CENTURA FUNDS INC, 497, 1998-02-02

CENTURA FUNDS INC
497, 1998-02-02

Previous: STRONG INTERNATIONAL INCOME FUNDS INC, 497J, 1998-02-02

Next: KEMPER STRATEGIC INCOME FUND, N-30D, 1998-02-02

<PAGE> 1

CENTURA FUNDS, INC.

CLASS C SHARES

3435 STELZER ROAD
COLUMBUS, OHIO 43219

GENERAL AND ACCOUNT INFORMATION:
(800) 442-3688

CENTURA BANK -- ADVISER
BISYS FUND SERVICES -- ADMINISTRATOR AND SPONSOR
CENTURA FUNDS DISTRIBUTOR, INC. -- DISTRIBUTOR

This Prospectus describes the five Funds (the "Funds") comprising Centura
Funds, Inc. (the "Company"), a registered open-end management investment company
advised by Centura Bank (the "Adviser"). Each Fund is a separate portfolio of
the Company. The Funds described in this Prospectus are:

CENTURA EQUITY GROWTH FUND
CENTURA EQUITY INCOME FUND
CENTURA SOUTHEAST EQUITY FUND
CENTURA FEDERAL SECURITIES INCOME FUND
CENTURA NORTH CAROLINA TAX-FREE BOND FUND

This Prospectus relates to Class C shares which only certain investors are
eligible to purchase. Each Fund also has Class A shares and Class B shares. (See
"Other Information -- Capitalization.")

SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND FUND SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
INVESTMENTS IN MUTUAL FUNDS, SUCH AS THE FUNDS, INVOLVE RISK, INCLUDING POSSIBLE
LOSS OF PRINCIPAL.

This Prospectus sets forth concisely the information a prospective investor
should know before investing in any of the Funds and should be read and retained
for information about each Fund.

A Statement of Additional Information (the "SAI"), dated August 28, 1997
and supplemented on November 25, 1997, containing additional and more detailed
information about the Funds, has been filed with the Securities and Exchange
Commission ("SEC") and is hereby incorporated by reference into the Prospectus.
It is available without charge and can be obtained by writing or calling the
Funds at the address and information numbers printed above.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The Date of this Prospectus is August 28, 1997.

As supplemented on November 25 and December 11, 1997.

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Highlights............................................................................ 3
Fund Expenses......................................................................... 5
Financial Highlights.................................................................. 7
The Funds............................................................................. 12
Description of Securities and Investment Practices.................................... 15
Investment Restrictions............................................................... 21
Risks of Investing in the Funds....................................................... 22
Management of the Funds............................................................... 25
Minimum Purchase Requirements......................................................... 28
Pricing and Purchase of Fund Shares................................................... 29
Exchange of Fund Shares............................................................... 29
Redemption of Fund Shares............................................................. 30
Portfolio Transactions................................................................ 32
Fund Share Valuation.................................................................. 32
Dividends, Distributions, and Federal Income Taxation................................. 33
Other Information..................................................................... 35
Appendix.............................................................................. i
</TABLE>

2
<PAGE> 3

HIGHLIGHTS

THE FUNDS

This prospectus describes the five funds comprising Centura Funds, Inc.
(the "Company"). Each Fund has a distinct investment objective and policies, as
described below. The investment objective of each Fund is a fundamental policy
of the Fund and may not be changed without approval of the Fund's shareholders.
See "The Funds." The Funds and their investment objectives and policies are as
follows:

- CENTURA EQUITY GROWTH FUND -- This Fund's objective is long-term capital
appreciation. It invests in a diversified portfolio comprised mainly of
publicly traded common and preferred stocks and securities convertible
into or exchangeable for common stock. Although its investments will be
principally in securities of U.S.-based companies; it may also invest in
securities of foreign issuers, generally in the form of American
Depositary Receipts ("ADRs").

- CENTURA EQUITY INCOME FUND -- This Fund's objective is to provide
long-term capital appreciation and income. The Fund invests primarily in
dividend-paying common stocks, convertible preferred stocks, and
convertible bonds, notes and debentures. It may also invest in securities
believed to offer special capital appreciation opportunities. The Fund
will invest primarily in securities of U.S.-based companies, but it may
also invest in securities of non-U.S. issuers, generally through ADRs.

- CENTURA SOUTHEAST EQUITY FUND -- This Fund's investment objective is
long-term capital appreciation. The Fund invests primarily in a
diversified portfolio of common and preferred stocks and securities
convertible into common stock of companies that are headquartered or have
substantial operations in the Southeastern region of the United States.

- CENTURA FEDERAL SECURITIES INCOME FUND -- This Fund seeks to provide
relatively high current income consistent with relative stability of
principal and safety. The Fund invests primarily in securities issued by
the U.S. Government, its agencies and instrumentalities. The maximum
maturity of any such security will be 10 years.

- CENTURA NORTH CAROLINA TAX-FREE BOND FUND -- This Fund seeks to provide
relatively high current income that is free of both Federal and North
Carolina personal income tax, together with relative safety of principal.
It invests primarily in a portfolio of high quality municipal securities
with a maximum maturity of 15 years and an average portfolio maturity of 5
to 10 years.

RISKS OF INVESTING IN THE FUNDS

Investment in each of the Funds involves certain risks. There can, of
course, be no assurance that a Fund will achieve its investment objective or be
successful in preventing or minimizing the risk of loss that is inherent in
certain types of investments. Fund investments in securities of foreign issuers
involves special risks not usually associated with investing in U.S. companies.
Concentration of Centura North Carolina Tax-Free Bond Fund and Centura Southeast
Equity Fund in securities of a single state or region, respectively, makes each
of these Funds particularly vulnerable to events affecting that state or region,
respectively. The Funds have authority, which they do not presently intend to
use, to invest in various types of derivative instruments, which would entail
special risks. Investors should be aware that the value of each Fund's shares
will fluctuate, which may cause a loss in the principal value of the investment.
See "Risks of Investing in the Funds."

3
<PAGE> 4

THE ADVISER

Management of the Funds is provided by Centura Bank (the "Adviser"),
headquartered in Rocky Mount, North Carolina. For its advisory services, the
Adviser, receives from each Fund a fee at an annual rate based on the Fund's
average daily net assets. This fee is at an annual rate of 0.70% for Centura
Equity Growth Fund, 0.70% for Centura Equity Income Fund, 0.70% for Centura
Southeast Equity Fund, 0.30% for Centura Federal Securities Income Fund, and
0.35% for Centura North Carolina Tax-Free Bond Fund. Fees to the Adviser may be
reduced pursuant to expense limitations. See "Management of the Funds."

THE DISTRIBUTOR, ADMINISTRATOR AND SPONSOR

Centura Funds Distributor, Inc. (the "Distributor") distributes the Funds'
shares. BISYS Fund Services, Inc. ("BISYS") acts as Sponsor and Administrator to
the Funds. For its services as Administrator, each Fund pays BISYS a fee at the
annual rate of 0.15% of its average daily net assets. BISYS also acts as
transfer agent and fund accounting agent for the Funds, for which it receives
additional fees.

CLASSES OF SHARES

Class C shares are offered at net asset value with no sales charge, and no
contingent deferred sales charge ("CDSC") is imposed on redemptions. Class C
shares are available only to accounts managed by the Adviser's Trust Department.
See "Pricing and Purchase of Fund Shares" and "Redemption of Fund Shares." Each
of the Funds also offers Class A shares (subject to a front-end sales charge,
unless waived) and Class B shares (subject to a CDSC, unless waived). See "Other
Information -- Capitalization."

The Funds reserve the right to redeem upon not less than 30 days' notice
all shares in a Fund's account which have an aggregate value of $1,000 or less.

ALL DIVIDENDS AND DISTRIBUTIONS WILL BE AUTOMATICALLY REINVESTED AT NET
ASSET VALUE IN ADDITIONAL SHARES OF THE SAME CLASS OF THE APPLICABLE FUND UNLESS
CASH PAYMENT IS REQUESTED. EACH OF THE FUNDS PAYS DIVIDENDS FROM INCOME, IF ANY,
MONTHLY.

SEE "PRICING AND PURCHASE OF FUND SHARES," "REDEMPTION OF FUND SHARES" AND
"DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAXATION" FOR MORE INFORMATION.

4
<PAGE> 5

FUND EXPENSES

The following expense table indicates costs and expenses that an investor
in Class C shares should anticipate incurring either directly or indirectly as a
shareholder in the Funds.

FEE TABLE*

<TABLE>
<CAPTION>
CENTURA
CENTURA NORTH
CENTURA CENTURA CENTURA FEDERAL CAROLINA
EQUITY EQUITY SOUTHEAST SECURITIES TAX-FREE
GROWTH INCOME EQUITY INCOME BOND
FUND FUND FUND FUND FUND
CLASS C CLASS C CLASS C CLASS C CLASS C
------- ------- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)....... None None None None None
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of offering
price).................................... None None None None None
Deferred Sales Charge (as a percentage of
redemption proceeds)**.................... None None None None None
Exchange Fees............................... None None None None None
Annual Fund Operating Expenses (as a
percentage of average net assets
annualized)
Management Fees (After Waiver)***........... 0.70 0.36 0.42 0.30 0.10
12b-1 Fees.................................. -- -- -- -- --
Other Expenses (After Waiver)***............ 0.35 0.39 0.83 0.28 0.34
Total Portfolio Operating Expenses***....... 1.05 0.75 1.25 0.58 0.44
</TABLE>

- ---------------
* Class A shares of each Fund are subject to a maximum 12b-1 fee of 0.50% and
a maximum front-end load of 4.50% for Centura Equity Growth Fund, Centura
Equity Income Fund, and Centura Southeast Equity Fund, and 2.75% for each of
the other Funds (unless waived). Class B shares of each Fund are subject to
a 12b-1 fee of 1.00%, and a maximum contingent deferred sales charge
("CDSC") of 5.00% for Centura Equity Growth Fund, Centura Equity Income
Fund, and Centura Southeast Equity Fund, and 3.00% for each of the other
Funds (unless waived) for redemptions within five years of purchase.

