. 516,720
500,000 Spartanburg County, South Carolina, School District,
5.25%, 5/1/11, Callable 5/1/10 @ 101, SCSDE........... 513,470
500,000 York County, South Carolina, School District, Series
A, 5.80%, 3/1/13, Callable 3/1/09 @ 101, SCSDE, FSA... 524,530
-----------
6,941,610
-----------
General Obligation Bonds (13.4%):
500,000 Charleston County, South Carolina, 5.25%, 9/1/17,
Callable 9/1/09 @ 101................................. 491,725
500,000 Horry County, South Carolina, 7.00%, 3/1/05........... 546,245
500,000 South Carolina, State Capital Improvements, 5.75%,
8/1/05................................................ 526,205
500,000 South Carolina, State Highway, Series B, 5.63%,
7/1/09, Callable 7/1/06 @ 102......................... 528,400
-----------
2,092,575
-----------
Health Care Bonds (6.5%):
500,000 Florence County, South Carolina, Regional Medical
Center Project, 5.25%, 11/1/11, Callable 11/1/08
@ 102, MBIA........................................... 505,050
500,000 South Carolina Jobs Economic Development--Anderson,
5.50%, 2/1/11, Callable 2/1/09 @ 101, FSA............. 515,880
-----------
1,020,930
-----------
Pollution Control Bonds (6.7%):
500,000 Charleston County, South Carolina, Solid Waste, 5.60%,
1/1/04, MBIA.......................................... 515,070
500,000 Darlington County, South Carolina, Pollution Control,
6.60%, 11/1/10, MBIA.................................. 530,725
-----------
1,045,795
-----------
Transportation Bonds (4.6%):
700,000 South Carolina, Transportation Infrastructure, 5.25%,
10/1/08, AMBAC........................................ 721,203
-----------
Utility Bonds (22.2%):
200,000 Camden, South Carolina, Public Utility Revenue, 5.50%,
3/1/22, Callable 3/1/07 @ 102, MBIA................... 196,046
500,000 Columbia, South Carolina, Waterworks & Sewer Systems,
5.70%, 2/1/10......................................... 530,420
1,000,000 Piedmont, Municipal Power Agency, South Carolina,
5.40%, 1/1/07, MBIA................................... 1,036,390
200,000 Piedmont, Municipal Power Agency, South Carolina,
5.50%, 1/1/13, MBIA................................... 206,654
500,000 South Carolina State Public Service, Series A, 5.38%,
1/1/04, MBIA.......................................... 511,250
</TABLE>
Continued
-63-
[LOGO OF BB&T FUNDS]
<PAGE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Municipal Bonds, continued:
South Carolina, continued:
Utility Bonds, continued:
$ 500,000 South Carolina State Public Service, Series A, 5.50%,
1/1/09, MBIA......................................... $ 519,785
500,000 Spartanburg, South Carolina, Water Works Revenue,
5.00%, 6/1/19, Callable 6/1/07 @ 101, FGIC........... 468,790
-----------
3,469,335
-----------
Total Municipal Bonds 15,291,448
-----------
Investment Companies (1.3%):
203,343 Dreyfus Tax-Exempt Cash Management Money Market
Fund................................................. 203,343
-----------
Total Investment Companies 203,343
-----------
Total Investments (Cost $15,313,291)(a)--99.1% 15,494,791
Other assets in excess of liabilities--0.9% 141,851
-----------
NET ASSETS--100.0% $15,636,642
===========
</TABLE>
----
(a) Represents cost for federal income tax and financial reporting purposes
and differs from market value by net unrealized appreciation of securities
as follows:
<TABLE>
<S> <C>
Unrealized appreciation.... $226,724
Unrealized depreciation.... (45,224)
--------
Net unrealized
appreciation............... $181,500
========
</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.
SCSDE--South Carolina School District Enhancement.
See notes to financial statements.
-64-
[LOGO OF BB&T FUNDS]
<PAGE>
VIRGINIA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Municipal Bonds (99.4%):
Virginia (96.3%):
Education Bonds (16.4%):
$ 810,000 Hampton Roads, Virginia, Medical College, Series A,
6.50%, 11/15/04, Callable 11/15/01 @ 102............. $ 839,719
1,000,000 Virginia College Building Authority, 5.50%, 4/1/10... 1,044,380
1,000,000 Virginia College Building Authority, 5.00%, 8/1/13,
Callable 8/1/07 @ 101................................ 979,530
1,000,000 Virginia State Public School Authority, 6.13%,
1/1/03, Callable 1/1/02 @ 102........................ 1,033,750
1,000,000 Virginia State Public School Authority, 6.25%,
1/1/04, Callable 1/1/02 @ 102........................ 1,038,210
2,050,000 Virginia State Public School Authority, Series I,
5.25%, 8/1/10........................................ 2,110,187
1,000,000 Virginia State Public School Authority, Series B,
5.25%, 8/1/10, Callable 8/1/09 @ 101................. 1,029,360
1,125,000 Virginia State Public School Authority, Series I,
5.00%, 8/1/11, Callable 8/1/07 @ 101................. 1,123,988
1,050,000 Virginia University, Series A, 5.00%, 6/1/06......... 1,069,121
1,000,000 Virginia University, Series A, 5.00%, 6/1/08......... 1,016,490
1,500,000 Winchester, Virginia, Industrial Development
Authority, Shenandoah University Project, 5.00%,
10/1/12, Callable 10/1/08 @ 102, MBIA................ 1,486,650
-----------
12,771,385
-----------
General Obligation Bonds (56.6%):
1,335,000 Alexandria, Virginia, Public Improvement, 5.00%,
6/15/07.............................................. 1,363,889
2,985,000 Alexandria, Virginia, Public Improvement, 5.00%,
6/15/08.............................................. 3,047,954
1,000,000 Arlington County, Virginia, 5.00%, 6/1/07............ 1,021,540
1,000,000 Arlington County, Virginia, 5.13%, 6/1/11, Callable
6/1/09 @ 100......................................... 1,016,380
1,000,000 Arlington County, Virginia, 5.00%, 10/1/12, Callable
10/1/08 @ 101........................................ 1,000,780
1,800,000 Arlington County, Virginia, 5.10%, 6/1/15, Callable
6/1/07 @ 101.5....................................... 1,768,500
1,175,000 Chesapeake, Virginia, 5.00%, 5/1/04.................. 1,193,448
1,000,000 Fairfax County, Virginia, Series B, 5.50%, 12/1/07... 1,051,270
1,000,000 Fairfax County, Virginia, Public Improvement,
Series B, 5.00%, 12/1/04............................. 1,019,530
2,000,000 Fairfax County, Virginia, Public Improvement,
Series A, 5.00%, 6/1/09, Callable 6/1/08 @ 102....... 2,039,340
1,000,000 Loudoun County, Virginia, Series B, 5.25%, 12/1/15... 994,750
1,000,000 Loudoun County, Virginia, Public Improvement,
Series C, 5.00%, 12/1/05............................. 1,021,390
1,200,000 Manassas, Virginia, 5.25%, 1/1/11, Callable 1/1/08
@ 102................................................ 1,222,812
1,000,000 Newport News, Virginia, 5.00%, 1/15/07............... 1,017,750
1,845,000 Newport News, Virginia, Series A, 5.50%, 5/1/13,
Callable 5/1/10 @ 102................................ 1,897,490
1,000,000 Norfolk, Virginia, 5.00%, 7/1/02, FGIC............... 1,009,790
1,840,000 Norfolk, Virginia, Capital Improvements, 5.38%,
6/1/05, FGIC......................................... 1,901,566
1,500,000 Richmond, Virginia, 5.25%, 1/15/09................... 1,545,630
2,925,000 Spotsylvania County, Virginia, 5.50%, 7/15/12, FSA... 3,061,860
1,500,000 Suffolk, Virginia, Public Improvement, 5.00%,
12/1/15, Callable 12/1/07 @ 102, AMBAC............... 1,448,820
1,500,000 Virginia Beach, Virginia, Series C, 6.40%, 8/1/04,
Callable 8/1/01 @ 102................................ 1,553,640
1,000,000 Virginia Beach, Virginia, Public Improvement, 5.25%,
8/1/06............................................... 1,032,370
1,200,000 Virginia Beach, Virginia, Public Improvement, 5.25%,
8/1/07............................................... 1,240,272
2,695,000 Virginia Beach, Virginia, Public Improvement, 5.25%,
3/1/08............................................... 2,783,450
3,205,000 Virginia Beach, Virginia, Public Improvement, 5.25%,
3/1/11, Callable 3/1/10 @ 101........................ 3,277,176
2,000,000 Virginia State, 5.00%, 6/1/04........................ 2,036,080
1,210,000 Virginia State, 5.50%, 6/1/07........................ 1,270,464
1,200,000 Virginia State Building Authority, 5.00%, 8/1/05..... 1,220,016
-----------
44,057,957
-----------
</TABLE>
Continued
-65-
[LOGO OF BB&T FUNDS]
<PAGE>
VIRGINIA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Municipal Bonds, continued:
Virginia, continued:
Health Care Bonds (6.1%):
$1,160,000 Danville, Virginia, Industrial Development Authority,
Regional Medical Center, 5.00%, 10/1/07, AMBAC....... $ 1,179,175
1,000,000 Virginia Beach, Virginia, Industrial Development
Authority, Sentara Health Systems, 5.25%, 11/1/09,
Callable 11/1/08 @ 101............................... 1,023,900
1,000,000 Virginia Beach, Virginia, Sentara Bayside Hospital,
6.60%, 11/1/09, Prerefunded 11/1/01 @ 102............ 1,042,740
1,500,000 Winchester, Virginia, Industrial Development,
Winchester Medical Center, 5.25%, 1/1/06, Callable
1/1/04 @ 102, AMBAC.................................. 1,537,905
-----------
4,783,720
-----------
Housing Bonds (6.0%):
1,000,000 Virginia State Building Authority, Series C, 5.20%,
8/1/03, Callable 8/1/02 @ 101........................ 1,017,600
1,075,000 Virginia State Building Authority, Series A, 5.13%,
8/1/06............................................... 1,101,338
1,500,000 Virginia State Building Authority, 5.10%, 8/1/07,
Callable 8/1/05 @ 101................................ 1,530,255
1,000,000 Virginia State Housing Authority, Series I, 5.90%,
7/1/02............................................... 1,015,500
-----------
4,664,693
-----------
Transportation Bonds (7.5%):
2,400,000 Chesapeake Bay Bridge & Tunnel, Virginia, 5.50%,
7/1/06, Callable 7/1/05 @ 102, FGIC.................. 2,500,560
1,000,000 Fairfax County, Virginia, Economic Development
Authority, 1st Series, 5.25%, 9/1/10, Callable 9/1/09
@ 102................................................ 1,027,990
1,000,000 Virginia Commonwealth, 5.75%, 5/15/09................ 1,066,400
1,350,000 Virginia Commonwealth, 5.13%, 5/15/19, Callable
5/15/07 @ 101........................................ 1,275,143
-----------
5,870,093
-----------
Utility Bonds (3.7%):
1,000,000 Fairfax County, Virginia, Water Authority, 5.00%,
4/1/21, Callable 4/1/17 @ 100........................ 929,680
1,000,000 Henrico County, Virginia, Water & Sewer, 5.25%,
5/1/13, Callable 5/1/09 @ 102........................ 1,000,760
1,000,000 Virginia, Southeastern Public Service Authority,
5.00%, 7/1/15, AMBAC................................. 970,470
-----------
2,900,910
-----------
75,048,758
-----------
Washington D.C. (3.1%):
Housing Bonds (1.0%):
750,000 Metropolitan Washington DC, Apartments Authority,
Series A, 7.10%, 10/1/01, Callable 10/1/00 @ 102,
FGIC................................................. 766,410
-----------
Transportation Bonds (2.1%):
1,500,000 Washington DC, Metropolitan Transportation Authority,
6.00%, 7/1/09, FGIC.................................. 1,618,410
-----------
2,384,820
-----------
Total Municipal Bonds 77,433,578
-----------
</TABLE>
Continued
-66-
[LOGO OF BB&T FUNDS]
<PAGE>
VIRGINIA INTERMEDIATE TAX-FREE FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ -----------
<C> <S> <C>
Investment Companies (1.5%):
1,174,057 Dreyfus Tax-Exempt Cash Management Fund............... $ 1,174,057
-----------
Total Investment Companies 1,174,057
-----------
Total Investments (Cost $77,636,980)(a)--100.9% 78,607,635
Liabilities in excess of other assets--(0.9)% (701,142)
-----------
NET ASSETS--100.0% $77,906,493
===========
</TABLE>
----
(a) Represents cost for federal income tax and financial reporting purposes
and differs from market value by net unrealized appreciation of securities
as follows:
<TABLE>
<S> <C>
Unrealized appreciation.. $1,248,383
Unrealized depreciation.. (277,728)
----------
Net unrealized
appreciation............. $ 970,655
==========
</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.
-67-
[LOGO OF BB&T FUNDS]
<PAGE>
GROWTH AND INCOME STOCK FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks (95.6%):
Aerospace/Defense (1.8%):
127,000 Parker-Hannifin Corp. ................................ $ 4,286,249
81,700 Raytheon Co.--Class A................................. 2,236,538
32,500 Raytheon Co.--Class B................................. 924,219
------------
7,447,006
------------
Apparel (0.5%):
83,200 V.F. Corp. ........................................... 2,054,000
------------
Automobiles & Trucks (0.9%):
139,530 Ford Motor Co. ....................................... 3,531,853
------------
Banking & Finance (10.2%):
150,000 Bank of America Corp. ................................ 7,856,250
186,666 Citigroup, Inc. (b)................................... 10,091,631
76,560 J.P. Morgan & Co. .................................... 12,507,989
166,800 Pacific Century Financial Corp. ...................... 2,856,450
145,000 U.S. Bancorp.......................................... 3,298,750
74,700 Wachovia Corp. ....................................... 4,234,556
------------
40,845,626
------------
Business Equipment & Services (2.8%):
127,400 Harris Corp. (b)...................................... 3,622,938
191,300 Pitney Bowes, Inc. ................................... 7,544,393
------------
11,167,331
------------
Chemicals (1.3%):
150,500 Air Products & Chemicals, Inc. ....................... 5,418,000
------------
Computer Software (2.8%):
63,000 Adobe Systems, Inc. .................................. 9,780,750
65,000 Computer Associates International, Inc. .............. 1,637,188
------------
11,417,938
------------
Computers (5.5%):
60,000 Electronic Data Systems Corp. ........................ 2,490,000
85,000 Hewlett-Packard Co. (b)............................... 8,245,000
99,800 IBM Corp. ............................................ 11,227,500
------------
21,962,500
------------
Consumer Goods & Services (2.9%):
152,600 American Greetings Corp. ............................. 2,670,500
163,000 Kimberly-Clark Corp. (b).............................. 9,097,438
------------
11,767,938
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Containers (0.5%):
105,925 Sonoco Products Co. .................................. $ 1,913,270
------------
Diversified Products (0.4%):
40,000 E.I. duPont de Nemours and Co. ....................... 1,657,500
------------
Electronic Components (1.3%):
185,000 Avnet, Inc. .......................................... 5,249,375
------------
Electronics (4.9%):
32,419 Agilent Technologies, Inc. (c)........................ 1,586,505
174,370 Emerson Electric (b).................................. 11,682,789
84,050 Tektronix, Inc. ...................................... 6,456,091
------------
19,725,385
------------
Engineering (0.2%):
28,300 Fluor Corp. (b)....................................... 849,000
------------
Financial Services (2.3%):
130,000 Fannie Mae............................................ 9,295,000
------------
Food & Related (4.6%):
77,200 Bob Evans Farms (b)................................... 1,428,200
120,100 Dole Food Co. ........................................ 1,801,500
212,400 Sara Lee Corp. ....................................... 4,314,375
441,900 SUPERVALU, Inc. ...................................... 6,656,119
215,000 Universal Foods Corp. ................................ 4,380,625
------------
18,580,819
------------
Forest & Paper Products (1.3%):
130,900 Weyerhaeuser Co. ..................................... 5,285,088
------------
Household--Major Appliances (0.4%):
44,200 Whirlpool Corp. ...................................... 1,718,275
------------
Household Products/Wares (1.8%):
40,000 Procter & Gamble Co. ................................. 2,680,000
94,107 Unilever.............................................. 4,540,663
------------
7,220,663
------------
Insurance (8.4%):
95,500 Aetna Services, Inc. ................................. 5,544,969
147,762 Aon Corp. ............................................ 5,799,659
199,400 Lincoln National Corp. ............................... 9,596,124
165,000 SAFECO Corp. (b)...................................... 4,496,250
163,000 St. Paul Cos., Inc. .................................. 8,037,937
------------
33,474,939
------------
</TABLE>
Continued
-68-
[LOGO OF BB&T FUNDS]
<PAGE>
GROWTH AND INCOME STOCK FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
----------- ----------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued:
Leisure Time Industries (0.6%):
227,725 Hasbro, Inc. ........................................ $ 2,604,605
------------
Manufacturing (0.5%):
20,000 Minnesota Mining & Manufacturing Co. ................ 1,822,500
------------
Media (0.5%):
48,900 Media General, Inc. ................................. 2,102,700
------------
Medical Equipment & Supplies (4.2%):
133,300 Johnson & Johnson.................................... 12,521,869
94,800 Mallinckrodt, Inc. .................................. 4,325,250
------------
16,847,119
------------
Petroleum (6.7%):
64,000 Ashland, Inc. ....................................... 2,156,000
101,030 Chevron Corp. ....................................... 8,612,808
90,000 Exxon Mobil Corp. ................................... 8,021,250
131,200 Phillips Petroleum Co. (b)........................... 8,232,800
------------
27,022,858
------------
Petroleum--International (1.4%):
93,600 Royal Dutch Petroleum Co.--NY Shares................. 5,610,150
------------
Pharmaceuticals (4.4%):
226,000 Abbott Laboratories.................................. 10,749,125
55,480 Bristol-Myers Squibb Co. ............................ 3,169,295
80,400 Schering-Plough Corp. ............................... 3,738,600
------------
17,657,020
------------
Photographic Equipment and Supplies (0.7%):
69,000 Eastman Kodak Co. ................................... 2,820,375
------------
Publishing (0.4%):
42,100 Houghton Mifflin Co. (b)............................. 1,652,425
------------
Railroad (1.2%):
105,700 CSX Corp. (b)........................................ 2,305,581
113,800 Trinity Industries, Inc. (b)......................... 2,660,075
------------
4,965,656
------------
Retail (0.6%):
120,250 May Department Stores Co. (b)........................ 2,465,125
------------
Retail--Food Stores (0.7%):
127,020 Albertson's, Inc. ................................... 2,667,420
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
----------- ----------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued:
Security Brokers & Dealers (1.6%):
123,362 Edwards (A.G.), Inc. (b)............................. $ 6,453,375
------------
Telecommunication--Equipment (2.9%):
16,200 Corning, Inc. ....................................... 4,811,400
135,000 Motorola, Inc. ...................................... 3,813,750
52,156 Nortel Networks Corp. (b)............................ 3,106,542
------------
11,731,692
------------
Telecommunications (0.1%):
23,000 BCE, Inc. ........................................... 537,625
------------
Tobacco (0.9%):
125,290 Philip Morris, Inc. ................................. 3,688,224
------------
Utilities--Electric (4.7%):
217,800 TXU Corp. ........................................... 8,630,325
372,775 Xcel Energy, Inc. ................................... 10,251,313
------------
18,881,638
------------
Utilities--Gas & Pipeline (0.9%):
100,800 NICOR, Inc. ......................................... 3,647,700
------------
Utilities--Telephone (7.8%):
259,122 AT&T Corp. .......................................... 7,611,709
220,000 BellSouth Corp. ..................................... 8,855,000
244,400 SBC Communications, Inc. ............................ 12,219,999
81,400 Sprint Corp. ........................................ 2,386,038
------------
31,072,746
------------
Total Common Stocks 384,832,459
------------
Investment Companies (4.2%):
16,959,305 Dreyfus Government Cash
Management Money Market Fund......................... 16,959,305
------------
Total Investment Companies 16,959,305
------------
Short Term Securities Purchased with Securities Lending Collateral
(13.1%):
Commercial Paper (4.8%):
Food Processing (2.1%):
$ 8,420,776 ConAgra, 6.68%, 11/2/00.............................. 8,331,712
Diversified Manufacturing (1.9%):
7,859,391 Tyco, 6.75%, 10/13/00................................ 7,772,446
Railroad (0.8%):
2,966,920 CSX, 6.69%, 10/10/00................................. 2,935,493
------------
19,039,651
------------
</TABLE>
Continued
-69-
[LOGO OF BB&T FUNDS]
<PAGE>
GROWTH AND INCOME STOCK FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
----------- --------------------------------------------------- ------------
<C> <S> <C>
Short Term Securities Purchased with Securities Lending
Collateral, continued:
Investment Companies (3.6%):
14,613,271 AIM Liquid Asset Money Market Fund................. $ 14,613,271
------------
Repurchase Agreements (3.1%):
$12,631,163 Lehman Brothers Triparty Agreement, 6.50%, 9/29/00,
maturing 10/2/00,
(See Significant Accounting Policies, Lending
Portfolio Securities in the Notes to Financial
Statements for collateral description)............. 12,631,163
------------
Variable Rate Notes (1.6%):
Financial Services (1.6%):
2,806,925 Ford Motor Credit, 6.86%, 4/11/02*................. 2,806,925
3,649,003 General Motors Acceptance Corp., 7.09%, 11/13/00*.. 3,649,003
------------
6,455,928
------------
Total Short Term Securities Purchased with Securities Lending
Collateral 52,740,013
------------
Total Investments
(Cost $346,202,657)(a)--112.9% 454,531,777
Liabilities in excess of other assets--(12.9)% (51,882,729)
------------
NET ASSETS--100.0% $402,649,048
============
</TABLE>
----
(a) Represents cost for federal income tax and financial reporting purposes
and differs from market value by net unrealized appreciation of securities
as follows:
<TABLE>
<S> <C>
Unrealized
appreciation........... $124,849,130
Unrealized
depreciation........... (16,520,010)
------------
Net unrealized
appreciation........... $108,329,120
============
</TABLE>
(b) All or part of this security has been loaned at September 30, 2000.
