<PAGE>
Centura Funds, Inc.
Centura Equity Growth Fund
Centura Equity Income Fund
Centura Federal Securities Income Fund
Centura North Carolina Tax-Free Bond Fund
June 9, 1997
Dear Shareholder:
We are pleased to provide you with this Annual Report for the Centura Funds
covering the Funds' fiscal year ended April 30, 1997. Following is a discussion
of the domestic equity and fixed-income markets and comments on each of the
Centura Funds.
ECONOMICS/CAPITAL MARKET COMMENTARY
The S&P 500 continued its strong performance, returning 25.09% for the year
ended April 30, 1997. The S&P 500 and the Dow Jones Industrial Average are
market capitalization-weighted indexes and are largely influenced by the larger
capitalization blue chip stocks. The returns on these large-capitalization
indexes have been somewhat deceiving as most broader market indexes have lagged
dramatically over the last year. The S&P equal weighted index, the Value Line
Index, and the Nasdaq Composite all lagged the S&P 500 dramatically, while the
Russell 2000 index was actually down for the year ended April 30, 1997.
Consequently, most equity mutual fund investors have seen returns that have
lagged the S&P 500 for the past year, as actively managed funds tend to be more
uniformly diversified than the large indexes.
Many investors (individual and institutional) have concluded over the last
three years that if they cannot beat the S&P 500, why not join it. As "Barron's
Magazine" pointed out in its March 3, 1997 issue, index funds have grown from
practically nothing in 1986 to over $65 billion at the end of 1996 and over $70
billion today. This surge in indexing has largely been a self-fulfilling
prophecy. Money flows in the index fund, the index fund buys stocks (weighted
identical to the index) in the index, the index rises, and more money comes into
the fund. Jack Brennan, chief executive of the Vanguard Group, recently warned
investors that "Indexing isn't invulnerable...investors who have enjoyed the
bounty of the S&P 500 index should consider that while large-cap stocks have led
the market's parade over the last few years, this trend won't last forever." Few
investors realize that the S&P 500 is market capitalization-weighted and that
the top ten stocks in the index represent approximately 20% of the index. As
larger stocks have increased dramatically in value over the last few years,
their proportional representation of the S&P 500 index has also increased. This
creates the need for index managers to purchase more of these large names as
money continues to flow into their funds, putting additional upward pressure on
their values. Instead of practicing a "buy low, sell high" strategy, the
indexer, in essence, becomes a momentum investor buying more as the stock moves
up.
The primary factor driving the domestic equity markets has been strong
corporate earnings. While the gross domestic product has accelerated over the
last couple of quarters, there has been little evidence of accelerating
inflation. In a preemptive move, the Federal Reserve moved to raise interest
rates by one-quarter of one percent at the March 25, 1997 meeting. The tight
labor markets and "irrational exuberance" in the equity markets were the primary
factors leading to the rise. Offsetting the accelerating wage price pressure was
the fact that commodity prices have remained relatively tame over the last year.
Bond prices have actually increased slightly since the Fed tightening, as many
fixed-income participants believe the economy will begin to slow in the second
half of 1997.
<PAGE>
CENTURA EQUITY INCOME FUND
We are excited about the addition of the Equity Income Fund to the Centura
family. We feel this fund, which was made available October 1, 1996, is
appropriate for people who desire the benefits of equity ownership, but also
have the need for an above-average dividend yield. Additionally, this fund has
typically experienced below-average market volatility, as measured by standard
deviation, over the last market cycle.
As of April 30, 1997, the Centura Equity Income Fund was invested in common
stocks (85.7%), preferred stocks (10.1%), and cash (4.1%) (as a percentage of
net assets). The average weighted market capitalization of the fund is
approximately $26.9 billion versus $43.7 billion for the S&P 500. The fund
continues to overweight basic materials, consumer staples, and energy.
Technology continues to be underweighted in this fund, due to the lack of yield
available in this sector. It remains our goal for this fund to maintain a
current yield above that of the S&P 500 index.
CENTURA EQUITY GROWTH FUND
The Centura Equity Growth fund maintained its focus on large-capitalization
and mid-capitalization issues that represented what we believe is "growth at a
reasonable price." The number of companies held in the fund's portfolio of
investments was increased from 31 a year ago to the present level of 47. It is
anticipated that going forward, the fund will maintain holdings of 40-50
companies. Additionally, it should be noted that some changes were also made to
reduce exposure to certain economic sectors and to provide the fund with greater
overall diversification. The recent correction in many mid-cap stocks has given
us the best buying opportunity that we have seen in the last two to three years.
That coupled with the lofty valuations of the large-capitalization
multinationals, leads us to believe that active management will finally have its
day versus the passive indexers. We have been using the strength in some of our
large multinationals holdings as an opportunity to pare back positions and move
into many of the neglected stocks that we believe are trading at more attractive
valuation levels. In the month of May many of these stocks were beginning to
come back to life, as evidenced by the fact that many of the broader indexes
outperformed the S&P 500 by a wide margin. For the year ended April 30, 1997 the
Centura Equity Growth Fund (C shares) returned 11.8%, which lagged the S&P 500
return of 25.1%, but exceeded the Morningstar Growth Fund (1067 funds) average
of 11.14%.
As of April 30, 1997 the Centura Equity Growth Fund was invested in common
stocks (95.7%), U.S. Government obligations (3.0%) and cash equivalents (1.6%)
(as a percentage of net assets). The average weighted market capitalization of
the fund's portfolio is approximately $18 billion versus $43.7 billion for the
S&P 500. It remains our goal to hold companies with superior financial strength
as evidenced by the fact that the average holding has long term debt of
approximately 34% of total capital. The average price/ earnings ratio based on
1997 estimates is below that of the market, although the portfolio has stronger
growth characteristics than that of the market as represented by the S&P 500.
The Equity Growth fund is currently overweighted in basic materials, capital
goods and consumer cyclicals.
CENTURA FEDERAL SECURITIES INCOME FUND
With investors trying to forecast Federal Reserve policy, and reacting to
sometimes conflicting reports on inflation prospects, the past 12 months have
provided mixed results for the bond markets. The long end of the yield curve
finished April 30, 1997 essentially unchanged from the level of a year ago. Most
of the change has occurred in the two-to-five-year maturity range, the five-year
U.S. Treasury was yielding 6.58%
2
<PAGE>
on April 30, 1997, up 16 basis points from the prior year. The Centura Federal
Securities fund returned 5.33% (Class C shares) over the past year which is
slightly behind the Morningstar average Short Government Fund, which returned
5.47% for the same period. Presently the portfolio is comprised of 71.1%
treasury obligations, 21.6% agency obligations and 6.2% cash equivalents (as a
percentage of net assets). The average maturity of the fund is 4.13 years and
the average duration is 3.26 years.
As of April 30, 1997 the three year U.S. Treasury was yielding 6.40% and the
30-year U.S. Treasury was yielding 6.95%. Given this fact, the conservative
fixed-income investor is able to receive 92% of the yield available in long
treasuries by going out only three years in maturity. Considering this with the
potential volatility on the long end of the yield curve, we feel the Centura
Federal Securities Income Fund is well-positioned to provide a representative
yield with relatively low principal risk.
CENTURA NORTH CAROLINA TAX-FREE BOND FUND
The North Carolina municipal market has moved in line with the US Treasury
market over the past year. The supply of new bonds being issued in North
Carolina has been relatively low and we see no pickup in supply over the next
few months. This lack of available supply has provided stability to the
municipal markets and should continue to do so over the foreseeable future. The
average maturity of the fund is 6.7 years and the average duration is 5.2 years.
For the year ended April 30, 1997 the Centura North Carolina Tax-Free Bond fund
(Class C shares) returned 4.97%.
The fund continues to stress quality with an average Moody's Investment
Service rating of Aa1. As of April 30, 1997, the fund is comprised of 64.7%
general obligation bonds, 32.1% revenue bonds and 3.2% cash equivalents. We
believe the Centura North Carolina Tax-Free Fund offers the high tax bracket
investor with an excellent taxable equivalent yield when compared to other
fixed-income alternatives.
CAPITAL MARKET OUTLOOK
The future for the U.S. economy continues to look bright as the economy is
expected to grow at 2.5% to 3.0% with subdued inflationary pressures. While it
is difficult to get enthusiastic about the large-cap blue chip names given their
current lofty valuations, equity fundamentals coupled with the macroeconomic
backdrop hardly favor a bearish tone. The market has been and will continue to
be liquidity driven over the coming year. It will continue to be our strategy to
reduce exposure to the stocks with the greatest expectations and reinvest the
proceeds into some of the lower expectation issues. To be successful in a value
style or "growth at a reasonable price" strategy, one must be willing to step in
and buy when the masses exit due to uncertainty over near term earnings
prospects. We would expect the market volatility to continue, especially as
investors attempt to anticipate Federal Reserve policy. Our outlook on the bond
markets is becoming more positive as it is our belief that the U.S. economy will
begin to slow somewhat over the second half of 1997. It would come as no
surprise to us to see the bond market produce higher total returns than common
stocks over the next six months to a year.
One should keep in mind that we are not market timers and remain committed
to quality common stocks over the long term. It will be our goal to provide
excellent risk adjusted returns over the coming year. Your continued support and
confidence is greatly appreciated.
LOOKING AHEAD
We would like to take this opportunity to introduce our latest addition to
the Centura Funds, the Centura Southeast Equity Fund.
3
<PAGE>
Prior to the Centura Southeast Equity Fund's initial offering on May 1,
1997, similarly managed common and collective trust funds were offered only to
trust and employee benefit clients of Centura Bank, Centura Funds' adviser. This
fund invests primarily in common and preferred stocks of smaller companies
headquartered in the Southeast United States. The fund employs Centura's value
style of equity management by seeking companies that the Fund manager believes
offer significant growth opportunities and which the manager believes are
selling below their estimated intrinsic values.
The Centura Southeast Equity Fund may be suited for more aggressive
investors who are willing to accept wider short-term fluctuations in search of
higher potential returns. We believe the fund rollout was especially timely, in
light of the fact that most small-cap indices have dramatically lagged the blue
chip stocks, despite a robust earnings outlook.*
Sincerely,
<TABLE>
<S> <C>
/s/ Frank G. Jolley /s/ Hugh Fanning
Frank G. Jolley, CFA Hugh Fanning
Chief Investment Officer President
Centura Bank/Trust Investments Centura Funds, Inc.
</TABLE>
*Small cap stocks typically carry additional risks since small companies
generally have a higher risk of failure. Investing in a geographic location may
also involve more risks since the companies are located within the same region.
4
<PAGE>
EQUITY GROWTH FUND
A $10,000 investment in the Equity Growth Fund, Class A, with a maximum sales
load of 4.50%, made on the inception date would have increased to $26,692. The
graph on the right shows how this compares to our benchmark over the same
period. Total return for the life of the Fund was 16.76%, reflecting the sales
load. Without the sales load, the return would have been 17.59%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS A S & P 500
<S> <C> <C> <C>
12/31/90 $9,554.50 $10,000
3/31/91 $11,155.10 $11,456
6/30/91 $11,320.20 $11,432
9/30/91 $11,782.20 $12,048
12/31/91 $12,508.30 $13,055
3/31/92 $12,820.80 $12,722
6/30/92 $12,986.80 $12,972
9/30/92 $13,465.40 $13,374
12/31/92 $14,505.00 $14,056
3/31/93 $15,214.60 $14,659
6/30/93 $15,396.10 $14,734
9/30/93 $16,237.70 $15,111
12/31/93 $17,128.80 $15,460
3/31/94 $16,237.70 $14,871
6/30/94 $15,446.60 $14,931
9/30/94 $16,153.90 $15,667
12/31/94 $15,690.40 $15,663
3/31/95 $17,223.60 $17,187
6/30/95 $19,107.10 $18,818
9/30/95 $20,106.30 $20,314
12/31/95 $21,168.10 $21,525
3/31/96 $22,875.80 $22,695
6/30/96 $23,185.30 $23,720
9/30/96 $23,904.20 $24,445
12/31/96 $26,245.10 $26,492
3/31/97 $26,220.80 $27,185
4/30/97 $26,692.10 $28,808
Average Annual Total Return* 1 Year 5 Year Since Inception
Class A(a) 6.56% 14.28% 16.76%
S & P 500 25.10% 17.08% 18.17%
</TABLE>
A $10,000 investment in the Equity Growth Fund, Class B, made on the inception
date would have increased to $26,730. The graph on the right shows how this
compares to our benchmark over the same period. Total return for the life of the
Fund was 16.78%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS B S & P 500
<S> <C> <C> <C>
12/31/90 $10,000.00 $10,000
3/31/91 $11,641.90 $11,456
6/30/91 $11,794.20 $11,432
9/30/91 $12,252.00 $12,048
12/31/91 $12,984.20 $13,055
3/31/92 $13,386.00 $12,722
6/30/92 $13,438.80 $12,972
9/30/92 $13,908.50 $13,374
12/31/92 $14,952.70 $14,056
3/31/93 $15,656.90 $14,659
6/30/93 $15,813.20 $14,734
9/30/93 $16,647.70 $15,111
12/31/93 $17,528.10 $15,460
3/31/94 $16,571.10 $14,871
6/30/94 $15,750.20 $14,931
9/30/94 $16,458.30 $15,667
12/31/94 $15,975.90 $15,663
3/31/95 $17,519.90 $17,187
6/30/95 $19,376.60 $18,818
9/30/95 $20,355.60 $20,314
12/31/95 $21,383.80 $21,525
3/31/96 $23,078.30 $22,695
6/30/96 $23,349.40 $23,720
9/30/96 $24,027.20 $24,445
12/31/96 $26,350.50 $26,492
3/31/97 $26,273.60 $27,185
4/30/97 $26,730.90 $28,808
Average Annual Total Return* 1 Year 5 Year Since Inception
Class B(b) 5.78% 14.44% 16.78%
S & P 500 25.10% 17.08% 18.17%
</TABLE>
A $10,000 investment in the Equity Growth Fund, Class C, made on the inception
date would have increased to $28,294. The graph on the right shows how this
compares to our benchmark over the same period. Total return for the life of the
Fund was 17.84%.