** Shareholders who redeem shares by wire may be charged a fee by the banks
receiving the wire payments on their behalf. (See "Redemption of Fund
Shares.")

*** Amounts shown for "Management Fees," "Other Expenses" and "Total Portfolio
Operating Expenses" for the Equity Income Fund and the North Carolina
Tax-Free Bond Fund reflect reductions of fees payable by those Funds to the
Adviser and for administrative and transfer agent services pursuant to
agreements to limit fund expenses. Without these reductions, "Management
Fees" for the Equity Income Fund and North Carolina Tax-Free Bond Fund,
respectively, would be 0.70% and 0.35%, "Other Expenses" would be 0.47% and
0.45%, and "Total Portfolio Operating Expenses" would be 1.17% and 0.80%.
"Management Fees," "Other Expenses" and Total Portfolio Operating Expenses
for Centura Southeast Equity Fund reflect anticipated waivers. Without these
reductions, "Management Fees," "Other Expenses" and "Total Portfolio
Operating Expenses" for this Fund would be 0.70%, 0.89%, and 1.59%,
respectively.

5
<PAGE> 6

EXAMPLE:*

An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time period:

- ---------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return. Actual return may be greater or less than the assumed amount.

6
<PAGE> 7

FINANCIAL HIGHLIGHTS

The following table sets forth certain information for each Fund's fiscal
periods ended April 30, 1997, April 30, 1996 and April 30, 1995. (No information
is shown for Centura Southeast Equity Fund, which commenced operations on May 1,
1997.) The information set forth in this table has been audited by McGladrey &
Pullen LLP, the Funds' independent accountant whose report on the financial
statements is included in the Funds' Annual Report. The Annual Report also
includes Management's Discussion of Fund Performance. The Annual Report may be
obtained without charge. The financial statements from the Annual Report are
also contained in the Statement of Additional Information, which is available
without charge upon request. This information should be read in conjunction with
the financial statements.

<TABLE>
<CAPTION>
CENTURA EQUITY GROWTH FUND
-----------------------------------------------------------------------------------------------------------
YEAR ENDED APRIL 30, 1997 YEAR ENDED APRIL 30, 1996 PERIOD ENDED APRIL 30, 1995(a)
------------------------------- ------------------------------- ---------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET
VALUE, BEGINNING
OF PERIOD............ $14.31 $14.24 $ 14.31 $10.70 $10.69 $ 10.70 $10.00 $10.00 $10.00
INVESTMENT ACTIVITIES:
Net investment
income............... 0.06 (0.04) 0.09 0.06 (0.06) 0.07 0.06 0.03 0.07
Net realized and
unrealized gains
from investments..... 1.58 1.57 15.58 3.67 3.65 3.65 0.70 0.69 0.70
Total from Investment
activities.......... 1.64 1.53 1.67 3.70 3.59 3.72 0.76 0.72 0.77
DISTRIBUTIONS:
Net investment
income............... (0.06) (0.01) (0.09) (0.05) -- (0.07) (0.06) (0.03) (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) (0.06) (0.03) (0.07)
NET ASSET VALUE, END
OF PERIOD............ $15.33 $15.20 $ 15.33 $14.31 $14.24 $ 14.31 $10.70 $10.69 $10.70
Total Return (excludes
sales and redemption
charges)............. 11.55% 10.78% 11.82% 34.72% 33.73% 34.97% 7.64%(e) 7.23%(e) 7.71%(e)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at end of
period (000).......... $8,501 $9,761 $147,213 $5,740 $6,194 $133,714 $ 968 $1,362 $84,004
Ratio of expenses to
average net assets... 1.30% 2.05% 1.05% 1.25% 2.02% 1.04% 1.25%(b) 2.03%(b) 1.04%(b)
Ratio of net
investment income
(loss) to average
net assets........... 0.42% (0.33)% 0.67% 0.27% (0.48)% 0.55% 0.63%(b) 0.00%(b) 0.79%(b)
Ratio of expenses to
average net assets*.. 1.55% 2.05% 1.05% (d) (d) (d) 1.32%(b) 2.06%(b) 1.07%(b)
Ratio of net
investment income
(loss) to average
net assets*........... 0.17% (0.33)% 0.67% (d) (d) (d) 0.60%(b) (0.03)%(b) 0.76%(b)
Portfolio Turnover...... 67%(c) 67%(c) 67%(c) 46%(c) 46%(c) 46%(c) 44%(c) 44%(c) 44%(c)
Average Commission
Rate Paid(f)........... $0.0805 $0.0805 $ 0.0805 -- -- -- -- -- --
</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.

7
<PAGE> 8

<TABLE>
<CAPTION>
EQUITY INCOME FUND
PERIOD ENDED APRIL 30, 1997(a)
-------------------------------
CLASS A CLASS B CLASS 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 (loss) 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 (loss) 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 where charged.

8
<PAGE> 9

<TABLE>
<CAPTION>
FEDERAL SECURITIES INCOME FUND
---------------------------------------------------------------------------------------------------------------
YEAR ENDED APRIL 30, 1997 YEAR ENDED APRIL 30, 1996 PERIOD ENDED APRIL 30, 1995(A)
---------------------------------- ---------------------------------- ---------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
------- ------- -------- ------- ------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET
VALUE,
BEGINNING OF
PERIOD...... $10.01 $10.01 $ 10.01 $ 9.97 $ 9.97 $ 9.97 $10.00 $10.00 $ 10.00
INVESTMENT
ACTIVITIES:
Net
investment
income.... 0.56 0.50 0.59 0.57 0.50 0.60 0.52 0.45 0.54
Net realized
and
unrealized
gains from
investments... (0.07) (0.07) (0.07) 0.04 0.04 0.04 (0.03) (0.03) (0.03)
Total from
Investment
activities... 0.49 0.43 0.52 0.61 0.54 0.64 0.49 0.42 0.51
DISTRIBUTIONS:
Net
investment
income.... (0.56) (0.50) (0.59) (0.57) (0.50) (0.60) (0.52) (0.45) (0.54)
Total
Distributions... (0.56) (0.50) (0.59) (0.57) (0.50) (0.60) (0.52) (0.45) (0.54)
NET ASSET
VALUE, END
OF PERIOD... $ 9.94 $ 9.94 $ 9.94 $10.01 $10.01 $ 10.01 $ 9.97 $ 9.97 $ 9.97
Total Return
(excludes
sales and
redemption
charges).... 5.07% 4.46% 5.33% 6.20% 5.40% 6.47% 5.02% (e) 4.32% (e) 5.28% (e)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets
at end of
period
(000)..... $ 481 $ 194 $119,434 $ 526 $ 176 $109,775 $ 247 $ 118 $93,807
Ratio of
expenses
to average
net
assets.... 0.82% 1.40% 0.58% 0.85% 1.61% 0.61% 0.86% (b) 1.61% (b) 0.63% (b)
Ratio of net
investment
income
(loss) to
average
net
assets.... 5.63% 5.04% 5.88% 5.61% 4.84% 5.88% 5.58% (b) 4.86% (b) 5.97% (b)
Ratio of
expenses
to average
net
assets*... 1.07% 1.65% 0.58% (d) (d) (d) 0.89% (b) 1.64% (b) 0.66% (b)
Ratio of net
investment
income
(loss) to
average
net
assets*... 5.38% 4.79% 5.88% (d) (d) (d) 5.55% (b) 4.83% (b) 5.94% (b)
Portfolio
Turnover.... 26% (c) 26% (c) 26%(c) 34% (c) 34% (c) 34% (c) 42% (c) 42% (c) 42% (c)
</TABLE>

9
<PAGE> 10

<TABLE>
<CAPTION>
NORTH CAROLINA TAX-FREE FUND
---------------------------------------------------------------------------------------------------------------
YEAR ENDED APRIL 30, 1997 YEAR ENDED APRIL 30, 1996 PERIOD ENDED APRIL 30, 1995(A)
--------------------------------- --------------------------------- ---------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD........ $10.04 $10.04 $10.04 $ 9.98 $ 9.98 $ 9.98 $10.00 $10.00 $10.00
INVESTMENT
ACTIVITIES:
Net investment
income...... 0.43 0.37 0.46 0.42 0.34 0.44 0.39 0.32 0.41
Net realized
and
unrealized
gains from
investments... 0.03 0.03 0.03 0.13 0.13 0.13 (0.02) (0.02) (0.02)
Total from
Investment
activities... 0.46 0.40 0.49 0.55 0.47 0.57 0.37 0.30 0.39
DISTRIBUTIONS
Net investment
income...... (0.43) (0.37) (0.46) (0.42) (0.34) (0.44) (0.39) (0.32) (0.41)
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) (0.39) (0.32) (0.41)
NET ASSET VALUE,
END OF
PERIOD........ $ 9.98 $ 9.98 $ 9.98 $10.04 $10.04 $10.04 $ 9.98 $ 9.98 $ 9.98
Total Return
(excludes
sales and
redemption
charges)...... 4.71% 4.11% 4.97% 5.50% 4.72% 5.78% 3.77% (e) 3.09% (e) 4.08% (e)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at
end of
period
(000)....... $3,823 $ 430 $32,159 $3,927 $ 393 $37,009 $ 429 $ 275 $34,885
Ratio of
expenses to
average net
assets...... 0.69% 1.27% 0.44% 0.68% 1.44% 0.44% 0.42% (b) 0.99% (b) 0.41% (b)
Ratio of net
investment
income
(loss) to
average net
assets...... 4.31% 3.73% 4.56% 3.98% 3.30% 4.32% 4.46% (b) 3.89% (b) 4.64% (b)
Ratio of
expenses to
average net
assets*..... 3.70% 3.12% 4.20% 3.62% 2.94% 3.96% 3.96% (b) 3.39% (b) 4.14% (b)
Ratio of net
investment
income
(loss) to
average net
assets*..... 3.70% 3.12% 4.20% 3.62% 2.94% 3.96% 3.96% (b) 3.39% (b) 4.14% (b)
Portfolio
Turnover...... 34% (c) 34% (c) 34% (c) 80% (c) 80% (c) 80% (c) 121% (c) 121% (c) 121% (c)
</TABLE>