(c) Represents non-income producing securities.
* The rate reflected is the rate in effect at September 30, 2000. The maturity
date reflected is the final maturity date.
See notes to financial statements.
-70-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks (60.1%):
Advertising (0.1%):
1,800 Omnicom Group, Inc. .................................. $ 131,288
------------
Aerospace/Defense (0.7%):
9,100 Boeing Co. ........................................... 573,300
11,000 Parker-Hannifin Corp. ................................ 371,250
------------
944,550
------------
Aluminum (0.2%):
12,400 Alcoa, Inc. .......................................... 313,875
------------
Apparel (0.1%):
7,500 V.F. Corp. ........................................... 185,156
------------
Appliances & Household Durables (0.1%):
3,500 Black & Decker Corp. ................................. 119,656
------------
Automobiles & Trucks (0.5%):
15,000 Ford Motor Co. ....................................... 379,688
5,000 General Motors Corp. ................................. 325,000
2,225 Visteon Corp. ........................................ 33,653
------------
738,341
------------
Banking & Finance (2.9%):
10,400 Bank of America Corp. ................................ 544,700
13,200 Bank One Corp. ....................................... 509,850
30,500 Citigroup, Inc. ...................................... 1,648,905
3,500 J.P. Morgan & Co. .................................... 571,813
14,000 U.S. Bancorp.......................................... 318,500
6,000 Wachovia Corp. ....................................... 340,125
------------
3,933,893
------------
Banks (0.9%):
5,800 Bank of New York Co., Inc. ........................... 325,163
7,000 Chase Manhattan Corp. ................................ 323,313
5,100 FleetBoston Financial Corp. .......................... 198,900
7,900 Wells Fargo & Co. .................................... 362,905
------------
1,210,281
------------
Beverages (1.5%):
19,800 Anheuser-Busch Cos. .................................. 837,787
13,500 Coca-Cola Co. ........................................ 744,188
9,300 PepsiCo, Inc. ........................................ 427,800
------------
2,009,775
------------
Business Equipment & Services (0.3%):
14,500 Harris Corp. ......................................... 412,344
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Cable Television (0.2%):
8,200 Comcast Corp.--Class A (b)............................ $ 335,688
------------
Chemicals (0.4%):
13,500 Air Products & Chemicals, Inc. ....................... 486,000
------------
Communication Services (0.1%):
2,500 Nextel Communications, Inc., Class A (b).............. 116,875
------------
Computer--Peripherals (0.1%):
5,200 Lexmark Intl. Group, Inc. (b)......................... 195,000
------------
Computer Networking (0.5%):
8,500 Cisco Systems, Inc. (b)............................... 469,625
1,600 Network Appliance, Inc. (b)........................... 203,800
------------
673,425
------------
Computer Services (0.3%):
3,750 America Online, Inc. (b).............................. 201,563
2,100 First Data Corp. ..................................... 82,031
2,000 Yahoo!, Inc. (b)...................................... 182,625
------------
466,219
------------
Computer Software (4.1%):
8,800 Adobe Systems, Inc. .................................. 1,366,200
16,000 Computer Associates International, Inc. .............. 403,000
5,200 Computer Sciences Corp. (b)........................... 386,100
29,500 Microsoft Corp. (b)................................... 1,777,374
14,100 Oracle Corp. (b)...................................... 1,110,375
2,100 Siebel Systems, Inc. (b).............................. 233,756
1,600 Veritas Software Corp. (b)............................ 227,200
------------
5,504,005
------------
Computers (3.7%):
14,100 Compaq Computer Corp. ................................ 388,878
12,400 Dell Computer Corp. (b)............................... 382,075
10,500 Electronic Data Systems Corp. ........................ 435,750
2,500 EMC Corp. (b)......................................... 247,813
8,700 Hewlett-Packard Co. .................................. 843,900
15,600 IBM Corp. ............................................ 1,754,999
8,700 Sun Microsystems, Inc. (b)............................ 1,015,725
------------
5,069,140
------------
Consumer Goods & Services (0.1%):
2,600 Kimberly-Clark Corp. ................................. 145,113
------------
</TABLE>
Continued
-71-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Containers (0.0%):
2,500 Sonoco Products Co. .................................. $ 45,156
------------
Diversified Products (2.5%):
10,500 E.I. duPont de Nemours and Co. ....................... 435,093
49,000 General Electric Co. ................................. 2,826,687
6,000 Gillette Co. ......................................... 185,250
------------
3,447,030
------------
Electronic Components (2.0%):
10,000 Avnet, Inc. .......................................... 283,750
43,000 Intel Corp. .......................................... 1,789,874
3,900 KLA-Tencor Corp. (b).................................. 160,631
4,100 Palm, Inc. (b)........................................ 217,044
4,500 Solectron Corp. (b)................................... 207,563
------------
2,658,862
------------
Electronic Components--Semiconductors (1.4%):
2,400 Analog Devices, Inc. (b).............................. 198,150
6,400 Applied Materials, Inc. (b)........................... 379,600
900 Broadcom Corp. (b).................................... 219,375
3,200 Micron Technology, Inc. (b)........................... 147,200
3,400 Novellus Systems (b).................................. 158,313
4,100 Teradyne, Inc. (b).................................... 143,500
11,500 Texas Instruments, Inc. .............................. 542,656
1,000 Xilinx, Inc. (b)...................................... 85,625
------------
1,874,419
------------
Electronics (1.6%):
6,540 Agilent Technologies, Inc. (b)........................ 320,051
8,900 Emerson Electric ..................................... 596,300
3,900 Molex, Inc. .......................................... 212,306
600 Sanmina Corp. (b)..................................... 56,175
12,800 Tektronix, Inc. ...................................... 983,201
------------
2,168,033
------------
Engineering (0.2%):
10,000 Fluor Corp. .......................................... 300,000
------------
Financial Services (2.1%):
8,300 American Express Co. ................................. 504,225
10,500 Associates First Capital Corp. ....................... 399,000
9,200 Fannie Mae............................................ 657,799
4,400 Freddie Mac........................................... 237,875
2,600 MBNA Corp. ........................................... 100,100
3,100 Merrill Lynch & Co., Inc. ............................ 204,600
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Financial Servies, continued:
6,200 Morgan Stanley Dean Witter & Co. ..................... $ 566,913
6,200 Schwab (Charles) Corp. ............................... 220,100
------------
2,890,612
------------
Food & Related (1.0%):
7,500 Dean Foods Co. ....................................... 249,375
29,100 Sara Lee Corp. ....................................... 591,093
27,000 SUPERVALU, Inc. ...................................... 406,688
5,000 Universal Foods Corp. ................................ 101,875
------------
1,349,031
------------
Forest & Paper Products (0.3%):
11,500 Weyerhaeuser Co. ..................................... 464,313
------------
Health Care--Hospitals (0.4%):
14,800 HCA-The Healthcare Co. ............................... 549,450
------------
Household--Major Appliances (0.4%):
12,800 Whirlpool Corp. ...................................... 497,600
------------
Household Products/Wares (0.9%):
9,200 Procter & Gamble Co. ................................. 616,400
12,100 Unilever N.V. ........................................ 583,825
------------
1,200,225
------------
Insurance (5.0%):
9,000 Aetna Services, Inc. ................................. 522,563
21,300 Allstate Corp. ....................................... 740,175
7,600 American General Corp. ............................... 592,800
12,800 American International Group, Inc. ................... 1,224,799
8,000 Aon Corp. ............................................ 314,000
8,300 Cigna Corp. .......................................... 866,519
11,400 Lincoln National Corp. ............................... 548,625
1,700 Marsh & McLennan Cos., Inc. .......................... 225,675
16,900 SAFECO Corp. ......................................... 460,525
14,200 St. Paul Cos., Inc. .................................. 700,238
17,500 Torchmark Corp. ...................................... 486,719
------------
6,682,638
------------
Leisure Time Industries (0.0%):
1,000 Harley-Davidson, Inc. ................................ 47,875
------------
</TABLE>
Continued
-72-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Machinery & Equipment (0.7%):
10,500 Caterpillar, Inc. .................................... $ 354,375
16,800 Ingersoll-Rand Co. ................................... 569,100
------------
923,475
------------
Manufacturing (0.8%):
14,900 Honeywell International Inc. ......................... 530,812
5,500 Minnesota Mining & Manufacturing Co. ................. 501,188
2,000 Tyco International Ltd. .............................. 103,750
------------
1,135,750
------------
Media (0.5%):
2,500 Clear Channel Communications, Inc. (b)................ 141,250
9,000 Gannett Co., Inc. .................................... 477,000
------------
618,250
------------
Medical Equipment & Supplies (1.4%):
9,400 Bausch & Lomb......................................... 366,013
11,900 Johnson & Johnson..................................... 1,117,856
8,000 Mallinckrodt, Inc. ................................... 365,000
------------
1,848,869
------------
Multimedia (1.0%):
13,300 The Walt Disney Co. .................................. 508,725
7,100 Time Warner, Inc. .................................... 555,575
5,985 Viacom Inc.--Class B (b).............................. 350,123
------------
1,414,423
------------
Office Equipment & Services (0.3%):
27,400 Xerox Corp. .......................................... 412,713
------------
Oil & Gas Exploration Products & Services (0.1%):
3,300 Halliburton Co. ...................................... 161,494
------------
Petroleum (2.9%):
2,400 Chevron Corp. ........................................ 204,600
18,800 Exxon Mobil Corp. .................................... 1,675,549
13,100 Phillips Petroleum Co. ............................... 822,025
7,000 Schlumberger Ltd. .................................... 576,188
12,700 Texaco, Inc. ......................................... 666,750
------------
3,945,112
------------
Petroleum--International (0.8%):
17,500 Royal Dutch Petroleum Co.--NY Shares.................. 1,048,906
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Pharmaceuticals (5.2%):
25,000 Abbott Laboratories................................... $ 1,189,062
6,300 American Home Products Corp. ......................... 356,344
4,900 Amgen, Inc. (b)....................................... 342,158
13,000 Bristol-Myers Squibb Co. ............................. 742,625
6,200 Cardinal Health, Inc. ................................ 546,763
6,200 Lilly (Eli) & Co. .................................... 502,975
19,400 Merck & Co., Inc. .................................... 1,444,087
31,500 Pfizer, Inc. ......................................... 1,415,530
4,200 Pharmacia Corp. ...................................... 252,788
2,800 Schering-Plough Corp. ................................ 130,200
------------
6,922,532
------------
Photographic Equipment and Supplies (0.2%):
7,500 Eastman Kodak Co. .................................... 306,563
------------
Pipelines (0.3%):
3,400 El Paso Energy Corp. ................................. 209,525
2,500 Enron Corp. .......................................... 219,063
------------
428,588
------------
Railroad (0.3%):
19,700 CSX Corp. ............................................ 429,706
------------
Restaurants (0.3%):
13,500 McDonalds Corp. ...................................... 407,531
------------
Retail (1.3%):
11,500 Gap, Inc. ............................................ 231,438
21,700 May Department Stores Co. ............................ 444,850
20,500 Wal-Mart Stores, Inc. ................................ 986,562
3,000 Walgreen Co. ......................................... 113,813
------------
1,776,663
------------
Retail--Food Stores (0.3%):
20,000 Albertson's, Inc. .................................... 420,000
------------
Retail--General Merchandise (0.5%):
25,300 Target Corp. ......................................... 648,313
------------
Retail--Specialty Stores (0.5%):
13,000 Home Depot, Inc. ..................................... 689,813
------------
Security Brokers & Dealers (0.2%):
5,500 Edwards (A.G.), Inc. (b).............................. 287,719
------------
</TABLE>
Continued
-73-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Telecommunication--Equipment (2.0%):
4,400 ADC Telecommunications, Inc. (b)...................... $ 118,319
1,000 Corning, Inc. ........................................ 297,000
3,100 JDS Uniphase Corp. (b)................................ 293,531
10,000 Lucent Technologies, Inc. (c)......................... 305,625
18,200 Motorola, Inc. ....................................... 514,150
15,700 Nortel Networks Corp. ................................ 935,130
2,700 Qualcomm, Inc. (b).................................... 192,375
------------
2,656,130
------------
Telecommunications (0.5%):
6,500 Global Crossing Ltd. (b).............................. 201,500
5,400 Qwest Communications International, Inc. (b).......... 259,537
7,100 Sprint Corp. (PCS Group) (b).......................... 248,944
------------
709,981
------------
Telephone--Integrated (0.3%):
13,900 WorldCom, Inc. (b).................................... 422,213
------------
Telephone Communications, Radio (0.7%):
4,200 Alltel Corp. ......................................... 219,188
14,800 Verizon Communications................................ 716,875
------------
936,063
------------
Tobacco (0.6%):
20,100 Philip Morris, Inc. .................................. 591,693
8,500 UST, Inc. ............................................ 194,438
------------
786,131
------------
Utilities--Electric (1.5%):
3,300 AES Corp. (b)......................................... 226,050
3,800 Dominion Resources, Inc. ............................. 220,638
2,700 Duke Energy Corp. .................................... 231,525
8,500 FPL Group, Inc. ...................................... 558,874
3,200 Reliant Energy........................................ 148,800
15,000 Scana Corp. .......................................... 463,125
6,600 The Southern Co. ..................................... 214,088
------------
2,063,100
------------
Utilities--Gas & Pipeline (0.7%):
2,900 Coastal Corp. ........................................ 214,963
15,600 NICOR, Inc. .......................................... 564,525
4,800 Williams Companies, Inc. ............................. 202,800
------------
982,288
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ---------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued:
Utilities--Telephone (1.6%):
16,400 AT&T Corp. ......................................... $ 481,750
12,500 BellSouth Corp. .................................... 503,125
15,000 SBC Communications, Inc. ........................... 750,000
15,000 Sprint Corp. ....................................... 439,688
------------
2,174,563
------------
Total Common Stocks 81,722,757
------------
Corporate Bonds (8.3%):
Automotive (0.7%):
$1,000,000 DaimlerChrysler NA,
7.40%, 1/20/05...................................... 1,008,796
------------
Banks (2.4%):
1,250,000 Bank One Corp.,
6.88%, 8/1/06....................................... 1,233,116
2,000,000 International Banking Reconstruction & Development,
6.38%, 7/21/05...................................... 1,983,978
------------
3,217,094
------------
Beverages (0.8%):
1,000,000 Anheuser-Busch Cos.,
7.50%, 3/15/12...................................... 1,020,680
------------
Computer Services (0.7%):
1,000,000 Electronic Data Systems, Inc.,
7.13%, 10/15/09..................................... 987,500
------------
Financial Services (1.5%):
1,500,000 Ford Motor Credit Co.,
7.50%, 3/15/05...................................... 1,508,059
500,000 General Electric Capital Corp.,
7.25%, 2/1/05....................................... 507,571
------------
2,015,630
------------
Manufacturing (0.8%):
1,000,000 Honeywell International,
7.50%, 3/1/10....................................... 1,020,411
------------
Retail--General Merchandise (0.7%):
1,000,000 Target Corp., 7.50%, 2/15/05........................ 1,019,152
------------
</TABLE>
Continued
-74-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Corporate Bonds, continued:
Telecommunications (0.7%):
$1,000,000 GTE North, Inc., 6.40%, 2/15/05....................... $ 974,402
------------
Total Corporate Bonds 11,263,665
------------
Pass-through Mortgage Securities (10.3%):
Federal Home Loan Mortgage Corp. (4.8%):
3,786,489 6.00%, 3/1/13, Pool #E00540........................... 3,685,882
1,196,886 6.00%, 6/1/13, Pool #E00553........................... 1,164,713
1,801,511 6.00%, 11/1/28, Pool #C00680.......................... 1,687,782
------------
6,538,377
------------
Federal National Mortgage Assoc. (5.5%):
978,400 6.00%, 6/1/03, Pool #250581........................... 949,048
4,160,927 6.50%, 4/1/14, Pool #323654........................... 4,086,779
596,187 7.00%, 4/1/24, Pool #250005........................... 590,595
1,901,772 7.50%, 10/1/29, Pool #252806.......................... 1,900,574
------------
7,526,996
------------
Total Pass-through Mortgage Securities 14,065,373
------------
U.S. Government Agencies (8.8%):
Federal Home Loan Bank (3.8%):
1,500,000 5.84%, 7/14/08........................................ 1,415,511
4,000,000 5.80%, 9/2/08......................................... 3,758,612
------------
5,174,123
------------
Federal Home Loan Mortgage Corp. (2.1%):
3,000,000 5.75%, 4/15/08........................................ 2,825,385
------------
Federal National Mortgage Assoc. (2.9%):
1,500,000 6.00%, 5/15/08........................................ 1,432,118
2,500,000 6.63%, 9/15/09........................................ 2,477,210
------------
3,909,328
------------
Total U.S. Government Agencies 11,908,836
------------
U.S. Treasury Bonds (4.6%):
5,000,000 7.25%, 5/15/16 (c).................................... 5,564,065
750,000 6.00%, 2/15/26........................................ 742,969
------------
Total U.S. Treasury Bonds 6,307,034
------------
U.S. Treasury Notes (6.8%):
1,400,000 5.88%, 11/15/04....................................... 1,398,688
2,000,000 7.88%, 11/15/04....................................... 2,140,000
2,000,000 7.50%, 2/15/05........................................ 2,121,876
3,000,000 6.63%, 5/15/07........................................ 3,109,689
500,000 5.75%, 8/15/10........................................ 497,969
------------
Total U.S. Treasury Notes 9,268,222
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security Market
Amount Description Value
---------- ---------------------------------------------------- ------------
<C> <S> <C>
Investment Companies (0.7%):
963,715 Dreyfus Cash Management Money Market Fund........... $ 963,715
------------
Total Investment Companies 963,715
------------
Short Term Securities Purchased with Securities Lending
Collateral (4.4%):
Commercial Paper (1.6%):
Food Processing (0.7%):
$ 955,343 ConAgra, 6.68%, 11/2/00............................. 945,238
------------
Diversified Manufacturing (0.7%):
891,654 Tyco, 6.75%, 10/13/00............................... 881,790
------------
Railroad (0.2%):
336,599 CSX, 6.69%, 10/10/00................................ 333,034
------------
2,160,062
------------
Investment Companies (1.2%):
1,657,886 AIM Liquid Asset Money Market Fund.................. 1,657,886
------------
Repurchase Agreements (1.1%):
1,433,015 Lehman Brothers Triparty Agreement, 6.50%, 9/29/00,
maturing 10/2/00,
(See Significant Accounting Policies, Lending
Portfolio Securities in the Notes to Financial
Statements for collateral description).............. 1,433,015
------------
Variable Rate Notes (0.5%):
Financial Services (0.5%):
318,448 Ford Motor Credit, 6.86%, 4/11/02*.................. 318,448
413,982 General Motors Acceptance Corp., 7.09%, 11/13/00*... 413,982
------------
732,430
------------
Total Short Term Securities Purchased with Securities Lending
Collateral 5,983,393
------------
Total Investments
(Cost $131,286,022)(a)--104.0% 141,482,995
Liabilities in excess of other assets--(4.0)% (5,495,390)
------------
NET ASSETS--100.0% $135,987,605
============
</TABLE>
Continued
-75-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
----
(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
$64,649. Cost for federal income tax purposes differs from market value by
net unrealized appreciation as follows:
<TABLE>
<S> <C>
Unrealized
appreciation............ $18,279,359
Unrealized
depreciation............ (8,147,035)
-----------
Net unrealized
appreciation............ $10,132,324
===========
</TABLE>
(b) Represents non-income producing securities.
(c) All or part of this security has been loaned at September 30, 2000.
* The rate reflected is the rate in effect at September 30, 2000. The
maturity date reflected is the final maturity date.
See notes to financial statements.