The S&P 500 Index is an unmanaged index generally representative of the domestic
stock market.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS C S & P 500
<S> <C> <C> <C>
12/31/90 $10,000.00 $10,000
3/31/91 $11,669.60 $11,456
6/30/91 $11,851.70 $11,432
9/30/91 $12,342.20 $12,048
12/31/91 $13,111.90 $13,055
3/31/92 $13,551.20 $12,722
6/30/92 $13,638.70 $12,972
9/30/92 $14,150.40 $13,374
12/31/92 $15,250.50 $14,056
3/31/93 $16,008.50 $14,659
6/30/93 $16,208.60 $14,734
9/30/93 $17,106.50 $15,111
12/31/93 $18,055.80 $15,460
3/31/94 $17,113.20 $14,871
6/30/94 $16,292.70 $14,931
9/30/94 $17,043.80 $15,667
12/31/94 $16,559.00 $15,663
3/31/95 $18,175.80 $17,187
6/30/95 $20,157.40 $18,818
9/30/95 $21,224.70 $20,314
12/31/95 $22,355.30 $21,525
3/31/96 $24,172.50 $22,695
6/30/96 $24,527.90 $23,720
9/30/96 $25,285.80 $24,445
12/31/96 $27,798.30 $26,492
3/31/97 $27,788.90 $27,185
4/30/97 $28,294.00 $28,808
Average Annual Total Return* 1 Year 5 Year Since Inception
Class C 11.82% 15.56% 17.84%
S & P 500 25.10% 17.08% 18.17%
</TABLE>
(a) Returns reflect maximum sales load of 4.50%. Without the sales load, the
returns would have been 11.55%, 15.32% and 17.59% for the one year, five
year and since inception returns, respectively.
(b) Returns reflect the appropriate contingent deferred sales charges (maximum
deferred sales load is 5.00%). Without such charges, the returns would
have been 10.78%, 14.55% and 16.78% for the one year, five year and since
inception returns, respectively.
* The inception date for performance purposes is December 31, 1990. The
quoted performance of the Centura Equity Growth Fund includes performance
of certain collective trust funds ("Commingled Accounts") advised by
Centura Bank prior to the establishment of the Fund on June 1, 1994. On
that date, the assets of the Commingled Accounts were transferred to the
Fund in connection with its commencement of operations. The Commingled
Accounts were operated using substantially the same investment objective,
policies and techniques of the Fund. During that time, the Commingled
Accounts were not registered under the Investment Company Act of 1940 (the
"1940 Act") and therefore were not subject to certain investment
restrictions that are imposed under the 1940 Act. If the Commingled
Accounts had been registered under the 1940 Act, the Commingled Accounts'
performance may have been adversely affected. Because the Commingled
Accounts did not charge any expenses, its performance has been adjusted to
reflect the Fund's estimated expenses at the time of its inception, which
were 1.25%, 2.00% and 1.00% of average daily net assets for Class A, Class
B and Class C, respectively. The performance information for the period
subsequent to the Fund's inception also assumes reinvestment of all net
investment income and realized capital gains and takes into account actual
expenses of the appropriate share class.
Past performance is no guarantee. The investment return and NAV will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than the
original cost.
The total return set forth may reflect the waiver of a portion of the fund's
fees for certain periods. Without the waiver of fees, returns would have been
lower.
5
<PAGE>
EQUITY INCOME FUND
A $10,000 investment in the Equity Growth Fund, Class A, with a maximum sales
load of 4.50%, made on the inception date would have increased to $22,776. The
graph on the right shows how this compares to our benchmark over the same
period. Total return for the life of the Fund was 13.87%, reflecting the sales
load. Without the sales load, the return would have been 14.69%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS A S & P 500
<S> <C> <C> <C>
12/31/90 $9,547.30 $10,000
3/31/91 $10,123.40 $11,456
6/30/91 $10,123.40 $11,432
9/30/91 $10,617.30 $12,048
12/31/91 $11,378.60 $13,055
3/31/92 $11,316.90 $12,722
6/30/92 $11,728.40 $12,972
9/30/92 $12,222.20 $13,374
12/31/92 $12,592.60 $14,056
3/31/93 $13,271.60 $14,659
6/30/93 $13,374.50 $14,734
9/30/93 $14,135.80 $15,111
12/31/93 $14,279.80 $15,460
3/31/94 $13,827.10 $14,871
6/30/94 $13,888.90 $14,931
9/30/94 $14,588.50 $15,667
12/31/94 $13,868.30 $15,663
3/31/95 $15,102.90 $17,187
6/30/95 $16,131.70 $18,818
9/30/95 $17,057.60 $20,314
12/31/95 $18,333.30 $21,525
3/31/96 $19,197.50 $22,695
6/30/96 $19,938.20 $23,720
9/30/96 $20,576.10 $24,445
12/31/96 $22,127.10 $26,492
3/31/97 $22,330.50 $27,185
4/30/97 $22,776.00 $28,808
Average Annual Total Return* 1 Year 5 Year Since Inception
Class A(a) 12.15% 13.11% 13.87%
S & P 500 25.10% 17.08% 18.17%
</TABLE>
A $10,000 investment in the Equity Growth Fund, Class B, made on the inception
date would have increased to $22,724. The graph on the right shows how this
compares to our benchmark over the same period. Total return for the life of the
Fund was 13.83%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS B S & P 500
<S> <C> <C> <C>
12/31/90 $10,000.00 $10,000
3/31/91 $10,582.60 $11,456
6/30/91 $10,563.30 $11,432
9/30/91 $11,053.90 $12,048
12/31/91 $11,826.10 $13,055
3/31/92 $11,727.20 $12,722
6/30/92 $12,132.60 $12,972
9/30/92 $12,628.40 $13,374
12/31/92 $12,993.80 $14,056
3/31/93 $13,668.70 $14,659
6/30/93 $13,745.60 $14,734
9/30/93 $14,483.00 $15,111
12/31/93 $14,606.20 $15,460
3/31/94 $14,124.60 $14,871
6/30/94 $14,166.40 $14,931
9/30/94 $14,845.70 $15,667
12/31/94 $14,082.90 $15,663
3/31/95 $15,303.40 $17,187
6/30/95 $16,322.70 $18,818
9/30/95 $17,233.00 $20,314
12/31/95 $18,485.80 $21,525
3/31/96 $19,324.00 $22,695
6/30/96 $20,030.00 $23,720
9/30/96 $20,629.30 $24,445
12/31/96 $22,138.30 $26,492
3/31/97 $22,306.80 $27,185
4/30/97 $22,723.90 $28,808
Average Annual Total Return* 1 Year 5 Year Since Inception
Class B(b) 11.40% 13.16% 13.83%
S & P 500 25.10% 17.08% 18.17%
</TABLE>
A $10,000 investment in the Equity Growth Fund, Class C, made on the inception
date would have increased to $24,169. The graph on the right shows how this
compares to our benchmark over the same period. Total return for the life of the
Fund was 14.94%.
The S&P 500 Index is an unmanaged index generally representative of the domestic
stock market.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS C S & P 500
<S> <C> <C> <C>
12/31/90 $10,000.00 $10,000
3/31/91 $10,608.80 $11,456
6/30/91 $10,616.00 $11,432
9/30/91 $11,136.60 $12,048
12/31/91 $11,943.80 $13,055
3/31/92 $11,873.60 $12,722
6/30/92 $12,314.60 $12,972
9/30/92 $12,849.80 $13,374
12/31/92 $13,254.40 $14,056
3/31/93 $13,977.40 $14,659
6/30/93 $14,091.30 $14,734
9/30/93 $14,884.00 $15,111
12/31/93 $15,048.10 $15,460
3/31/94 $14,588.50 $14,871
6/30/94 $14,668.20 $14,931
9/30/94 $15,409.90 $15,667
12/31/94 $14,654.90 $15,663
3/31/95 $15,964.30 $17,187
6/30/95 $17,069.70 $18,818
9/30/95 $18,066.40 $20,314
12/31/95 $19,427.80 $21,525
3/31/96 $20,359.30 $22,695
6/30/96 $21,155.80 $23,720
9/30/96 $21,843.00 $24,445
12/31/96 $23,483.40 $26,492
3/31/97 $23,712.30 $27,185
4/30/97 $24,168.50 $28,808
Average Annual Total Return* 1 Year 5 Year Since Inception
Class C 17.41% 14.39% 14.94%
S & P 500 25.10% 17.08% 18.17%
</TABLE>
(a) Returns reflect maximum sales load of 4.50%. Without the sales load, the
returns would have been 17.33%, 14.15% and 14.69% for the one year, five
year and since inception returns, respectively.
(b) Returns reflect the appropriate contingent deferred sales charges (maximum
deferred sales load is 5.00%). Without such charges, the returns would
have been 16.40%, 13.28% and 13.83% for the one year, five year and since
inception returns, respectively.
* The inception date for performance purposes is December 31, 1990. The
quoted performance of the Centura Equity Income Fund includes performance
of certain collective trust funds ("Commingled Accounts") advised by
Centura Bank prior to the establishment of the Fund on June 1, 1994. On
that date, the assets of the Commingled Accounts were transferred to the
Fund in connection with its commencement of operations. The Commingled
Accounts were operated using substantially the same investment objective,
policies and techniques of the Fund. During that time, the Commingled
Accounts were not registered under the Investment Company Act of 1940 (the
"1940 Act") and therefore were not subject to certain investment
restrictions that are imposed under the 1940 Act. If the Commingled
Accounts had been registered under the 1940 Act, the Commingled Accounts'
performance may have been adversely affected. Because the Commingled
Accounts did not charge any expenses, its performance has been adjusted to
reflect the Fund's estimated expenses at the time of its inception, which
were 1.00%, 1.75% and 0.75% of average daily net assets for Class A, Class
B and Class C, respectively. The performance information for the period
subsequent to the Fund's inception also assumes reinvestment of all net
investment income and realized capital gains and takes into account actual
expenses of the appropriate share class.
Past performance is no guarantee. The investment return and NAV will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than the
original cost.
The total return set forth may reflect the waiver of a portion of the fund's
fees for certain periods. Without the waiver of fees, returns would have been
lower.
6
<PAGE>
FEDERAL SECURITIES INCOME FUND
A $10,000 investment in the Federal Securities Income Fund, Class A, with a
maximum sales load of 2.75%, made on the inception date would have increased to
$14,034. The graph on the right shows how this compares to our benchmark over
the same period. Total return for the life of the Fund was 5.49%, reflecting the
sales load. Without the sales load, the return would have been 5.95%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
INTERMEDIATE GOVERNMENT
CLASS A BOND INDEX
<S> <C> <C> <C>
12/31/90 $9,724.50 $10,000
3/31/91 $9,892.20 $10,220
6/30/91 $10,035.90 $10,393
9/30/91 $10,431.10 $10,886
12/31/91 $10,838.30 $11,411
3/31/92 $10,742.50 $11,291
6/30/92 $11,101.80 $11,729
9/30/92 $11,520.90 $12,243
12/31/92 $11,461.00 $12,202
3/31/93 $11,820.30 $12,672
6/30/93 $12,011.90 $12,921
9/30/93 $12,215.50 $13,193
12/31/93 $12,227.50 $13,214
3/31/94 $12,047.90 $12,970
6/30/94 $11,972.00 $12,897
9/30/94 $12,044.20 $12,996
12/31/94 $12,005.40 $12,984
3/31/95 $12,454.50 $13,524
6/30/95 $12,964.30 $14,157
9/30/95 $13,173.80 $14,375
12/31/95 $13,593.80 $14,857
3/31/96 $13,440.70 $14,778
6/30/96 $13,474.50 $14,878
9/30/96 $13,678.20 $15,133
12/31/96 $13,933.40 $15,483
3/31/97 $13,885.70 $15,478
4/30/97 $14,034.20 $15,653
Average Annual Total Return* 1 Year 5 Year Since Inception
Class A(a) 2.21% 4.71% 5.49%
Lehman Brothers 6.23% 6.25% 7.33%
Intermediate Government
Bond Index
</TABLE>
A $10,000 investment in the Federal Securities Income Fund, Class B, made on the
inception date would have increased to $13,781. The graph on the right shows how
this compares to our benchmark over the same period. Total return for the life
of the Fund was 5.19%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
INTERMEDIATE GOVERNMENT
CLASS B BOND INDEX
<S> <C> <C> <C>
12/31/90 $10,000.00 $10,000
3/31/91 $10,145.50 $10,220
6/30/91 $10,271.40 $10,393
9/30/91 $10,661.00 $10,886
12/31/91 $11,054.00 $11,411
3/31/92 $10,939.40 $11,291
6/30/92 $11,282.50 $11,729
9/30/92 $11,692.20 $12,243
12/31/92 $11,603.50 $12,202
3/31/93 $11,948.20 $12,672
6/30/93 $12,117.20 $12,921
9/30/93 $12,303.80 $13,193
12/31/93 $12,283.00 $13,214
3/31/94 $12,088.80 $12,970
6/30/94 $11,989.20 $12,897
9/30/94 $12,039.20 $12,996
12/31/94 $11,977.30 $12,984
3/31/95 $12,402.00 $13,524
6/30/95 $12,884.70 $14,157
9/30/95 $13,068.10 $14,375
12/31/95 $13,459.50 $14,857
3/31/96 $13,282.80 $14,778
6/30/96 $13,291.40 $14,878
9/30/96 $13,470.00 $15,133
12/31/96 $13,704.00 $15,483
3/31/97 $13,640.20 $15,478
4/30/97 $13,780.60 $15,653
Average Annual Total Return* 1 Year 5 Year Since Inception
Class B(b) 1.48% 4.40% 5.19%
Lehman Brothers 6.23% 6.25% 7.33%
Intermediate Government
Bond Index
</TABLE>
A $10,000 investment in the Federal Securities Income Fund, Class C, made on the
inception date would have increased to $14,656. The graph on the right shows how
this compares to our benchmark over the same period. Total return for the life
of the Fund was 6.22%.