10
<PAGE> 11

<TABLE>
<CAPTION>
SOUTHEAST EQUITY FUND
(UNAUDITED)
PERIOD ENDED OCTOBER 31,
1997(a)
-------------------------------
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......................... $ 10.00 $ 10.00 $ 10.00
INVESTMENT ACTIVITIES:
Net investment income....................................... 0.04 (0.01) 0.05
Net realized and unrealized gains from investments.......... 3.58 3.57 3.57
------- ------- -------
Total from Investment Activities............................ 3.62 3.56 3.62
DISTRIBUTIONS:
Net investment income....................................... (0.04) (0.02) (0.05)
Total Distributions......................................... (0.04) (0.02) (0.05)
------- ------- -------
NET ASSET VALUE, END OF PERIOD................................ $ 13.58 $ 13.54 $ 13.57
======= ======= =======
Total return (excludes sales and redemption charges)(d)....... 36.20% 35.58% 36.23%
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)........................... $ 1,504 $ 2,365 $24,160
Ratio of expenses to average net assets(b).................. 1.30% 2.04% 1.03%
Ratio of net investment income (loss) to average net
assets(b)................................................ 0.53% (0.20)% 0.81%
Ratio of expenses to average net assets*(b)................. 1.78% 2.28% 1.31%
Ratio of net investment income (loss) to average net
assets*(b)............................................... 0.05% (0.44)% 0.53%
Portfolio Turnover............................................ 36% 36% 36%
Average Commission Rate Paid(e)............................... $0.0772 $0.0772 $0.0772
</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 May 1, 1997 (commencement of operations) to October 31,
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.

11
<PAGE> 12

THE FUNDS

Each Fund is a separate diversified investment fund or portfolio, commonly
known as a mutual fund. The Funds are portfolios of the Company, which was
organized under the laws of the State of Maryland on March 1, 1994 as an
open-end, management investment company. Centura Equity Income Fund and Centura
Southeast Equity Fund were established as new portfolios of the Company on
August 28, 1996 and March 28, 1997, respectively. The Company's Board of
Directors oversees the overall management of the Funds and elects the Funds'
officers.

Centura Equity Growth Fund. Investors seeking long-term growth of capital
and for whom current income is not an objective should consider investing in
Centura Equity Growth Fund.

The investment objective of Centura Equity Growth Fund is long-term capital
appreciation. The Fund invests primarily in a diversified portfolio of publicly
traded common and preferred stocks and securities convertible into or
exchangeable for common stock. The Adviser uses fundamental analysis to select
stocks for the Fund's portfolio and the Fund will invest primarily in stocks of
established growth companies that are undervalued relative to their industry or
to their historical valuation ranges. However, the Adviser may also invest in
companies which it believes have improving prospects whose equity securities are
currently selling below their estimated intrinsic value. In addition,
out-of-favor growth cyclicals may be used if the adviser anticipates a
sustainable earnings recovery for these companies. The Fund expects to invest
primarily in securities of U.S.-based companies, but it may also invest in
securities of non-U.S. companies, generally through American Depository Receipts
("ADRs"). Under normal circumstances, at least 65% of the Fund's total assets
will be invested in equity securities and convertible securities. However, the
Fund may invest without limit in debt instruments for temporary defensive
purposes when the Adviser has determined that abnormal market or economic
conditions so warrant. These debt obligations may include U.S. Government
securities; certificates of deposit, bankers' acceptances and other short-term
debt obligations of banks with total assets of at least $1,000,000,000; debt
obligations of corporations (corporate bonds, debentures, notes and other
similar corporate debt instruments); commercial paper; and repurchase agreements
with respect to securities in which the Fund is authorized to invest. Although
the Fund's investments in such debt securities and in convertible and preferred
stock will generally be rated A, A-1, or better by Standard & Poor's Corporation
("S&P") or A, Prime-1 or better by Moody's Investors Service, Inc. ("Moody's"),
or deemed of comparable quality by the Adviser, the Fund is authorized to invest
up to 15% of its assets in securities rated as low as BBB by S&P or Baa by
Moody's, or deemed of comparable quality by the Adviser. Securities rated BBB or
Baa, or deemed equivalent to such securities, may have speculative
characteristics. See "Risks of Investing in the Funds." If any security held by
the Fund is downgraded below BBB/Baa (or so deemed by the Adviser), the
securities will generally be sold unless it is determined that such sale is not
in the best interest of the Fund. The Fund will invest in no securities rated
below BBB or Baa.

Centura Equity Income Fund. Investors seeking long-term growth and income
should consider an investment in Centura Equity Income Fund.

The investment objective of Centura Equity Income Fund is to provide
long-term capital appreciation and income. This Fund invests primarily in
dividend-paying common stocks, convertible preferred stocks, and convertible
bonds, notes and debentures. In managing this Fund, the Adviser uses fundamental
analysis to select stocks for the Fund's portfolio. The Fund will invest
primarily in the stocks of established companies with above average dividend
yields and/or prospects for increasing dividends. However, the Adviser may also
select stocks (or convertible securities) of companies that it believes offer
special appreciation opportunities because they are undervalued in the
marketplace based on such factors as price/earnings ratios or the ratio of stock
price to the company's inherent asset value, book value, cash flow or underlying
franchise value. The Fund expects to invest

12
<PAGE> 13

primarily in securities of U.S.-based companies, but it may also invest in
securities of non-U.S. companies, generally through ADRs. Under normal
circumstances, at least 65% of the Fund's total assets will be invested in
equity securities and convertible securities and at least 65% of such assets
will be invested in income producing securities. However, for temporary
defensive purposes when the Adviser has determined that abnormal market or
economic conditions so warrant, the Fund may invest without limit in debt
instruments of the same types, and subject to the same conditions, as Centura
Equity Growth Fund under such circumstances.

Centura Southeast Equity Fund. Investors seeking long-term growth of
capital through investment in companies of the southeastern United States should
consider investing in Centura Southeast Equity Fund.

The investment objective of the Centura Southeast Equity Fund is long-term
capital appreciation. The Fund invests primarily in a diversified portfolio of
common and preferred stocks and securities convertible into common stock of
companies headquartered or with substantial operations in the southeastern
region of the United States. For a company to qualify as having "substantial
operations" in the southeastern United States, it must derive at least 50% of
its income from or have at least 50% of its physical assets located within the
region. The southeastern region includes Alabama, Arkansas, Florida, Georgia,
Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and
Virginia. From time to time the Fund may also invest substantially in companies
headquartered or with substantial operations in the state of Texas.

The Adviser uses fundamental analysis to select stocks of issuers that are
undervalued relative to their industry or their historical valuation ranges.
However, the Adviser may also invest in companies which it believes have
improving prospects, whose equity securities are selling below their estimated
intrinsic value. In addition, out-of-favor cyclicals may be purchased if the
Adviser anticipates a sustainable earnings recovery. Under normal market
conditions, at least 65% of the Fund's total assets will be invested in
securities of southeastern issuers, and at least 65% of its total assets will be
invested in equity securities or securities convertible into equity securities.
Under normal market conditions, the Adviser anticipates investing a majority of
the Fund's assets in securities of small to medium sized companies. Subject to
the foregoing, the Fund also has authority to invest in equity and debt
securities of non-southeastern issuers and non-U.S. issuers. Its investments in
non-U.S. issuers will generally be in the form of American Depository Receipts
("ADRs"). For temporary defensive purposes during abnormal market or economic
conditions, the Fund may invest without limit in debt instruments of the same
type, and subject to the same conditions, as Centura Equity Growth Fund under
such circumstances.

Centura Federal Securities Income Fund. Investors seeking relatively high
current income from a portfolio of U.S. Government securities should consider
investing in Centura Federal Securities Income Fund.

The investment objective of Centura Federal Securities Income Fund is to
provide high current income consistent with relative stability of principal and
safety. It pursues this objective by investing primarily in securities issued by
the U.S. Government, its agencies and instrumentalities with maximum maturities
of ten years. These securities typically display greater price stability and
safety than debt securities of longer maturity and lower quality, although the
latter generally offer higher income. In addition to limiting the maturity of
its portfolio securities, the Fund attempts to moderate principal fluctuations
by using a modified "laddering" approach to structuring the Fund's
portfolio -- i.e., by investing in securities with different maturities and
adjusting their relative proportions, as well as the maximum and average
maturity of its portfolio securities, to adapt to various market conditions.
Using this approach, the Fund hopes both to capture a high proportion of the
currently available yield on fixed income securities and to limit volatility.

To permit desirable flexibility, the Fund has authority to invest in
corporate debt securities rated A or better by S&P or Moody's (or deemed of
comparable quality by the Adviser) and high quality money market instruments
including commercial paper rated A-1 or better by S&P or Prime-1 or better by
Moody's (or deemed by the Adviser to be of comparable quality); certificates of
deposit, bankers' acceptances and other short-term

13
<PAGE> 14

debt obligations of banks with total assets of at least $1,000,000,000; and
repurchase agreements with respect to securities in which the Fund is authorized
to invest.