-76-
[LOGO OF BB&T FUNDS]
<PAGE>
LARGE COMPANY GROWTH FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks (94.2%):
Aerospace/Defense (1.2%):
34,300 Boeing Co............................................. $ 2,160,900
------------
Aluminum (0.9%):
67,200 Alcoa, Inc............................................ 1,701,000
------------
Banking & Finance (4.4%):
47,400 Bank of America Corp. ................................ 2,482,575
105,999 Citigroup, Inc. ...................................... 5,730,571
------------
8,213,146
------------
Banks (1.7%):
45,450 Firstar Corp.......................................... 1,016,944
16,400 State Street Corp..................................... 2,132,000
------------
3,148,944
------------
Beverages (1.5%):
50,250 Coca-Cola Co. ........................................ 2,770,031
------------
Business Equipment & Services (1.1%):
30,000 SEI Investments Co.................................... 2,122,500
------------
Business Services (3.2%):
94,400 Paychex, Inc.......................................... 4,956,000
28,800 Robert Half International, Inc. (b)................... 999,000
------------
5,955,000
------------
Computer Networking (3.0%):
99,600 Cisco Systems, Inc. (b)(c)............................ 5,502,900
------------
Computer Services (1.5%):
51,000 America Online, Inc. (b).............................. 2,741,250
------------
Computer Software (3.2%):
74,700 Oracle Corp. (b)(c)................................... 5,882,625
------------
Computers (10.6%):
61,500 CDW Computer Centers, Inc. (b)........................ 4,243,500
64,900 EMC Corp. (b)......................................... 6,433,212
15,500 IBM Corp.............................................. 1,743,750
61,950 Sun Microsystems, Inc. (b)............................ 7,232,662
------------
19,653,124
------------
Diversified Products (4.7%):
28,000 Colgate-Palmolive Co.................................. 1,321,600
128,200 General Electric Co................................... 7,395,538
------------
8,717,138
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Electronic Components (5.9%):
97,400 Intel Corp............................................ $ 4,054,275
80,500 Jabil Circuit (b)..................................... 4,568,375
57,800 KLA-Tencor Corp. (b).................................. 2,380,638
------------
11,003,288
------------
Electronic Components--Semiconductors (3.7%):
20,000 Altera Corp. (b)...................................... 955,000
20,000 Analog Devices, Inc. (b).............................. 1,651,250
23,600 Applied Materials, Inc. (b)........................... 1,399,775
62,000 Texas Instruments, Inc. (c)........................... 2,925,625
------------
6,931,650
------------
Electronics (5.1%):
30,000 Agilent Technologies, Inc. (b)........................ 1,468,125
67,000 Kemet Corp. (b)....................................... 1,850,875
29,800 Linear Technology Corp................................ 1,929,550
118,425 Symbol Technologies, Inc. (c)......................... 4,255,898
------------
9,504,448
------------
Financial Services (2.9%):
33,950 American Express Co................................... 2,062,463
35,800 Morgan Stanley Dean Witter & Co. ..................... 3,273,462
------------
5,335,925
------------
Food & Related (0.2%):
10,000 Sysco Corp............................................ 463,125
------------
Insurance (1.1%):
20,550 American International Group, Inc..................... 1,966,378
------------
Leisure Time Industries (0.8%):
30,000 Harley-Davidson, Inc.................................. 1,436,250
------------
Medical Equipment & Supplies (0.8%):
15,250 Johnson & Johnson..................................... 1,432,547
------------
Medical Instruments (1.7%):
60,600 Medtronic, Inc. (c)................................... 3,139,838
------------
Petroleum (1.9%):
25,000 EOG Resources, Inc.................................... 971,875
29,399 Exxon Mobil Corp...................................... 2,620,186
------------
3,592,061
------------
</TABLE>
Continued
-77-
[LOGO OF BB&T FUNDS]
<PAGE>
LARGE COMPANY GROWTH FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
---------- ---------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued:
Pharmaceuticals (9.3%):
96,500 Amgen, Inc. (b)..................................... $ 6,738,413
33,750 King Pharmaceuticals, Inc. (b)...................... 1,128,516
41,250 Merck & Co., Inc. .................................. 3,070,547
141,850 Pfizer, Inc......................................... 6,374,384
------------
17,311,860
------------
Pipelines (2.2%):
46,500 Enron Corp.......................................... 4,074,563
------------
Retail (5.7%):
128,550 Wal-Mart Stores, Inc................................ 6,186,468
116,550 Walgreen Co. (c).................................... 4,421,616
------------
10,608,084
------------
Retail--Specialty Stores (0.4%):
15,450 Home Depot, Inc..................................... 819,816
------------
Telecommunication--Equipment (12.4%):
18,500 Corning, Inc........................................ 5,494,499
220,600 Ericsson LM--ADR (c)................................ 3,267,638
30,000 Motorola, Inc....................................... 847,500
88,800 Nokia Corp.--ADR (c)................................ 3,535,350
61,600 Nortel Networks Corp. (c)........................... 3,669,049
41,200 Powerwave Technologies, Inc. (b).................... 1,564,313
54,900 Scientific Atlanta, Inc............................. 3,493,013
25,000 Tellabs, Inc. (b)................................... 1,193,750
------------
23,065,112
------------
Telecommunications (0.7%):
35,000 Sprint Corp. (PCS Group) (b)(c)..................... 1,227,188
------------
Utilities--Telephone (2.4%):
52,550 BellSouth Corp...................................... 2,115,138
46,000 SBC Communications, Inc............................. 2,300,000
------------
4,415,138
------------
Total Common Stocks 174,895,829
------------
Investment Companies (5.9%):
8,185,136 Dreyfus Government Cash Management Money Market
Fund................................................ 8,185,136
2,811,347 Dreyfus Treasury Cash Management Money Market Fund.. 2,811,347
------------
Total Investment Companies 10,996,483
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
---------- ---------------------------------------------- ------------
<C> <S> <C>
Short Term Securities Purchased with Securities Lending
Collateral (17.8%):
Commercial Paper (6.4%):
Food Processing (2.8%):
$5,293,469 ConAgra, 6.68%, 11/2/00....................... $ 5,237,481
Diversified Manufacturing (2.6%):
4,940,571 Tyco, 6.75%, 10/13/00......................... 4,885,916
Railroad (1.0%):
1,865,066 CSX, 6.69%, 10/10/00.......................... 1,845,310
------------
11,968,707
------------
Investment Companies (4.9%):
9,186,196 AIM Liquid Asset Money Market Fund............ 9,186,196
------------
Repurchase Agreements (4.3%):
7,940,203 Lehman Brothers Triparty Agreement, 6.50%,
9/29/00, maturing 10/2/00, (See Significant
Accounting Policies, Lending Portfolio
Securities in the Notes to Financial
Statements for collateral description)........ 7,940,203
------------
Variable Rate Notes (2.2%):
Financial Services (2.2%):
1,764,490 Ford Motor Credit, 6.86%, 4/11/02*............ 1,764,490
2,293,836 General Motors Acceptance Corp., 7.09%,
11/13/00*..................................... 2,293,836
------------
4,058,326
------------
Total Short Term Securities Purchased with Securities
Lending Collateral 33,153,432
------------
Total Investments
(Cost $165,644,658)(a)--117.9% 219,045,744
Liabilities in excess of other assets--(17.9)% (33,179,487)
------------
NET ASSETS--100.0% $185,866,257
============
</TABLE>
Continued
-78-
[LOGO OF BB&T FUNDS]
<PAGE>
LARGE COMPANY GROWTH FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
----
(a) Represents cost for federal income tax and financial reporting purposes and
differs from market value by net unrealized appreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized
appreciation............ $60,325,382
Unrealized
depreciation............ (6,924,296)
-----------
Net unrealized
appreciation............ $53,401,086
===========
</TABLE>
(b) Represents non-income producing securities.
(c) All or part of this security has been loaned at September 30, 2000.
* The rate reflected is the rate in effect at September 30, 2000. The maturity
date reflected is the final maturity date.
ADR--American Depository Receipt.
See notes to financial statements.
-79-
[LOGO OF BB&T FUNDS]
<PAGE>
SMALL COMPANY GROWTH FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
--------- ------------------------------------------------------- ------------
<C> <S> <C>
Common Stocks (82.6%):
Amusement and Recreation (0.4%):
14,100 Extended Stay America, Inc............................. $ 186,825
42,300 Oakley, Inc. .......................................... 742,894
------------
929,719
------------
Analytical Instruments (2.2%):
37,996 Bruker Daltonics, Inc. ................................ 1,686,072
15,000 Ciphergen Biosystems Inc............................... 480,000
19,000 EXFO Electro-Optical Engineering....................... 827,688
28,300 Illumina, Inc.......................................... 1,284,112
29,100 Varian, Inc............................................ 1,253,119
------------
5,530,991
------------
Apparel (0.5%):
24,500 Columbia Sportswear Co. ............................... 1,123,938
------------
Banks (0.7%):
12,900 Greater Bay Bancorp.................................... 895,744
28,600 Southwest Bancorp of Texas, Inc. (c)................... 934,862
------------
1,830,606
------------
Biotechnology (7.5%):
20,900 Aurora Biosciences Corp. .............................. 1,421,200
39,550 Barr Laboratories, Inc. ............................... 2,622,659
100 Charles River Laboratories, Inc. ...................... 3,400
30,300 Deltagen, Inc.......................................... 937,406
30,300 Digene Corp............................................ 1,090,800
2,400 Discovery Partners International, Inc. ................ 48,750
49,600 Dyax Corp. (c)......................................... 2,170,000
55,700 Genaissance Pharmaceuticals, Inc....................... 1,152,294
50,700 Genencor International, Inc............................ 1,501,988
26,600 Lexicon Genetics, Inc.................................. 841,225
26,300 Millennium Pharmaceuticals, Inc. (b)(c)................ 3,841,443
26,500 Techne Corp. .......................................... 2,968,000
------------
18,599,165
------------
Business Services (0.4%):
21,100 Getty Images, Inc...................................... 642,232
21,500 I-Many, Inc............................................ 428,656
------------
1,070,888
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
--------- ------------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued:
Commercial Services (2.0%):
70,200 Plexus Corp............................................ $ 4,949,100
------------
Computer Networking (0.3%):
9,400 Cerner Corp. (b)....................................... 436,513
9,400 Henry (Jack) & Associates, Inc. ....................... 407,725
------------
844,238
------------
Computer Services (1.5%):
12,315 i2 Technologies, Inc. (b).............................. 2,303,674
24,500 Packeteer, Inc. (b).................................... 929,469
16,500 TALX Corp.............................................. 424,875
------------
3,658,018
------------
Computer Software (10.5%):
19,600 Actuate Corp. (b)...................................... 677,119
19,700 Art Technology Group, Inc. (b)......................... 1,866,575
30,600 Aspen Technology, Inc. (b)............................. 1,380,825
15,100 Business Objects (b)................................... 1,707,244
23,900 Descartes Systems Group, Inc. (b)...................... 1,183,050
16,200 Docent, Inc. (b)....................................... 296,663
13,800 Informatica Corp. (b).................................. 1,286,850
56,800 Manugistics Group, Inc. (b)............................ 5,573,499
32,300 Mercury Interactive Corp. (b).......................... 5,063,024
11,400 Netegrity, Inc. (b).................................... 798,000
22,000 Nuance Communications, Inc. (b)(c)..................... 2,677,125
12,600 SignalSoft Corp. (b)................................... 511,875
47,000 SmartForce PLC--ADR (b)................................ 2,226,625
11,737 Ulticom, Inc. (b)...................................... 553,106
11,900 Vastera, Inc. (b)...................................... 261,800
------------
26,063,380
------------
Computers (1.6%):
73,800 Concurrent Computer Corp. (b).......................... 1,402,200
14,500 InFocus Corp. (b)...................................... 768,500
48,400 M-Systems Flash Disk Pioneers Ltd. (b)................. 1,848,275
------------
4,018,975
------------
Electric Utility (3.2%):
75,000 Calpine Corp. (b)...................................... 7,828,125
------------
</TABLE>
Continued
-80-
[LOGO OF BB&T FUNDS]
<PAGE>
SMALL COMPANY GROWTH FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
--------- ----------------------------------------------------- ------------
<C> <S> <C>
Common Stock, continued:
Electronic Components (0.5%):
18,350 Cable Design Technologies Corp. (b).................. $ 446,134
10,500 Capstone Turbine Corp. (b)........................... 727,125
------------
1,173,259
------------
Electronic Components--Semiconductors (9.1%):
33,600 02Micro International Ltd. (b)....................... 578,025
32,011 Applied Micro Circuits Corp. (b)..................... 6,628,277
25,400 Elantec Semiconductor, Inc. (b)...................... 2,530,475
19,900 Exar Corp. (b)....................................... 2,407,900
34,503 Flextronics International Ltd. (b)(c)................ 2,833,559
31,600 Integrated Circuit Systems, Inc. (b)................. 584,600
2,400 Marvel Technology Group (b).......................... 185,100
26,600 Oak Technology, Inc. (b)............................. 728,175
80,102 TranSwitch Corp. (b)................................. 5,106,502
13,000 Virata Corp. (b)..................................... 859,625
------------
22,442,238
------------
Electronics (1.5%):
18,300 ACT Manufacturing, Inc. (b)(c)....................... 965,325
6,800 Active Power, Inc. (b)............................... 421,600
12,400 Kent Electronics Corp. (b)........................... 296,050
10,362 Power-One, Inc. (b).................................. 627,063
13,200 Sanmina Corp. (b).................................... 1,235,850
7,400 TTM Technologies, Inc. (b)(c)........................ 173,900
------------
3,719,788
------------
Financial Services (3.0%):
27,400 Affiliated Managers Group, Inc. (b).................. 1,560,088
80,600 Investors Financial Services Corp. .................. 5,087,875
23,000 LaBranche and Company, Inc. (b)...................... 767,625
------------
7,415,588
------------
Health Care (1.4%):
42,900 Advance Paradigm, Inc. (b)........................... 1,809,844
22,100 Novoste Corp. (b).................................... 939,250
21,100 Oxford Health Plans, Inc. (b)........................ 648,495
------------
3,397,589
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
--------- ------------------------------------------------------- ------------
<C> <S> <C>
Common Stock, continued:
Leisure Time Industries (2.2%):
66,400 International Game Technology (b)...................... $ 2,232,700
34,700 MGM Mirage, Inc. (c)................................... 1,325,106
71,100 Park Place Entertainment Corp. (b)..................... 1,075,388
35,800 WMS Industries, Inc. (b)............................... 805,500
------------
5,438,694
------------
Media (0.2%):
25,900 Entravision Communications Corp. (b)................... 450,013
------------
Medical Equipment & Supplies (1.6%):
70,800 Inhale Therapeutic Systems, Inc. (b)(c)................ 3,991,350
------------
Oil & Gas Exploration Products & Services (1.2%):
18,125 Cal Dive International, Inc. (b)....................... 1,036,524
32,850 Cross Timbers Oil Co. ................................. 630,309
18,800 Patterson Energy, Inc. (b)............................. 646,250
22,200 Spinnaker Exploration Co. (b).......................... 774,225
------------
3,087,308
------------
Pharmaceuticals (19.3%):
20,028 3 Dimensional Pharmaceuticals, Inc. (b)................ 721,008
37,309 Aclara Biosciences, Inc. (b)(c)........................ 1,133,261
19,900 Alkermes, Inc. (b)..................................... 768,638
37,200 AmeriSource Health Corp.--Class A (b).................. 1,748,400
70,600 Celgene Corp. (b)...................................... 4,200,700
78,200 Genzyme Transgenics Corp. (b).......................... 2,756,550
21,400 InterMune Parmaceuticals, Inc. (b)..................... 1,160,950
69,900 IntraBiotics Pharmaceuticals, Inc. (b)(c).............. 1,135,875
43,200 Large Scale Biology Corp. (b)(c)....................... 1,414,800
31,100 Maxim Pharmaceuticals, Inc. (b)(c)..................... 1,889,325
22,700 Medicis Pharmaceutical Corp. (b)....................... 1,396,050
107,900 Noven Pharmaceuticals, Inc. (b)........................ 4,612,725
31,400 OSI Pharmaceuticals, Inc. (b).......................... 2,198,000
36,200 Pharmacopeia, Inc. (b)................................. 923,100
14,200 QLT, Inc. (b).......................................... 1,006,425
73,111 Shire Pharmaceuticals Group PLC (b)(c)................. 3,774,355
96,300 Titan Pharmaceuticals, Inc. (b)........................ 6,259,500
38,200 United Therapeutics Corp. (b)(c)....................... 3,337,725
87,000 Vertex Pharmaceuticals, Inc. (b)....................... 7,351,499
------------
47,788,886
------------
</TABLE>
Continued
-81-
[LOGO OF BB&T FUNDS]
<PAGE>
SMALL COMPANY GROWTH FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
--------- ------------------------------------------------------- ------------
<C> <S> <C>
Common Stock, continued:
Printing & Publishing (0.3%):
8,000 Scholastic Corp. (b)................................... $ 636,500
------------
Research & Development Laboratories (0.1%):
6,700 Lexent, Inc. (b)....................................... 199,325
------------
Restaurants (0.7%):
37,500 Brinker International, Inc. (b)........................ 1,129,688
25,600 California Pizza Kitchen, Inc. (b)(c).................. 716,800
------------
1,846,488
------------
Retail (2.3%):
20,600 American Eagle Outfitters (b).......................... 648,900
152,400 Pier 1 Imports, Inc. .................................. 2,066,925
23,772 The Talbots, Inc. ..................................... 1,574,895
103,600 Venator Group, Inc. (b)................................ 1,282,050
------------
5,572,770
------------
Steel Pipe and Tubes (0.8%):
26,600 Shaw Group, Inc. (b)................................... 1,875,300
------------
Telecommunication--Equipment (6.0%):
3,700 Avici Systems Inc. (b)................................. 351,963
80,800 Natural Microsystems Corp. (b)......................... 4,346,787
35,500 Pinnacle Holdings, Inc. (b)............................ 945,188
62,000 Polycom, Inc. (b)...................................... 4,152,062
29,700 REMEC, Inc. (b)........................................ 874,294
10,100 Repeater Technologies, Inc. (b)........................ 118,675
10,300 SDL, Inc. (b)(c)....................................... 3,172,400
3,400 Sonus Networks, Inc. (b)............................... 429,675
14,200 WJ Communications, Inc. (b)............................ 525,400
------------
14,916,444
------------
Telecommunications (1.6%):
14,400 Microcell Telecommunications (b)....................... 418,500
7,100 OmniSky Corp. (b)(c)................................... 144,219
54,207 SBA Communications Corp. (b)........................... 2,273,307
56,700 Spectrasite Holdings, Inc. (b)......................... 1,052,494
------------
3,888,520
------------
Total Common Stocks 204,287,203
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
or
Principal Security
Amount Description Market Value
----------- ----------------------------------------------- ------------
<C> <S> <C>
U.S. Government Agencies (17.4%):
Federal Home Loan Bank (16.8%):
$41,510,000 0.00%*, 10/2/00................................ $ 41,488,415
------------
Federal Home Loan Mortgage Corp. (0.6%):
1,500,000 0.00%*, 10/10/00 (d)........................... 1,498,125
------------
Total U.S. Government Agencies 42,986,540
------------
Short Term Securities Purchased with Securities Lending
Collateral (12.9%):
Commercial Paper (4.6%):
Food Processing (2.0%):
5,103,479 ConAgra, 6.68%, 11/2/00........................ 5,049,501
Diversified Manufacturing (1.9%):
4,763,247 Tyco, 6.75%, 10/13/00.......................... 4,710,553
Railroad (0.7%):
1,798,126 CSX, 6.69%, 10/10/00........................... 1,779,079
------------
11,539,133
------------
Investment Companies (3.6%):
8,856,490 AIM Liquid Asset Money Market Fund............. 8,856,490
------------
Repurchase Agreements (3.1%):
7,655,218 Lehman Brothers Triparty Agreement, 6.50%,
9/29/00, maturing 10/2/00, (See Significant
Accounting Policies, Lending Portfolio
Securities in the Notes to Financial Statements
for collateral description).................... 7,655,218
------------
Variable Rate Notes (1.6%):
Financial Services (1.6%):
$1,701,160 Ford Motor Credit,
6.86%, 4/11/02**............................... 1,701,160
2,211,507 General Motors Acceptance Corp., 7.09%,
11/13/00**..................................... 2,211,507
------------
3,912,667
------------
Total Short Term Securities Purchased with Securities
Lending Collateral 31,963,508
------------
Total Investments
(Cost $219,711,639)(a)--112.9% 279,237,251
Liabilities in excess of other assets--(12.9)% (31,799,586)
------------
TOTAL NET ASSETS--100.0% $247,437,665
============
</TABLE>
Continued
-82-
[LOGO OF BB&T FUNDS]
<PAGE>
SMALL COMPANY GROWTH FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
----
(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 $2,366,826. Cost for federal
income tax purposes differs from market value by
net unrealized appreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized
appreciation............ $61,500,192
Unrealized
depreciation............ (4,341,406)
-----------
Net unrealized
appreciation............ $57,158,786
===========
</TABLE>
(b) Represents non-income producing securities.
(c) All or part of this security has been loaned at
September 30, 2000.
(d) Security has been deposited as initial margin on
open futures contracts.
*Represents discount note.
** The rate reflected is the rate in effect at
September 30, 2000. The maturity date reflected is
the final maturity date.
ADR--American Depository Receipt.
PLC--Public Limited Company.
At September 30, 2000, the Fund's open long futures contracts were as follows:
<TABLE>
<CAPTION>
Unrealized
Number of Opening Notional Depreciation Market
Contracts Contract Type Amount on Futures Value
--------- ------------- ----------- ------------ -----------
<C> <S> <C> <C> <C>
Standard & Poor's
50 500, 12/15/00 $18,688,125 $(516,875) $18,171,250
</TABLE>
See notes to financial statements.