The Lehman Brothers Intermediate Government Bond Index is an unmanaged index
generally representative of the bond market.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
INTERMEDIATE GOVERNMENT
CLASS C BOND INDEX
<S> <C> <C> <C>
12/31/90 $10,000.00 $10,000
3/31/91 $10,170.90 $10,220
6/30/91 $10,322.80 $10,393
9/30/91 $10,740.90 $10,886
12/31/91 $11,164.40 $11,411
3/31/92 $11,076.40 $11,291
6/30/92 $11,452.20 $11,729
9/30/92 $11,897.60 $12,243
12/31/92 $11,836.90 $12,202
3/31/93 $12,218.90 $12,672
6/30/93 $12,422.70 $12,921
9/30/93 $12,645.40 $13,193
12/31/93 $12,655.70 $13,214
3/31/94 $12,486.80 $12,970
6/30/94 $12,413.00 $12,897
9/30/94 $12,496.20 $12,996
12/31/94 $12,463.90 $12,984
3/31/95 $12,938.20 $13,524
6/30/95 $13,476.20 $14,157
9/30/95 $13,702.70 $14,375
12/31/95 $14,148.40 $14,857
3/31/96 $13,997.80 $14,778
6/30/96 $14,041.80 $14,878
9/30/96 $14,263.00 $15,133
12/31/96 $14,552.80 $15,483
3/31/97 $14,497.70 $15,478
4/30/97 $14,655.70 $15,653
Average Annual Total Return* 1 Year 5 Year Since Inception
Class C 5.33% 5.58% 6.22%
Lehman Brothers 6.23% 6.25% 7.33%
Intermediate Government
Bond Index
</TABLE>
(a) Returns reflect maximum sales load of 2.75%. Without the sales load, the
returns would have been 5.07%, 5.31% and 5.95% for the one year, five year
and since inception returns, respectively.
(b) Returns reflect the appropriate contingent deferred sales charges (maximum
deferred sales load is 3.00%). Without such charges, the returns would
have been 4.46%, 4.57% and 5.19% for the one year, five year and since
inception returns, respectively.
* The inception date for performance purposes is December 31, 1990. The
quoted performance of the Centura Federal Securities Fund includes
performance of certain collective trust funds ("Commingled Accounts")
advised by Centura Bank prior to the establishment of the Fund on June 1,
1994. On that date, the assets of the Commingled Accounts were transferred
to the Fund in connection with its commencement of operations. The
Commingled Accounts were operated using substantially the same investment
objective, policies and techniques of the Fund. During that time, the
Commingled Accounts were not registered under the Investment Company Act
of 1940 (the "1940 Act") and therefore were not subject to certain
investment restrictions that are imposed under the 1940 Act. If the
Commingled Accounts had been registered under the 1940 Act, the Commingled
Accounts' performance may have been adversely affected. Because the
Commingled Accounts did not charge any expenses, its performance has been
adjusted to reflect the Fund's estimated expenses at the time of its
inception, which were 0.94%, 1.69% and 0.69% of average daily net assets
for Class A, Class B and Class C, respectively. The performance
information for the period subsequent to the Fund's inception also assumes
reinvestment of all net investment income and realized capital gains and
takes into account actual expenses of the appropriate share class.
Past performance is no guarantee. The investment return and NAV will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than the
original cost.
The total return set forth may reflect the waiver of a portion of the fund's
fees for certain periods. Without the waiver of fees, returns would have been
lower.
7
<PAGE>
NORTH CAROLINA TAX-FREE BOND FUND
A $10,000 investment in the North Carolina Tax-Free Bond Fund, Class A, with a
maximum sales load of 2.75%, made on the inception date would have increased to
$13,015. The graph on the right shows how this compares to our benchmark over
the same period. Total return for the life of the Fund was 4.30%, reflecting the
sales load. Without the sales load, the return would have been 4.77%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
CLASS A MUNICIPAL BOND INDEX
<S> <C> <C> <C>
1/31/91 $9,727.50 $10,000
3/31/91 $9,682.10 $10,226
6/30/91 $9,761.60 $10,444
9/30/91 $10,045.40 $10,850
12/31/91 $10,329.10 $11,240
3/31/92 $10,306.40 $11,247
6/30/92 $10,544.80 $11,674
9/30/92 $10,749.10 $11,985
12/31/92 $10,874.00 $12,203
3/31/93 $11,101.00 $12,656
6/30/93 $11,293.90 $13,070
9/30/93 $11,623.10 $13,511
12/31/93 $11,736.60 $13,701
3/31/94 $11,328.00 $12,949
6/30/94 $11,253.00 $13,096
9/30/94 $11,299.10 $13,186
12/31/94 $11,252.40 $12,996
3/31/95 $11,771.10 $13,915
6/30/95 $11,985.10 $14,251
9/30/95 $12,266.30 $14,661
12/31/95 $12,632.60 $15,266
3/31/96 $12,485.30 $15,082
6/30/96 $12,481.90 $15,197
9/30/96 $12,652.00 $15,547
12/31/96 $12,951.40 $15,944
3/31/97 $12,930.40 $15,906
4/30/97 $13,015.00 $16,040
Average Annual Total Return* 1 Year 5 Year Since Inception
Class A(a) 1.87% 4.19% 4.30%
Lehman Brothers Intermediate Government Bond Index 6.65% 7.17% 7.74%
</TABLE>
A $10,000 investment in the North Carolina Tax-Free Bond Fund, Class B, made on
the inception date would have increased to $12,831. The graph on the right shows
how this compares to our benchmark over the same period. Total return for the
life of the Fund was 4.07%, reflecting the sales load.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
CLASS B MUNICIPAL BOND INDEX
<S> <C> <C> <C>
1/31/91 $10,000.00 $10,000
3/31/91 $9,943.00 $10,226
6/30/91 $10,005.80 $10,444
9/30/91 $10,272.30 $10,850
12/31/91 $10,544.40 $11,240
3/31/92 $10,502.60 $11,247
6/30/92 $10,736.80 $11,674
9/30/92 $10,920.20 $11,985
12/31/92 $11,030.40 $12,203
3/31/93 $11,245.20 $12,656
6/30/93 $11,418.10 $13,070
9/30/93 $11,743.80 $13,511
12/31/93 $11,837.80 $13,701
3/31/94 $11,401.80 $12,949
6/30/94 $11,317.60 $13,096
9/30/94 $11,337.10 $13,186
12/31/94 $11,269.00 $12,996
3/31/95 $11,766.90 $13,915
6/30/95 $11,958.80 $14,251
9/30/95 $12,216.90 $14,661
12/31/95 $12,557.80 $15,266
3/31/96 $12,388.00 $15,082
6/30/96 $12,361.70 $15,197
9/30/96 $12,509.50 $15,547
12/31/96 $12,776.80 $15,944
3/31/97 $12,753.10 $15,906
4/30/97 $12,831.30 $16,040
Average Annual Total Return* 1 Year 5 Year Since Inception
Class B(b) 1.13% 3.92% 4.07%
Lehman Brothers Intermediate Government Bond Index 6.65% 7.17% 7.74%
</TABLE>
A $10,000 investment in the North Carolina Tax-Free Bond Fund, Class C, made on
the inception date would have increased to $13,600. The graph on the right shows
how this compares to our benchmark over the same period. Total return for the
life of the Fund was 5.04%.
The Lehman Brothers Municipal Bond Index is an unmanaged index generally
representative of the municipal bond market.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
CLASS C MUNICIPAL BOND INDEX
<S> <C> <C> <C>
1/31/91 $10,000.00 $10,000
3/31/91 $9,959.60 $10,226
6/30/91 $10,047.50 $10,444
9/30/91 $10,340.70 $10,850
12/31/91 $10,640.90 $11,240
3/31/92 $10,625.30 $11,247
6/30/92 $10,886.70 $11,674
9/30/92 $11,096.50 $11,985
12/31/92 $11,232.60 $12,203
3/31/93 $11,476.10 $12,656
6/30/93 $11,677.60 $13,070
9/30/93 $12,036.50 $13,511
12/31/93 $12,158.80 $13,701
3/31/94 $11,736.40 $12,949
6/30/94 $11,674.70 $13,096
9/30/94 $11,730.40 $13,186
12/31/94 $11,689.20 $12,996
3/31/95 $12,235.40 $13,915
6/30/95 $12,466.20 $14,251
9/30/95 $12,767.10 $14,661
12/31/95 $13,156.60 $15,266
3/31/96 $13,011.30 $15,082
6/30/96 $13,015.90 $15,197
9/30/96 $13,201.50 $15,547
12/31/96 $13,522.40 $15,944
3/31/97 $13,508.80 $15,906
4/30/97 $13,599.90 $16,040
Average Annual Total Return* 1 Year 5 Year Since Inception
Class C 4.97% 5.05% 5.04%
Lehman Brothers Intermediate Government Bond Index 6.65% 7.17% 7.74%
</TABLE>
(a) Returns reflect maximum sales load of 2.75%. Without the sales load, the
returns would have been 4.71%, 4.78%, and 4.77% for the one year, five
year and since inception returns, respectively.
(b) Returns reflect the appropriate contingent deferred sales charges (maximum
deferred sales load is 3.00%). Without such charges, the returns would
have been 4.11%, 4.09% and 4.07% for the one year, five year and since
inception returns, respectively.
* The inception date for performance purposes is January 31, 1991. The
quoted performance of the Centura North Carolina Tax-Free Fund includes
performance of certain collective trust funds ("Commingled Accounts")
advised by Centura Bank prior to the establishment of the Fund on June 1,
1994. On that date, the assets of the Commingled Accounts were transferred
to the Fund in connection with its commencement of operations. The
Commingled Accounts were operated using substantially the same investment
objective, policies and techniques of the Fund. During that time, the
Commingled Accounts were not registered under the Investment Company Act
of 1940 (the "1940 Act") and therefore were not subject to certain
investment restrictions that are imposed under the 1940 Act. If the
Commingled Accounts had been registered under the 1940 Act, the Commingled
Accounts' performance may have been adversely affected. Because the
Commingled Accounts did not charge any expenses, its performance had been
adjusted to reflect the Fund's estimated expenses at the time of its
inception, which were 1.04%, 1.79% and 0.79% of average daily net assets
for Class A, Class B and Class C, respectively. The performance
information for the period subsequent to the Fund's inception also assumes
reinvestment of all net investment income and realized capital gains and
takes into account actual expenses of the appropriate share class.
Past performance is no guarantee. The investment return and NAV will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than the
original cost.
The total return set forth may reflect the waiver of a portion of the fund's
fees for certain periods. Without the waiver of fees, returns would have been
lower.
8
<PAGE>
CENTURA FUNDS, INC.
EQUITY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------------------------------------------- -------------
<C> <S> <C>
COMMON STOCKS -- 95.7%
AEROSPACE/DEFENSE -- 2.1%
35,000 Boeing Co. ..................................................................... $ 3,451,875
-------------
AIRLINES -- 1.7%
30,000 AMR Corp. (b) .................................................................. 2,793,750
-------------
BANKING & FINANCIAL SERVICES -- 1.4%
28,000 Mellon Bank Corp. .............................................................. 2,327,500
-------------
BEVERAGES -- 2.1%
100,000 PepsiCo, Inc. .................................................................. 3,487,500
-------------
CHEMICALS -- 5.2%
202,000 Cabot Corp. .................................................................... 4,444,000
78,100 Mississippi Chemical Corp. ..................................................... 1,718,200
125,000 Schulman, Inc. ................................................................. 2,375,000
-------------
8,537,200
-------------
COMPUTER EQUIPMENT -- 0.9%
30,000 Cisco Systems, Inc. (b) ........................................................ 1,552,500
-------------
CONSUMER DURABLES -- 3.3%
110,000 Briggs & Stratton Corp. ........................................................ 5,403,750
-------------
CONSUMER NON-DURABLE -- 6.2%
180,000 Archer-Daniels-Midland Co. ..................................................... 3,307,500
30,000 Colgate Palmolive Co. .......................................................... 3,330,000
150,000 IBP, Inc. ...................................................................... 3,562,500
-------------
10,200,000
-------------
CONSUMER SERVICES -- 2.9%
120,000 Dow Jones and Co., Inc. ........................................................ 4,860,000
-------------
CONSUMER STAPLES -- 2.7%
120,000 Millipore Corp. ................................................................ 4,530,000
-------------
ELECTRICAL & ELECTRONICS -- 1.2%
54,000 AMP, Inc. ...................................................................... 1,937,250
-------------
ELECTRICAL EQUIPMENT -- 2.7%
40,000 General Electric Co. ........................................................... 4,435,179
-------------
ELECTRONICS -- 0.3%
23,600 Lexmark International Group, Inc. (b) .......................................... 548,700
-------------
ENERGY -- 4.9%
40,000 Amoco Corp. .................................................................... 3,345,000
160,000 Tosco Corp. .................................................................... 4,740,000
-------------
8,085,000
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
CENTURA FUNDS, INC.