Centura North Carolina Tax-Free Bond Fund. Investors seeking dividend
income that is generally free of regular federal and North Carolina personal
income taxes should consider investing in the Centura North Carolina Tax-Free
Bond Fund.

The investment objective of Centura North Carolina Tax-Free Bond Fund is
relatively high current income that is free of both regular federal and North
Carolina personal income tax, together with relative safety of principal. This
Fund invests primarily in a portfolio of obligations issued by the state of
North Carolina, its political subdivisions, and their agencies and
instrumentalities, the income from which, in the opinion of the issuer's bond
counsel, is exempt from regular federal and North Carolina personal income taxes
("North Carolina Municipal Obligations"). By limiting the Fund's average
portfolio maturity to between 5 and 10 years, with a maximum maturity for any
portfolio security of 15 years, the Fund seeks to capture a high proportion of
the currently available return on North Carolina Municipal Obligations while
providing greater safety of principal than would be available from longer term
municipal securities. It also seeks to moderate price fluctuations by
diversifying its investments among different municipal issuers and by limiting
its investments to securities of high quality.

The Fund seeks to provide income that is fully free from regular federal
and North Carolina personal income taxes, as well as from the federal
alternative minimum tax. To provide the flexibility to deal with a variety of
market circumstances, however, the Fund has limited authority (a) to invest in
municipal obligations of other states ("Municipal Obligations"), the income from
which would not be free from North Carolina income tax, (b) to invest up to 10%
of its assets in municipal obligations subject to the federal alternative
minimum tax ("AMT Obligations"), and (c) to invest up to 20% of its assets in
AMT Obligations plus cash reserves and obligations producing taxable income,
including obligations of the U.S. Government, its agencies and
instrumentalities; certificates of deposit, bankers' acceptances and other
short-term debt obligations of U.S banks with total assets of at least
$1,000,000,000; commercial paper rated A-1 or better by S&P or Prime-1 or better
by Moody's (or deemed by the Adviser to be of comparable quality); and
repurchase agreements relating to underlying securities in which the Fund is
authorized to invest. For temporary defensive purposes when the Adviser has
determined that abnormal market and economic conditions so warrant, the Fund may
invest up to 50% of its assets in investments producing taxable income and AMT
Obligations. Any distributions by the Fund of capital gains and other income
that are not designated by the Fund as "exempt-interest" dividends will normally
be subject to federal, state and, in some cases, local tax. As a fundamental
policy, during periods of normal market conditions, at least 80% of the Fund's
net assets will be invested in securities the interest income from which is
exempt from the regular federal income tax. Additionally, under normal
circumstances, (a) at least 65% of the Fund's total assets will be invested in
"bonds" -- i.e. debt obligations with a duration of at least one year from the
date of issue, and (b) at least 65% of the value of the Fund's total assets will
be invested in bonds that are North Carolina Municipal Obligations. Tax advisers
should be consulted regarding tax effects for particular investors.

The Fund's quality criteria require that the Fund purchase Municipal
Obligations rated A, SP-1 or better by S&P or A, MIG-1 or better by Moody's;
commercial paper rated A-1 or better by S&P or Prime-1 or better by Moody's;
corporate debt securities rated A or better by S&P or Moody's (or debt
securities given equivalent ratings by at least two other nationally recognized
statistical rating organizations ("NRSROs")) or, if any of such securities are
not rated, that they be of comparable quality in the Adviser's opinion. For more
information on Municipal Obligations and North Carolina Municipal Obligations,
see "Description of Securities and Investment Practices" and "Risks of Investing
in the Funds."

14
<PAGE> 15

In determining to invest in a particular Municipal Obligation, the Adviser
will rely on the opinion of bond counsel for the issuer as to the validity of
the security and the exemption of interest on such security from federal and
relevant state income taxes, and the Adviser will not make an independent
investigation of the basis for any such opinion.

OTHER INVESTMENT POLICIES OF THE FUNDS

Each of the Funds may also invest up to 5% of its total assets in another
investment company, not to exceed 10% of the value of its total assets in the
securities of other investment companies. Taxable distributions earned from
other investment companies will, likewise, represent taxable income to a Fund. A
Fund will incur additional expenses due to the duplication of expenses as a
result of investing in funds other than the Funds. Each of the Funds has
authority, which it does not presently intend to exercise, to invest in futures
and options contracts and to lend its portfolio securities. For information
concerning these practices, see "Investment Policies" in the SAI.

DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES

U.S. Government Securities (All Funds). U.S. Government securities are
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. U.S. Treasury bills, which have a maturity of up to one year,
are direct obligations of the United States and are the most frequently issued
marketable U.S. Government security. The U.S. Treasury also issues securities
with longer maturities in the form of notes and bonds.

U.S. Government agency and instrumentality obligations are debt securities
issued by U.S. Government-sponsored enterprises and Federal agencies. Some
obligations of agencies are supported by the full faith and credit of the United
States or by U.S. Treasury guarantees, such as mortgage-backed certificates
issued by the Government National Mortgage Association; others, such as
obligations of the Federal Home Loan Banks, Federal Farm Credit Banks, Bank for
Cooperatives, Federal Intermediate Credit Banks and the Federal Land Bank, are
guaranteed by the right of the issuer to borrow from the U.S. Treasury; others,
such as obligations of the Federal National Mortgage Association, are supported
by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as obligations of
the Student Loan Marketing Association and the Tennessee Valley Authority, are
backed only by the credit of the agency or instrumentality issuing the
obligation. In the case of obligations not backed by the full faith and credit
of the United States, the investor must look principally to the agency issuing
or guaranteeing the obligation for ultimate repayment.

Bank Obligations (All Funds). These obligations include negotiable
certificates of deposit and bankers' acceptances. The Funds limit their bank
investments to dollar-denominated obligations of U.S. or foreign banks which
have more than $1 billion in total assets at the time of investment and, in the
case of U.S. banks, are members of the Federal Reserve System or are examined by
the Comptroller of the Currency, or whose deposits are insured by the Federal
Deposit Insurance Corporation.

Commercial Paper (All Funds). Commercial paper includes short-term
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by domestic and foreign bank holding companies, corporations
and financial institutions, as well as similar instruments issued by government
agencies and instrumentalities.

Corporate Debt Securities (All Funds). A Fund's investments in corporate
debt securities are limited to corporate debt securities (corporate bonds,
debentures, notes and other similar corporate debt instruments) which meet the
previously disclosed minimum ratings and maturity criteria established for the
Fund under the direction

15
<PAGE> 16

of the Board of Directors and the Fund's Adviser or, if unrated, are in the
Adviser's opinion comparable in quality to corporate debt securities in which
the Fund may invest. See "The Funds."

Repurchase Agreements (All Funds). Securities held by the Funds may be
subject to repurchase agreements. A repurchase agreement is a transaction in
which the seller of a security commits itself at the time of the sale to
repurchase that security from the buyer at a mutually agreed-upon time and
price. These agreements permit the Funds to earn income for periods as short as
overnight. Repurchase agreements may be considered to be loans by the purchaser
collateralized by the underlying securities. These agreements will be fully
collateralized at all times and the collateral will be marked-to-market daily.
The Funds will enter into repurchase agreements only with dealers, domestic
banks or recognized financial institutions which in the opinion of the Adviser,
present minimal credit risks in accordance with guidelines adopted by the Board
of Directors. In the event of default by the seller under the repurchase
agreement a Fund may have problems in exercising its rights to the underlying
securities and may experience time delays in connection with the disposition of
such securities.

Loans of Portfolio Securities (All Funds). To increase current income each
Fund may lend its portfolio securities worth up to 5% of that Fund's total
assets to brokers, dealers and financial institutions, provided certain
conditions are met, including the condition that each loan is secured
continuously by collateral maintained on a daily mark-to-market basis in an
amount at least equal to the current market value of the securities loaned. For
further information, see the SAI.

Variable and Floating Rate Demand and Master Demand Notes (All Funds). The
Funds may, from time to time, buy variable or floating rate demand notes issued
by corporations, bank holding companies and financial institutions and similar
instruments issued by government agencies and instrumentalities. These
securities will typically have a maturity over one year but carry with them the
right of the holder to put the securities to a remarketing agent or other entity
at designated time intervals and on specified notice. The obligation of the
issuer of the put to repurchase the securities may be backed by a letter of
credit or other obligation issued by a financial institution. The repurchase
price is ordinarily par plus accrued and unpaid interest. Generally, the
remarketing agent will adjust the interest rate every seven days (or at other
specified intervals) in order to maintain the interest rate at the prevailing
rate for securities with a seven-day or other designated maturity. A Fund's
investment in demand instruments which provide that the Fund will not receive
the principal note amount within seven days' notice, in combination with the
Fund's other investments in illiquid instruments, will be limited to an
aggregate total of 15% of that Fund's net assets.

The Funds may also buy variable rate master demand notes. The terms of
these obligations permit a Fund to invest fluctuating amounts at varying rates
of interest pursuant to direct arrangements between the Fund, as lender, and the
borrower. These instruments permit weekly and, in some instances, daily changes
in the amounts borrowed. The Funds have the right to increase the amount under
the note at any time up to the full amount provided by the note agreement, or to
decrease the amount, and the borrower may repay up to the full amount of the
note without penalty. The notes may or may not be backed by bank letters of
credit. Because the notes are direct lending arrangements between the Fund and
borrower, it is not generally contemplated that they will be traded, and there
is no secondary market for them, although they are redeemable (and, thus,
immediately repayable by the borrower) at principal amount, plus accrued
interest, at any time. In connection with any such purchase and on an ongoing
basis, the Adviser will consider the earning power, cash flow and other
liquidity ratios of the issuer, and its ability to pay principal and interest on
demand, including a situation in which all holders of such notes make demand
simultaneously. While master demand notes, as such, are not typically rated by
credit rating agencies, a Fund may, under its minimum rating standards, invest
in them only if, at the time of an investment, the issuer meets the criteria set
forth in this Prospectus for commercial paper obligations.