-83-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Security
Shares Description Market Value
---------- ----------------------------------------------------- ------------
<C> <S> <C>
Common Stocks (92.1%):
Canada (1.1%):
Telecommunications (1.1%):
58,500 BCE, Inc. ........................................... $ 1,367,438
------------
Chile (0.6%):
Telecommunications (0.6%):
40,000 Compania de Telecomunicationes de Chile SA, ADR...... 695,000
------------
Finland (2.8%):
Telecommunication--Equipment (2.8%):
86,525 Nokia OYJ............................................ 3,506,069
------------
France (7.0%):
Insurance (1.8%):
17,255 Axa.................................................. 2,253,480
------------
Petroleum (2.4%):
19,989 Total Fina Elf SA.................................... 2,924,505
------------
Retail--Food Products (1.4%):
24,059 Carrefour SA......................................... 1,776,970
------------
Telecommunication--Equipment (1.1%):
22,424 Alcatel.............................................. 1,434,591
------------
Telecommunications (0.3%):
20,000 Telecom Argentina Stet--France Telecom SA, ADR....... 432,500
------------
8,822,046
------------
Germany (3.7%):
Banks (2.1%):
31,762 Deutsche Bank AG..................................... 2,634,588
------------
Financial Services (1.6%):
6,843 Muenchener Rueckversicherungs-Gesellschaft AG........ 2,034,948
------------
4,669,536
------------
Great Britain (13.6%):
Banks (1.9%):
84,839 Barclays PLC......................................... 2,354,405
------------
Beverages/Alcoholic (1.2%):
256,562 Scottish & Newcastle PLC............................. 1,568,517
------------
Food Products (1.2%):
157,734 Granada Compass PLC (b).............................. 1,471,554
------------
Petroleum (1.5%):
580,491 Centrica PLC......................................... 1,858,125
------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
Great Britain, continued:
Pharmaceuticals (2.0%):
83,120 Glaxo Wellcome PLC.................................... $ 2,508,245
------------
Telecommunications (5.8%):
199,252 British Telecommunications PLC........................ 2,094,564
139,610 Cable & Wireless PLC.................................. 1,989,826
891,434 Vodafone Group PLC.................................... 3,324,619
------------
7,409,009
------------
17,169,855
------------
Hong Kong (1.4%):
Banks (0.4%):
220,000 Bank of East Asia..................................... 493,787
------------
Publishing (0.2%):
364,000 South China Morning Post Ltd. ........................ 277,777
------------
Real Estate (0.8%):
109,000 Sun Hung Kai Properties Ltd. ......................... 1,027,526
------------
1,799,090
------------
India (0.5%):
Banks (0.5%):
52,000 ICICI Ltd. ADR........................................ 572,000
------------
Japan (22.2%):
Auto & Auto Parts (0.9%):
178,000 Fuji Heavy Industries Ltd. ........................... 1,106,941
------------
Banks (4.3%):
139,000 Bank of Tokyo--Mitsubishi Ltd. ....................... 1,642,634
72,000 Daiwa Securities Group, Inc. ......................... 844,198
144,000 Sanwa Bank Ltd. ...................................... 1,281,955
127,000 Sumitomo Bank Ltd. ................................... 1,610,124
------------
5,378,911
------------
Building--Heavy Construction (1.1%):
157,000 Obayashi Corp. ....................................... 581,159
79,000 Sekisui House Ltd. ................................... 763,974
------------
1,345,133
------------
Chemicals (1.1%):
403,000 Mitsubishi Chemical Corp. ............................ 1,398,529
------------
Diversified (1.8%):
130,000 Asahi Glass Company Ltd. ............................. 1,329,354
351,000 Marubeni Corp. ....................................... 880,261
------------
2,209,615
------------
</TABLE>
Continued
-84-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments, continued
September 30, 2000
<TABLE>
<CAPTION>
Security
Shares Description Market Value
---------- ----------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued:
Japan, continued:
Electronic Components/Instruments (0.7%):
6,600 Murata Manufacturing Company Ltd. ................... $ 910,050
------------
Electronic Equipment (3.1%):
6,500 Advantest Corp. ..................................... 1,021,377
104,000 Sharp Corp. ......................................... 1,609,180
13,100 Sony Corp. .......................................... 1,328,669
------------
3,959,226
------------
Electronics (0.7%):
9,500 Tokyo Electron Ltd. ................................. 861,558
------------
Investment Company (0.6%):
8,100 Softbank Corp. ...................................... 757,079
------------
Machinery & Capital Goods (0.3%):
32,000 Mori Seiki Company Ltd. ............................. 400,370
------------
Machinery & Equipment (0.8%):
13,200 Fuji Machine Manufacturing Company Ltd. ............. 470,294
122,000 Okuma Corp. ......................................... 508,051
------------
978,345
------------
Office Equipment & Services (1.1%):
73,000 Ricoh Company Ltd. .................................. 1,327,457
------------
Printing--Commercial (1.1%):
143,000 Toppan Printing Company Ltd. ........................ 1,382,889
------------
Real Estate (0.0%):
300 Mitsui Fudosan Company Ltd. ......................... 3,759
------------
Retail--Major Department Stores (0.6%):
107,000 Takashimaya Company Ltd. ............................ 745,614
------------
Steel (0.4%):
309,000 Nippon Steel Corp. .................................. 549,028
------------
Telecommunication--Equipment (1.5%):
14,300 Matsushita Communication Industrial Company Ltd. .... 1,933,399
------------
Telecommunications (1.6%):
151 DDI Corp. ........................................... 992,134
37 NTT DoCoMo, Inc. .................................... 1,061,447
------------
2,053,581
------------
Transportation (0.5%):
125,000 Nippon Express Company Ltd. ......................... 667,453
------------
27,968,937
------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
---------- ----------- ------------
<C> <S> <C>
Common Stocks, continued:
Mexico (1.9%):
Banks (0.7%):
700,000 Grupo Financiero Banorte SA (b)..................... $ 907,239
------------
Broadcasting & Publishing (0.5%):
11,000 Grupo Televisa SA, GDR (b).......................... 634,563
------------
Telecommunications (0.7%):
13,300 Grupo Iusacell SA, ADR (b).......................... 157,938
12,500 Telefonos de Mexico SA, ADR......................... 664,843
------------
822,781
------------
2,364,583
------------
Netherlands (15.0%):
Banking/Insurance (1.6%):
64,484 Fortis NV........................................... 1,974,506
------------
Banks (2.0%):
37,873 ING Groep NV........................................ 2,522,542
------------
Computer (1.4%):
54,774 ASM Lithography Holding NV (b)...................... 1,817,353
------------
Electronics (1.6%):
45,808 Koninklijke Philips Electronics NV.................. 1,971,374
------------
Media/Television (0.9%):
60,969 United Pan-Europe Communications NV (b)............. 1,193,294
------------
Petroleum (1.9%):
38,579 Royal Dutch Petroleum Co. .......................... 2,331,606
------------
Publishing (2.7%):
171,726 Elsevier NV......................................... 1,924,495
30,356 VNU NV.............................................. 1,526,850
------------
3,451,345
------------
Retail--Food Products (1.6%):
69,530 Koninklijke Ahold NV................................ 1,971,333
------------
Transportation (1.3%):
68,232 TNT Post Group NV................................... 1,586,520
------------
18,819,873
------------
Portugal (1.5%):
Telecommunication--Equipment (1.5%):
53,175 PT Multimedia--Servicos de Telecomunicacoes e
Multimedia SA (b)................................... 1,947,299
------------
</TABLE>
Continued
-85-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
<TABLE>
<CAPTION>
Security
Shares Description Market Value
---------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued:
South Africa (1.7%):
Communication Equipment (0.9%):
146,000 DataTec Ltd. (b)...................................... $ 1,112,029
------------
Diversified (0.3%):
24,900 Johnnic Holdings Ltd. ................................ 323,102
------------
Retail--General Merchandise (0.5%):
1,150,000 Profurn Ltd. ......................................... 684,805
------------
2,119,936
------------
Spain (6.5%):
Banks (1.6%):
181,411 Banco Santander Central Hispano SA.................... 1,991,411
------------
Media/Television (1.3%):
74,728 Promotora de Informaciones SA (b)..................... 1,688,108
------------
Petroleum (2.0%):
131,006 Repsol-YPF SA......................................... 2,410,318
------------
Telecommunications (1.6%):
104,800 Telefonica SA......................................... 2,076,130
------------
8,165,967
------------
Sweden (4.0%):
Appliances & Household Products (1.0%):
101,116 Electrolux AB......................................... 1,270,116
------------
Finance Services (1.7%):
294,962 Nordic Baltic Holding AB.............................. 2,112,775
------------
Telecommunication--Equipment (1.3%):
107,433 Ericsson.............................................. 1,633,855
------------
5,016,746
------------
</TABLE>
<TABLE>
<CAPTION>
Security
Shares Description Market Value
---------- ---------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued:
Switzerland (7.6%):
Banks (2.0%):
18,970 UBS AG.............................................. $ 2,524,299
------------
Financial Services (2.0%):
5,390 Zurich Allied AG.................................... 2,491,617
------------
Pharmaceuticals (3.6%):
1,959 Novartis AG......................................... 3,003,489
179 Roche Holding AG.................................... 1,574,136
------------
4,577,625
------------
9,593,541
------------
Taiwan (0.1%):
Computer Hardware (0.1%):
11,750 Acer, Inc. GDR...................................... 63,743
7,800 Synnex Technology International Corp. GDR........... 97,890
------------
161,633
------------
Thailand (0.0%):
Real Estate (0.0%):
490,000 Golden Land Property Developement Public Company
Ltd. (b)............................................ 52,257
------------
Turkey (0.9%):
Banks (0.9%):
63,900,000 Turkiye Is Bankasi.................................. 1,080,162
------------
Total Common Stocks 115,891,969
------------
Total Investments
(Cost $122,831,201)(a)--92.1% 115,891,968
Other assets in excess of liabilities--7.9% 9,976,306
------------
NET ASSETS--100.0% $125,868,274
============
</TABLE>
Continued
-86-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL EQUITY FUND
Schedule of Portfolio Investments, Continued
September 30, 2000
----
(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 $366,235. Cost for federal income
tax purposes differs from market value by net
unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized
appreciation.......... $ 5,125,331
Unrealized
depreciation.......... (12,430,799)
------------
Net unrealized
depreciation.......... $ (7,305,468)
============
</TABLE>
(b) Represents non-income producing securities.
AB--Aktiebolag (Swedish Stock Co.).
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.).
See notes to financial statements.
-87-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER CONSERVATIVE GROWTH FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ -------------------------------------------------------- -----------
<C> <S> <C>
Investment Companies (100.6%):
499,322 BB&T Balanced Fund...................................... $ 6,546,109
182,830 BB&T Growth and Income Stock Fund....................... 3,400,647
470,359 BB&T Intermediate Corporate Bond Fund................... 4,694,183
343,598 BB&T Intermediate U.S. Government Bond Fund............. 3,343,213
147,949 BB&T International Equity Fund.......................... 1,864,153
141,733 BB&T Large Company Growth Fund.......................... 2,103,312
836,570 BB&T Short-Intermediate U.S. Government Income Fund..... 8,064,534
46,413 BB&T Small Company Growth Fund.......................... 1,647,186
772,665 BB&T U.S. Treasury Money Market Fund.................... 772,665
-----------
Total Investment Companies 32,436,002
-----------
Total Investments in Affiliates (Cost $32,253,712)(a)--100.6% 32,436,002
Liabilities in excess of other assets--(0.6)% (184,727)
-----------
NET ASSETS--100.0% $32,251,275
===========
</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 $82,782. Cost for federal income tax
purposes differs from market value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.. $ 717,935
Unrealized depreciation.. (618,427)
---------
Net unrealized
appreciation............. $ 99,508
=========
</TABLE>
See notes to financial statements.
-88-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER MODERATE GROWTH FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ------------------------------------------------------ -----------
<C> <S> <C>
Investment Companies (100.4%):
302,980 BB&T Balanced Fund.................................... $ 3,972,071
353,052 BB&T Growth and Income Stock Fund..................... 6,566,772
282,371 BB&T Intermediate Corporate Bond Fund................. 2,818,067
205,268 BB&T Intermediate U.S. Government Bond Fund........... 1,997,258
230,042 BB&T International Equity Fund........................ 2,898,530
274,252 BB&T Large Company Growth Fund........................ 4,069,895
500,905 BB&T Short-Intermediate U.S. Government Income Fund... 4,828,720
60,779 BB&T Small Company Growth Fund........................ 2,157,032
1,297,674 BB&T U.S. Treasury Money Market Fund.................. 1,297,674
-----------
Total Investment Companies 30,606,019
-----------
Total Investments in Affiliates (Cost $29,444,607)(a)--100.4% 30,606,019
Liabilities in excess of other assets--(0.4)% (131,037)
-----------
NET ASSETS--100.0% $30,474,982
===========
</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 $75,170. Cost for federal income tax
purposes differs from market value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.. $1,428,018
Unrealized depreciation.. (341,776)
----------
Net unrealized
appreciation............. $1,086,242
==========
</TABLE>
See notes to financial statements.
-89-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER GROWTH FUND
Schedule of Portfolio Investments
September 30, 2000
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------ ------------------------------------------------------ -----------
<C> <S> <C>
Investment Companies (100.3%):
114,938 BB&T Balanced Fund.................................... $ 1,506,832
504,727 BB&T Growth and Income Stock Fund..................... 9,387,922
162,457 BB&T Intermediate Corporate Bond Fund................. 1,621,319
134,403 BB&T Intermediate U.S. Government Bond Fund........... 1,307,739
272,471 BB&T International Equity Fund........................ 3,433,134
392,122 BB&T Large Company Growth Fund........................ 5,819,088
305,011 BB&T Short-Intermediate U.S. Government Income Fund... 2,940,311
77,115 BB&T Small Company Growth Fund........................ 2,736,796
1,484,871 BB&T U.S. Treasury Money Market Fund.................. 1,484,871
-----------
Total Investment Companies 30,238,012
-----------
Total Investments in Affiliates (Cost $28,318,830)(a)--100.3% 30,238,012
Liabilities in excess of other assets--(0.3)% (100,807)
-----------
NET ASSETS--100.0% $30,137,205
===========
</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 $110,671. Cost for federal income tax
purposes differs from market value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.. $2,164,404
Unrealized depreciation.. (355,893)
----------
Net unrealized
appreciation............. $1,808,511
==========
</TABLE>
See notes to financial statements.
-90-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements
September 30, 2000
1. Organization:
The BB&T Funds commenced operations on October 5, 1992 and are 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 BB&T Funds are authorized to issue an unlimited number of shares without
par value. The BB&T 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 Intermediate
Corporate 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 Prime Money Market Fund and the
U.S. Treasury Money Market Fund are referred to as the "Money Market 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 Equity Index Fund commenced operation on September 11,
2000, and will operate on a separate fiscal year ending December 31, 2000.
The Funds offer 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 Intermediate Corporate 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, the Capital Manager Growth Fund, and the Equity Index 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.
Continued
-91-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
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 accounting principles generally accepted in the United States
of America. The preparation of financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent 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 non-Money Market 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
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.
Continued
-92-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
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.
Futures Contracts:
The Funds (except for the U.S. Treasury Money Market Fund) may invest in
futures contracts to gain additional exposure to the market. This investment
involves, to varying degrees, elements of market risk and risks in excess of
the amount recognized in the Statements of Assets and Liabilities. The face
or contract amounts reflect the extent of the exposure 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 if counterparties are unable
to perform under the terms of the contract.
To the extent that a Fund enters into futures contracts on an index or group
of securities, the Fund exposes itself to an indeterminate liability. 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
Continued
-93-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
on the exchanges where they trade are paid or received each day and are
recorded as a gain or loss on futures contracts. Futures contracts are valued
at the settlement price established each day by the board of trade or
exchange on which they are traded.
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.
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 pledge assets with a market value equal to the purchase commitment for
payment of 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. North
Carolina Intermediate Tax-Free Fund and the Intermediate Corporate Bond Fund
held "when-issued" securities as of September 30, 2000.
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.
Continued
-94-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
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 thereof. 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 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. As of
September 30, 2000, the following Funds had securities with the following
market values on loan:
<TABLE>
<CAPTION>
Market
Market Value of Average
Value of Loaned Market Value
Collateral Securities on loan
----------- ----------- ------------
<S> <C> <C> <C>
U.S. Treasury Money Market Fund....... -- -- $ 41,975,043
Short-Intermediate U.S. Government
Income Fund.......................... $14,402,500 $14,239,570 32,422,064
Intermediate U.S. Government Bond
Fund................................. 47,393,750 46,708,230 39,670,151
Intermediate Corporate Bond Fund...... 2,120,000 2,058,560 505,052
Growth and Income Stock Fund.......... 52,628,130 50,445,112 117,617,367
Balanced Fund......................... 5,970,700 5,790,574 16,302,447
Large Company Growth Fund............. 33,083,100 30,944,477 19,618,200
Small Company Growth Fund............. 31,895,700 31,019,904 11,664,823
</TABLE>
The Fund received cash collateral for securities loaned. This cash was
invested in commercial paper, variable rate notes, investment companies and
repurchase agreements at September 30, 2000.
As disclosed in the schedules of portfolio investments, the Short-
Intermediate U.S. Government Income Fund, Intermediate U.S. Government Bond
Fund, Intermediate Corporate Bond Fund, Growth and Income Stock
Continued
-95-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
Fund, Balanced Fund, Large Company Growth Fund and Small Company Growth Fund
invested cash collateral in a Lehman Brothers Tri-Party Repurchase Agreement
with interest rate of 6.50% and a maturity date of 10/2/00 which was
collateralized by the following securities:
<TABLE>
<CAPTION>
Market
Principal Description Value
--------- ----------- -----------
<C> <S> <C>
$25,000,000 Asset Backed Capital Funding, 6.58%, 3/9/01 $25,000,000
14,280,000 Baus Funding, LLC, 0.00%, 2/20/01 14,280,000
6,000,000 Enron Oil and Gas Co., 0.00%, 10/2/00 6,000,000
422,000 Sweetwater Capital Corp., 6.30%, 10/16/00 422,000
200,000 Trident Capital Finance Corp., 6.56%, 10/4/00 200,000
</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 Intermediate Corporate Bond Fund, the North Carolina
Intermediate Tax-Free Fund, the 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 accounting principles generally accepted
in the United States of America. 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
-96-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
As of September 30, 2000, the following reclassifications have been made to
increase (decrease) such accounts with offsetting adjustments made to
capital:
<TABLE>
<CAPTION>
Accumulated
Undistributed Net
(Distribution 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....................... $ (8,868) $ 8,868
Intermediate U.S. Government Bond
Fund.............................. 10,861 (10,861)
Intermediate Corporate Bond Fund... 25,491 (23,320)
North Carolina Intermediate Tax-
Free Fund......................... 9,414 (9,414)
South Carolina Intermediate Tax-
Free Fund......................... 1,790 (1,790)
Virginia Intermediate Tax-Free
Fund.............................. 22,823 (22,823)
Balanced Fund...................... (8,244) 8,244
Large Company Growth Fund.......... 532,939 (532,941)
Small Company Growth Fund.......... 1,251,443 (1,251,439)
International Equity Fund.......... 226,427 (226,427)
</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 Intermediate Corporate Bond
Fund and 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 operations
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 Intermediate Corporate Bond Fund and the Virginia
Intermediate Tax-Free Fund were paid by BISYS Fund Services.
Continued
-97-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
3.Purchases and Sales of Securities:
Purchases and sales of securities (excluding short-term securities) for the
period ended September 30, 2000 are as follows:
<TABLE>
<CAPTION>
Purchases Sales
------------ ------------
<S> <C> <C>
Short-Intermediate U.S. Government Income Fund... $182,783,078 $168,644,287
Intermediate U.S. Government Bond Fund........... 194,189,135 224,303,896
Intermediate Corporate Bond Fund (a)............. 220,356,557 134,295,997
North Carolina Intermediate Tax-Free Fund........ 75,907,140 68,165,437
South Carolina Intermediate Tax-Free Fund........ 13,697,326 16,248,289
Virginia Intermediate Tax-Free Fund.............. 49,243,549 50,779,589
Growth and Income Stock Fund..................... 95,912,828 160,284,887
Balanced Fund.................................... 83,774,004 105,047,529
Large Company Growth Fund........................ 151,887,914 113,095,394
Small Company Growth Fund........................ 381,409,712 368,607,810
International Equity Fund........................ 222,831,653 206,869,608
Capital Manager Conservative Growth Fund......... 12,374,700 13,302,000
Capital Manager Moderate Growth Fund............. 14,274,000 13,442,000
Capital Manager Growth Fund...................... 14,860,000 11,733,000
</TABLE>
----
(a)For the period from December 2, 1999 (commencement of operations) to
September 30, 2000.
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. 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. Pursuant to a
Sub-Advisory agreement with BB&T, BlackRock Institutional Management
Corporation served as the Sub-Advisor to the Prime Money Market Fund until
June 27, 2000. A special meeting of shareholders was held on June 28, 2000 to
approve a new Sub-Advisory Agreement between BB&T and Federated Investment
Management Company ("Federated"). Under the agreement, Federated manages the
Prime Money Market Fund subject to the general supervision of the Funds'
Board of Trustees and BB&T. For their services, Sub-Advisors are entitled to
a fee, payable by BB&T.
Continued
-98-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
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. Prior to July 1,
2000 fees payable to BISYS for administration were 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 were
charged a fee of 0.05% of the average daily net assets. BISYS Ohio serves the
Funds as transfer agent and fund accountant. In accordance with an agreement
effective as of July 1, 2000, BISYS and BISYS Ohio began receiving
compensation for providing administration, fund accounting and transfer
agency services as an all inclusive fee at a rate of 0.25% of the average
daily net assets of each fund. The fee is accrued daily and payable on a
monthly basis.
Information regarding these transactions is as follows for the year ended
September 30, 2000:
<TABLE>
<CAPTION>
October 1, 1999 July 1, 2000
through through
June 30, 2000 September 30, 2000
---------------------------------------- ------------------
Administration,
Fund Transfer Agent and
Accounting Transfer Agent Administration Fund Accounting
---------- -------------- -------------- ------------------
<S> <C> <C> <C> <C>
Prime Money Market
Fund................... $39,006 $54,550 $128,174 $213,799
U.S. Treasury Money
Market Fund............ 99,510 92,369 556,457 371,107
Short-Intermediate U.S.
Government Income
Fund................... 53,564 36,655 276,490 109,758
Intermediate U.S.
Government Bond Fund... 63,317 65,910 285,295 129,390
Intermediate Corporate
Bond Fund.............. 38,154 21,246 75,642 82,016
North Carolina
Intermediate Tax-Free
Fund................... 27,369 36,121 128,200 70,687
South Carolina
Intermediate Tax-Free
Fund................... 20,993 25,484 25,028 16,667
Virginia Intermediate
Tax-Free Fund.......... 30,866 26,348 116,652 29,677
Growth and Income Stock
Fund................... 113,846 293,668 633,526 278,452
Balanced Fund........... 56,325 150,282 226,897 100,534
Large Company Growth
Fund................... 49,186 165,278 219,680 141,690
Small Company Growth
Fund................... 65,764 177,053 301,533 172,194
International Equity
Fund................... 54,873 92,189 181,633 102,684
Capital Manager
Conservative Growth
Fund................... 20,625 41,876 12,560 18,904
Capital Manager Moderate
Growth Fund............ 20,625 43,072 11,257 29,387
Capital Manager Growth
Fund................... 20,625 45,479 10,497 15,415
</TABLE>
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, 2000, BISYS received $280,360 from commissions earned on sales
of shares of the Funds' variable net asset value funds, of which $277,688 was
allowed to affiliated broker/dealers of the Funds.
Continued
-99-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
BB&T, BISYS, and BISYS Ohio may voluntarily reduce or reimburse fees to
assist the Funds in maintaining competitive expense ratios.