EQUITY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------------------------------------------- -------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
FINANCIAL SERVICES -- 3.8%
72,000 American Express Co. ........................................................... $ 4,741,298
55,000 Equifax, Inc. .................................................................. 1,564,260
-------------
6,305,558
-------------
HEALTH CARE -- 3.8%
175,000 Allegiance Corp. ............................................................... 3,871,875
125,000 Trigon Healthcare, Inc. (b) .................................................... 2,375,000
-------------
6,246,875
-------------
HOUSEHOLD PRODUCTS -- 1.9%
200,000 Dial Corp. ..................................................................... 3,100,000
-------------
INSURANCE -- 8.4%
20,000 General Re Corp. ............................................................... 3,345,000
96,000 Jefferson-Pilot Corp. .......................................................... 5,544,000
90,000 Provident Companies, Inc. ...................................................... 5,028,750
-------------
13,917,750
-------------
LEISURE -- 1.7%
100,000 Brunswick Corp. ................................................................ 2,825,000
-------------
MEDICAL -- BIOTECHNOLOGY -- 1.7%
47,100 Genentech, Inc. (b) ............................................................ 2,761,238
-------------
MINING -- 2.7%
58,300 Potash Corp. of Saskatchewan, Inc. ............................................. 4,481,812
-------------
OIL/GAS EXPLORATION -- 2.3%
130,000 Dresser Industries, Inc. ....................................................... 3,883,750
-------------
PHARMACEUTICALS -- 5.0%
65,000 Rhone-Poulenc Rorer ............................................................ 4,688,125
77,500 R.P. Scherer Corp. (b) ......................................................... 3,565,000
-------------
8,253,125
-------------
PUBLISHING & PRINTING -- 0.7%
50,000 Readers Digest Association, Inc. ............................................... 1,150,000
-------------
RETAIL -- 2.1%
125,000 Wal-Mart Stores, Inc. .......................................................... 3,531,250
-------------
RETAIL -- DEPARTMENT STORE -- 2.1%
79,000 Dayton Hudson Corp. ............................................................ 3,555,000
-------------
RETAIL -- GROCERY -- 2.0%
120,000 Kroger Co. (b) ................................................................. 3,300,000
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
CENTURA FUNDS, INC.
EQUITY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------------------------------------------- -------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
STEEL/IRON -- 3.0%
100,000 Nucor Corp. .................................................................... $4,975,000
-------------
TECHNOLOGY -- 6.6%
63,000 Computer Science Corp. (b) ..................................................... 3,937,500
24,000 International Business Machines Corp. .......................................... 3,858,000
64,000 Varian Associates, Inc. ........................................................ 3,080,000
-------------
10,875,500
-------------
TELECOMMUNICATIONS -- 3.2%
65,000 AT & T Corp. ................................................................... 2,177,500
55,000 Motorola, Inc. ................................................................. 3,148,750
-------------
5,326,250
-------------
TEXTILES -- 2.8%
150,000 Unifi, Inc. .................................................................... 4,650,000
-------------
TRANSPORTATION -- AIR -- 1.6%
50,000 Kansas City Southern Industries ................................................ 2,575,000
-------------
UTILITIES -- 1.3%
50,000 Duke Power Company, Inc. ....................................................... 2,193,750
-------------
UTILITIES -- ELECTRIC -- 1.4%
110,000 Southern Co. ................................................................... 2,241,250
-------------
TOTAL COMMON STOCKS (COST $132,253,397) ........................................ 158,298,312
-------------
U.S. GOVERNMENT OBLIGATIONS -- 3.0%
$5,000,000 U.S. Treasury Bills, 5/22/97 ................................................... 4,983,931
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $4,985,008) ............................ 4,983,931
-------------
INVESTMENT COMPANIES -- 1.6%
1,796,959 Financial Square Prime Money Market Fund ....................................... 1,796,959
957,617 Temporary Investment Fund ...................................................... 957,617
-------------
TOTAL INVESTMENT COMPANIES (COST $2,754,576) ................................... 2,754,576
-------------
TOTAL INVESTMENTS (COST $139,992,981) (A) -- 100.3% ............................ 166,036,819
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.3%) ................................ (561,525)
-------------
NET ASSETS -- 100.0% ........................................................... $165,475,294
-------------
-------------
</TABLE>
- -------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $30,060,110
Unrealized depreciation............................................. (4,016,272)
-------------
Net unrealized appreciation......................................... $26,043,838
-------------
-------------
</TABLE>
(b) Non-income producing securities
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
CENTURA FUNDS, INC.
EQUITY INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 1997
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS -- 85.7%
AEROSPACE/DEFENSE -- 1.9%
10,000 Boeing Co. ....................................................................... $ 986,250
------------
BANKING & FINANCIAL SERVICES -- 3.6%
12,000 Mellon Bank Corp. ................................................................ 997,500
13,500 CCB Financial Corp. .............................................................. 916,312
------------
1,913,812
------------
BEVERAGES -- 0.7%
9,500 Coca-Cola Bottling Co. ........................................................... 368,125
------------
BUSINESS EQUIPMENT & SERVICES -- 3.2%
89,000 Rollins Inc. ..................................................................... 1,713,250
------------
CHEMICALS -- 3.7%
20,000 Goodrich (B. F.) Co. ............................................................. 797,500
35,000 Lubrizol Corp. ................................................................... 1,146,250
------------
1,943,750
------------
CONSUMER DURABLES -- 1.8%
20,000 Briggs & Stratton Corp. .......................................................... 982,500
------------
CONSUMER SERVICES -- 6.1%
40,000 Dow Jones and Co., Inc. .......................................................... 1,620,000
35,000 Tambrands, Inc. .................................................................. 1,645,000
------------
3,265,000
------------
ELECTRICAL & ELECTRONICS -- 1.1%
16,000 AMP, Inc. ........................................................................ 574,000
------------
ELECTRICAL EQUIPMENT -- 2.7%
13,000 General Electric Co. ............................................................. 1,441,375
------------
ENERGY -- 5.6%
16,000 Amoco Corp. ...................................................................... 1,338,000
9,000 Royal Dutch Petroleum Co. ........................................................ 1,622,250
------------
2,960,250
------------
ENTERTAINMENT -- 2.6%
30,500 Time Warner, Inc. ................................................................ 1,372,500
------------
FOOD -- 5.0%
40,000 Flowers Industries, Inc. ......................................................... 975,000
95,000 Lance Inc. ....................................................................... 1,721,875
------------
2,696,875
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
CENTURA FUNDS, INC.
EQUITY INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1997
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
GAS UTILITY -- 1.7%
40,000 UGI Corp. ........................................................................ $ 910,000
------------
HEALTH CARE -- 4.9%
22,000 Abbott Labratories ............................................................... 1,342,000
19,000 American Home Products Corp. ..................................................... 1,258,750
------------
2,600,750
------------
HOUSEHOLD PRODUCTS -- 2.1%
50,000 Bassett Furniture Industries, Inc. ............................................... 1,131,250
------------
INSURANCE -- 2.3%
21,000 Jefferson-Pilot Corp. ............................................................ 1,212,750
------------
MINING -- 2.0%
14,000 Potash Corp. of Saskatchewan, Inc. ............................................... 1,076,250
------------
NATURAL GAS UTILITY -- 0.7%
16,000 Piedmont Natural Gas Co., Inc. ................................................... 376,000
------------
OIL/GAS EXPLORATION -- 2.6%
12,500 Schlumberger Ltd. ................................................................ 1,384,375
------------
PHARMACEUTICALS -- 2.5%
34,000 Glaxo Holdings, ADR .............................................................. 1,338,750
------------
POLLUTION CONTROL -- 2.2%
40,000 WMX Technologies, Inc. ........................................................... 1,175,000
------------
PUBLISHING & PRINTING -- 1.9%
44,700 Readers Digest Association, Inc., Class A ........................................ 1,028,100
------------
RAW MATERIALS -- 4.2%
18,000 Aluminum Co. of America .......................................................... 1,257,750
9,000 DuPont (E I) De Nemours .......................................................... 955,125
------------
2,212,875
------------
REAL ESTATE INVESTMENT TRUST -- 2.6%
44,700 Highwoods Properties Inc. ........................................................ 1,391,288
------------
RETAIL -- 2.7%
30,000 J.C. Penney, Inc. ................................................................ 1,432,500
------------
RETAIL -- GROCERY -- 2.1%
80,000 Ingles Markets Inc., Class A ..................................................... 1,100,000
------------
TECHNOLOGY -- 2.7%
9,000 International Business Machines, Corp. ........................................... 1,446,750
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
CENTURA FUNDS, INC.
EQUITY INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1997
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
TELECOMMUNICATIONS -- 4.2%
25,000 AT & T Corp. ..................................................................... $ 837,500
31,000 Bell South, Corp. ................................................................ 1,379,500
------------
2,217,000
------------
TOBACCO -- 2.5%
48,000 Universal Corp. .................................................................. 1,344,000
------------
UTILITIES -- 1.7%
20,000 GTE Corp. ........................................................................ 917,500
------------
UTILITIES -- ELECTRIC -- 2.1%
55,000 Southern Co. ..................................................................... 1,120,625
------------
TOTAL COMMON STOCKS (COST $37,230,324) ........................................... 45,633,450
------------
PREFERRED STOCKS -- 10.1%
COMPUTER SERVICES -- 2.4%
15,000 Microsoft Corp. .................................................................. 1,284,374
------------
FINANCIAL SERVICES -- 2.6%
36,500 Time Warner Financial ............................................................ 1,350,500
------------
FOOD -- 2.4%
27,000 Chiquita Brands .................................................................. 1,289,250
------------
OIL/GAS -- 2.7%
27,000 Tejas Gas Corp. .................................................................. 1,444,500
------------
TOTAL PREFERRED STOCKS (COST $4,805,410) ......................................... 5,368,624
------------
INVESTMENT COMPANIES -- 4.1%
1,103,965 Financial Square Prime Money Market Fund ......................................... 1,103,965
1,103,965 Temporary Investment Fund ........................................................ 1,103,965
------------
TOTAL INVESTMENT COMPANIES (COST $2,207,929) ..................................... 2,207,930
------------
TOTAL INVESTMENTS (COST $44,243,663) (A) -- 99.9% ................................ 53,210,004
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1% .................................... 40,693
------------
NET ASSETS -- 100.0% ............................................................. $ 53,250,697
------------
------------
</TABLE>
- -------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 10,599,425
Unrealized depreciation............................................. (1,633,084)
-------------
Net unrealized appreciation......................................... $ 8,966,341
-------------
-------------
</TABLE>
ADR -- American Depository Receipts
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
CENTURA FUNDS, INC.
FEDERAL SECURITIES INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------------------------------------------- -------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 21.6%
FEDERAL FARM CREDIT BANK -- 6.5%
$ 3,000,000 7.13%, 8/8/01 .................................................................. $ 2,997,870
3,000,000 5.94%, 1/23/01 ................................................................. 2,917,740
2,000,000 5.84%, 11/21/03 ................................................................ 1,901,680
-------------
7,817,290
-------------
FEDERAL HOME LOAN BANK -- 6.7%
2,000,000 7.89%, 12/23/97 ................................................................ 2,025,560
3,000,000 7.02%, 7/6/99 .................................................................. 3,045,390
3,000,000 6.83%, 6/7/01 .................................................................. 2,996,520
-------------
8,067,470
-------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 1.7%
2,000,000 7.35%, 6/1/05 .................................................................. 1,989,000
-------------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 6.7%
2,000,000 7.29%, 9/29/99 ................................................................. 2,011,580
3,000,000 7.40%, 7/1/04 .................................................................. 3,093,480
3,000,000 7.47%, 5/3/06 .................................................................. 2,992,170
-------------
8,097,230
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $26,093,913) .................... 25,970,990
-------------
U.S. GOVERNMENT OBLIGATIONS -- 71.1%
U.S. TREASURY NOTES -- 71.1%
3,000,000 5.50%, 9/30/97 ................................................................. 2,998,290
5,000,000 5.25%, 7/31/98 ................................................................. 4,954,950
7,000,000 7.13%, 10/15/98 ................................................................ 7,101,990
5,000,000 5.13%, 12/31/98 ................................................................ 4,920,250
5,000,000 6.38%, 1/15/99 ................................................................. 5,018,950
5,000,000 7.00%, 4/15/99 ................................................................. 5,067,750
5,000,000 8.00%, 8/15/99 ................................................................. 5,175,600
5,000,000 7.75%, 11/30/99 ................................................................ 5,160,150
5,000,000 8.50%, 2/15/00 ................................................................. 5,263,450
5,000,000 7.13%, 2/29/00 ................................................................. 5,090,500
5,000,000 6.38%, 8/15/02 ................................................................. 4,958,500
5,000,000 5.75%, 8/15/03 ................................................................. 4,778,550
5,000,000 7.88%, 11/15/04 ................................................................ 5,343,000
5,000,000 6.50%, 5/15/05 ................................................................. 4,932,300
5,000,000 6.50%, 8/15/05 ................................................................. 4,927,150
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
CENTURA FUNDS, INC.