16
<PAGE> 17

Forward Commitments and When-Issued Securities (All Funds). A Fund may
purchase when-issued securities and make contracts to purchase securities for a
fixed price at a future date beyond customary settlement time if the Fund holds,
and maintains until the settlement date in a segregated account cash, U.S.
Government securities or high-grade debt obligations in an amount sufficient to
meet the purchase price, or if the Fund enters into offsetting contracts for the
forward sale of other securities it owns. Purchasing securities on a when-issued
basis and forward commitments involves a risk of loss if the value of the
security to be purchased declines prior to the settlement date, which risk is in
addition to the risk of decline in value of a Fund's other assets. No income
accrues on securities purchased on a when-issued basis prior to the time
delivery of the securities is made, although a Fund may earn interest on
securities it has deposited in the segregated account because it does not pay
for the when-issued securities until they are delivered. Investing in
when-issued securities has the effect of (but is not the same as) leveraging the
Fund's assets. Although a Fund would generally purchase securities on a when-
issued basis or enter into forward commitments with the intention of actually
acquiring securities, that Fund may dispose of a when-issued security or forward
commitment prior to settlement if the Adviser deems it appropriate to do so. A
Fund may realize short-term profits or losses upon such sales.

Mortgage-Related Securities (Centura Equity Income Fund, Centura Federal
Securities Income Fund and Centura North Carolina Tax-Free Bond Fund). Mortgage
pass-through securities are securities representing interests in "pools" of
mortgages in which payments of both interest and principal on the securities are
made monthly, in effect "passing through" monthly payments made by the
individual borrowers on the residential mortgage loans which underlie the
securities (net of fees paid to the issuer or guarantor of the securities).
Centura North Carolina Tax-Free Bond Fund may invest only in those mortgage
pass-through securities whose payments are tax-exempt. Early repayment of
principal on mortgage pass-through securities (arising from prepayments of
principal due to sale of the underlying property, refinancing, or foreclosure,
net of fees and costs which may be incurred) may expose a Fund to a lower rate
of return upon reinvestment of principal. Also, if a security subject to
prepayment has been purchased at a premium, in the event of prepayment the value
of the premium would be lost. Like other fixed-income securities, when interest
rates rise, the value of a mortgage-related security generally will decline;
however, when interest rates decline, the value of mortgage-related securities
with prepayment features may not increase as much as other fixed-income
securities. In recognition of this prepayment risk to investors, the Public
Securities Association (the "PSA") has standardized the method of measuring the
rate of mortgage loan principal prepayments. The PSA formula, the Constant
Prepayment Rate (the "CPR"), or other similar models that are standard in the
industry will be used by a Fund in calculating maturity for purposes of its
investment in mortgage-related securities. Upward trends in interest rates tend
to lengthen the average life of mortgage-related activities and also cause the
value of outstanding securities to drop. Thus, during periods of rising interest
rates, the value of these securities held by a Fund would tend to drop and the
portfolio-weighted average life of the securities held by a Fund may tend to
lengthen due to this effect. Longer-term securities tend to experience more
price volatility. Under these circumstances, a Manager may, but is not required
to, sell securities in part in order to maintain an appropriate
portfolio-weighted average life.

Payment of principal and interest on some mortgage pass-through securities
(but not the market value of the securities themselves) may be guaranteed by the
full faith and credit of the U.S. Government (such as securities guaranteed by
the Government National Mortgage Association ("GNMA"); or guaranteed by agencies
or instrumentalities of the U.S. Government (such as securities guaranteed by
the Federal National Mortgage Association ("FNMA") or the Federal Home Loan
Mortgage Corporation ("FHLMC"), which are supported only by the discretionary
authority of the U.S. Government to purchase the agency's obligations). Mortgage
pass-through securities created by nongovernmental issuers (such as commercial
banks, savings and loan institutions, private mortgage insurance companies,
mortgage bankers and other secondary market issuers) may be supported by various
forms of insurance or guarantees, including individual loan, title, pool and
hazard insurance, and letters of credit, which may be issued by governmental
entities, private insurers or the mortgage poolers.

17
<PAGE> 18

A Fund may also invest in investment grade Collateralized Mortgage
Obligations ("CMOs") which are hybrid instruments with characteristics of both
mortgage-backed bonds and mortgage pass-through securities. Similar to a bond,
interest and prepaid principal on a CMO are paid, in most cases, semi-annually.
CMOs may be collateralized by whole mortgage loans but are more typically
collateralized by portfolios of mortgage pass-through securities guaranteed by
GNMA, FHLMC or FNMA. CMOs are structured into multiple classes, with each class
bearing a different stated maturity. Monthly payments of principal, including
prepayments, are first returned to investors holding the shortest maturity
class; investors holding longer maturity classes receive principal only after
the first class has been retired. CMOs may be issued by government and
non-governmental entities. Some CMOs are debt obligations of FHLMC issued in
multiple classes with different maturity dates secured by the pledge of a pool
of conventional mortgages purchased by FHLMC. Other types of CMOs are issued by
corporate issuers in several series, with the proceeds used to purchase
mortgages or mortgage pass-through certificates. With some CMOs, the issuer
serves as a conduit to allow loan originators (primarily builders or savings and
loan associations) to borrow against their loan portfolios. To the extent a
particular CMO is issued by an investment company, a Fund's ability to invest in
such CMOs will be limited. See "The Funds -- Other Investment Policies of the
Funds."

Assumptions generally accepted by the industry concerning the probability
of early payment may be used in the calculation of maturities for debt
securities that contain put or call provisions, sometimes resulting in a
calculated maturity different from the stated maturity of the security.

It is anticipated that governmental, government-related or private entities
may create mortgage loan pools and other mortgage-related securities offering
mortgage pass-through and mortgage-collateralized investments in addition to
those described above. As new types of mortgage-related securities are developed
and offered to investors, the Adviser will, consistent with a Fund's investment
objectives, policies and quality standards, consider making investments in such
new types of mortgage-related securities, but no investments will be made in
such securities until the Fund's prospectus and/or SAI have been revised to
reflect such securities.

Other Asset-Backed Securities (Centura Equity Income Fund, Centura Federal
Securities Income Fund and Centura North Carolina Tax-Free Bond Fund). Other
asset-backed securities (unrelated to mortgage loans) are developed from time to
time and may be purchased by a Fund to the extent consistent with its investment
objective and policies, but only after disclosure reflecting such securities has
been added to the Fund's prospectus and/or SAI.

Foreign Securities (Centura Equity Growth Fund, Centura Equity Income Fund
and Centura Southeast Equity Fund). These Funds may invest in securities
represented by American Depositary Receipts ("ADRs"). ADRs are
dollar-denominated receipts generally issued by domestic banks, which represent
the deposit with the bank of a security of a foreign issuer, and which are
publicly traded on exchanges or over-the-counter in the United States. There are
certain risks associated with investments in unsponsored ADR programs. Because
the non-U.S. company does not actively participate in the creation of the ADR
program, the underlying agreement for service and payment will be between the
depositary and the shareholders. The company issuing the stock underlying the
ADRs pays nothing to establish the unsponsored facility, as fees for ADR
issuance and cancellation are paid by brokers. Investors directly bear the
expenses associated with certificate transfer, custody and dividend payment. In
addition, in an unsponsored ADR program, there may be several depositories with
no defined legal obligations to the non-U.S. company. The duplicate depositories
may lead to marketplace confusion because there would be no central source of
information to buyers, sellers and intermediaries. The efficiency of
centralization gained in a sponsored program can greatly reduce the delays in
delivery of dividends and annual reports. For more information, see "Risks of
Investing in the Funds."

18
<PAGE> 19

Forward Foreign Currency Transactions (Centura Equity Growth Fund, Centura
Equity Income Fund and Centura Southeast Equity Fund). These Funds may enter
into forward foreign currency exchange contracts in order to protect against
uncertainty in the level of future foreign exchange rates. These contracts,
which involve costs, permit a Fund to purchase or sell a specific amount of a
particular currency at a specified price on a specified future date. A Fund will
realize a benefit from this type of contract only to the extent that the
relevant currencies move as anticipated. If the currencies do not move as
anticipated, the contracts may cause greater loss to a Fund than if they had not
been used. See the SAI for further information concerning forward foreign
currency transactions.

Futures Contracts and Options (All Funds). The Funds may purchase and sell
futures contracts on securities, currencies, and indices of securities, and
write and sell put and call options on securities, currencies and indices of
securities as a hedge against changes in interest rates, stock prices, currency
fluctuations and other market developments, provided that not more than 5% of a
Fund's net assets are committed to margin deposits on futures contracts and
premiums for options. See the SAI for information about futures and options. See
"Risks of Investing in the Funds" for a discussion of risks related to investing
in futures and options.