Information regarding these transactions is as follows for the period ended
September 30, 2000:
<TABLE>
<CAPTION>
Administration,
Transfer Agent
Investment Advisory and Fund Distribution Distribution
Fees Accounting Fees Fees Class A Fees Class B
---------------------- --------------- ------------ ------------
As a
Percentage Voluntary Voluntary Voluntary Voluntary
of Average Fee Fee Fee Fee
Net Assets) Reductions Reductions Reductions Reductions
----------- ---------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Prime Money Market Fund.... .40% $180,824 $68,193 $ 77,793 $ --
U.S. Treasury Money Market
Fund...................... .40% 418,159 -- 118,503 --
Short-Intermediate U.S.
Government Income Fund.... .60% 183,172 88,181 10,352 --
Intermediate U.S.
Government Bond Fund...... .60% 190,451 -- 7,693 --
Intermediate Corporate Bond
Fund (a)..................... .60% 166,393 49,213 319 3
North Carolina Intermediate
Tax-Free Fund............. .60% 87,075 56,943 41,645 --
South Carolina Intermediate
Tax-Free Fund............. .60% 44,388 32,869 4,060 --
Virginia Intermediate Tax-
Free Fund................. .60% 77,990 46,122 360 --
Growth and Income Stock
Fund...................... .74% 733,347 -- 87,068 --
Balanced Fund.............. .74% 261,388 -- 48,643 --
Large Company Growth Fund.. .74% 262,628 -- 26,022 --
Small Company Growth Fund.. 1.00% -- -- 48,911 --
International Equity Fund.. 1.00% -- -- 6,580 --
Capital Manager
Conservative Growth Fund.. .25% 55,839 8,303 884 --
Capital Manager Moderate
Growth Fund............... .25% 50,245 7,616 3,523 --
Capital Manager Growth
Fund...................... .25% 47,122 7,489 3,305 --
</TABLE>
----
(a) For the period from December 2, 1999 (commencement of operations) to
September 30, 2000.
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
-100-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
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 Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 341,764,199 $ 8,840,718 $ 475,185,468 $ 126,910,127
Dividends reinvested... 2,584,071 144,220 3,263,718 1,741,054
Cost of shares
redeemed............... (72,524,259) (6,852,933) (350,310,036) (127,887,932)
------------- ------------- ------------- -------------
Change in net assets
from Class A Share
transactions........... $ 271,824,011 $ 2,132,005 $ 128,139,150 $ 763,249
============= ============= ============= =============
Class B Shares:
Proceeds from shares
issued................. $ 80,475,754 $ 14,771,996 $ 29,308,581 $ 2,908,678
Dividends reinvested... 52,414 9,984 50,346 44,123
Cost of shares
redeemed............... (48,275,725) (5,690,911) (21,197,759) (1,943,945)
------------- ------------- ------------- -------------
Change in net assets
from Class B Share
transactions........... $ 32,252,443 $ 9,091,069 $ 8,161,168 $ 1,008,856
============= ============= ============= =============
Trust Shares:
Proceeds from shares
issued................. $ 180,828,672 $ 148,779,482 $ 763,785,870 $ 458,159,592
Dividends reinvested... 114,687 -- 4,604,344 2,723,204
Cost of shares
redeemed............... (159,104,375) (130,059,657) (655,357,876) (414,094,480)
------------- ------------- ------------- -------------
Change in net assets
from Trust Share
transactions........... $ 21,838,984 $ 18,719,825 $ 113,032,338 $ 46,788,316
============= ============= ============= =============
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 341,764,199 8,840,718 475,185,468 126,910,127
Reinvested............. 2,584,071 144,220 3,263,718 1,741,054
Redeemed............... (72,524,259) (6,852,933) (350,310,036) (127,887,933)
------------- ------------- ------------- -------------
Change in Class A
Shares................. 271,824,011 2,132,005 128,139,150 763,248
============= ============= ============= =============
Class B Shares:
Issued................. 80,475,754 14,771,996 29,308,581 2,908,677
Reinvested............. 52,414 9,984 50,346 44,123
Redeemed............... (48,275,725) (5,690,911) (21,197,759) (1,943,944)
------------- ------------- ------------- -------------
Change in Class B
Shares................. 32,252,443 9,091,069 8,161,168 1,008,856
============= ============= ============= =============
Trust Shares:
Issued................. 180,828,672 148,779,482 763,785,870 458,159,592
Reinvested............. 114,687 -- 4,604,344 2,723,204
Redeemed............... (159,104,375) (130,059,657) (655,357,876) (414,094,480)
------------- ------------- ------------- -------------
Change in Trust
Shares................. 21,838,984 18,719,825 113,032,338 46,788,316
============= ============= ============= =============
</TABLE>
Continued
-101-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
<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,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 153,231 $ 1,289,374 $ 261,852 $ 1,339,933
Dividends reinvested... 181,120 172,172 138,889 188,814
Cost of shares
redeemed............... (1,669,688) (1,121,205) (1,118,145) (2,452,023)
------------ ------------ ------------- ------------
Change in net assets
from Class A Share
transactions........... $ (1,335,337) $ 340,341 $ (717,404) $ (923,276)
============ ============ ============= ============
Class B Shares:
Proceeds from shares
issued................. -- -- $ 213,411 $ 1,856,430
Dividends reinvested... -- -- 101,740 81,359
Cost of shares
redeemed............... -- -- (655,847) (413,844)
------------ ------------ ------------- ------------
Change in net assets
from Class B Share
transactions........... -- -- $ (340,696) $ 1,523,945
============ ============ ============= ============
Trust Shares:
Proceeds from shares
issued................. $ 63,709,213 $ 52,461,643 $ 69,379,907 $ 90,515,306
Dividends reinvested... 360,500 387,596 2,587,972 3,071,777
Cost of shares
redeemed............... (60,705,292) (36,082,594) (102,703,679) (50,389,065)
------------ ------------ ------------- ------------
Change in net assets
from Trust Share
transactions........... $ 3,364,421 $ 16,766,645 $ (30,735,800) $ 43,198,018
============ ============ ============= ============
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 16,028 132,382 27,274 131,719
Reinvested............. 18,970 17,513 14,514 18,588
Redeemed............... (175,088) (115,052) (117,137) (240,944)
------------ ------------ ------------- ------------
Change in Class A
Shares................. (140,090) 34,843 (75,349) (90,637)
============ ============ ============= ============
Class B Shares:
Issued................. -- -- 22,090 186,307
Reinvested............. -- -- 10,663 8,085
Redeemed............... -- -- (69,116) (42,205)
------------ ------------ ------------- ------------
Change in Class B
Shares................. -- -- (36,363) 152,187
============ ============ ============= ============
Trust Shares:
Issued................. 6,666,323 5,339,894 7,271,631 9,053,837
Reinvested............. 37,749 39,422 269,958 303,294
Redeemed............... (6,360,265) (3,669,679) (10,696,151) (4,990,144)
------------ ------------ ------------- ------------
Change in Trust
Shares................. 343,807 1,709,637 (3,154,562) 4,366,987
============ ============ ============= ============
</TABLE>
Continued
-102-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
<TABLE>
<CAPTION>
Intermediate North Carolina
Corporate Intermediate
Bond Fund Tax-Free Fund
------------- ----------------------------
For the For the For the
Period Ended Year Ended Year Ended
September 30, September 30, September 30,
2000 (a) 2000 1999
------------- ------------- -------------
<S> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued......... $ 231,419 $ 1,683,591 $ 8,174,924
Dividends reinvested................ 6,952 412,504 508,644
Cost of shares redeemed............. (5,782) (4,437,564) (5,695,033)
------------ ------------ ------------
Change in net assets from Class A
Share transactions.................. $ 232,589 $ (2,341,469) $ 2,988,535
============ ============ ============
Class B Shares:
Proceeds from shares issued......... $ 68,407 -- --
Dividends reinvested................ 1,179 -- --
------------ ------------ ------------
Change in net assets from Class B
Share transactions.................. $ 69,586 -- --
============ ============ ============
Trust Shares:
Proceeds from shares issued......... $ 99,573,443 $ 23,993,708 $ 18,232,656
Dividends reinvested................ 1,979,046 -- --
Cost of shares redeemed............. (13,184,746) (13,662,242) (16,923,332)
------------ ------------ ------------
Change in net assets from Trust
Share transactions.................. $ 88,367,743 $ 10,331,466 $ 1,309,324
============ ============ ============
SHARE TRANSACTIONS:
Class A Shares:
Issued.............................. 23,529 171,560 797,867
Reinvested.......................... 708 42,009 49,458
Redeemed............................ (587) (453,633) (565,397)
------------ ------------ ------------
Change in Class A Shares............ 23,650 (240,064) 281,928
============ ============ ============
Class B Shares:
Issued.............................. 6,941 -- --
Reinvested.......................... 120 -- --
------------ ------------ ------------
Change in Class B Shares............ 7,061 -- --
============ ============ ============
Trust Shares:
Issued.............................. 10,067,340 2,437,804 1,790,660
Reinvested.......................... 201,738 -- --
Redeemed............................ (1,340,317) (1,389,398) (1,646,273)
------------ ------------ ------------
Change in Trust Shares.............. 8,928,761 1,048,406 144,387
============ ============ ============
</TABLE>
----
(a) For the period from December 2, 1999 (commencement of operations) through
September 30, 2000.
Continued
-103-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
<TABLE>
<CAPTION>
South Carolina Virginia
Intermediate Intermediate
Tax-Free Fund Tax-Free 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,
2000 1999 2000 1999 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 107,312 $ 1,082,689 $ 151,324 $ 75,507
Dividends reinvested... 42,426 21,108 2,875 219
Cost of shares
redeemed............... (69,141) (190,511) (49,059) --
----------- ----------- ------------ -----------
Change in net assets
from Class A Share
transactions........... $ 80,597 $ 913,286 $ 105,140 $ 75,726
=========== =========== ============ ===========
Trust Shares:
Proceeds from shares
issued................. $ 1,578,920 $ 3,179,820 $ 9,921,847 $85,116,364
Dividends reinvested... -- -- -- --
Cost of shares
redeemed............... (3,635,842) (3,959,304) (12,261,491) (3,000,806)
----------- ----------- ------------ -----------
Change in net assets
from Trust Share
transactions........... $(2,056,922) $ (779,484) $ (2,339,644) $82,115,558
=========== =========== ============ ===========
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 10,836 106,752 13,921 6,838
Reinvested............. 4,359 2,086 266 20
Redeemed............... (7,152) (18,833) (4,655) --
----------- ----------- ------------ -----------
Change in Class A
Shares................. 8,043 90,005 9,532 6,858
=========== =========== ============ ===========
Trust Shares:
Issued................. 163,237 315,919 918,996 7,578,336
Redeemed............... (373,481) (395,464) (1,134,290) (271,258)
----------- ----------- ------------ -----------
Change in Trust
Shares................. (210,244) (79,545) (215,294) 7,307,078
=========== =========== ============ ===========
</TABLE>
----
(a) For the period from May 17, 1999 (commencement of operations) through
September 30, 1999.
Continued
-104-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
<TABLE>
<CAPTION>
Growth and Income Balanced
Stock Fund 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,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 3,796,177 $ 6,320,172 $ 1,903,077 $ 3,507,718
Dividends reinvested... 3,922,634 2,181,851 1,326,454 1,612,593
Cost of shares
redeemed............... (11,015,747) (12,271,770) (5,628,488) (5,876,168)
------------- ------------ ------------ ------------
Change in net assets
from Class A Share
transactions........... $ (3,296,936) $ (3,769,747) $ (2,398,957) $ (755,857)
============= ============ ============ ============
Class B Shares:
Proceeds from shares
issued................. $ 4,570,935 $ 8,325,365 $ 2,713,746 $ 8,086,591
Dividends reinvested... 3,810,492 1,656,594 1,290,566 1,179,731
Cost of shares
redeemed............... (8,687,642) (5,576,977) (5,611,315) (2,574,249)
------------- ------------ ------------ ------------
Change in net assets
from Class B Share
transactions........... $ (306,215) $ 4,404,982 $ (1,607,003) $ 6,692,073
============= ============ ============ ============
Trust Shares:
Proceeds from shares
issued................. $ 67,796,289 $ 92,724,798 $ 13,895,596 $ 22,201,143
Dividends reinvested... 15,989,751 9,088,063 6,135,704 6,382,802
Cost of shares
redeemed............... (109,009,908) (93,528,869) (34,757,351) (16,913,945)
------------- ------------ ------------ ------------
Change in net assets
from Trust Share
transactions........... $ (25,223,868) $ 8,283,992 $(14,726,051) $ 11,670,000
============= ============ ============ ============
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 206,989 305,936 141,345 242,216
Reinvested............. 212,641 107,276 98,920 112,288
Redeemed............... (611,504) (598,229) (425,151) (408,749)
------------- ------------ ------------ ------------
Change in Class A
Shares................. (191,874) (185,017) (184,886) (54,245)
============= ============ ============ ============
Class B Shares:
Issued................. 253,546 405,101 205,960 564,554
Reinvested............. 207,579 81,928 96,734 82,552
Redeemed............... (485,126) (271,160) (430,139) (179,654)
------------- ------------ ------------ ------------
Change in Class B
Shares................. (24,001) 215,869 (127,445) 467,452
============= ============ ============ ============
Trust Shares:
Issued................. 3,741,943 4,568,228 1,050,184 1,547,586
Reinvested............. 865,221 445,664 458,756 445,292
Redeemed............... (5,988,503) (4,521,898) (2,643,004) (1,174,036)
------------- ------------ ------------ ------------
Change in Trust
Shares................. (1,381,339) 491,994 (1,134,064) 818,842
============= ============ ============ ============
</TABLE>
Continued
-105-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
<TABLE>
<CAPTION>
Large Company Small Company
Growth Fund Growth 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,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 6,898,484 $ 3,990,667 $235,457,079 $ 77,265,660
Dividends reinvested... 375,769 123,138 1,662,844 --
Cost of shares
redeemed............... (1,407,435) (694,002) (227,841,945) (80,169,893)
------------ ------------ ------------ ------------
Change in net assets
from Class A Share
transactions........... $ 5,866,818 $ 3,419,803 $ 9,277,978 $ (2,904,233)
============ ============ ============ ============
Class B Shares:
Proceeds from shares
issued................. $ 13,606,737 $ 7,867,231 $ 5,666,254 $ 1,586,635
Dividends reinvested... 832,156 275,410 1,380,650 --
Cost of shares
redeemed............... (2,372,972) (998,677) (1,782,416) (2,571,977)
------------ ------------ ------------ ------------
Change in net assets
from Class B Share
transactions........... $ 12,065,921 $ 7,143,964 $ 5,264,488 $ (985,342)
============ ============ ============ ============
Trust Shares:
Proceeds from shares
issued................. $ 59,543,017 $ 42,112,134 $110,824,560 $ 32,958,723
Dividends reinvested... 26,883 61,859 7,205,297 --
Cost of shares
redeemed............... (25,408,213) (16,078,382) (70,957,761) (23,736,534)
------------ ------------ ------------ ------------
Change in net assets
from Trust Share
transactions........... $ 34,161,687 $ 26,095,611 $ 47,072,096 $ 9,222,189
============ ============ ============ ============
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 464,907 342,286 7,077,516 3,592,160
Reinvested............. 27,671 11,626 57,103 --
Redeemed............... (95,212) (61,035) (6,759,660) (3,677,582)
------------ ------------ ------------ ------------
Change in Class A
Shares................. 397,366 292,877 374,959 (85,422)
============ ============ ============ ============
Class B Shares:
Issued................. 940,217 683,822 166,927 77,396
Reinvested............. 62,147 26,129 49,029 --
Redeemed............... (163,625) (86,488) (55,077) (123,241)
------------ ------------ ------------ ------------
Change in Class B
Shares................. 838,739 623,463 160,879 (45,845)
============ ============ ============ ============
Trust Shares:
Issued................. 3,968,598 3,632,275 3,072,107 1,601,445
Reinvested............. 1,974 5,824 243,752 --
Redeemed............... (1,723,246) (1,371,709) (1,929,709) (1,098,270)
------------ ------------ ------------ ------------
Change in Trust
Shares................. 2,247,326 2,266,390 1,386,150 503,175
============ ============ ============ ============
</TABLE>
Continued
-106-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
<TABLE>
<CAPTION>
Capital Manager
International Conservative
Equity Fund Growth 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,
2000 1999 2000 1999 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 1,216,213 $ 559,154 $ 21,322 $ 409,402
Dividends reinvested... 98,756 26,800 24,360 10,103
Cost of shares
redeemed............... (437,820) (344,011) (294,210) (6,750)
------------ ------------ ----------- -----------
Change in net assets
from Class A Share
transactions........... $ 877,149 $ 241,943 $ (248,528) $ 412,755
============ ============ =========== ===========
Class B Shares:
Proceeds from shares
issued................. $ 1,899,812 $ 498,182 $ 32,292 $ 112,121
Dividends reinvested... 122,074 36,730 6,226 902
Cost of shares
redeemed............... (318,031) (560,459) (1,750) (1,253)
------------ ------------ ----------- -----------
Change in net assets
from Class B Share
transactions........... $ 1,703,855 $ (25,547) $ 36,768 $ 111,770
============ ============ =========== ===========
Trust Shares:
Proceeds from shares
issued................. $ 65,828,382 $ 24,995,842 $ 5,104,980 $10,346,198
Dividends reinvested... 1,323,102 417,850 538,750 117,555
Cost of shares
redeemed............... (43,808,257) (17,448,374) (7,367,476) (2,372,370)
------------ ------------ ----------- -----------
Change in net assets
from Trust Share
transactions........... $ 23,343,227 $ 7,965,318 $(1,723,746) $ 8,091,383
============ ============ =========== ===========
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 86,879 48,478 1,982 39,088
Reinvested............. 7,261 2,462 2,300 963
Redeemed............... (32,150) (30,905) (28,135) (637)
------------ ------------ ----------- -----------
Change in Class A
Shares................. 61,990 20,035 (23,853) 39,414
============ ============ =========== ===========
Class B Shares:
Issued................. 137,165 43,393 3,036 10,615
Reinvested............. 9,096 3,408 587 84
Redeemed............... (23,524) (49,342) (166) (117)
------------ ------------ ----------- -----------
Change in Class B
Shares................. 122,737 (2,541) 3,457 10,582
============ ============ =========== ===========
Trust Shares:
Issued................. 4,819,198 2,102,842 475,719 978,110
Reinvested............. 96,577 38,139 50,611 11,077
Redeemed............... (3,204,244) (1,454,123) (691,303) (223,419)
------------ ------------ ----------- -----------
Change in Trust
Shares................. 1,711,531 686,858 (164,973) 765,768
============ ============ =========== ===========
</TABLE>
----
(a) The Fund commenced offering Class B shares on January 29, 1999.
Continued
-107-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
<TABLE>
<CAPTION>
Capital Manager
Moderate Growth Capital Manager
Fund Growth 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,
2000 1999 (a) 2000 1999 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................. $ 562,131 $ 666,015 $ 816,433 $ 959,556
Dividends reinvested... 67,445 67,177 64,353 28,038
Cost of shares
redeemed............... (1,033,323) (342,290) (355,693) (310,922)
----------- ---------- ---------- ---------
Change in net assets
from Class A Share
transactions........... $ (403,747) $ 390,902 $ 525,093 $ 676,672
=========== ========== ========== =========
Class B Shares:
Proceeds from shares
issued................. $ 434,771 $ 196,189 $1,848,603 $ 176,179
Dividends reinvested... 12,556 1,271 24,785 142
Cost of shares
redeemed............... (113,713) (5) (73,030) (7,686)
----------- ---------- ---------- ---------
Change in net assets
from Class B Share
transactions........... $ 333,614 $ 197,455 $1,800,358 $ 168,635
=========== ========== ========== =========
Trust Shares:
Proceeds from shares
issued................. $ 2,150,419 $3,571,247 $1,008,243 $ 300,467
Dividends reinvested... 207,373 13,704 29,032 2,841
Cost of shares
redeemed............... (2,045,832) (189,439) (518,754) (65,657)
----------- ---------- ---------- ---------
Change in net assets
from Trust Share
transactions........... $ 311,960 $3,395,512 $ 518,521 $ 237,651
=========== ========== ========== =========
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 50,944 62,893 70,902 89,234
Reinvested............. 6,072 6,391 5,629 2,662
Redeemed............... (93,407) (32,057) (30,576) (28,686)
----------- ---------- ---------- ---------
Change in Class A
Shares................. (36,391) 37,227 45,955 63,210
=========== ========== ========== =========
Class B Shares:
Issued................. 38,798 18,381 160,196 15,856
Reinvested............. 1,129 117 2,149 13
Redeemed............... (10,095) -- (6,271) (716)
----------- ---------- ---------- ---------
Change in Class B
Shares................. 29,832 18,498 156,074 15,153
=========== ========== ========== =========
Trust Shares:
Issued................. 193,960 331,505 87,020 27,938
Reinvested............. 18,613 1,272 2,527 266
Redeemed............... (184,968) (17,468) (44,055) (5,940)
----------- ---------- ---------- ---------
Change in Trust
Shares................. 27,605 315,309 45,492 22,264
=========== ========== ========== =========
</TABLE>
----
(a) The Fund commenced offering Class B shares on January 29, 1999.
Continued
-108-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
7.Federal Income Taxes:
At September 30, 2000, 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..................................... $ 837 2007
Short Intermediate U.S. Government Income Fund.............. 452,268 2004
Short Intermediate U.S. Government Income Fund.............. 126,693 2005
Short Intermediate U.S. Government Income Fund.............. 20,229 2006
Short Intermediate U.S. Government Income Fund.............. 573,262 2008
Intermediate U.S. Government Bond Fund...................... 101,544 2008
North Carolina Intermediate Tax-Free Fund................... 489,306 2008
South Carolina Intermediate Tax-Free Fund................... 117,458 2008
Virginia Intermediate Tax-Free Fund......................... 269,826 2008
</TABLE>
To the extent that these carryforwards are used to offset future capital
gains, it is probable that the gains so offset will not be distributed to
shareholders.