FEDERAL SECURITIES INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------------------------------------------- -------------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS -- (CONTINUED)
U.S. TREASURY NOTES -- (CONTINUED)
$5,000,000 6.50%, 10/15/06 ................................................................ $ 4,916,800
5,000,000 6.25%, 2/15/07 ................................................................. 4,836,200
-------------
85,444,380
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $85,730,435) ........................... 85,444,380
-------------
INVESTMENT COMPANIES -- 6.2%
3,211,302 Financial Square Treasury Short Term Money Market Fund ......................... 3,211,302
4,229,954 Trust for Federal Securities -- Treasury Money Market Fund ..................... 4,229,954
-------------
TOTAL INVESTMENT COMPANIES (COST $7,441,256) ................................... 7,441,256
-------------
TOTAL INVESTMENTS (COST $119,265,604) (A) -- 98.9% ............................. 118,856,626
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.1% .................................. 1,252,174
-------------
NET ASSETS -- 100.0% ........................................................... $ 120,108,800
-------------
-------------
</TABLE>
- -------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 653,081
Unrealized depreciation............................................. (1,062,059)
-------------
Net unrealized depreciation......................................... $ (408,978)
-------------
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
CENTURA FUNDS, INC.
NORTH CAROLINA TAX-FREE BOND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- --------------------------------------------------------------------------------- ------------
<C> <S> <C>
NORTH CAROLINA MUNICIPAL OBLIGATIONS -- 97.4%
$1,000,000 Buncombe County UTGO, Refunding, 5.00%, 3/1/01 .................................. $ 1,015,000
935,000 Cabarrus County GO, 5.30%, 2/1/08, Callable 2/1/07 @ 100.5 ...................... 944,350
500,000 Carteret County, (MBIA), 5.40%, 5/1/07, Callable 5/1/06 @ 100.5 ................. 508,750
1,000,000 Carteret County GO, 5.40%, 5/1/09 ............................................... 1,011,250
1,000,000 Catawba County UTGO, 4.60%, 6/1/05 .............................................. 978,750
1,500,000 Charlotte UTGO, Refunding, 5.10%, 6/1/09 ........................................ 1,498,125
1,000,000 Charlotte Mecklenberg Hospital Authority Health Care System, Revenue, Refunding,
6.00%, 1/1/04 ................................................................. 1,060,000
500,000 Chatham County, 5.40%, 4/1/12, Callable 4/1/06 @ 102 ............................ 496,250
1,400,000 Cleveland County UTGO, (FGIC), Refunding, 5.10%, 6/1/07 ......................... 1,387,750
1,630,000 Concord North Carolina Utilities Systems RB, 6.00%, 12/1/10, Callable 12/1/02 @
102 ........................................................................... 1,705,388
1,000,000 Craven County GO, 5.40%, 6/1/02 ................................................. 1,031,250
1,535,000 Cumberland County Civic Center Project, Series A, CP, (AMBAC), 6.20%, 12/1/07 ... 1,650,125
880,000 Durham County GO, 5.75%, 2/1/07, Callable 2/1/02 @ 102 .......................... 920,700
1,280,000 Fayetteville Public Works, Series A, Revenue, (AMBAC), 5.25%, 3/1/08 ............ 1,280,000
850,000 Gaston County UTGO, (MBIA), 5.70%, 3/1/04 ....................................... 893,562
1,000,000 Gaston County UTGO, (MBIA), 5.70%, 3/1/05 ....................................... 1,052,500
700,000 Gastonia County UTGO, (FGIC), 5.20%, 4/1/01 ..................................... 714,000
1,000,000 Greensboro Public Improvement, Series B, UTGO, 5.40%, 4/1/04 .................... 1,030,000
1,000,000 Guilford County UTGO, Refunding, 4.90%, 4/1/01 .................................. 1,007,500
1,000,000 Lee County GO, 5.00%, 4/1/06 .................................................... 998,750
1,000,000 Lincoln County GO, 4.70%, 6/1/99 ................................................ 1,008,750
1,500,000 North Carolina Municipal Power Agency #1, Catawba Electric Revenue, (MBIA)
Refunding, 5.25%, 1/1/09 ...................................................... 1,486,875
1,000,000 Onslow County UTGO, 5.60%, 3/1/05 ............................................... 1,035,000
1,050,000 Orange County UTGO, Refunding, 5.10%, 6/1/03 .................................... 1,067,062
1,000,000 Pitt County UTGO, Refunding, 5.10%, 2/1/06 ...................................... 998,750
625,000 Pitt County CP, 5.35%, 4/1/07 ................................................... 625,781
1,250,000 Raleigh UTGO, Refunding, 6.40%, 3/1/02 .......................................... 1,337,500
1,000,000 Union City GO, 4.80%, 5/1/05 .................................................... 991,250
1,000,000 University of North Carolina Hospital at Chapel Hill, RB, 4.45%, 2/15/03 ........ 987,500
1,460,000 University of North Carolina, Utility System RB, Refunding, 5.00%, 8/1/09 ....... 1,412,550
1,275,000 Wilkes County UTGO, Refunding, 5.20%, 6/1/05 .................................... 1,278,188
1,000,000 Winston Salem CP, 5.30%, 6/1/09 ................................................. 992,500
1,000,000 Winston-Salem Water & Sewer System RB, 6.30%, 6/1/06 ............................ 1,081,250
------------
TOTAL MUNICIPAL BONDS (COST $35,278,481) ........................................ 35,486,956
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
CENTURA FUNDS, INC.
NORTH CAROLINA TAX-FREE BOND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- --------------------------------------------------------------------------------- ------------
<C> <S> <C>
INVESTMENT COMPANIES -- 3.2%
$ 578,198 Institutional Liquid Assets Tax-Free Money Market Fund .......................... $ 578,198
578,198 PNC Investment Money Market Fund ................................................ 578,198
------------
TOTAL INVESTMENT COMPANIES (COST $1,156,396) .................................... 1,156,396
------------
TOTAL INVESTMENTS (COST $36,434,877) (A) -- 100.6% .............................. 36,643,352
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.6%) ................................. (232,301)
------------
NET ASSETS -- 100.0% ............................................................ $ 36,411,051
------------
------------
</TABLE>
- -------------
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................... $ 394,480
Unrealized depreciation............................................... (186,005)
-------------
Net unrealized appreciation........................................... $ 208,475
-------------
-------------
</TABLE>
AMBAC -- AMBAC Indemnity Corporation
CP -- Certificate of Participation
GO -- General Obligation
MBIA -- Municipal Bond Insurance Association
RB -- Revenue Bond
UTGO -- Unlimited Tax General Obligation
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
CENTURA FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 1997
<TABLE>
<CAPTION>
FEDERAL NORTH
EQUITY EQUITY SECURITIES CAROLINA
GROWTH INCOME INCOME TAX-FREE
FUND FUND FUND BOND FUND
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (Cost $139,992,981; $44,243,663;
$119,265,604; and $36,434,877 respectively) .......... $ 166,036,819 $ 53,210,004 $ 118,856,626 $ 36,643,352
Interest and dividends receivable ...................... 205,792 150,296 1,916,962 555,180
Receivable for capital shares issued ................... 32,049 101,736 -- --
Receivable from brokers for investments sold ........... 1,082,899 -- -- --
Unamortized organization costs ......................... 15,362 -- 20,317 6,773
------------- ------------ ------------- ------------
Total Assets ....................................... 167,372,921 53,462,036 120,793,905 37,205,305
------------- ------------ ------------- ------------
LIABILITIES:
Dividends payable ...................................... 36,564 127,153 578,052 136,741
Payable to brokers for investments purchased ........... 1,564,260 -- -- 620,225
Payable for capital shares issued ...................... 18,343 1,375 -- 100
Accrued expenses and other payables:
Investment advisory fees ............................. 93,331 15,526 29,552 3,031
Administration fees .................................. 3,486 546 2,552 225
Distribution fees -- Class A ......................... 9,402 302 213 1,044
Legal and audit fees ................................. 43,584 22,464 35,626 20,079
Printing costs ....................................... 20,068 9,149 10,877 2,372
Fund accounting and transfer agent fees .............. 92,430 23,613 18,084 7,786
Custodian fees ....................................... 15,713 10,467 9,741 2,420
Other liabilities .................................... 446 744 408 231
------------- ------------ ------------- ------------
Total Liabilities .................................. 1,897,627 211,339 685,105 794,254
------------- ------------ ------------- ------------
NET ASSETS:
Shares of beneficial interest outstanding (par value
$.001 per share) 600,000,000 shares authorized ....... 10,797 4,888 12,078 3,647
Additional paid-in-capital ............................. 112,888,659 40,414,919 120,926,983 36,320,166
Accumulated undistributed net investment income ........ -- -- -- 3,300
Accumulated undistributed net realized gains (losses)
from investment transactions ......................... 26,532,000 3,864,549 (421,283) (124,537)
Net unrealized appreciation (depreciation) from
investments .......................................... 26,043,838 8,966,341 (408,978) 208,475
------------- ------------ ------------- ------------
Net Assets ......................................... $ 165,475,294 $ 53,250,697 $ 120,108,800 $ 36,411,051
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
Class A:
Net Assets ........................................... $ 8,501,009 $ 337,971 $ 480,938 $ 3,822,950
Shares Outstanding ................................... 554,682 30,972 48,378 382,886
Net Asset Value Per Share ............................ $15.33 $10.91 $9.94 $9.98
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
Maximum Sales Charge ................................. 4.50% 4.50% 2.75% 2.75%
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
Maximum Offering Price Per Share (100%/(100% --
Maximum Sales Charge) of net asset value adjusted to
the nearest cent) per share ........................ $16.05 $11.42 $10.22 $10.26
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
Class B:
Net Assets ........................................... $ 9,761,420 $ 426,607 $ 193,946 $ 429,500
Shares Outstanding ................................... 642,044 39,225 19,509 43,022
Net Asset Value Per Share ............................ $15.20 $10.88 $9.94 $9.98
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
Class C:
Net Assets ........................................... $ 147,212,865 $ 52,486,119 $ 119,433,916 $ 32,158,601
Shares Outstanding ................................... 9,600,522 4,817,568 12,010,384 3,220,915
Net Asset Value Per Share ............................ $15.33 $10.89 $9.94 $9.98
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
CENTURA FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1997
<TABLE>
<CAPTION>
FEDERAL NORTH
EQUITY EQUITY SECURITIES CAROLINA
GROWTH INCOME INCOME TAX-FREE
FUND FUND(a) FUND BOND FUND
-------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income ................................ $ 353,475 $ 58,404 $7,423,464 $ 1,971,868
Dividend income ................................ 2,412,651 933,834 277,526 38,855
-------------- ------------ ------------ ------------
Total income.................................. 2,766,126 992,238 7,700,990 2,010,723
-------------- ------------ ------------ ------------
EXPENSES:
Investment advisory fees........................ 1,127,435 217,106 358,174 140,821
Administration fees............................. 241,593 46,523 179,087 60,352
Distribution fees -- Class A.................... 36,184 525 2,690 19,193
Distribution fees -- Class B.................... 80,683 710 1,931 4,199
Custodian fees.................................. 59,019 23,036 31,324 15,400
Accounting fees................................. 28,792 19,212 31,735 39,742
Legal and audit fees............................ 71,905 24,909 48,729 29,313
Trustees' fees and expenses..................... 9,466 5,340 4,840 1,731
Transfer agent fees............................. 101,541 16,260 13,117 11,109
Registration and filing fees.................... 9,359 2,314 6,033 6,078
Printing costs.................................. 30,092 7,440 7,609 3,019
Other expenses.................................. 5,020 493 6,066 13,617
-------------- ------------ ------------ ------------
Total expenses before voluntary fee
reductions.................................. 1,801,089 363,868 691,335 344,574
Expenses voluntarily reduced.................. (18,092) (129,595) (1,828) (154,284)
-------------- ------------ ------------ ------------
Net expenses.................................... 1,782,997 234,273 689,507 190,290
-------------- ------------ ------------ ------------
Net investment income............................. 983,129 757,965 7,011,483 1,820,433
-------------- ------------ ------------ ------------
REALIZED/UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS:
Net realized gains (losses) from investment
transactions.................................. 30,002,586 3,967,356 (421,283) (121,237)
Net change in unrealized appreciation/
depreciation from investments................. (11,207,750) 638,500 (348,816) 294,839
-------------- ------------ ------------ ------------
Net realized/unrealized gains (losses) from
investments................................... 18,794,836 4,605,856 (770,099) 173,602
-------------- ------------ ------------ ------------
Change in net assets resulting from operations.... $ 19,777,965 $ 5,363,821 $6,241,384 $ 1,994,035
-------------- ------------ ------------ ------------
-------------- ------------ ------------ ------------
</TABLE>
- ------------
(a) For the period from October 1, 1996 (commencement of operations) to April
30, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
CENTURA FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
EQUITY EQUITY FEDERAL SECURITIES
GROWTH FUND INCOME FUND INCOME FUND
---------------------------- --------------- ----------------------------
FOR THE YEAR FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED ENDED
APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30,
1997 1996 1997(A) 1997 1996
------------- ------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income.............. $ 983,129 $ 583,300 $ 757,965 $ 7,011,483 $ 6,103,135
Net realized gains (losses) from
investment transactions.......... 30,002,586 5,486,387 3,967,356 (421,283) 304,345
Net change in unrealized
appreciation/depreciation from
investments...................... (11,207,750) 28,573,774 638,500 (348,816) (266,951)
------------- ------------- --------------- ------------- -------------
Change in net assets resulting from
operations......................... 19,777,965 34,643,461 5,363,821 6,241,384 6,140,529
------------- ------------- --------------- ------------- -------------
DISTRIBUTIONS FROM NET INVESTMENT
INCOME:
Class A.......................... (28,839) (9,804) (2,507) (30,280) (19,788)
Class B.......................... (3,989) (1,144) (1,604) (9,729) (8,208)
Class C.......................... (950,301) (572,220) (753,854) (6,971,474) (6,075,139)
------------- ------------- --------------- ------------- -------------
Total distributions from net
investment income................ (983,129) (583,168) (757,965) (7,011,483) (6,103,135)
------------- ------------- --------------- ------------- -------------
DISTRIBUTIONS FROM CAPITAL GAINS:
Class A.......................... (283,432) (12,445) (221) (171) --
Class B.......................... (322,055) (14,106) (127) (65) --
Class C.......................... (5,790,963) (432,003) (102,459) (38,775) --
------------- ------------- --------------- ------------- -------------
Total distributions from capital
gains............................ (6,396,450) (458,554) (102,807) (39,011) --
------------- ------------- --------------- ------------- -------------
Total Distributions.................. (7,379,579) (1,041,722) (860,772) (7,050,494) (6,103,135)
------------- ------------- --------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Total proceeds from sales of
shares:.......................... 44,819,658 42,312,114 57,125,785 31,072,500 28,954,453
Total proceeds of shares issued in
reinvestment of dividends:....... 5,223,588 749,529 342,774 4,090,678 3,649,135
Total cost of shares redeemed:..... (42,614,739) (17,349,109) (8,720,911) (24,722,945) (16,335,762)
------------- ------------- --------------- ------------- -------------
Change in net assets from share
transactions....................... 7,428,507 25,712,534 48,747,648 10,440,233 16,267,826
------------- ------------- --------------- ------------- -------------
Change in net assets................. 19,826,893 59,314,273 53,250,697 9,631,123 16,305,220
NET ASSETS:
Beginning of period................ 145,648,401 86,334,128 -- 110,477,677 94,172,457
------------- ------------- --------------- ------------- -------------
End of period...................... $ 165,475,294 $ 145,648,401 $ 53,250,697 $ 120,108,800 $ 110,477,677
------------- ------------- --------------- ------------- -------------
------------- ------------- --------------- ------------- -------------
SHARE TRANSACTIONS:
Issued............................. 3,129,448 3,430,567 5,662,614 3,105,195 2,838,555
Reinvested......................... 346,962 60,527 31,912 408,648 357,299
Redeemed........................... (2,859,406) (1,376,172) (806,761) (2,475,427) (1,602,427)
------------- ------------- --------------- ------------- -------------
Change in shares..................... 617,004 2,114,922 4,887,765 1,038,416 1,593,427
------------- ------------- --------------- ------------- -------------
------------- ------------- --------------- ------------- -------------
</TABLE>
- -------------
(a) For the period from October 1, 1996 (commencement of operations) to April
30, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
CENTURA FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
<TABLE>
<CAPTION>
NORTH CAROLINA
TAX-FREE BOND FUND
----------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
APRIL 30, APRIL 30,
1997 1996
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income....................................................... $ 1,820,433 $ 1,695,259
Net realized gains (losses) from investment transactions.................... (121,237) 792,820
Net Change in unrealized appreciation/depreciation from investments......... 294,839 (318,669)
------------- -------------
Change in net assets resulting from operations................................ 1,994,035 2,169,410
------------- -------------
DISTRIBUTIONS FROM NET INVESTMENT INCOME:.....................................