Municipal Obligations (Centura North Carolina Tax-Free Bond Fund). The
Fund may invest in securities issued by states, their political subdivisions and
agencies and instrumentalities of the foregoing, the income from which, in the
opinion of bond counsel for the issuer, is exempt from regular income taxes by
the federal government and state of the issuing entity ("Municipal
Obligations"). Such Municipal Obligations include municipal bonds, floating rate
and variable rate Municipal Obligations, participation interests in municipal
bonds, tax-exempt asset-backed certificates, tax-exempt commercial paper,
short-term municipal notes, and stand-by commitments. It may be anticipated that
governmental, government-related or private entities will create other
tax-exempt investments in addition to those described above. As new types of
tax-exempt vehicles are developed, the Adviser will, consistent with the Fund's
investment objectives, policies and quality standards, consider making
investments in such types of Municipal Obligations, but will not make such
investments until they are reflected in the Fund's prospectus and/or SAI. The
Fund will purchase only Municipal Obligations rated A, SP-1 or better by S&P or
A, MIG-1 or better by Moody's (or given equivalent ratings by another NRSRO) or,
if the securities are not rated, are of comparable quality in the Adviser's
opinion. Municipal Obligations in which the Fund may invest include "general
obligation" and "revenue" securities. General obligation securities are backed
by the issuer's full faith, credit and taxing power for the payment of principal
and interest. The taxes that can be levied for the payment of debt service may
be limited or unlimited in terms of rate or amount or special assessments.
Revenue securities are secured primarily by net revenues generated by a
particular facility or group of facilities, or by the proceeds of a special
excise or other specific revenue source. Additional security may be provided by
a debt service reserve fund. Municipal bonds include industrial development
bonds ("IDBs"), moral obligation bonds, put bonds and private activity bonds
("PABs"). PABs generally relate to the financing of a facility used by a private
entity or entities. The credit quality of such bonds is usually directly related
to that of the users of the facilities. The interest on most PABs is an item of
tax preference for purposes of the Federal alternative minimum tax and Fund
distributions attributable to such interest likewise, constitute an item of tax
preference. For information on the risks related to the Fund's concentration in
North Carolina Municipal Obligations, see "Risks of Investing in the Funds."

Municipal Lease Obligations (Centura North Carolina Tax-Free Bond
Fund). The Fund may invest in municipal lease obligations including
certificates of participation ("COPs"), which finance a variety of public
projects. Because of the way these instruments are structured, they may carry a
greater risk than other types of Municipal Obligations. The Fund may invest in
lease obligations only when they are rated by a rating agency or, if unrated,
are deemed by the Adviser, to be of a quality comparable to the Fund's quality
standards. With respect to any such unrated municipal lease obligations in which
the Fund invests, the Company's Board of Directors will

19
<PAGE> 20

be responsible for determining their credit quality, on an ongoing basis,
including assessing the likelihood that the lease will not be canceled. Prior to
purchasing a municipal lease obligation and on a regular basis thereafter, the
Adviser will evaluate the credit quality and, pursuant to guidelines adopted by
the Directors, the liquidity of the security. In making its evaluation, the
Adviser will consider various credit factors, such as the necessity of the
project, the municipality's credit quality, future borrowing plans, and sources
of revenue pledged for lease repayment, general economic conditions in the
region where the security is issued, and liquidity factors, such as dealer
activity. For discussion regarding municipal lease obligations, see "Risks of
Investing in the Funds" in this Prospectus and "Investment Policies" in the SAI.

Stand-By Commitments (Centura North Carolina Tax-Free Bond Fund). The Fund
may acquire "stand-by commitments," which will enable it to improve its
portfolio liquidity by making available same-day settlements on sales of its
securities. A stand-by commitment gives the Fund, when it purchases a Municipal
Obligation from a broker, dealer or other financial institution ("seller"), the
right to sell up to the same principal amount of such securities back to the
seller, at the Fund's option, at a specified price. Stand-by commitments are
also known as "puts." The Fund may acquire stand-by commitments solely to
facilitate portfolio liquidity and not to protect against changes in the market
price of the Fund's portfolio securities. The exercise by the Fund of a stand-by
commitment is subject to the ability of the other party to fulfill its
contractual commitment.

The Fund expects that stand-by commitments generally will be available
without the payment of any direct or indirect consideration. However, if
necessary or advisable, the Fund will pay for stand-by commitments either
separately in cash or by paying a higher price for portfolio securities which
are acquired subject to the commitments.

It is difficult to evaluate the likelihood of use or the potential benefit
of a stand-by commitment. Therefore, it is expected that the Directors will
determine that stand-by commitments ordinarily have a "fair value" of zero,
regardless of whether any direct or indirect consideration was paid. However, if
the market price of the security subject to the stand-by commitment is less than
the exercise price of the stand-by commitment, such security win ordinarily be
valued at such exercise price. Where the Fund has paid for a stand-by
commitment, its cost will be reflected as unrealized depreciation for the period
during which the commitment is held.

There is no assurance that stand-by commitments will be available to the
Fund nor does the Fund assume that such commitments would continue to be
available under all market conditions.

Third Party Puts (Centura North Carolina Tax-Free Bond Fund). The Fund may
also purchase long-term fixed rate bonds that have been coupled with an option
granted by a third party financial institution allowing the Fund at specified
intervals to tender (or "put") the bonds to the institution and receive the face
value thereof (plus accrued interest). These third party puts are available in
several different forms, may be represented by custodial receipts or trust
certificates and may be combined with other features such as interest rate
swaps. The Fund receives a short-term rate of interest (which is periodically
reset), and the interest rate differential between that rate and the fixed rate
on the bond is retained by the financial institution. The financial institution
granting the option does not provide credit enhancement. In the event that there
is a default in the payment of principal or interest, or downgrading of a bond
to below investment grade, or a loss of the bond's tax-exempt status, the put
option will terminate automatically. The risk to the Fund in this case will be
that of holding a long-term bond which would tend to lengthen the weighted
average maturity of the Fund's portfolio.

These bonds coupled with puts may present tax issues also associated with
stand-by commitments. As with any stand-by commitments acquired by the Fund, the
Fund intends to take the position that it is the owner of any Municipal
Obligation acquired subject to a third-party put, and that tax-exempt interest
earned with respect to such Municipal Obligations will be tax-exempt in its
hands. There is no assurance that the Internal Revenue Service will agree with
such position in any particular case. Additionally, the federal income tax
treatment of

20
<PAGE> 21

certain other aspects of these investments, including the treatment of tender
fees and swap payments, in relation to various regulated investment company tax
provisions is unclear. However, the Adviser intends to manage the Fund's
portfolio in a manner designed to minimize any adverse impact from these
investments.

Participation Interests (Centura North Carolina Tax-Free Bond Fund). The
Fund may purchase from banks participation interests in all or part of specific
holdings of Municipal Obligations. Each participation is backed by an
irrevocable letter of credit or guarantee of the selling bank that the Fund's
Adviser has determined meets the prescribed quality standards of the Fund. Thus
either the credit of the issuer of the Municipal Obligation or the selling bank,
or both, will meet the quality standards of the Fund. The Fund has the right to
sell the participation back to the bank after seven days' notice for the full
principal amount of the Fund's interest in the Municipal Obligation plus accrued
interest, but only (a) as required to provide liquidity to the Fund, (b) to
maintain a high quality investment portfolio or (c) upon a default under the
terms of the Municipal Obligation. The selling bank will receive a fee from the
Fund in connection with the arrangement. The Fund will not purchase
participation interests unless it receives an opinion of counsel or a ruling of
the Internal Revenue Service satisfactory to the Adviser that interest earned by
the Fund on Municipal Obligations on which it holds participation interests is
exempt from federal income tax.

INVESTMENT RESTRICTIONS

The following restrictions are applicable to each of the Funds, except as
otherwise indicated.

(1) No Fund may, with respect to 75% of its total assets, purchase
more than 10% of the voting securities of any one issuer or invest more
than 5% of the value of such assets in the securities or instruments of any
one issuer, except securities or instruments issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.

(2) No Fund may purchase securities or instruments which would cause
25% or more of the market value of its total assets at the time of such
purchase to be invested in securities or instruments of one or more issuers
having their principal business activities in the same industry, provided
that there is no limit with respect to investments in the U.S. Government,
its agencies and instrumentalities.

(3) No Fund may borrow money, except that a Fund may borrow from banks
up to 10% of the current value of its total net assets for temporary or
emergency purposes. A Fund will make no purchase if its outstanding
borrowings exceed 5% of its total assets.

(4) No Fund may make loans, except that a Fund may (a) lend its
portfolio securities, (b) enter into repurchase agreements with respect to
its portfolio securities, and (c) purchase the types of debt instruments
described in this Prospectus or the SAI.

For purposes of investment restriction number (1), Centura North Carolina
Tax-Free Bond Fund considers a Municipal Obligation to be issued by the
governmental entity (or entities) whose assets and revenues back the Municipal
Obligation. For a Municipal Obligation backed only by the assets and revenues of
a nongovernmental user, such user is deemed to be the issuer; such issuers, to
the extent their principal business activities are in the same industry, are
also subject to investment restriction (2). For purposes of investment
restriction (2), public utilities are not deemed to be a single industry but are
separated by industrial categories, such as telephone or gas utilities.

The foregoing investment restrictions and those described in the SAI as
fundamental are policies of each Fund which may be changed with respect to that
Fund only when permitted by law and approved by the holders

21
<PAGE> 22

of a majority of the applicable Fund's outstanding voting securities as
described under "Other Information -- Voting."

Additionally, as a non-fundamental policy, no Fund may invest more than 15%
of the aggregate value of its net assets in investments which are illiquid, or
not readily marketable (including repurchase agreements having maturities of
more than seven calendar days and variable and floating rate demand and master
demand notes not requiring receipt of the principal note amount within seven
days' notice).

If a percentage restriction on investment policies or the investment or use
of assets set forth in this Prospectus are adhered to at the time a transaction
is effected, later changes in percentage resulting from changing values will not
be considered a violation.