During the fiscal year ended September 30, 2000, the Funds declared long-term
capital gain distributions as follows:
<TABLE>
<CAPTION>
Amount
-----------
<S> <C>
Intermediate U.S. Government Bond Fund.......................... $ 738,763
North Carolina Intermediate Tax-Free Fund....................... 4,155
Growth and Income Stock Fund.................................... 36,675,244
Balanced Fund................................................... 6,759,670
Large Company Growth Fund....................................... 6,972,457
Small Company Growth Fund....................................... 12,891,585
International Equity Fund....................................... 3,189,963
Capital Manager Conservative Growth Fund........................ 736,374
Capital Manager Moderate Growth Fund............................ 778,008
Capital Manager Growth Fund..................................... 861,189
</TABLE>
Continued
-109-
[LOGO OF BB&T FUNDS]
<PAGE>
Notes to Financial Statements, Continued
September 30, 2000
For corporate shareholders, the following percentage of the total ordinary
income distributions paid during the fiscal year ended September 30, 2000
qualify for the corporate dividends received deduction for the following
Funds:
<TABLE>
<CAPTION>
(Unaudited)
Percentage
-----------
<S> <C>
Growth and Income Stock Fund..................................... 85.84%
Balanced Fund.................................................... 40.26%
Small Company Growth Fund........................................ 1.08%
Capital Manager Conservative Growth Fund......................... 4.35%
Capital Manager Moderate Growth Fund............................. 8.40%
Capital Manager Growth Fund...................................... 14.08%
</TABLE>
During the fiscal year ended September 30, 2000, the following Funds declared
tax-exempt income distributions:
<TABLE>
<CAPTION>
(Unaudited)
Tax-Exempt
Distributions
-------------
<S> <C>
North Carolina Intermediate Tax-Free Fund...................... $3,668,920
South Carolina Intermediate Tax-Free Fund...................... 681,453
Virginia Intermediate Tax-Free Fund............................ 3,343,892
</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.................. $2,835,168
Intermediate U.S. Government Bond Fund.......................... 4,549,107
Intermediate Corporate Bond Fund................................ 711,534
North Carolina Intermediate Tax-Free Fund....................... 566,197
South Carolina Intermediate Tax-Free Fund....................... 263,763
Virginia Intermediate Tax-Free Fund............................. 876,287
</TABLE>
-110-
[LOGO OF BB&T FUNDS]
<PAGE>
Special Meetings of Shareholders (Unaudited):
On January 14, 2000, there was a special meeting of Shareholders of the
Funds. There were three proposals put forth for vote by the Shareholders of
the Funds. The description of each proposal and number of shares voted are as
follows:
A.) To elect the Board of Trustees of the Funds to hold office until their
respective successors have been duly elected and qualified or until their
earlier resignation or removal.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
----------- ------- -------
<S> <C> <C> <C>
. Walter B. Grimm............................ 432,515,413 0 989,602
. W. Ray Long................................ 432,510,992 0 994,023
. William E. Graham Jr....................... 432,511,602 0 993,413
. Thomas W. Lambeth.......................... 432,516,207 0 988,808
. Robert W. Stewart.......................... 432,516,207 0 988,808
. Raymond McCulloch.......................... 432,511,714 0 993,301
</TABLE>
B.) To ratify or reject the selection of KPMG LLP as the independent
accountants for the Funds for the fiscal year.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- ---------
<S> <C> <C>
430,884,528 980,311 1,640,178
</TABLE>
C.) To eliminate the Small Company Growth Fund's Fundamental investment
policy to invest at least 65% of its assets in companies with a market
capitalization under $1 billion at the time of purchase.
<TABLE>
<CAPTION>
BROKER
FOR AGAINST ABSTAIN NON-VOTE
--- ------- ------- ---------
<S> <C> <C> <C>
2,715,267 15,025 10,385 2,905,282
</TABLE>
On June 28, 2000, there was another special meeting of Shareholders of the
Prime Money Market Fund. There were two proposals put forth for vote by the
Shareholders of the Prime Money Market Fund. The description of each proposal
and number of shares voted on as follow:
A.) To approve the new Investment Sub-Advisory Agreement between Branch
Banking and Trust Company ("BB&T") and Federated Investment Management
Company ("Federated") with respect to the Fund.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C>
67,407,749 0 791
</TABLE>
B.) To approve an amendment to the Prime Money Market Fund's industry
concentration policy to prohibit concentration in the financial services
industry.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C>
67,407,749 0 791
</TABLE>
-111-
[LOGO OF BB&T FUNDS]
<PAGE>
PRIME MONEY MARKET FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the October 1,
Year Ended Year Ended 1997 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $ 1.000 $ 1.000 $ 1.000
-------- ------- -------
Investment Activities
Net investment income.............. 0.052 0.043 0.048
-------- ------- -------
Total from Investment Activities.. 0.052 0.043 0.048
-------- ------- -------
Distributions
Net investment income.............. (0.052) (0.043) (0.048)
-------- ------- -------
Total Distributions............... (0.052) (0.043) (0.048)
-------- ------- -------
Net Asset Value, End of Period...... $ 1.000 $ 1.000 $ 1.000
======== ======= =======
Total Return........................ 5.35% 4.42% 4.93%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).... $277,219 $ 5,395 $ 3,262
Ratio of expenses to average net
assets............................. 1.00% 0.80% 0.83%(c)
Ratio of net investment income to
average net assets................. 5.68% 4.34% 4.83%(c)
Ratio of expenses to average net
assets*............................ 1.25% 1.39% 1.43%(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.
-112-
[LOGO OF BB&T FUNDS]
<PAGE>
PRIME MONEY MARKET FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the September 2,
Year Ended Year Ended 1998 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $ 1.000 $ 1.000 $ 1.000
------- ------- -------
Investment Activities
Net investment income.............. 0.046 0.036 0.003
------- ------- -------
Total from Investment Activities.. 0.046 0.036 0.003
------- ------- -------
Distributions
Net investment income.............. (0.046) (0.036) (0.003)
------- ------- -------
Total Distributions............... (0.046) (0.036) (0.003)
------- ------- -------
Net Asset Value, End of Period...... $ 1.000 $ 1.000 $ 1.000
======= ======= =======
Total Return (excludes redemption
charge)............................. 4.65% 3.64% 0.32%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).... $41,644 $ 9,391 $ 300
Ratio of expenses to average net
assets............................. 1.63% 1.56% 1.64%(c)
Ratio of net investment income to
average net assets................. 4.76% 3.58% 3.98%(c)
Ratio of expenses to average net
assets*............................ 1.80% 1.89% 1.99%(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.
-113-
[LOGO OF BB&T FUNDS]
<PAGE>
PRIME MONEY MARKET FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the October 1,
Year Ended Year Ended 1997 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period............................. $ 1.000 $ 1.000 $ 1.000
------- ------- --------
Investment Activities
Net investment income............. 0.056 0.046 0.051
------- ------- --------
Total from Investment
Activities....................... 0.056 0.046 0.051
------- ------- --------
Distributions
Net investment income............. (0.056) (0.046) (0.051)
------- ------- --------
Total Distributions.............. (0.056) (0.046) (0.051)
------- ------- --------
Net Asset Value, End of Period..... $ 1.000 $ 1.000 $ 1.000
======= ======= ========
Total Return....................... 5.70% 4.69% 5.23%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)... $78,331 $56,492 $ 37,769
Ratio of expenses to average net
assets............................ 0.63% 0.54% 0.55%(c)
Ratio of net investment income to
average net assets................ 5.62% 4.57% 5.11%(c)
Ratio of expenses to average net
assets*........................... 0.80% 0.88% 0.91%(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.
-114-
[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,
--------------------------------------------
2000 1999 1998 1997 1996
-------- ------- ------- ------- -------
<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........... 0.049 0.040 0.046 0.044 0.044
-------- ------- ------- ------- -------
Total from Investment
Activities..................... 0.049 0.040 0.046 0.044 0.044
-------- ------- ------- ------- -------
Distributions
Net investment income........... (0.049) (0.040) (0.046) (0.044) (0.044)
-------- ------- ------- ------- -------
Total Distributions............ (0.049) (0.040) (0.046) (0.044) (0.044)
-------- ------- ------- ------- -------
Net Asset Value, End of Period... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======= ======= ======= =======
Total Return..................... 4.98% 4.08% 4.75% 4.50% 4.49%
Ratios/Supplementary Data:
Net Assets, End of Period
(000)........................... $170,380 $42,241 $41,478 $32,541 $27,931
Ratio of expenses to average net
assets.......................... 1.00% 0.84% 0.86% 0.95% 0.99%
Ratio of net investment income
to average net assets........... 5.11% 4.00% 4.65% 4.41% 4.37%
Ratio of expenses to average net
assets*......................... 1.23% 1.23% 1.26% 1.25% 1.25%
</TABLE>
----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
See notes to financial statements.
-115-
[LOGO OF BB&T FUNDS]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September January 1,
30, 1996 to
------------------------------- September 30,
2000 1999 1998 1997 1996 (a)
------- ------ ------ ------ -------------
<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......... 0.042 0.033 0.039 0.036 0.025
------- ------ ------ ------ ------
Total from Investment
Activities................... 0.042 0.033 0.039 0.036 0.025
------- ------ ------ ------ ------
Distributions
Net investment income......... (0.042) (0.033) (0.039) (0.036) (0.025)
------- ------ ------ ------ ------
Total Distributions.......... (0.042) (0.033) (0.039) (0.036) (0.025)
------- ------ ------ ------ ------
Net Asset Value, End of
Period......................... $ 1.000 $1.000 $1.000 $1.000 $1.000
======= ====== ====== ====== ======
Total Return (excludes
redemption charge)............. 4.28% 3.31% 3.97% 3.67% 2.53%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000)......................... $10,425 $2,264 $1,255 $1,502 $1,305
Ratio of expenses to average
net assets.................... 1.63% 1.59% 1.61% 1.75% 1.75%(c)
Ratio of net investment income
to average net assets......... 4.43% 3.25% 3.90% 3.61% 3.55%(c)
Ratio of expenses to average
net assets*................... 1.73% 1.73% 1.76% ** **
</TABLE>
----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** There were no voluntary fee reductions during this period.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
See notes to financial statements.
-116-
[LOGO OF BB&T FUNDS]
<PAGE>
U.S. TREASURY MONEY MARKET FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September 30,
------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<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....... 0.052 0.043 0.049 0.046 0.046
-------- -------- -------- -------- --------
Total from Investment
Activities................. 0.052 0.043 0.049 0.046 0.046
-------- -------- -------- -------- --------
Distributions
Net investment income....... (0.052) (0.043) (0.049) (0.046) (0.046)
-------- -------- -------- -------- --------
Total Distributions........ (0.052) (0.043) (0.049) (0.046) (0.046)
-------- -------- -------- -------- --------
Net Asset Value, End of
Period....................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return................. 5.33% 4.34% 5.01% 4.71% 4.74%
Ratios/Supplementary Data:
Net Assets, End of Period
(000)....................... $395,617 $282,585 $235,796 $266,840 $205,974
Ratio of expenses to average
net assets.................. 0.63% 0.59% 0.61% 0.75% 0.75%
Ratio of net investment
income to average net
assets...................... 5.24% 4.26% 4.90% 4.61% 4.63%
Ratio of expenses to average
net assets*................. 0.73% 0.73% 0.76% 0.75% 0.75%
</TABLE>
----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
See notes to financial statements.
-117-
[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,
--------------------------------------
2000 1999 1998 1997 1996
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period... $ 9.65 $10.06 $ 9.76 $ 9.73 $ 9.88
------ ------ ------ ------ ------
Investment Activities
Net investment income................. 0.50 0.50 0.51 0.54 0.55
Net realized and unrealized gains
(losses) on investments............... (0.01) (0.41) 0.30 0.03 (0.15)
------ ------ ------ ------ ------
Total from Investment Activities..... 0.49 0.09 0.81 0.57 0.40
------ ------ ------ ------ ------
Distributions
Net investment income................. (0.51) (0.50) (0.51) (0.54) (0.55)
------ ------ ------ ------ ------
Total Distributions.................. (0.51) (0.50) (0.51) (0.54) (0.55)
------ ------ ------ ------ ------
Net Asset Value, End of Period......... $ 9.63 $ 9.65 $10.06 $ 9.76 $ 9.73
====== ====== ====== ====== ======
Total Return (excludes sales charge)... 5.24% 0.95% 8.50% 6.07% 4.09%
Ratios/Supplementary Data:
Net Assets, End of Period (000)....... $3,270 $4,626 $4,476 $5,151 $6,356
Ratio of expenses to average net
assets................................ 1.01% 1.02% 1.06% 1.11% 1.19%
Ratio of net investment income to
average net assets.................... 5.27% 5.04% 5.15% 5.60% 5.55%
Ratio of expenses to average net
assets*............................... 1.41% 1.42% 1.44% 1.46% 1.54%
Portfolio turnover(a)................. 101.07% 99.99% 53.74% 87.99% 54.82%
</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.
See notes to financial statements.
-118-
[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,
-----------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................ $ 9.65 $ 10.07 $ 9.77 $ 9.74 $ 9.89
-------- -------- -------- -------- -------
Investment Activities
Net investment income........ 0.52 0.53 0.53 0.57 0.57
Net realized and unrealized
gains (losses) on
investments.................. -- (0.42) 0.30 0.03 (0.15)
-------- -------- -------- -------- -------
Total from Investment
Activities.................. 0.52 0.11 0.83 0.60 0.42
-------- -------- -------- -------- -------
Distributions
Net investment income........ (0.53) (0.53) (0.53) (0.57) (0.57)
-------- -------- -------- -------- -------
Total Distributions......... (0.53) (0.53) (0.53) (0.57) (0.57)
-------- -------- -------- -------- -------
Net Asset Value, End of
Period........................ $ 9.64 $ 9.65 $ 10.07 $ 9.77 $ 9.74
======== ======== ======== ======== =======
Total Return.................. 5.62% 1.10% 8.77% 6.33% 4.36%
Ratios/Supplementary Data:
Net Assets, End of Period
(000)........................ $170,362 $167,285 $157,329 $103,523 $62,621
Ratio of expenses to average
net assets................... 0.76% 0.77% 0.81% 0.86% 0.93%
Ratio of net investment
income to average net
assets....................... 5.52% 5.29% 5.40% 5.85% 5.81%
Ratio of expenses to average
net assets*.................. 0.91% 0.92% 0.94% 0.96% 1.03%
Portfolio turnover(a)........ 101.07% 99.99% 53.74% 87.99% 54.82%
</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.
See notes to financial statements.
-119-
[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,
---------------------------------------
2000 1999 1998 1997 1996
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.. $ 9.70 $10.57 $ 9.84 $ 9.63 $ 9.88
------ ------ ------ ------ ------
Investment Activities
Net investment income................ 0.52 0.50 0.51 0.53 0.56
Net realized and unrealized gains
(losses) on investments.............. 0.05 (0.76) 0.74 0.21 (0.25)
------ ------ ------ ------ ------
Total from Investment Activities.... 0.57 (0.26) 1.25 0.74 0.31
------ ------ ------ ------ ------
Distributions
Net investment income................ (0.53) (0.50) (0.52) (0.53) (0.56)
Net realized gains................... (0.02) (0.11) -- -- --
In excess of net realized gains...... (0.01) -- -- -- --
------ ------ ------ ------ ------
Total Distributions................. (0.56) (0.61) (0.52) (0.53) (0.56)
------ ------ ------ ------ ------
Net Asset Value, End of Period........ $ 9.71 $ 9.70 $10.57 $ 9.84 $ 9.63
====== ====== ====== ====== ======
Total Return (excludes sales charge).. 6.09% (2.49%) 13.07% 7.93% 3.17%
Ratios/Supplementary Data:
Net Assets, End of Period (000)...... $2,579 $3,308 $4,562 $4,211 $3,659
Ratio of expenses to average net
assets............................... 1.08% 1.08% 1.09% 1.12% 1.13%
Ratio of net investment income to
average net assets................... 5.46% 5.00% 5.10% 5.49% 5.68%
Ratio of expenses to average net
assets*.............................. 1.43% 1.43% 1.44% 1.47% 1.48%
Portfolio turnover(a)................ 103.41% 73.46% 60.98% 62.45% 76.29%
</TABLE>
----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) 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>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
January 1,
For the Year Ended September 30, 1996 to
--------------------------------------- September 30,
2000 1999 1998 1997 1996 (a)
-------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $ 9.68 $ 10.54 $ 9.81 $ 9.60 $10.17
-------- -------- -------- ------- ------
Investment Activities
Net investment income.. 0.45 0.43 0.43 0.46 0.31
Net realized and
unrealized gains
(losses) on
investments............ 0.04 (0.75) 0.74 0.21 (0.57)
-------- -------- -------- ------- ------
Total from Investment
Activities............ 0.49 (0.32) 1.17 0.67 (0.26)
-------- -------- -------- ------- ------
Distributions
Net investment income.. (0.45) (0.43) (0.44) (0.46) (0.31)
Net realized gains..... (0.02) (0.11) -- -- --
In excess of net
realized gains......... (0.01) -- -- -- --
-------- -------- -------- ------- ------
Total Distributions... (0.48) (0.54) (0.44) (0.46) (0.31)
-------- -------- -------- ------- ------
Net Asset Value, End of
Period.................. $ 9.69 $ 9.68 $ 10.54 $ 9.81 $ 9.60
======== ======== ======== ======= ======
Total Return (excludes
redemption charge)...... 5.31% (3.13%) 12.26% 7.14% (2.48%)(b)
Ratios/Supplementary
Data:
Net Assets, End of
Period (000)........... $ 2,329 $ 2,679 $ 1,314 $ 623 $ 353
Ratio of expenses to
average net assets..... 1.83% 1.83% 1.84% 1.87% 1.85%(c)
Ratio of net investment
income to average net
assets................. 4.71% 4.28% 4.35% 4.74% 5.01%(c)
Ratio of expenses to
average net assets*.... 1.93% 1.93% 1.94% 1.97% 1.95%(c)
Portfolio turnover(d).. 103.41% 73.46% 60.98% 62.45% 76.29%(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) 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.
-121-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September 30,
-------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................... $ 9.72 $ 10.59 $ 9.85 $ 9.64 $ 9.89
-------- -------- -------- -------- --------
Investment Activities
Net investment income...... 0.55 0.53 0.54 0.56 0.58
Net realized and unrealized
gains (losses) on
investments................ 0.04 (0.76) 0.75 0.21 (0.25)
-------- -------- -------- -------- --------
Total from Investment
Activities................ 0.59 (0.23) 1.29 0.77 0.33
-------- -------- -------- -------- --------
Distributions
Net investment income...... (0.55) (0.53) (0.55) (0.56) (0.58)
Net realized gains......... (0.02) (0.11) -- -- --
In excess of net realized
gains...................... (0.01) -- -- -- --
-------- -------- -------- -------- --------
Total Distributions....... (0.58) (0.64) (0.55) (0.56) (0.58)
-------- -------- -------- -------- --------
Net Asset Value, End of
Period...................... $ 9.73 $ 9.72 $ 10.59 $ 9.85 $ 9.64
======== ======== ======== ======== ========
Total Return................ 6.36% (2.23%) 13.46% 8.20% 3.43%
Ratios/Supplementary Data:
Net Assets, End of Period
(000)...................... $182,899 $213,417 $186,256 $142,545 $119,633
Ratio of expenses to
average net assets......... 0.83% 0.83% 0.84% 0.87% 0.87%
Ratio of net investment
income to average net
assets..................... 5.71% 5.26% 5.35% 5.74% 5.94%
Ratio of expenses to
average net assets*........ 0.93% 0.93% 0.94% 0.97% 0.97%
Portfolio turnover(a)...... 103.41% 73.46% 60.98% 62.45% 76.29%
</TABLE>
----
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) 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.
-122-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE CORPORATE BOND FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
December 2,
1999 to
September 30,
2000 (a)
-------------
<S> <C>
Net Asset Value, Beginning of Period............................. $10.00
------
Investment Activities
Net investment income........................................... 0.50
Net realized and unrealized losses on investments............... (0.02)
------
Total from Investment Activities............................... 0.48
------
Distributions
Net investment income........................................... (0.50)
------
Total Distributions............................................ (0.50)
------
Net Asset Value, End of Period................................... $ 9.98
======
Total Return (excludes sales charge)............................. 4.97%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)................................. $ 236
Ratio of expenses to average net assets......................... 1.03%(c)
Ratio of net investment income to average net assets............ 6.06%(c)
Ratio of expenses to average net assets*........................ 1.59%(c)
Portfolio turnover(d)........................................... 186.79%(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) 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.
-123-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE CORPORATE BOND FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
December 2,
1999 to
September 30,
2000 (a)
-------------
<S> <C>
Net Asset Value, Beginning of Period............................. $10.00
------
Investment Activities
Net investment income........................................... 0.44
Net realized and unrealized losses on investments............... (0.02)
------
Total from Investment Activities............................... 0.42
------
Distributions
Net investment income........................................... (0.44)
------
Total Distributions............................................ (0.44)
------
Net Asset Value, End of Period................................... $ 9.98
======
Total Return (excludes redemption charge)........................ 4.41%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)................................. $ 70
Ratio of expenses to average net assets......................... 1.75%(c)
Ratio of net investment income to average net assets............ 5.34%(c)
Ratio of expenses to average net assets*........................ 2.03%(c)
Portfolio turnover(d)........................................... 186.79%(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) 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.
-124-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERMEDIATE CORPORATE BOND FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
December 2,
1999 to
September 30,
2000 (a)
-------------
<S> <C>
Net Asset Value, Beginning of Period............................ $ 10.00
-------
Investment Activities
Net investment income.......................................... 0.51
Net realized and unrealized losses on investments.............. (0.02)
-------
Total from Investment Activities.............................. 0.49
-------
Distributions
Net investment income.......................................... (0.51)
-------
Total Distributions........................................... (0.51)
-------
Net Asset Value, End of Period.................................. $ 9.98
=======
Total Return.................................................... 5.13%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)................................ $89,101
Ratio of expenses to average net assets........................ 0.75%(c)
Ratio of net investment income to average net assets........... 6.30%(c)
Ratio of expenses to average net assets*....................... 1.09%(c)
Portfolio turnover(d).......................................... 186.79%(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) 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.