Class A................................................................... (165,050) (82,525)
Class B................................................................... (15,612) (10,750)
Class C................................................................... (1,636,471) (1,601,984)
------------- -------------
Total distributions from net investment income.............................. (1,817,133) (1,695,259)
------------- -------------
DISTRIBUTIONS FROM CAPITAL GAINS:
Class A................................................................... (35,190) (17,195)
Class B................................................................... (3,918) (2,298)
Class C................................................................... (325,775) (274,060)
------------- -------------
Total distributions from capital gains...................................... (364,883) (293,553)
------------- -------------
Total Distributions........................................................... (2,182,016) (1,988,812)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Total proceeds from sales of shares:........................................ 5,467,800 15,935,885
Total proceeds of shares issued in reinvestment of dividends:............... 261,076 155,004
Total cost of shares redeemed............................................... (10,459,064) (10,531,042)
------------- -------------
Change in net assets from share transactions.................................. (4,730,188) 5,559,847
------------- -------------
Change in net assets.......................................................... (4,918,169) 5,740,445
NET ASSETS:
Beginning of period......................................................... 41,329,220 35,588,775
------------- -------------
End of period (including undistributed net investment income of $3,300 and
$0, respectively)......................................................... $ 36,411,051 $ 41,329,220
------------- -------------
------------- -------------
SHARE TRANSACTIONS:
Issued...................................................................... 545,043 1,567,952
Reinvested.................................................................. 25,967 15,138
Redeemed.................................................................... (1,042,355) (1,030,664)
------------- -------------
Change in shares.............................................................. (471,345) 552,426
------------- -------------
------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997
1. DESCRIPTION -- Centura Funds, Inc. (the "Company") is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company, organized under the laws of the State of Maryland on March
1, 1994. The company currently consists of four separate investment portfolios:
Centura Equity Growth Fund, Centura Federal Securities Income Fund, Centura
North Carolina Tax-Free Bond Fund, and Centura Equity Income Fund (collectively,
the "Funds"). The Funds, with the exception of Equity Income Fund, which
commenced operations on October 1, 1996, commenced operations on June 1, 1994,
and prior to that date had no operations other than organizational matters. The
Centura Southeast Equity Fund commenced operations on May 1, 1997 and is not
included in this annual report.
The Equity Growth Fund seeks to achieve its investment objective of
long-term capital appreciation by investing in a diversified portfolio comprised
mainly of publicly traded common and preferred stocks and securities convertible
into or exchangeable for common stock. The Federal Securities Fund seeks to
achieve its investment objective of providing relatively high current income
consistent with relative stability of principal and safety by investing
primarily in securities issued by the U.S. Government, its agencies and
instrumentalities. The North Carolina Tax-Free Bond Fund seeks to achieve its
investment objective of providing relatively high current income that is free of
both federal and North Carolina personal income tax together with relative
safety of principal by investing primarily in a portfolio of high quality North
Carolina municipal securities. The Equity Income Fund seeks to achieve its
investment objective of providing long-term capital appreciation and income by
investing primarily in dividend-paying common stocks, convertible preferred
stocks, and convertible bonds, notes and debentures.
The Funds each have three classes of shares known as Class A, Class B and
Class C Shares. Class A Shares are offered with a maximum front-end sales charge
of 4.50% for the Equity Growth Fund and Equity Income Fund and 2.75% for the
Federal Securities Income Fund and North Carolina Tax-Free Bond Fund. Class B
Shares are offered with a contingent deferred sales charge ("CDSC") declining
from a maximum in the first year after purchase of 5.00% for the Equity Income
Fund and the Centura Equity Growth Fund and 3.00% for each of the other Funds to
a minimum in the fifth year after purchase of 1.00% for all of the Funds. This
charge is imposed if shareholders redeem their shares within five years from the
date of purchase. On the seventh anniversary of their purchase date, Class B
Shares convert automatically to Class A Shares. Class C Shares are offered to
accounts managed by the Adviser's Trust Department and to non-profit
Institutions who invest at least $100,000, and there is no sales charge or CDSC
imposed on this class.
2. SIGNIFICANT ACCOUNTING POLICIES -- The following is a summary of
significant accounting policies followed by the Funds in the preparation of
their financial statements. The policies are in conformity with generally
accepted accounting principles. The preparation of financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of income and expenses for the period. Actual results could differ from
those estimates.
a. SECURITY VALUATION Securities listed on an exchange are valued on the
basis of the last sale prior to the time the valuation is made. If there has
been no sale since the immediately previous valuation, then the
23
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1997
current bid price is used. Quotations are taken from the exchange where the
security is primarily traded. Over-the-counter securities are valued on the
basis of the bid price at the close of business on each business day. Securities
for which market quotations are not readily available are valued at fair value
as determined in good faith by or at the direction of the Board of Directors.
Notwithstanding the above, bonds and other fixed-income securities are valued by
using market quotations and may be valued on the basis of prices provided by a
pricing service approved by the Board of Directors. Short-term securities with
remaining maturities of 60 days or less are valued at amortized cost.
b. INVESTMENT TRANSACTIONS Transactions are recorded on the trade date.
Identified cost of investments sold is used for both financial statement and
federal income tax purposes. Interest income, including the amortization of
discount or premium, is recorded as accrued. Dividends are recorded on the
ex-dividend date.
c. FEDERAL INCOME TAXES Each Fund's policy is to qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended. By so qualifying, the Funds will not be subject to federal income taxes
to the extent that they distribute taxable and tax-exempt income for their
fiscal year. The Funds also intend to meet the distribution requirements to
avoid the payment of an excise tax.
d. DIVIDENDS TO SHAREHOLDERS The Equity Growth Fund and Equity Income Fund
declare and pay dividends of substantially all of its net investment income
monthly. The Federal Securities Income Fund and North Carolina Tax-Free Bond
Fund declare dividends of substantially all of their net investment income daily
and pay those dividends monthly. Each Fund will distribute, at least annually,
substantially all net capital gains, if any, earned by such Fund. Distributions
to shareholders are recorded on the ex-dividend date. The amount of dividends
and distributions are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax basis
treatment; temporary differences do not require reclassification. Dividends and
distributions 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 capital gains.
e. ORGANIZATION EXPENSES Costs incurred in connection with the organization
and initial registration of the Company, which have been allocated among the
Funds, have been deferred and are being amortized over a five year period,
beginning with each Fund's commencement of operations.
f. DETERMINATION OF NET ASSET VALUE AND ALLOCATION OF EXPENSES Expenses
directly attributable to a Fund are charged to that Fund; other expenses are
allocated proportionately among each Fund within the Company in relation to the
net assets of each Fund or on another reasonable basis. In calculating net asset
value per share of each class, investment income, realized and unrealized gains
and losses and expenses other than class specific expenses, are allocated daily
to each class of shares based upon the proportion of net assets of each class at
the beginning of each day. Class specific expenses, as determined under
applicable law and regulatory policy, are borne by the class incurring the
expense.
24
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1997
3. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES -- Centura Bank
("Adviser") serves as the Company's investment adviser. Pursuant to the Advisory
Contracts, the Adviser manages the investments of the Funds and continuously
reviews, supervises and administers the Funds' investments. The Adviser is
responsible for placing orders for the purchase and sale of investment
securities directly with brokers and dealers selected at its discretion. The
terms of the Advisory Contracts provide for annual fees at the following
percentages of average daily net assets:
<TABLE>
<S> <C>
Equity Growth Fund............................................................. 0.70%
Equity Income Fund............................................................. 0.70%
Federal Securities Income Fund................................................. 0.30%
North Carolina Tax-Free Bond Fund.............................................. 0.35%
</TABLE>
For the year ended April 30, 1997, gross advisory fees and the corresponding
waived fees are listed below:
<TABLE>
<CAPTION>
GROSS FEES WAIVED FEES
------------ -----------
<S> <C> <C>
Equity Growth Fund.............................................................. $ 1,127,435 --
Equity Income (a)............................................................... 217,106 $ 105,451
Federal Securities Income Fund.................................................. 358,174 --
North Carolina Tax-Free Bond Fund............................................... 140,821 100,587
</TABLE>
- -------------
(a) For the period from October 1, 1996 (commencement of operations) to April
30, 1997.
Furman Selz LLC ("Furman Selz") provided the Funds with administrative, fund
accounting and transfer agency services for the period from May 1, 1996 through
September 30, 1996. Effective October 1, 1996, BISYS Fund Services, Inc.
("BISYS") became the Funds' transfer agent and fund accounting agent. Also
effective October 1, 1996, BISYS Fund Services ("Administrator") became the
Funds' administrator.
Services provided under the Administrative Services Contracts include
providing day-to-day administration of matters related to the corporate
existence of the Company, maintenance of its records and the preparation of
reports. The terms of the Administrative Services Contracts provide for annual
fees of 0.15% of average daily net assets of each Fund.
For the year ended April 30, 1997, gross administration fees and the
corresponding waived fees are listed below:
<TABLE>
<CAPTION>
GROSS FEES WAIVED FEES
----------- -----------
<S> <C> <C>
Equity Growth Fund................................................................ $ 241,593 --
Equity Income Fund (a)............................................................ 46,523 $ 23,882
Federal Securities Income Fund.................................................... 46,523 --
North Carolina Tax-Free Bond Fund................................................. 60,352 43,051
</TABLE>
- -------------
(a) For the period from October 1, 1996 (commencement of operations) to April
30, 1997.
Services provided under the Transfer Agency Agreements include providing
personnel and facilities to perform shareholder servicing and transfer agency
related services. The Transfer Agency Agreements
25
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1997
provide for a per account fee and reimbursement for out-of-pocket expenses in
connection with shareholder servicing. For the year ended April 30, 1997,
transfer agent expenses incurred were $101,541, $13,117 and $11,109 for the
Equity Growth Fund, Federal Securities Income Fund and North Carolina Tax-Free
Bond Fund, respectively. For the period from October 1, 1996 (commencement of
operations) to April 30, 1997, transfer agent expenses incurred by the Equity
Income Fund were $16,260.
The terms of the Fund Accounting Agreements provide for each of the Funds to
pay $2,500 per month to the fund accounting servicer (Furman Selz for the period
from May 1, 1996 through September 30, 1996 and BISYS Fund Services for the
period from October 1, 1996 through April 30, 1997). For the year ended April
30, 1997, fund accounting fees incurred were $28,792, $31,735 and $39,742 for
the Equity Growth Fund, Federal Securities Income Fund and North Carolina
Tax-Free Bond Fund, respectively. For the period from October 1, 1996
(commencement of operations) to April 30, 1997, fund accounting fees incurred by
the Equity Income Fund were $19,212.
Centura Funds Distributor, Inc. acts as the Funds' Distributor. The
Distributor is an affiliate of the Funds' Administrator and was formed
specifically to distribute the Funds.