RISKS OF INVESTING IN THE FUNDS

The price per share of each of the Funds will fluctuate with changes in the
value of the investments held by the Fund. Shareholders of a Fund should expect
the value of their shares to fluctuate with changes in the value of the
securities owned by that Fund. There is, of course, no assurance that a Fund
will achieve its investment objective or be successful in preventing or
minimizing the risk of loss that is inherent in investing in particular types of
investment products. In order to attempt to minimize that risk, the Adviser
monitors developments in the economy, the securities markets, and with each
particular issuer. Also, as noted earlier, each Fund is managed within certain
limitations that restrict the amount of a Fund's investment in any single
issuer.

Foreign Securities (Centura Equity Growth Fund, Centura Equity Income Fund
and Centura Southeast Equity Fund). Investing in the securities of issuers in
any foreign country, including ADRS, involves special risks and considerations
not typically associated with investing in securities of U.S. issuers. These
include differences in accounting, auditing and financial reporting standards;
generally higher commission rates on foreign portfolio transactions; the
possibility of nationalization, expropriation or confiscatory taxation; adverse
changes in investment or exchange control regulations (which may include
suspension of the ability to transfer currency from a country); and political
instability which could affect U.S. investments in foreign countries.
Additionally, foreign securities and dividends and interest payable on those
securities may be subject to foreign taxes, including taxes withheld from
payments on those securities. Foreign securities often trade with less frequency
and volume than domestic securities and, therefore, may exhibit greater price
volatility. Additional costs associated with an investment in foreign securities
may include higher custodial fees than apply to domestic custodial arrangements
and transaction costs of foreign currency conversions. Changes in foreign
exchange rates also will affect the value of securities denominated or quoted in
currencies other than the U.S. dollar. A Fund's objective may be affected either
unfavorably or favorably by fluctuations in the relative rates of exchange
between the currencies of different nations, by exchange control regulations and
by indigenous economic and political developments. A decline in the value of any
particular currency against the U.S. dollar will cause a decline in the U.S.
dollar value of a Fund's holdings of securities denominated in such currency
and, therefore, will cause an overall decline in a Fund's net asset value and
any net investment income and capital gains to be distributed in U.S. dollars to
shareholders of the Fund. The rate of exchange between the U.S. dollar and other
currencies is determined by several factors including the supply and demand for
particular currencies, central bank efforts to support particular currencies,
the movement of interest rates, the pace of business activity in certain other
countries and the United States, and other economic and financial conditions
affecting the world economy. Although a Fund may engage in forward foreign
currency transactions and foreign currency options to protect its portfolio
against fluctuations in currency exchange rates in relation to the U.S. dollar,
there is no assurance that these techniques will be successful. See "Description
of Securities and Investment Practices" and below for additional information
about these kinds of transactions.

22
<PAGE> 23

Although the Funds value their assets daily in terms of U.S. dollars, the
Funds do not intend to convert their holdings of foreign currencies into U.S.
dollars on a daily basis. The Funds will do so from time to time, and investors
should be aware of the costs of currency conversion. Although foreign exchange
dealers do not charge a fee for conversion, they do realize a profit based on
the difference ("spread") between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign currency
to a Fund at one rate, while offering a lesser rate of exchange should the Fund
desire to sell that currency to the dealer.

Through the Funds' flexible policies, the Adviser endeavors to avoid
unfavorable consequences and to take advantage of favorable developments in
particular nations where, from time to time, it may place the Funds'
investments. See the SAI for further information about foreign securities.

Zero Coupon and Pay-In-Kind Securities (Centura Equity Income Fund, Centura
Federal Securities Income Fund and Centura North Carolina Tax-Free Bond
Fund). Zero coupon bonds (which do not pay interest until maturity) and
pay-in-kind securities (which pay interest in the form of additional securities)
may be more speculative and may fluctuate more in value than securities which
pay income periodically and in cash. In addition, although a Fund receives no
periodic cash payments from such investments, applicable tax rules require the
Fund to accrue and pay out its income from such securities annually as income
dividends and require stockholders to pay tax on such dividends (except if such
dividends qualify as exempt-interest dividends).

North Carolina Municipal Obligations (Centura North Carolina Tax-Free Bond
Fund). Because this Fund will concentrate its investments in North Carolina
Municipal Obligations, it may be affected by political, economic or regulatory
factors that may impair the ability of North Carolina issuers to pay interest on
or to repay the principal of their debt obligations. Thus, the net asset value
of the shares may be particularly impacted by the general economic situation
within North Carolina. The concentration of the Fund's investments in a single
state may involve greater risk than if the Fund invested in Municipal
Obligations throughout the country, due to the possibility of an economic or
political development which could uniquely affect the ability of issuers to meet
the debt obligations of the securities.

The economy of North Carolina is supported by industry, agricultural
products, and tourism, with the largest segment of its work force employed in
manufacturing. From 1980 to 1995, the state's per capita income grew 133.8%,
from $7,999 to $20,604. The state has the nation's tenth highest population, and
its unemployment rate in March 1995 was 3.9% of the labor force (versus a
national rate of 5.5%). The state's labor force grew 26.4% between 1980 and
1994, while its complexion shifted from agriculture to the production of goods
and services. In 1993, North Carolina nevertheless ranked tenth in the nation in
gross agricultural income. Although 20% of its agricultural income comes from
tobacco, 34% comes from a diversified poultry industry and the remainder from a
relatively large variety of other agricultural plant and animal products. North
Carolina is the third most diversified state in the country in terms of its
agriculture.

Obligations of issuers of North Carolina Municipal Obligations are subject
to the provisions of bankruptcy, insolvency and other laws affecting the rights
and remedies of creditors, such as the Federal Bank Reform Act of 1978. In
addition, the obligations of such issuers may become subject to the laws enacted
in the future by Congress or the North Carolina legislature or by referenda
extending the time for payment of principal and/or interest, or imposing other
constraints upon enforcement of such obligations or upon municipalities to levy
taxes. There is also the possibility that, as a result of legislation or other
conditions, the power or ability of any issuer to pay, when due, the principal
of and interest on its North Carolina Municipal Obligations may be materially
affected. Additional considerations relating to the risks of investing in North
Carolina Municipal Obligations are presented in the SAI.

Municipal Lease Obligations (Centura North Carolina Tax-Free Bond
Fund). Municipal lease obligations have special risks not normally associated
with municipal bonds. These obligations frequently contain "non-

23
<PAGE> 24

appropriation" clauses that provide that the governmental issuer of the
obligation has no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the legislative body on a
yearly or other periodic basis. For more information on risks of municipal lease
investments, see the SAI.

Risks of Options Transactions (All Funds). The purchase and writing of
options involves certain risks. During the option period, the covered call
writer has, in return for the premium on the option, given up the opportunity to
profit from a price increase in the underlying securities above the exercise
price, but, as long as its obligation as a writer continues, has retained the
risk of loss should the price of the underlying security decline. The writer of
an option has no control over the time when it may be required to fulfill its
obligation as a writer of the option. Once an option writer has received an
exercise notice, it cannot effect a closing purchase transaction in order to
terminate its obligation under the option and must deliver the underlying
securities at the exercise price. If a put or call option purchased by a Fund is
not sold when it has remaining value, and if the market price of the underlying
security, in the case of a put, remains equal to or greater than the exercise
price, or in the case of a call, remains less than or equal to the exercise
price, the Fund will lose its entire investment in the option. Also, where a put
or call option on a particular security is purchased to hedge against price
movements in a related security, the price of the put or call option may move
more or less than the price of the related security. There can be no assurance
that a liquid market will exist when a Fund seeks to close out an option
position. Furthermore, if trading restrictions or suspensions are imposed on the
options market, a Fund may be unable to close out a position. If a Fund cannot
effect a closing transaction, it will not be able to sell the underlying
security while the previously written option remains outstanding, even if it
might otherwise be advantageous to do so.

Risks of Foreign Currency Options (Centura Equity Growth Fund, Centura
Equity Income Fund and Centura Southeast Equity Fund). Currency options traded
on U.S. or other exchanges may be subject to position limits which may limit the
ability of a Fund to reduce foreign currency risk using such options. Over-the-
counter options differ from exchange-traded options in that they are two-party
contracts with price and other terms negotiated between buyer and seller and
generally do not have as much market liquidity as exchange-traded options.
Employing hedging strategies with options on currencies does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Furthermore, such hedging transactions reduce
or preclude the opportunity for gain if the value of the hedged currency should
change relative to the U.S dollar. A Fund will not speculate in options on
foreign currencies.

There is no assurance that a liquid secondary market will exist for any
particular foreign currency option, or at any particular time. In the event no
liquid secondary market exists, it might not be possible to effect closing
transactions in particular options. If a Fund cannot close out an option which
it holds, it would have to exercise its option in order to realize any profit
and would incur transactional costs on the sale of the underlying assets.

Risks of Futures And Related Options Transactions (All Funds). There are
several risks associated with the use of futures contracts and options on
futures contracts. While a Fund's use of futures contracts and related options
for hedging may protect a Fund against adverse movements in the general level of
interest rates or securities prices, such transactions could also preclude the
opportunity to benefit from favorable movements in the level of interest rates
or securities prices. There can be no guarantee that the Adviser's forecasts
about market value interest rates and other applicable factors will be correct
or that there will be a correlation between price movements in the hedging
vehicle and in the securities being hedged. The skills required to invest
successfully in futures and options may differ from the skills required to
manage other assets in a Fund's portfolio. An incorrect forecast or imperfect
correlation could result in a loss on both the hedged securities in a Fund and
the hedging vehicle so that the Fund's return might have been better had hedging
not been attempted.