-125-
[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,
------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period............................. $ 9.89 $ 10.52 $ 10.27 $10.05 $10.15
------- ------- ------- ------ ------
Investment Activities
Net investment income............. 0.40 0.40 0.42 0.40 0.36
Net realized and unrealized gains
(losses) on investments........... 0.08 (0.56) 0.25 0.22 (0.10)
------- ------- ------- ------ ------
Total from Investment
Activities....................... 0.48 (0.16) 0.67 0.62 0.26
------- ------- ------- ------ ------
Distributions
Net investment income............. (0.40) (0.40) (0.42) (0.40) (0.36)
Net realized gains................ -- (0.05) -- -- --
In excess of net realized gains... -- (0.02) -- -- --
------- ------- ------- ------ ------
Total Distributions.............. (0.40) (0.47) (0.42) (0.40) (0.36)
------- ------- ------- ------ ------
Net Asset Value, End of Period..... $ 9.97 $ 9.89 $ 10.52 $10.27 $10.05
======= ======= ======= ====== ======
Total Return (excludes sales
charge)............................ 5.04% (1.53%) 6.63% 6.28% 2.61%
Ratios/Supplementary Data:
Net Assets, End of Period (000)... $11,403 $13,677 $11,592 $9,419 $9,261
Ratio of expenses to average net
assets............................ 0.95% 0.95% 0.96% 1.00% 1.11%
Ratio of net investment income to
average net assets................ 4.12% 3.95% 4.03% 3.94% 3.58%
Ratio of expenses to average net
assets*........................... 1.46% 1.47% 1.48% 1.50% 1.61%
Portfolio turnover(a)............. 80.33% 39.70% 32.63% 16.98% 20.90%
</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.
See notes to financial statements.
-126-
[LOGO OF BB&T FUNDS]
<PAGE>
NORTH CAROLINA INTERMEDIATE TAX-FREE FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September 30,
-------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period............................ $ 9.89 $ 10.53 $ 10.27 $ 10.05 $ 10.15
------- ------- ------- ------- -------
Investment Activities
Net investment income............ 0.42 0.42 0.43 0.41 0.38
Net realized and unrealized gains
(losses) on investments.......... 0.09 (0.57) 0.26 0.22 (0.10)
------- ------- ------- ------- -------
Total from Investment
Activities...................... 0.51 (0.15) 0.69 0.63 0.28
------- ------- ------- ------- -------
Distributions
Net investment income............ (0.42) (0.42) (0.43) (0.41) (0.38)
Net realized gains............... -- (0.05) -- -- --
In excess of net realized gains.. -- (0.02) -- -- --
------- ------- ------- ------- -------
Total Distributions............. (0.42) (0.49) (0.43) (0.41) (0.38)
------- ------- ------- ------- -------
Net Asset Value, End of Period.... $ 9.98 $ 9.89 $ 10.53 $ 10.27 $ 10.05
======= ======= ======= ======= =======
Total Return...................... 5.31% (1.47%) 6.90% 6.43% 2.77%
Ratios/Supplementary Data:
Net Assets, End of Period (000).. $81,510 $70,430 $73,454 $61,120 $28,443
Ratio of expenses to average net
assets........................... 0.80% 0.80% 0.81% 0.85% 0.96%
Ratio of net investment income to
average net assets............... 4.27% 4.09% 4.18% 4.13% 3.72%
Ratio of expenses to average net
assets*.......................... 0.96% 0.98% 0.98% 1.00% 1.11%
Portfolio turnover(a)............ 80.33% 39.70% 32.63% 16.98% 20.90%
</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.
See notes to financial statements.
-127-
[LOGO OF BB&T FUNDS]
<PAGE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the October 20,
Year Ended Year Ended 1997 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $ 9.80 $ 10.47 $10.00
------ -------- ------
Investment Activities
Net investment income.............. 0.39 0.38 0.31
Net realized and unrealized gains
(losses) on investments............ 0.10 (0.59) 0.47
------ -------- ------
Total from Investment Activities.. 0.49 (0.21) 0.78
------ -------- ------
Distributions
Net investment income.............. (0.39) (0.38) (0.31)
Net realized gains................. -- (0.06) --
In excess of net realized gains.... -- (0.02) --
------ -------- ------
Total Distributions............... (0.39) (0.46) (0.31)
------ -------- ------
Net Asset Value, End of Period...... $ 9.90 $ 9.80 $10.47
====== ======== ======
Total Return (excludes sales
charge)............................. 5.10% (2.09%) 7.91%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).... $1,251 $ 1,160 $ 297
Ratio of expenses to average net
assets............................. 0.90% 0.97% 1.04%(c)
Ratio of net investment income to
average net assets................. 3.97% 3.72% 3.85%(c)
Ratio of expenses to average net
assets*............................ 1.72% 1.91% 1.97%(c)
Portfolio turnover(d).............. 84.20% 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.
-128-
[LOGO OF BB&T FUNDS]
<PAGE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the October 20,
Year Ended Year Ended 1997 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $ 9.74 $ 10.41 $ 10.00
------- ------- -------
Investment Activities
Net investment income.............. 0.40 0.39 0.38
Net realized and unrealized gains
(losses) on investments............ 0.10 (0.59) 0.41
------- ------- -------
Total from Investment Activities.. 0.50 (0.20) 0.79
------- ------- -------
Distributions
Net investment income.............. (0.40) (0.39) (0.38)
Net realized gains................. -- (0.06) --
In excess of net realized gains.... -- (0.02) --
------- ------- -------
Total Distributions............... (0.40) (0.47) (0.38)
------- ------- -------
Net Asset Value, End of Period...... $ 9.84 $ 9.74 $ 10.41
======= ======= =======
Total Return........................ 5.27% (1.98%) 8.02%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).... $14,386 $16,295 $18,242
Ratio of expenses to average net
assets............................. 0.75% 0.82% 0.88%(c)
Ratio of net investment income to
average net assets................. 4.11% 3.86% 3.88%(c)
Ratio of expenses to average net
assets*............................ 1.22% 1.41% 1.39%(c)
Portfolio turnover(d).............. 84.20% 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.
-129-
[LOGO OF BB&T FUNDS]
<PAGE>
VIRGINIA INTERMEDIATE TAX-FREE FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the May 17,
Year Ended 1999 to
September 30, September 30,
2000 1999 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $10.86 $11.24
------ ------
Investment Activities
Net investment income........................... 0.45 0.30
Net realized and unrealized gains (losses) on
investments..................................... 0.10 (0.38)
------ ------
Total from Investment Activities............... 0.55 (0.08)
------ ------
Distributions
Net investment income........................... (0.45) (0.30)
------ ------
Total Distributions............................ (0.45) (0.30)
------ ------
Net Asset Value, End of Period................... $10.96 $10.86
====== ======
Total Return (excludes sales charge)............. 5.22% (0.66%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)................. $ 180 $ 74
Ratio of expenses to average net assets......... 0.93% 1.00%(c)
Ratio of net investment income to average net
assets.......................................... 4.15% 4.05%(c)
Ratio of expenses to average net assets*........ 1.40% 1.51%(c)
Portfolio turnover(d)........................... 64.45% 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) 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>
VIRGINIA INTERMEDIATE TAX-FREE FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the May 17,
Year Ended 1999 to
September 30, September 30,
2000 1999 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $ 10.86 $ 11.24
------- -------
Investment Activities
Net investment income........................... 0.46 0.17
Net realized and unrealized gains (losses) on
investments..................................... 0.10 (0.38)
------- -------
Total from Investment Activities............... 0.56 (0.21)
------- -------
Distributions
Net investment income........................... (0.46) (0.17)
------- -------
Total Distributions............................ (0.46) (0.17)
------- -------
Net Asset Value, End of Period................... $ 10.96 $ 10.86
======= =======
Total Return..................................... 5.35% (1.77%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)................. $77,727 $79,353
Ratio of expenses to average net assets......... 0.78% 0.88%(c)
Ratio of net investment income to average net
assets.......................................... 4.30% 4.18%(c)
Ratio of expenses to average net assets*........ 0.90% 0.99%(c)
Portfolio turnover(d)........................... 64.45% 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) 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.
-131-
[LOGO OF BB&T FUNDS]
<PAGE>
GROWTH AND INCOME STOCK FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September 30,
-------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period............................ $ 19.60 $ 18.48 $ 19.98 $ 15.31 $ 12.97
------- ------- ------- ------- -------
Investment Activities
Net investment income............ 0.49 0.25 0.23 0.26 0.26
Net realized and unrealized gains
(losses) on investments.......... 0.56 1.93 (0.17) 5.30 2.43
------- ------- ------- ------- -------
Total from Investment
Activities...................... 1.05 2.18 0.06 5.56 2.69
------- ------- ------- ------- -------
Distributions
Net investment income............ (0.49) (0.25) (0.23) (0.26) (0.26)
Net realized gains............... (1.59) (0.81) (1.33) (0.63) (0.09)
------- ------- ------- ------- -------
Total Distributions............. (2.08) (1.06) (1.56) (0.89) (0.35)
------- ------- ------- ------- -------
Net Asset Value, End of Period.... $ 18.57 $ 19.60 $ 18.48 $ 19.98 $ 15.31
======= ======= ======= ======= =======
Total Return (excludes sales
charge)........................... 5.69% 11.64% 0.10% 37.80% 20.97%
Ratios/Supplementary Data:
Net Assets, End of Period (000).. $33,004 $38,604 $39,817 $34,679 $18,949
Ratio of expenses to average net
assets........................... 1.17% 1.10% 1.10% 1.09% 1.11%
Ratio of net investment income to
average net assets............... 2.62% 1.22% 1.18% 1.52% 1.82%
Ratio of expenses to average net
assets*.......................... 1.60% 1.59% 1.59% 1.58% 1.60%
Portfolio turnover(a)............ 23.85% 13.52% 13.17% 22.66% 19.82%
</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.
See notes to financial statements.
-132-
[LOGO OF BB&T FUNDS]
<PAGE>
GROWTH AND INCOME STOCK FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September
30,
-----------------------------------
January 1,
1996 to
September 30,
2000 1999 1998 1997 1996 (a)
------- ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period.................. $ 19.51 $ 18.42 $ 19.93 $ 15.29 $13.78
------- ------- ------- ------- ------
Investment Activities
Net investment income..... 0.35 0.11 0.09 0.13 0.13
Net realized and
unrealized gains (losses)
on investments............ 0.56 1.90 (0.18) 5.28 1.52
------- ------- ------- ------- ------
Total from Investment
Activities............... 0.91 2.01 (0.09) 5.41 1.65
------- ------- ------- ------- ------
Distributions
Net investment income..... (0.36) (0.11) (0.09) (0.14) (0.14)
Net realized gains........ (1.59) (0.81) (1.33) (0.63) --
------- ------- ------- ------- ------
Total Distributions...... (1.95) (0.92) (1.42) (0.77) (0.14)
------- ------- ------- ------- ------
Net Asset Value, End of
Period..................... $ 18.47 $ 19.51 $ 18.42 $ 19.93 $15.29
======= ======= ======= ======= ======
Total Return (excludes
redemption charge)......... 4.88% 10.73% (0.67%) 36.70% 12.01%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000)..................... $36,078 $38,590 $32,455 $16,690 $3,880
Ratio of expenses to
average net assets........ 1.92% 1.84% 1.85% 1.84% 1.85%(c)
Ratio of net investment
income to average net
assets.................... 1.90% 0.47% 0.43% 0.77% 1.13%(c)
Ratio of expenses to
average net assets*....... 2.10% 2.08% 2.09% 2.08% 2.09%(c)
Portfolio turnover(d)..... 23.85% 13.52% 13.17% 22.66% 19.82%(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) 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.
-133-
[LOGO OF BB&T FUNDS]
<PAGE>
GROWTH AND INCOME STOCK FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September 30,
------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period....................... $ 19.64 $ 18.52 $ 20.02 $ 15.34 $ 12.99
-------- -------- -------- -------- --------
Investment Activities
Net investment income....... 0.54 0.30 0.28 0.30 0.29
Net realized and unrealized
gains (losses) on
investments................. 0.55 1.93 (0.17) 5.31 2.44
-------- -------- -------- -------- --------
Total from Investment
Activities................. 1.09 2.23 0.11 5.61 2.73
-------- -------- -------- -------- --------
Distributions
Net investment income....... (0.54) (0.30) (0.28) (0.30) (0.29)
Net realized gains.......... (1.59) (0.81) (1.33) (0.63) (0.09)
-------- -------- -------- -------- --------
Total Distributions........ (2.13) (1.11) (1.61) (0.93) (0.38)
-------- -------- -------- -------- --------
Net Asset Value, End of
Period....................... $ 18.60 $ 19.64 $ 18.52 $ 20.02 $ 15.34
======== ======== ======== ======== ========
Total Return................. 5.89% 11.89% 0.35% 38.13% 21.31%
Ratios/Supplementary Data:
Net Assets, End of Period
(000)....................... $333,567 $379,321 $348,613 $308,984 $206,659
Ratio of expenses to average
net assets.................. 0.92% 0.84% 0.85% 0.84% 0.86%
Ratio of net investment
income to average net
assets...................... 2.90% 1.47% 1.43% 1.77% 2.07%
Ratio of expenses to average
net assets*................. 1.10% 1.09% 1.09% 1.08% 1.10%
Portfolio turnover(a)....... 23.85% 13.52% 13.17% 22.66% 19.82%
</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.
See notes to financial statements.
-134-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September 30,
-------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period............................ $ 13.83 $ 13.82 $ 13.63 $ 11.96 $ 11.04
------- ------- ------- ------- -------
Investment Activities
Net investment income............ 0.34 0.35 0.39 0.45 0.43
Net realized and unrealized gains
(losses) on investments.......... (0.10) 0.74 0.54 2.04 0.92
------- ------- ------- ------- -------
Total from Investment
Activities...................... 0.24 1.09 0.93 2.49 1.35
------- ------- ------- ------- -------
Distributions
Net investment income............ (0.34) (0.35) (0.39) (0.45) (0.43)
Net realized gains............... (0.58) (0.73) (0.35) (0.37) --
------- ------- ------- ------- -------
Total Distributions............. (0.92) (1.08) (0.74) (0.82) (0.43)
------- ------- ------- ------- -------
Net Asset Value, End of Period.... $ 13.15 $ 13.83 $ 13.82 $ 13.63 $ 11.96
======= ======= ======= ======= =======
Total Return (excludes sales
charge)........................... 1.74% 7.72% 6.89% 21.76% 12.43%
Ratios/Supplementary Data:
Net Assets, End of Period (000).. $17,726 $21,207 $21,948 $17,234 $12,456
Ratio of expenses to average net
assets........................... 1.22% 1.15% 1.17% 1.18% 1.20%
Ratio of net investment income to
average net assets............... 2.54% 2.43% 2.75% 3.63% 3.78%
Ratio of expenses to average net
assets*.......................... 1.65% 1.64% 1.66% 1.67% 1.69%
Portfolio turnover(a)............ 57.95% 35.98% 31.85% 27.07% 19.87%
</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.
See notes to financial statements.
-135-
[LOGO OF BB&T FUNDS]
<PAGE>
BALANCED FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September January 1,
30, 1996 to
--------------------------------- September 30,
2000 1999 1998 1997 1996 (a)
------- ------- ------- ------ -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period....................... $ 13.75 $ 13.76 $ 13.57 $11.91 $11.54
------- ------- ------- ------ ------
Investment Activities
Net investment income....... 0.24 0.26 0.28 0.36 0.27
Net realized and unrealized
gains (losses) on
investments................. (0.11) 0.71 0.55 2.04 0.37
------- ------- ------- ------ ------
Total from Investment
Activities................. 0.13 0.97 0.83 2.40 0.64
------- ------- ------- ------ ------
Distributions
Net investment income....... (0.24) (0.25) (0.29) (0.37) (0.27)
Net realized gains.......... (0.58) (0.73) (0.35) (0.37) --
------- ------- ------- ------ ------
Total Distributions........ (0.82) (0.98) (0.64) (0.74) (0.27)
------- ------- ------- ------ ------
Net Asset Value, End of
Period....................... $ 13.06 $ 13.75 $ 13.76 $13.57 $11.91
======= ======= ======= ====== ======
Total Return (excludes
redemption charge)........... 0.92% 6.82% 6.16% 20.90% 5.67%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000)....................... $18,859 $21,610 $15,183 $6,360 $2,339
Ratio of expenses to average
net assets.................. 1.97% 1.90% 1.92% 1.93% 1.95%(c)
Ratio of net investment
income to average net
assets...................... 1.79% 1.70% 1.98% 2.88% 3.13%(c)
Ratio of expenses to average
net assets*................. 2.15% 2.14% 2.16% 2.17% 2.18%(c)
Portfolio turnover(d)....... 57.95% 35.98% 31.85% 27.07% 19.87%(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) 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>
BALANCED FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September 30,
---------------------------------------------
2000 1999 1998 1997 1996
------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period.......................... $ 13.80 $ 13.79 $ 13.60 $ 11.93 $ 11.01
------- -------- -------- ------- -------
Investment Activities
Net investment income.......... 0.37 0.39 0.42 0.49 0.46
Net realized and unrealized
gains (losses) on investments.. (0.11) 0.74 0.54 2.04 0.92
------- -------- -------- ------- -------
Total from Investment
Activities.................... 0.26 1.13 0.96 2.53 1.38
------- -------- -------- ------- -------
Distributions
Net investment income.......... (0.37) (0.39) (0.42) (0.49) (0.46)
Net realized gains............. (0.58) (0.73) (0.35) (0.37) --
------- -------- -------- ------- -------
Total Distributions........... (0.95) (1.12) (0.77) (0.86) (0.46)
------- -------- -------- ------- -------
Net Asset Value, End of Period.. $ 13.11 $ 13.80 $ 13.79 $ 13.60 $ 11.93
======= ======== ======== ======= =======
Total Return.................... 1.92% 8.01% 7.18% 22.11% 12.74%
Ratios/Supplementary Data:
Net Assets, End of Period
(000).......................... $99,403 $120,278 $108,943 $88,524 $69,374
Ratio of expenses to average
net assets..................... 0.97% 0.90% 0.92% 0.93% 0.95%
Ratio of net investment income
to average net assets.......... 2.79% 2.69% 3.00% 3.88% 4.03%
Ratio of expenses to average
net assets*.................... 1.15% 1.14% 1.16% 1.17% 1.19%
Portfolio turnover(a).......... 57.95% 35.98% 31.85% 27.07% 19.87%
</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.
See notes to financial statements.
-137-
[LOGO OF BB&T FUNDS]
<PAGE>
LARGE COMPANY GROWTH FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the October 3,
Year Ended Year Ended 1997 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period............................. $ 11.96 $ 9.62 $10.00
------- ------ ------
Investment Activities
Net investment loss............... (0.06) (0.04) --
Net realized and unrealized gains
(losses) on investments........... 3.59 2.94 (0.25)
------- ------ ------
Total from Investment
Activities....................... 3.53 2.90 (0.25)
------- ------ ------
Distributions
Net investment income............. -- -- (0.03)
Net realized gains................ (0.74) (0.56) --
In excess of net realized gains... -- -- (0.10)
------- ------ ------
Total Distributions.............. (0.74) (0.56) (0.13)
------- ------ ------
Net Asset Value, End of Period..... $ 14.75 $11.96 $ 9.62
======= ====== ======
Total Return (excludes sales
charge)............................ 30.08% 30.93% (2.54%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)... $13,156 $5,912 $1,938
Ratio of expenses to average net
assets............................ 1.24% 1.22% 1.39%(c)
Ratio of net investment loss to
average net assets................ (0.43%) (0.34%) (0.04%)(c)
Ratio of expenses to average net
assets*........................... 1.66% 1.71% 1.87%(c)
Portfolio turnover(d)............. 76.76% 67.59% 108.36%(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) 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>
LARGE COMPANY GROWTH FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the October 3,
Year Ended Year Ended 1997 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period............................. $ 11.82 $ 9.58 $10.00
------- ------- ------
Investment Activities
Net investment loss............... (0.17) (0.12) (0.02)
Net realized and unrealized gains
(losses) on investments........... 3.56 2.92 (0.29)
------- ------- ------
Total from Investment
Activities....................... 3.39 2.80 (0.31)
------- ------- ------
Distributions
Net investment income............. -- -- (0.01)
Net realized gains................ (0.74) (0.56) --
In excess of net realized gains... -- -- (0.10)
------- ------- ------
Total Distributions.............. (0.74) (0.56) (0.11)
------- ------- ------
Net Asset Value, End of Period..... $ 14.47 $ 11.82 $ 9.58
======= ======= ======
Total Return (excludes redemption
charge)............................ 29.22% 29.97% (3.13%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)... $27,172 $12,289 $3,985
Ratio of expenses to average net
assets............................ 1.99% 1.97% 2.14%(c)
Ratio of net investment loss to
average net assets................ (1.18%) (1.08%) (0.78%)(c)
Ratio of expenses to average net
assets*........................... 2.16% 2.21% 2.37%(c)
Portfolio turnover(d)............. 76.76% 67.59% 108.36%(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) 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>
LARGE COMPANY GROWTH FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the October 3,
Year Ended Year Ended 1997 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period............................. $ 11.99 $ 9.63 $ 10.00
-------- ------- -------
Investment Activities
Net investment income (loss)...... (0.03) (0.01) 0.04
Net realized and unrealized gains
(losses) on investments........... 3.62 2.93 (0.27)
-------- ------- -------
Total from Investment
Activities....................... 3.59 2.92 (0.23)
-------- ------- -------
Distributions
Net investment income............. -- -- (0.04)
Net realized gains................ (0.74) (0.56) (0.10)
-------- ------- -------
Total Distributions.............. (0.74) (0.56) (0.14)
-------- ------- -------
Net Asset Value, End of Period..... $ 14.84 $ 11.99 $ 9.63
======== ======= =======
Total Return....................... 30.52% 31.15% (2.33%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)... $145,538 $90,635 $50,975
Ratio of expenses to average net
assets............................ 0.99% 0.98% 1.06%(c)
Ratio of net investment income
(loss) to average net assets...... (0.18%) (0.08%) 0.41%(c)
Ratio of expenses to average net
assets*........................... 1.16% 1.22% 1.30%(c)
Portfolio turnover(d)............. 76.76% 67.59% 108.36%(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) 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>
SMALL COMPANY GROWTH FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September 30,
----------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................ $ 24.92 $ 17.50 $ 23.33 $ 21.06 $14.53
------- ------- ------- ------- ------
Investment Activities
Net investment loss.......... (0.25) (0.28) (0.29) (0.15) (0.20)
Net realized and unrealized
gains (losses) on futures and
investments.................. 13.20 7.70 (5.23) 2.44 6.73
------- ------- ------- ------- ------
Total from Investment
Activities.................. 12.95 7.42 (5.52) 2.29 6.53
------- ------- ------- ------- ------
Distributions
Net realized gains........... (3.00) -- -- -- --
In excess of net realized
gains........................ -- -- (0.31) (0.02) --
------- ------- ------- ------- ------
Total Distributions......... (3.00) -- (0.31) (0.02) --
------- ------- ------- ------- ------
Net Asset Value, End of
Period........................ $ 34.87 $ 24.92 $ 17.50 $ 23.33 $21.06
======= ======= ======= ======= ======
Total Return (excludes sales
charge)....................... 54.34% 42.32% (23.81%) 10.90% 44.94%
Ratios/Supplementary Data:
Net Assets, End of Period
(000)........................ $28,936 $11,336 $ 9,456 $12,676 $7,413
Ratio of expenses to average
net assets................... 1.66% 1.80% 1.86% 1.89% 2.01%
Ratio of net investment loss
to average net assets........ (0.74%) (1.23%) (1.36%) (1.29%) (1.26%)
Ratio of expenses to average
net assets*.................. 1.91% 2.05% 2.11% 2.14% 2.26%
Portfolio turnover(a)........ 206.16% 184.39% 157.44% 80.66% 71.62%
</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.