Each of the Funds has adopted a Service and Distribution Plan (the "Plan")
with respect to its Class A and Class B Shares. The Plans provide that each
class of shares will pay the Distributor a fee calculated as a percentage of the
value of average daily net assets of that class as reimbursement for its costs
incurred in financing certain distribution and shareholder service activities
related to that class.
The Class A Plan provides for payments by each Fund to the Distributor at an
annual rate not to exceed 0.50% of the Fund's average net assets attributable to
its Class A Shares. Such fees may include a Service Fee totaling up to 0.25% of
the average annual net assets attributable to a Fund's Class A Shares. Service
Fees are paid to securities dealers and other financial institutions for
maintaining shareholder accounts and providing related services to shareholders.
During the current fiscal year the Adviser has undertaken to limit 12b-1 fees
for Class A Shares to 0.25%. For the year ended April 30, 1997, Centura Funds
Distributor, Inc. earned distribution fees for Class A Shares of $36,184, $2,690
and $19,193 for the Equity Growth Fund, Federal Securities Income Fund and North
Carolina Tax-Free Bond Fund, respectively. For the period from October 1, 1996
(commencement of operations) to April 30, 1997, distribution fees incurred by
the Equity Income Fund (Class A Shares) were $525. In addition, the Distributor
also retains a portion of the front-end sales charge.
The Class B Plan provides for payments by the Fund to the Distributor at an
annual rate not to exceed 1.00% of the Fund's average net assets attributable to
its Class B Shares. Such fees may include a Service Fee totaling up to 0.25% of
the average annual net assets attributable to a Fund's Class B Shares. For the
year ended April 30, 1997, Centura Funds Distributor, Inc. earned distribution
fees for Class B Shares of $80,683, $1,931 and $4,199 for the Equity Growth
Fund, Federal Securities Income Fund and North Carolina Tax-Free Bond Fund,
respectively. For the period from October 1, 1996 (commencement of operations)
to April 30, 1997, distribution fees incurred by the Equity Income Fund (Class B
Shares) were $710. The Distributor also receives the proceeds of any CDSC
imposed on redemptions of Class B Shares.
Centura Bank acts as custodian for the Funds. For furnishing custodial
services, Centura Bank is paid a monthly fee with respect to the Funds at an
annual rate based on a percentage of average daily net assets
26
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1997
plus certain transaction and out-of-pocket expenses. For the year ended April
30, 1997, Centura Bank earned custodian fees and out-of-pocket expenses of
$59,019, $31,324 and $15,400 for the Equity Growth Fund, Federal Securities
Income Fund and North Carolina Tax-Free Bond Fund, respectively. For the period
from October 1, 1996 (commencement of operations) to April 30, 1997, custodian
fees and out-of-pocket expenses incurred by the Equity Income Fund were $23,036.
4. CONCENTRATION OF CREDIT RISK -- The North Carolina Tax-Free Bond Fund
invests substantially all of its assets in a varied portfolio of debt
obligations issued by the State of North Carolina and its authorities and
agencies. The issuers' abilities to meet their obligations may be affected by
economic or political developments in the state of North Carolina.
5. ACQUISITION OF CENTURA INCOME EQUITY PERSONAL TRUST AND CENTURA INCOME
EQUITY EMPLOYEE BENEFITS GROUP TRUST -- On October 1, 1996, the Equity Income
Fund issued Class C Shares to acquire all of the assets and liabilities of the
Centura Income Equity Personal Trust and Centura Income Equity Employee Benefits
Group Trust. The following is a summary of shares issued, net assets acquired,
net asset value per share and unrealized appreciation as of the date acquired:
<TABLE>
<S> <C>
Shares...................................................... 4,810,734
Net Assets.................................................. $ 48,107,348
Net Asset Value............................................. $ 10.00
Unrealized Appreciation..................................... $ 8,327,841
</TABLE>
6. SECURITIES TRANSACTIONS -- The cost of securities purchased and proceeds
from securities sold (excluding short-term securities) for the year ended April
30, 1997, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------- --------------
<S> <C> <C>
Equity Growth Fund........................................................... $ 99,445,502 $ 102,487,967
Equity Income Fund (a)....................................................... 15,800,721 11,583,384
Federal Securities Income Fund............................................... 36,562,277 29,403,250
North Carolina Tax-Free Bond Fund............................................ 13,091,819 17,557,532
</TABLE>
- -------------
(a) For the period from October 1, 1996 (commencement of operations) to April
30, 1997.
27
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1997
7. CAPITAL SHARE TRANSACTIONS -- The Company is authorized to issue 600
million shares of capital stock with a par value of $.001. Transactions in
shares of the Funds for the years ended April 30, 1997 and April 30, 1996,
respectively, were as follows:
<TABLE>
<CAPTION>
EQUITY GROWTH FUND EQUITY INCOME FUND
---------------------- ---------------------
AMOUNT SHARES AMOUNT SHARES
----------- --------- ---------- ---------
FOR THE YEAR ENDED FOR THE PERIOD ENDED
APRIL 30, 1997 APRIL 30, 1997 (A)
---------------------- ---------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares issued.................................. $ 2,662,321 184,402 $ 335,666 31,415
Dividends reinvested........................... 312,197 20,703 1,994 185
Shares redeemed................................ (761,290) (51,492) (5,711) (628)
----------- --------- ---------- ---------
Net Increase -- Class A Shares................. $ 2,213,228 153,613 $ 331,949 30,972
----------- --------- ---------- ---------
----------- --------- ---------- ---------
CLASS B SHARES:
Shares issued.................................. $ 3,195,251 223,156 $ 421,394 39,170
Dividends reinvested........................... 325,799 21,728 1,009 93
Shares redeemed................................ (559,565) (37,680) (1,450) (38)
----------- --------- ---------- ---------
Net Increase -- Class B Shares................. $ 2,961,485 207,204 $ 420,953 39,225
----------- --------- ---------- ---------
----------- --------- ---------- ---------
CLASS C SHARES:
Shares issued.................................. $38,962,086 2,721,890 $56,368,725 5,592,029
Dividends reinvested........................... 4,585,592 304,531 339,771 31,634
Shares redeemed................................ (41,293,884) (2,770,234) (8,713,750) (806,095)
----------- --------- ---------- ---------
Net Increase -- Class C Shares................. $ 2,253,794 256,187 $47,994,746 4,817,568
----------- --------- ---------- ---------
----------- --------- ---------- ---------
Total Net Increase............................. $ 7,428,507 617,004 $48,747,648 4,887,765
----------- --------- ---------- ---------
----------- --------- ---------- ---------
<CAPTION>
FOR THE YEAR ENDED
APRIL 30, 1996
----------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares issued.................................. $ 3,996,812 318,467
Dividends reinvested........................... 22,225 1,775
Shares redeemed................................ (127,873) (9,661)
----------- ---------
Net Increase -- Class A Shares................. $ 3,891,164 310,581
----------- ---------
----------- ---------
CLASS B SHARES:
Shares issued.................................. $ 3,972,644 319,526
Dividends reinvested........................... 15,094 1,215
Shares redeemed................................ (168,362) (13,258)
----------- ---------
Net Increase -- Class B Shares................. $ 3,819,376 307,483
----------- ---------
----------- ---------
CLASS C SHARES:
Shares issued.................................. $34,342,658 2,792,574
Dividends reinvested........................... 712,210 57,537
Shares redeemed................................ (17,052,874) (1,353,253)
----------- ---------
Net Increase -- Class C Shares................. $18,001,994 1,496,858
----------- ---------
----------- ---------
Total Net Increase............................. $25,712,534 2,114,922
----------- ---------
----------- ---------
</TABLE>
- -------------
(a) For the period from October 1, 1996 (commencement of operations) to April
30, 1997.
28
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1997
<TABLE>
<CAPTION>
Federal Securities North Carolina
Income Fund Tax-Free Bond Fund
---------------------- ----------------------
Amount Shares Amount Shares
----------- --------- ----------- ---------
For the Year Ended For the Year Ended
April 30, 1997 April 30, 1997
---------------------- ----------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares issued................................. $ 100,235 10,024 $ 53,925 5,368
Dividends reinvested.......................... 32,140 3,216 198,536 19,744
Shares redeemed............................... (174,691) (17,468) (335,666) (33,512)
----------- --------- ----------- ---------
Net Decrease -- Class A Shares................ $ (42,316) (4,228) $ (83,205) (8,400)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
CLASS B SHARES:
Shares issued................................. $ 42,895 4,302 $ 27,431 2,738
Dividends reinvested.......................... 7,598 759 14,712 1,464
Shares redeemed............................... (31,751) (3,177) (3,153) (311)
----------- --------- ----------- ---------
Net Increase -- Class B Shares................ $ 18,742 1,884 $ 38,990 3,891
----------- --------- ----------- ---------
----------- --------- ----------- ---------
CLASS C SHARES:
Shares issued................................. $30,929,370 3,090,869 $ 5,386,444 536,937
Dividends reinvested.......................... 4,050,940 404,673 47,828 4,759
Shares redeemed............................... (24,516,503) (2,454,782) (10,120,245) (1,008,532)
----------- --------- ----------- ---------
Net Increase (Decrease) -- Class C Shares..... $10,463,807 1,040,760 $(4,685,973) (466,836)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
Total Net Increase (Decrease)................. $10,440,233 1,038,416 $(4,730,188) (471,345)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 1996 APRIL 30, 1996
---------------------- ----------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares issued................................. $ 296,512 28,969 $ 3,531,762 347,776
Dividends reinvested.......................... 19,767 1,936 100,014 9,761
Shares redeemed............................... (31,434) (3,077) (94,372) (9,198)
----------- --------- ----------- ---------
Net Increase -- Class A Shares................ $ 284,845 27,828 $ 3,537,404 348,339
----------- --------- ----------- ---------
----------- --------- ----------- ---------
CLASS B SHARES:
Shares issued................................. $ 112,249 10,998 $ 231,490 22,572
Dividends reinvested.......................... 8,047 788 9,265 904
Shares redeemed............................... (61,464) (6,030) (122,233) (11,906)
----------- --------- ----------- ---------
Net Increase -- Class B Shares................ $ 58,832 5,756 $ 118,522 11,570
----------- --------- ----------- ---------
----------- --------- ----------- ---------
CLASS C SHARES:
Shares issued................................. $28,545,692 2,798,588 $12,172,633 1,197,604
Dividends reinvested.......................... 3,621,321 354,575 45,725 4,473
Shares redeemed............................... (16,242,864) (1,593,320) (10,314,437) (1,009,560)
----------- --------- ----------- ---------
Net Increase -- Class C Shares................ $15,924,149 1,559,843 $ 1,903,921 192,517
----------- --------- ----------- ---------
----------- --------- ----------- ---------
Total Net Increase............................ $16,267,826 1,593,427 $ 5,559,847 552,426
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
29
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1997
8. FEDERAL INCOME TAX INFORMATION (UNAUDITED) -- During the year ended April
30, 1997, the North-Carolina Tax-Free Bond Fund declared tax-exempt income
distributions in the amount of $1,667,941.
During the year ended April 30, 1997, the following Funds declared long-term
capital gain distributions in the following amounts:
<TABLE>
<S> <C>
Equity Growth Fund................................................................... $ 5,964,726
Equity Income Fund (a)............................................................... 102,807
Federal Securities Income Fund....................................................... 39,011
North Carolina Tax-Free Bond Fund.................................................... 99,786
</TABLE>
- ------------
(a) For the period from October 1, 1996 (commencement of operations) to April
30, 1997.