See notes to financial statements.
-141-
[LOGO OF BB&T FUNDS]
<PAGE>
SMALL COMPANY GROWTH FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September
30,
-----------------------------------
January 1,
1996 to
September 30,
2000 1999 1998 1997 1996 (a)
------- ------- ------ ------ -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period...... $ 24.21 $ 17.13 $23.02 $20.92 $15.24
------- ------- ------ ------ ------
Investment Activities
Net investment loss..... (0.49) (0.41) (0.39) (0.20) (0.21)
Net realized and
unrealized gains
(losses) on futures and
investments............. 12.81 7.49 (5.19) 2.32 5.89
------- ------- ------ ------ ------
Total from Investment
Activities............. 12.32 7.08 (5.58) 2.12 5.68
------- ------- ------ ------ ------
Distributions
Net realized gains...... (3.00) -- -- -- --
In excess of net
realized gains.......... -- -- (0.31) (0.02) --
------- ------- ------ ------ ------
Total Distributions.... (3.00) -- (0.31) (0.02) --
------- ------- ------ ------ ------
Net Asset Value, End of
Period................... $ 33.53 $ 24.21 $17.13 $23.02 $20.92
======= ======= ====== ====== ======
Total Return (excludes
redemption charge)....... 53.29% 41.25% (24.40%) 10.16% 37.27%(b)
Ratios/Supplementary
Data:
Net Assets, End of
Period (000)............ $20,707 $11,054 $8,609 $8,869 $3,200
Ratio of expenses to
average net assets...... 2.41% 2.55% 2.61% 2.64% 2.72%(c)
Ratio of net investment
loss to average net
assets.................. (1.49%) (1.98%) (2.11%) (2.04%) (2.01%)(c)
Portfolio turnover(d)... 206.16% 184.39% 157.44% 80.66% 71.62%(b)
</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.
See notes to financial statements.
-142-
[LOGO OF BB&T FUNDS]
<PAGE>
SMALL COMPANY GROWTH FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the Year Ended September 30,
-------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period.................. $ 25.25 $ 17.69 $ 23.52 $ 21.18 $ 14.57
-------- -------- ------- ------- -------
Investment Activities
Net investment loss....... (0.17) (0.22) (0.20) (0.11) (0.17)
Net realized and
unrealized gains (losses)
on futures and
investments............... 13.41 7.78 (5.32) 2.47 6.78
-------- -------- ------- ------- -------
Total from Investment
Activities............... 13.24 7.56 (5.52) 2.36 6.61
-------- -------- ------- ------- -------
Distributions
Net realized gains........ (3.00) -- -- -- --
In excess of net realized
gains..................... -- -- (0.31) (0.02) --
-------- -------- ------- ------- -------
Total Distributions...... (3.00) -- (0.31) (0.02) --
-------- -------- ------- ------- -------
Net Asset Value, End of
Period..................... $ 35.49 $ 25.25 $ 17.69 $ 23.52 $ 21.18
======== ======== ======= ======= =======
Total Return............... 54.82% 42.66% (23.62%) 11.17% 45.37%
Ratios/Supplementary Data:
Net Assets, End of Period
(000)..................... $197,795 $105,725 $65,180 $58,660 $36,373
Ratio of expenses to
average net assets........ 1.41% 1.54% 1.61% 1.64% 1.79%
Ratio of net investment
loss to average net
assets.................... (0.49%) (0.98%) (1.11%) (1.04%) (1.00%)
Ratio of expenses to
average net assets*....... 1.41% 1.55% 1.61% 1.64% 1.79%
Portfolio turnover(a)..... 206.16% 184.39% 157.44% 80.66% 71.62%
</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.
See notes to financial statements.
-143-
[LOGO OF BB&T FUNDS]
<PAGE>
INTERNATIONAL EQUITY FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the For the January 2,
Year Ended Year Ended Year Ended 1997 to
September 30, September 30, September 30, September 30,
2000 1999 1998 1997 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $12.48 $ 9.91 $11.24 $10.00
------ ------ ------ ------
Investment Activities
Net investment income
(loss)................. (0.04) (0.01) 0.03 0.03
Net realized and
unrealized gains
(losses) on foreign
currency and
investments............ 0.68 2.78 (1.09) 1.25
------ ------ ------ ------
Total from Investment
Activities............ 0.64 2.77 (1.06) 1.28
------ ------ ------ ------
Distributions
Net investment income.. -- (0.03) (0.03) (0.02)
Net realized gains..... (0.63) (0.17) (0.23) --
In excess of net
investment income...... -- -- (0.01) (0.02)
------ ------ ------ ------
Total Distributions... (0.63) (0.20) (0.27) (0.04)
------ ------ ------ ------
Net Asset Value, End of
Period.................. $12.49 $12.48 $ 9.91 $11.24
====== ====== ====== ======
Total Return (excludes
sales charge)........... 4.75% 28.33% (9.60%) 12.84%(b)
Ratios/Supplementary
Data:
Net Assets, End of
Period (000)........... $2,681 $1,906 $1,314 $ 833
Ratio of expenses to
average net assets..... 1.76% 1.81% 1.75% 1.97%(c)
Ratio of net investment
income (loss) to
average net assets..... (0.26%) (0.07%) 0.26% 0.14%(c)
Ratio of expenses to
average net assets*.... 2.01% 2.06% 2.01% 2.24%(c)
Portfolio turnover(d).. 179.44% 82.00% 53.27% 41.45%(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) 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>
INTERNATIONAL EQUITY FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the For the January 2,
Year Ended Year Ended Year Ended 1997 to
September 30, September 30, September 30, September 30,
2000 1999 1998 1997 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $12.34 $ 9.85 $11.23 $10.00
------ ------ ------ ------
Investment Activities
Net investment loss.... (0.15) (0.10) (0.04) (0.01)
Net realized and
unrealized gains
(losses) on foreign
currency and
investments............ 0.68 2.77 (1.10) 1.26
------ ------ ------ ------
Total from Investment
Activities............ 0.53 2.67 (1.14) 1.25
------ ------ ------ ------
Distributions
Net investment income.. -- (0.01) -- --
Net realized gains..... (0.63) (0.17) (0.23) --
In excess of net
investment income...... -- -- (0.01) (0.02)
------ ------ ------ ------
Total Distributions... (0.63) (0.18) (0.24) (0.02)
------ ------ ------ ------
Net Asset Value, End of
Period.................. $12.24 $12.34 $ 9.85 $11.23
====== ====== ====== ======
Total Return (excludes
redemption charge)...... 3.88% 27.46% (10.29%) 12.51%(b)
Ratios/Supplementary
Data:
Net Assets, End of
Period (000)........... $3,861 $2,378 $1,923 $1,179
Ratio of expenses to
average net assets..... 2.51% 2.56% 2.50% 2.69%(c)
Ratio of net investment
loss to average net
assets................. (0.99%) (0.84%) (0.50%) (0.62%)(c)
Ratio of expenses to
average net assets*.... 2.51% 2.56% 2.51% 2.74%(c)
Portfolio turnover(d).. 179.44% 82.00% 53.27% 41.45%(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) 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>
INTERNATIONAL EQUITY FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the For the January 2,
Year Ended Year Ended Year Ended 1997 to
September 30, September 30, September 30, September 30,
2000 1999 1998 1997 (a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period.................. $ 12.56 $ 9.95 $ 11.28 $ 10.00
-------- ------- ------- -------
Investment Activities......
Net investment income..... (0.01) 0.02 0.06 0.03
Net realized and
unrealized gains (losses)
on foreign
currency and investments.. 0.68 2.80 (1.10) 1.30
-------- ------- ------- -------
Total from Investment
Activities............... 0.67 2.82 (1.04) 1.33
-------- ------- ------- -------
Distributions..............
Net investment income..... -- (0.04) (0.06) (0.02)
Net realized gains........ (0.63) (0.17) (0.23) --
In excess of net
investment income......... -- -- -- (0.03)
-------- ------- ------- -------
Total Distributions...... (0.63) (0.21) (0.29) (0.05)
-------- ------- ------- -------
Net Asset Value, End of
Period..................... $ 12.60 $ 12.56 $ 9.95 $ 11.28
======== ======= ======= =======
Total Return............... 4.96% 28.70% (9.45%) 13.34%(b)
Ratios/Supplementary Data:
Net Assets, End of Period
(000)..................... $119,326 $97,447 $70,356 $52,373
Ratio of expenses to
average net assets........ 1.51% 1.56% 1.50% 1.79%(c)
Ratio of net investment
income (loss) to average
net assets................ (0.04%) 0.18% 0.50% 0.32%(c)
Ratio of expenses to
average net assets*....... 1.51% 1.56% 1.51% 1.81%(c)
Portfolio turnover(d)..... 179.44% 82.00% 53.27% 41.45%(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) 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>
CAPITAL MANAGER CONSERVATIVE GROWTH FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the January 29,
Year Ended Year Ended 1998 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $10.39 $10.05 $10.09
------ ------ ------
Investment Activities
Net investment income.............. 0.38 0.30 0.19
Net realized and unrealized gains
(losses) on investments with
affiliates......................... 0.54 0.52 (0.01)
------ ------ ------
Total from Investment Activities.. 0.92 0.82 0.18
------ ------ ------
Distributions
Net investment income.............. (0.38) (0.31) (0.22)
Net realized gains................. (0.22) (0.17) --
------ ------ ------
Total Distributions............... (0.60) (0.48) (0.22)
------ ------ ------
Net Asset Value, End of Period...... $10.71 $10.39 $10.05
====== ====== ======
Total Return (excludes sales
charge)............................. 9.08% 8.19% 1.89%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).... $ 293 $ 532 $ 119
Ratio of expenses to average net
assets............................. 0.66% 0.62% 0.83%(c)
Ratio of net investment income to
average net assets................. 3.55% 2.95% 2.91%(c)
Ratio of expenses to average net
assets*............................ 1.10% 1.07% 1.33%(c)
Portfolio turnover(d).............. 38.27% 16.45% 4.28%(b)
</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 voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-147-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER CONSERVATIVE GROWTH FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the January 29,
Year Ended 1999 to
September 30, September 30,
2000 1999 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $10.39 $10.54
------ ------
Investment Activities
Net investment income............................ 0.29 0.21
Net realized and unrealized gains (losses) on
investments with affiliates...................... 0.56 (0.15)
------ ------
Total from Investment Activities................ 0.85 0.06
------ ------
Distributions
Net investment income............................ (0.31) (0.21)
Net realized gains............................... (0.22) --
------ ------
Total Distributions............................. (0.53) (0.21)
------ ------
Net Asset Value, End of Period.................... $10.71 $10.39
====== ======
Total Return (excludes redemption charge)......... 8.31% 0.59%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).................. $ 150 $ 110
Ratio of expenses to average net assets.......... 1.41% 1.35%(c)
Ratio of net investment income to average net
assets........................................... 2.75% 3.92%(c)
Ratio of expenses to average net assets*......... 1.60% 1.75%(c)
Portfolio turnover(d)............................ 38.27% 16.45%(b)
</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 voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-148-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER CONSERVATIVE GROWTH FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the October 2,
Year Ended Year Ended 1997 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $ 10.43 $ 10.08 $ 10.00
------- ------- -------
Investment Activities
Net investment income.............. 0.40 0.32 0.32
Net realized and unrealized gains
on investments with affiliates..... 0.55 0.53 0.08
------- ------- -------
Total from Investment Activities.. 0.95 0.85 0.40
------- ------- -------
Distributions
Net investment income.............. (0.41) (0.33) (0.32)
Net realized gains................. (0.22) (0.17) --
------- ------- -------
Total Distributions............... (0.63) (0.50) (0.32)
------- ------- -------
Net Asset Value, End of Period...... $ 10.75 $ 10.43 $ 10.08
======= ======= =======
Total Return........................ 9.31% 8.47% 3.95%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).... $31,808 $32,590 $23,773
Ratio of expenses to average net
assets............................. 0.41% 0.38% 0.47%(c)
Ratio of net investment income to
average net assets................. 3.75% 3.15% 3.12%(c)
Ratio of expenses to average net
assets*............................ 0.60% 0.58% 0.67%(c)
Portfolio turnover(d).............. 38.27% 16.45% 4.28%(b)
</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 voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-149-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER MODERATE GROWTH FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the January 29,
Year Ended Year Ended 1998 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $10.65 $ 9.85 $10.01
------ ------ ------
Investment Activities
Net investment income.............. 0.31 0.22 0.15
Net realized and unrealized gains
(losses) on investments with
affiliates......................... 0.89 1.06 (0.15)
------ ------ ------
Total from Investment Activities.. 1.20 1.28 --
------ ------ ------
Distributions
Net investment income.............. (0.31) (0.23) (0.16)
Net realized gains................. (0.29) (0.25) --
------ ------ ------
Total Distributions............... (0.60) (0.48) (0.16)
------ ------ ------
Net Asset Value, End of Period...... $11.25 $10.65 $ 9.85
====== ====== ======
Total Return (excludes sales
charge)............................. 11.35% 13.07% 0.10%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).... $1,318 $1,635 $1,146
Ratio of expenses to average net
assets............................. 0.74% 0.68% 0.93%(c)
Ratio of net investment income to
average net assets................. 2.67% 1.93% 1.93%(c)
Ratio of expenses to average net
assets*............................ 1.19% 1.13% 1.39%(c)
Portfolio turnover(d).............. 46.69% 17.33% 4.85%(b)
</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 voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-150-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER MODERATE GROWTH FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the January 29,
Year Ended 1999 to
September 30, September 30,
2000 1999 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $10.64 $10.64
------ ------
Investment Activities
Net investment income............................ 0.22 0.14
Net realized and unrealized gains on investments
with affiliates.................................. 0.88 --
------ ------
Total from Investment Activities................ 1.10 0.14
------ ------
Distributions
Net investment income............................ (0.24) (0.14)
Net realized gains............................... (0.29) --
------ ------
Total Distributions............................. (0.53) (0.14)
------ ------
Net Asset Value, End of Period.................... $11.21 $10.64
====== ======
Total Return (excludes redemption charge)......... 10.45% 1.29%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).................. $ 542 $ 197
Ratio of expenses to average net assets.......... 1.54% 1.47%(c)
Ratio of net investment income to average net
assets........................................... 1.94% 2.54%(c)
Ratio of expenses to average net assets*......... 1.69% 1.78%(c)
Portfolio turnover(d)............................ 46.69% 17.33%(b)
</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 voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-151-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER MODERATE GROWTH FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the October 2,
Year Ended Year Ended 1997 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $ 10.65 $ 9.85 $ 10.00
------- ------- -------
Investment Activities
Net investment income.............. 0.34 0.25 0.23
Net realized and unrealized gains
(losses) on investments with
affiliates......................... 0.89 1.05 (0.16)
------- ------- -------
Total from Investment Activities.. 1.23 1.30 0.07
------- ------- -------
Distributions.......................
Net investment income.............. (0.34) (0.25) (0.22)
Net realized gains................. (0.29) (0.25) --
------- ------- -------
Total Distributions............... (0.63) (0.50) (0.22)
------- ------- -------
Net Asset Value, End of Period...... $ 11.25 $ 10.65 $ 9.85
======= ======= =======
Total Return........................ 11.63% 13.34% 0.68%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).... $28,616 $26,800 $21,682
Ratio of expenses to average net
assets............................. 0.49% 0.43% 0.46%(c)
Ratio of net investment income to
average net assets................. 2.98% 2.17% 2.21%(c)
Ratio of expenses to average net
assets*............................ 0.69% 0.63% 0.66%(c)
Portfolio turnover(d).............. 46.69% 17.33% 4.85%(b)
</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 voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-152-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER GROWTH FUND
Class A Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the January 29,
Year Ended Year Ended 1998 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period............................. $10.79 $ 9.67 $ 9.93
------ ------ ------
Investment Activities
Net investment income............. 0.25 0.15 0.10
Net realized and unrealized gains
(losses) on investments with
affiliates........................ 1.24 1.46 (0.26)
------ ------ ------
Total from Investment
Activities....................... 1.49 1.61 (0.16)
------ ------ ------
Distributions
Net investment income............. (0.26) (0.17) (0.10)
Net realized gains................ (0.36) (0.32) --
------ ------ ------
Total Distributions.............. (0.62) (0.49) (0.10)
------ ------ ------
Net Asset Value, End of Period..... $11.66 $10.79 $ 9.67
====== ====== ======
Total Return (excludes sales
charge)............................ 14.02% 16.81% (1.45%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)... $1,606 $ 990 $ 276
Ratio of expenses to average net
assets............................ 0.70% 0.69% 0.90%(c)
Ratio of net investment income to
average net assets................ 2.24% 1.24% 1.16%(c)
Ratio of expenses to average net
assets*........................... 1.14% 1.14% 1.38%(c)
Portfolio turnover(d)............. 43.28% 17.93% 7.69%(b)
</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 voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-153-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER GROWTH FUND
Class B Shares
Financial Highlights
<TABLE>
<CAPTION>
For the January 29,
Year Ended 1999 to
September 30, September 30,
2000 1999 (a)
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $10.79 $10.69
------ ------
Investment Activities
Net investment income............................ 0.17 0.10
Net realized and unrealized gains on investments
with affiliates.................................. 1.24 0.10
------ ------
Total from Investment Activities................ 1.41 0.20
------ ------
Distributions
Net investment income............................ (0.20) (0.10)
Net realized gains............................... (0.36) --
------ ------
Total Distributions............................. (0.56) (0.10)
------ ------
Net Asset Value, End of Period.................... $11.64 $10.79
====== ======
Total Return (excludes redemption charge)......... 13.23% 1.87%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000).................. $1,993 $ 163
Ratio of expenses to average net assets.......... 1.45% 1.94%(c)
Ratio of net investment income to average net
assets........................................... 1.49% 1.16%(c)
Ratio of expenses to average net assets*......... 1.64% 2.14%(c)
Portfolio turnover(d)............................ 43.28% 17.93%(b)
</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 voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-154-
[LOGO OF BB&T FUNDS]
<PAGE>
CAPITAL MANAGER GROWTH FUND
Trust Shares
Financial Highlights
<TABLE>
<CAPTION>
For the For the October 2,
Year Ended Year Ended 1997 to
September 30, September 30, September 30,
2000 1999 1998 (a)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period............................. $ 10.79 $ 9.68 $ 10.00
------- ------- -------
Investment Activities
Net investment income............. 0.29 0.17 0.16
Net realized and unrealized gains
(losses) on investments with
affiliates........................ 1.23 1.45 (0.32)
------- ------- -------
Total from Investment
Activities....................... 1.52 1.62 (0.16)
------- ------- -------
Distributions
Net investment income............. (0.29) (0.19) (0.16)
Net realized gains................ (0.36) (0.32) --
------- ------- -------
Total Distributions.............. (0.65) (0.51) (0.16)
------- ------- -------
Net Asset Value, End of Period..... $ 11.66 $ 10.79 $ 9.68
======= ======= =======
Total Return....................... 14.28% 16.96% (1.72%)(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)... $26,538 $24,063 $21,370
Ratio of expenses to average net
assets............................ 0.45% 0.46% 0.47%(c)
Ratio of net investment income to
average net assets................ 2.49% 1.43% 1.53%(c)
Ratio of expenses to average net
assets*........................... 0.64% 0.66% 0.67%(c)
Portfolio turnover(d)............. 43.28% 17.93% 7.69%(b)
</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 voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-155-
[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, Intermediate Corporate 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, 2000, and the related statements of
operations, statements of changes in net assets 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 auditing standards generally
accepted in the United States of America. 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, 2000, by
confirmation with the custodian, correspondence with 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, 2000,
the results of their operations, the changes in their net assets and the
financial highlights for each of the periods indicated herein, in conformity
with accounting principles generally accepted in the United States of America.
KPMG LLP
Columbus, Ohio
November 17, 2000
-156-
[LOGO OF BB&T FUNDS]
<PAGE>
[LOGO OF BB&T FUNDS]
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
[GRAPHIC]
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, 2000