For the taxable year ended April 30, 1997, the following percentages of
income dividends paid by the following Funds qualify for the dividends received
deduction available to corporations:
<TABLE>
<S> <C>
Equity Growth Fund............................. 69.5%
Equity Income Fund............................. 38.1
</TABLE>
At April 30, 1997, the following Funds had the following capital loss
carryovers (amounts are approximate):
<TABLE>
<CAPTION>
EXPIRATION
AMOUNT DATE
--------- -------------
<S> <C> <C>
Federal Securities Income Fund............................................. $ 421,283 2005
North Carolina Tax-Free Bond Fund.......................................... 124,537 2005
</TABLE>
30
<PAGE>
CENTURA FUNDS, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
EQUITY GROWTH FUND
-------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
APRIL 30, 1997 APRIL 30, 1996
---------------------------------- ----------------------------------
CLASS CLASS CLASS CLASS CLASS CLASS
A B C A B C
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 14.31 $ 14.24 $ 14.31 $ 10.70 $ 10.69 $ 10.70
-------- -------- -------- -------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.06 (0.04) 0.09 0.03 (0.06) 0.07
Net realized and unrealized gains from
investments......................... 1.58 1.57 1.58 3.67 3.65 3.65
-------- -------- -------- -------- -------- --------
Total from Investment Activities...... 1.64 1.53 1.67 3.70 3.59 3.72
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS
Net investment income................. (0.06) (0.01) (0.09) (0.05) -- (0.07)
Net realized gains.................... (0.56) (0.56) (0.56) (0.04) (0.04) (0.04)
-------- -------- -------- -------- -------- --------
Total Distributions................... (0.62) (0.57) (0.65) (0.09) (0.04) (0.11)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 15.33 $ 15.20 $ 15.33 $ 14.31 $ 14.24 $ 14.31
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total Return (excludes sales and
redemption charges)................... 11.55% 10.78% 11.82% 34.72% 33.73% 34.97%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $ 8,501 $ 9,761 $147,213 $ 5,740 $ 6,194 $133,714
Ratio of expenses to average net
assets.............................. 1.30% 2.05% 1.05% 1.26% 2.02% 1.04%
Ratio of net investment income (loss)
to average net assets............... 0.42% (0.33)% 0.67% 0.27% (0.48)% 0.55%
Ratio of expenses to average net
assets*............................. 1.55% 2.05% 1.05% (d) (d) (d)
Ratio of net investment income (loss)
to average net assets*.............. 0.17% (0.33)% 0.67% (d) (d) (d)
Portfolio Turnover...................... 67%(c) 67%(c) 67%(c) 46%(c) 46%(c) 46%(c)
Average Commission Rate Paid (f) . $ 0.0805 $ 0.0805 $ 0.0805 -- -- --
<CAPTION>
PERIOD ENDED
APRIL 30, 1995(a)
----------------------------------
CLASS CLASS CLASS
A B C
-------- -------- --------
<S> <C><C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 10.00 $ 10.00 $ 10.00
-------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.06 0.03 0.07
Net realized and unrealized gains from
investments......................... 0.70 0.69 0.70
-------- -------- --------
Total from Investment Activities...... 0.76 0.72 0.77
-------- -------- --------
DISTRIBUTIONS
Net investment income................. (0.06) (0.03) (0.07)
Net realized gains.................... -- -- --
-------- -------- --------
Total Distributions................... (0.06) (0.03) (0.07)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 10.70 $ 10.69 $ 10.70
-------- -------- --------
-------- -------- --------
Total Return (excludes sales and
redemption charges)................... 7.64%(e) 7.23%(e) 7.71%(e)
-------- -------- --------
-------- -------- --------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $ 968 $ 1,362 $ 84,004
Ratio of expenses to average net
assets.............................. 1.29%(b) 2.03%(b) 1.04%(b)
Ratio of net investment income (loss)
to average net assets............... 0.63%(b) 0.00%(b) 0.79%(b)
Ratio of expenses to average net
assets*............................. 1.32%(b) 2.06%(b) 1.07%(b)
Ratio of net investment income (loss)
to average net assets*.............. 0.60%(b) (0.03)%(b) 0.76%(b)
Portfolio Turnover...................... 44%(c) 44%(c) 44%(c)
Average Commission Rate Paid (f) . -- -- --
</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) For the period from June 1, 1994 (commencement of operations) to April 30,
1995.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(d) There were no waivers or reimbursements during the period.
(e) Not annualized.
(f) Represents the total dollar amount of commissions paid on portfolio
transactions divided by the total number of portfolio shares purchased and
sold by the Fund for which commissions were charged. Disclosure is not
required for prior periods.
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
CENTURA FUNDS, INC.
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
EQUITY INCOME FUND
-------------------------------------
PERIOD ENDED
APRIL 30, 1997(a)
-------------------------------------
CLASS CLASS CLASS
A B C
--------- --------- ---------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......................................... $ 10.00 $ 10.00 $ 10.00
--------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income....................................................... 0.14 0.11 0.15
Net realized and unrealized gains from investments.......................... 0.93 0.90 0.91
--------- --------- ---------
Total from Investment Activities............................................ 1.07 1.01 1.06
--------- --------- ---------
DISTRIBUTIONS
Net investment income....................................................... (0.14) (0.11) (0.15)
Net realized gains.......................................................... (0.02) (0.02) (0.02)
--------- --------- ---------
Total Distributions......................................................... (0.16) (0.13) (0.17)
--------- --------- ---------
NET ASSET VALUE, END OF PERIOD................................................ $ 10.91 $ 10.88 $ 10.89
--------- --------- ---------
--------- --------- ---------
Total Return (excludes sales and redemption charges) (d)...................... 10.69% 10.15% 10.65%
--------- --------- ---------
--------- --------- ---------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)........................................... $ 338 $ 427 $ 52,486
Ratio of expenses to average net assets (b)................................. 0.99% 1.71% 0.75%
Ratio of net investment income to average net assets (b).................... 2.15% 1.52% 2.45%
Ratio of expenses to average net assets* (b)................................ 1.65% 2.12% 1.17%
Ratio of net investment income to average net assets* (b)................... 1.48% 1.10% 2.03%
Portfolio Turnover............................................................ 24%(c) 24%(c) 24%(c)
Average Commission Rate Paid (e).............................................. $ 0.0898 $ 0.0898 $ 0.0898
</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) For the period from October 1, 1996 (commencement of operations) to April
30, 1997.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(d) Not annualized.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by the total number of portfolio shares purchased and
sold by the Fund for which commissions were charged. Disclosure is not
required for prior periods.
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
CENTURA FUNDS, INC.
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
FEDERAL SECURITIES INCOME FUND
-------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
APRIL 30, 1997 APRIL 30, 1996
---------------------------------- ----------------------------------
CLASS CLASS CLASS CLASS CLASS CLASS
A B C A B C
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 10.01 $ 10.01 $ 10.01 $ 9.97 $ 9.97 $ 9.97
-------- -------- -------- -------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.56 0.50 0.59 0.57 0.50 0.60
Net realized and unrealized gains
(losses) from investments........... (0.07) (0.07) (0.07) 0.04 0.04 0.04
-------- -------- -------- -------- -------- --------
Total from Investment Activities...... 0.49 0.43 0.52 0.61 0.54 0.64
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS
Net investment income................. (0.56) (0.50) (0.59) (0.57) (0.50) (0.60)
-------- -------- -------- -------- -------- --------
Total Distributions................... (0.56) (0.50) (0.59) (0.57) (0.50) (0.60)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 9.94 $ 9.94 $ 9.94 $ 10.01 $ 10.01 $ 10.01
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total Return (excludes sales and
redemption charges)................... 5.07% 4.46% 5.33% 6.20% 5.40% 6.47%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $ 481 $ 194 $119,434 $ 526 $ 176 $109,775
Ratio of expenses to average net
assets.............................. 0.82% 1.40% 0.58% 0.85% 1.61% 0.61%
Ratio of net investment income to
average net assets.................. 5.63% 5.04% 5.88% 5.61% 4.84% 5.88%
Ratio of expenses to average net
assets*............................. 1.07% 1.65% 0.58% (d) (d) (d)
Ratio of net investment income to
average net assets*................. 5.38% 4.79% 5.88% (d) (d) (d)
Portfolio Turnover...................... 26%(c) 26%(c) 26%(c) 34%(c) 34%(c) 34%(c)
<CAPTION>
PERIOD ENDED
APRIL 30, 1995(a)
----------------------------------
CLASS CLASS CLASS
A B C
-------- -------- --------
<S> <C><C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 10.00 $ 10.00 $ 10.00
-------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.52 0.45 0.54
Net realized and unrealized gains
(losses) from investments........... (0.03) (0.03) (0.03)
-------- -------- --------
Total from Investment Activities...... 0.49 0.42 0.51
-------- -------- --------
DISTRIBUTIONS
Net investment income................. (0.52) (0.45) (0.54)
-------- -------- --------
Total Distributions................... (0.52) (0.45) (0.54)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 9.97 $ 9.97 $ 9.97
-------- -------- --------
-------- -------- --------
Total Return (excludes sales and
redemption charges)................... 5.02%(e) 4.32%(e) 5.28%(e)
-------- -------- --------
-------- -------- --------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $ 247 $ 118 $ 93,807
Ratio of expenses to average net
assets.............................. 0.86%(b) 1.61%(b) 0.63%(b)
Ratio of net investment income to
average net assets.................. 5.58%(b) 4.86%(b) 5.97%(b)
Ratio of expenses to average net
assets*............................. 0.89%(b) 1.64%(b) 0.66%(b)
Ratio of net investment income to
average net assets*................. 5.55%(b) 4.83%(b) 5.94%(b)
Portfolio Turnover...................... 42%(c) 42%(c) 42%(c)
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) For the period from June 1, 1994 (commencement of operations) to April 30,
1995.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(d) There were no waivers or reimbursements during the period.
(e) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
CENTURA FUNDS, INC.
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
NORTH CAROLINA TAX-FREE BOND FUND
-------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
APRIL 30, 1997 APRIL 30, 1996
---------------------------------- ----------------------------------
CLASS CLASS CLASS CLASS CLASS CLASS
A B C A B C
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 10.04 $ 10.04 $ 10.04 $ 9.98 $ 9.98 $ 9.98
-------- -------- -------- -------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.43 0.37 0.46 0.42 0.34 0.44
Net realized and unrealized gains
(losses) from investments........... 0.03 0.03 0.03 0.13 0.13 0.13
-------- -------- -------- -------- -------- --------
Total from Investment Activities...... 0.46 0.40 0.49 0.55 0.47 0.57
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS
Net investment income................. (0.43) (0.37) (0.46) (0.42) (0.34) (0.44)
Net realized gains.................... (0.09) (0.09) (0.09) (0.07) (0.07) (0.07)
-------- -------- -------- -------- -------- --------
Total Distributions................... (0.52) (0.46) (0.55) (0.49) (0.41) (0.51)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 9.98 $ 9.98 $ 9.98 $ 10.04 $ 10.04 $ 10.04
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total Return (excludes sales and
redemption charges)................... 4.71% 4.11% 4.97% 5.50% 4.72% 5.78%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $ 3,823 $ 430 $ 32,159 $ 3,927 $ 393 $ 37,009
Ratio of expenses to average net
assets.............................. 0.69% 1.27% 0.44% 0.68% 1.44% 0.44%
Ratio of net investment income to
average net assets.................. 4.31% 3.73% 4.56% 3.98% 3.30% 4.32%
Ratio of expenses to average net
assets*............................. 1.30% 1.88% 0.80% 1.04% 1.80% 0.80%
Ratio of net investment income to
average net assets*................. 3.70% 3.12% 4.20% 3.62% 2.94% 3.96%
Portfolio Turnover...................... 34%(c) 34%(c) 34%(c) 80%(c) 80%(c) 80%(c)
<CAPTION>
PERIOD ENDED
APRIL 30, 1995(a)
----------------------------------
CLASS CLASS CLASS
A B C
-------- -------- --------
<S> <C><C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 10.00 $ 10.00 $ 10.00
-------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.39 0.32 0.41
Net realized and unrealized gains
(losses) from investments........... (0.02) (0.02) (0.02)
-------- -------- --------
Total from Investment Activities...... 0.37 0.30 0.39
-------- -------- --------
DISTRIBUTIONS
Net investment income................. (0.39) (0.32) (0.41)
Net realized gains.................... -- -- --
-------- -------- --------
Total Distributions................... (0.39) (0.32) (0.41)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 9.98 $ 9.98 $ 9.98
-------- -------- --------
-------- -------- --------
Total Return (excludes sales and
redemption charges)................... 3.77%(d) 3.09%(d) 4.08%(d)
-------- -------- --------
-------- -------- --------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $ 429 $ 275 $ 34,885
Ratio of expenses to average net
assets.............................. 0.42%(b) 0.99%(b) 0.41%(b)
Ratio of net investment income to
average net assets.................. 4.46%(b) 3.89%(b) 4.64%(b)
Ratio of expenses to average net
assets*............................. 0.92%(b) 1.49%(b) 0.91%(b)
Ratio of net investment income to
average net assets*................. 3.96%(b) 3.39%(b) 4.14%(b)
Portfolio Turnover...................... 121%(c) 121%(c) 121%(c)
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) For the period from June 1, 1994 (commencement of operations) to April 30,
1995.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(d) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders
Centura Funds, Inc.
We have audited the accompanying statements of assets and liabilities of
Centura Equity Growth Fund, Centura Equity Income Fund, Centura Federal
Securities Income Fund and Centura North Carolina Tax-Free Bond Fund, separate
portfolios of Centura Funds, Inc., including the schedules of portfolio
investments, as of April 30, 1997, and the related statements of operations,
changes in net assets, and the financial highlights for the periods indicated in
the accompanying financial statements. These financial statements and financial
highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1997, by correspondence with the custodian and brokers. 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
Centura Equity Growth Fund, Centura Equity Income Fund, Centura Federal
Securities Income Fund and Centura North Carolina Tax-Free Bond Fund as of April
30, 1997, the results of their operations, the changes in their net assets and
the financial highlights for the periods indicated, in conformity with generally
accepted accounting principles.
McGladrey & Pullen, LLP
New York, New York
May 23, 1997
35
<PAGE>
[LOGO]
Centura Funds
FOR ADDITIONAL INFORMATION ON THE
CENTURA FUNDS, CALL
1-800-44-CENTURA
(800-442-3688)
INVESTMENT ADVISER AND CUSTODIAN
Centura Bank
131 North Church Street
Rocky Mount, NC 27802
ADMINISTRATOR AND SPONSOR
BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, OH 43219
DISTRIBUTOR
Centura Funds Distributor, Inc.
3435 Stelzer Road
Columbus, OH 43219
COUNSEL INDEPENDENT
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
INDEPENDENT ACCOUNTANTS
McGladrey & Pullen LLP
555 Fifth Avenue
New York, NY 10017
The financial statements included herein have been taken from the records
of the Company without examination by the Independent accountants and
accordingly they do not express an opinion thereon.
This report is for the information of the shareholders of Centura Funds. Its
use in connection with any offering of the Funds' shares is authorized
only in case of a concurrent or prior delivery of the Funds'
current prospectus.
Investments in mutual funds involve risk, including possible loss of
principal. Centura Funds are not deposits, guaranteed by or
obligations of Centura Bank or its affiliates and are
not insured by the FDIC, the Federal Reserve
Board or any other government agency.
[LOGO]
Centura Funds
CENTURA
EQUITY GROWTH
FUND
CENTURA
EQUITY INCOME
FUND
CENTURA
FEDERAL SECURITIES
INCOME FUND
CENTURA
NORTH CAROLINA
TAX-FREE BOND
FUND
ANNUAL
REPORT
APRIL 30, 1997
CNANN0697 6/97