24
<PAGE> 25

There can be no assurance that a liquid market will exist at a time when a
Fund seeks to close out a futures contract or futures option position. Most
futures exchanges and boards of trade limit the amount of fluctuation permitted
in futures contract prices during a single day; once the daily limit has been
reached on a particular contract, no trades may be made that day at a price
beyond that limit. In addition, certain of these instruments are relatively new
and without a significant trading history. As a result, there is no assurance
that an active secondary market will develop or continue to exist. Lack of a
liquid market for any reason may prevent the Fund from liquidating an
unfavorable position and the Fund would remain obligated to meet margin
requirements until the position is closed. The potential risk to a Fund from a
futures transaction is unlimited. Therefore, although the Funds have authority
to engage in futures transactions, they have no present intention to do so and
will engage in such transactions only when disclosure to that affect has been
added to the Prospectus.

A Fund will only enter into futures contracts or futures options which are
standardized and traded on a U.S. or foreign exchange or board of trade, or
similar entity, or are quoted on an automated quotation system. A Fund will not
enter into a futures contract if immediately thereafter the initial margin
deposits for futures contracts held by the Fund plus premiums paid by it for
open futures options positions, less the amount by which any such positions are
"in-the-money," would exceed 5% of the Fund's total assets.

The Funds may trade futures contracts and options on futures contracts on
U.S. domestic markets and, except for Centura North Carolina Tax-Free Bond Fund,
also on exchanges located outside of the United States. Foreign markets,
however, may have greater risk potential than domestic markets. Unlike trading
on domestic commodity exchanges, trading on foreign commodity exchanges is not
regulated by the Commodity Futures Trading Commission and may be subject to
greater risk than trading on domestic exchanges. For example, some foreign
exchanges are principal markets so that no common clearing facility exists and a
trader may look only to the broker for performance of the contract. In addition,
any profits that a Fund might realize in trading could be eliminated by adverse
changes in the exchange rate of the currency in which the transaction is
denominated, or the Fund could incur losses as a result of changes in the
exchange rate. Transactions on foreign exchanges may include both commodities
that are traded on domestic exchanges or boards of trade and those that are not.

Risks of Forward Foreign Currency Contracts (Centura Equity Growth Fund,
Centura Equity Income Fund and Centura Southeast Equity Fund). The precise
matching of forward contracts and the value of the securities involved will not
generally be possible since the future value of the securities in foreign
currencies will change as a consequence of market movements in the value of
those securities between the date the forward contract is entered into and the
date it matures. Projection of short-term currency market movements is extremely
difficult, and the successful execution of a short-term hedging strategy is
highly uncertain. There can be no assurance that new forward contracts or
offsets will always be available to the Funds.

Risks of Concentrating Investments in Southeastern Issuers (Centura
Southeast Equity Fund). Because Centura Southeast Equity Fund will normally
invest primarily in equity securities of southeastern issuers, its portfolio
will be more vulnerable to negative economic developments and natural disasters
affecting the region than a fund with a more geographically diversified
portfolio. There can, of course, be no assurance that southeastern issuers will
outperform, or perform as well as, issuers of other regions, and there can be no
assurance that southeastern issuers whose securities are held by the Fund will
outperform, or perform as well as, those of the region generally, other issuers
of the region, or issuers of any other U.S. or foreign region.

MANAGEMENT OF THE FUNDS

The business and affairs of each Fund are managed under the direction of
the Board of Directors. The Directors are Leslie H. Garner, Jr., James H. Speed,
Jr., Frederick E. Turnage, Lucy Hancock Bode and

25
<PAGE> 26

J. Franklin Martin. Additional information about the Directors, as well as the
Company's executive officers, may be found in the SAI under the heading
"Management -- Directors and Officers."

THE ADVISER: CENTURA BANK

Centura Bank, 131 North Church Street, Rocky Mount, North Carolina 27802,
is a member bank of the Federal Reserve System. Centura Bank and its parent,
Centura Banks, Inc., were formed in 1990 through a merger of two other Rocky
Mount, North Carolina bank holding companies and their subsidiary banks.

For the advisory services it provides the Funds, the Adviser receives from
each Fund fees, payable monthly based on the average daily net assets, at an
annual rate based on the Fund's average net assets. Fees are 0.70% for Centura
Equity Growth Fund, 0.70% for Centura Equity Income Fund, 0.30% for Centura
Federal Securities Income Fund, 0.35% for Centura North Carolina Tax-Free Bond
Fund and 0.70% for Centura Southeast Equity Fund. The Adviser also serves as
Custodian for the Funds' assets, for which it receives additional fees. For the
fiscal year ended April 30, 1997, the Adviser received $1,127,435 in advisory
fees from the Equity Growth Fund and $358,174 from the Federal Securities Income
Fund. The advisory fees for the North Carolina Tax-Free Bond Fund amounted to
$140,821; however, the Adviser waived $100,587. For the period from October 1,
1996 (the commencement of operations) to April 30, 1997, the advisory fees for
the Equity Income Fund were $217,106; however, the Adviser waived $105,451.

Frank Jolley has primary responsibility for management of the Centura
Equity Income Fund and the Centura Equity Growth Fund. Mr. Jolley has over 17
years experience in investments and financial analysis. He graduated from the
University of North Carolina with a Bachelor of Science in business
administration. Mr. Jolley began his investment career with Dean Witter Reynolds
in retail sales and later served as a branch manager for a regional securities
firm. Primary duties at Centura have included the management of common and
collective funds along with personal trust and pension fund investment
responsibilities. In August 1996, Mr. Jolley was named Chief Investment Officer
of Centura's asset management area. As Chief Investment Officer, his duties
include oversight of all Centura's mutual funds. Mr. Jolley is a Chartered
Financial Analyst and a member of the North Carolina Society of Financial
Analysts where he currently serves as the Secretary and member of the Board.

C. Nathaniel Siewers serves as portfolio manager of Centura North Carolina
Tax-Free Bond Fund and Centura Federal Securities Income Fund. Mr. Siewers has
over twelve years of experience managing fixed income securities. His most
recent experience involved managing Centura Bank's fixed income portfolio of
both taxable and tax-free securities, with assets of approximately $1.6 billion
at June 30, 1997. Mr. Siewers graduated from Wake Forest University with a
Bachelor of Arts degree in economics and from East Carolina University with a
Masters in Business Administration. He is a Certified Public Accountant and a
Fellow in the North Carolina Association of Certified Public Accountants. Mr.
Siewers has been a faculty member of the North Carolina School of Banking since
1987; he is the Associate Dean for the 1997 term and has been named Dean for the
1998 and 1999 terms.

Daniel Cole serves as portfolio manager for Centura Southeast Equity Fund.
Mr. Cole joined Centura Bank in November, 1996 where he has managed the Centura
Southeast Common Trust Funds and has personal and pension fund investment
responsibilities. Mr. Cole has four years experience in investments and
portfolio management. He began his investment career with Southern National Bank
in Winston-Salem, North Carolina as an investment analyst and portfolio manager
in Trust Investments. In 1995, Mr. Cole joined Central Carolina Bank in Durham,
North Carolina as a portfolio manager and trust investment officer where he was
primarily responsible for personal trust and endowment fund investment
management. He graduated from Guilford College in Greensboro, North Carolina
with a Bachelor of Science degree and from Virginia Polytechnic Institute and
State University in Blacksburg, Virginia with an M.B.A. in Finance. Mr. Cole is
a Level III Chartered Financial

26
<PAGE> 27

Analyst candidate and a member of the Association for Investment Management and
Research and the North Carolina Society of Financial Analysts.

THE DISTRIBUTOR

Centura Funds Distributor, Inc., 125 West 55th Street, New York, New York
10019, acts as the Funds' Distributor. The Distributor is an affiliate of the
Funds' Administrator, BISYS, and was formed specifically to distribute the
Funds.

SERVICE ORGANIZATIONS

Payments may be made by the Funds or by the Adviser to various banks, trust
companies, broker-dealers or other financial organizations (collectively,
"Service Organizations") for providing administrative services for the Funds and
their shareholders, such as maintaining shareholder records, answering
shareholder inquiries and forwarding materials and information to shareholders.
The Funds may pay fees to Service Organizations (which vary depending upon the
services provided) in amounts up to an annual rate of 0.25% of the daily net
asset value of the shares of either class owned by shareholders with whom the
Service Organization has a servicing relationship.

Some Service Organizations may impose additional or different conditions on
their clients, such as requiring their clients to invest more than a Fund's
minimum initial or subsequent investments or charging a direct fee for
servicing. If imposed, these fees would be in addition to any amounts which
might be paid to the Service Organization by the Funds. Each Service
Organization has agreed to transmit to its clients a schedule of any such fees.
Shareholders using Service Organizations are urged to consult with them
regarding any such fees or conditions.

The Glass-Steagall Act and other applicable laws provide that, among other
things, banks may not engage in the business of underwriting, selling or
distributing securities. There is currently no precedent prohibiting banks from
performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or interpretations
of such laws, as well as changes in either federal or state regulations relating
to the permissible activities of banks and their subsidiaries or affiliates,
could prevent a bank Service Organization from continuing to perform all or a
part of its servicing activities. If a bank were prohibited from so acting, its
shareholder clients would be permitted to remain shareholders of the Funds and
alternative means for continuing the servicing of such shareholders would be
sought. It is not expected that shareholders would suffer any adverse financial
consequences as a result of any of these occurrences.

THE ADMINISTRATOR AND SPONSOR

BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services
("BISYS"), 3435 Stelzer Road, Columbus, Ohio 43219, acts as Sponsor and
Administrator of the Funds. BISYS is a subsidiary of BISYS Group, Inc., which is
headquartered in Little Falls, New Jersey and supports more than 5,000 financial
institutions and corporate clients through two strategic business units. BISYS
Information Services Group provides image and data processing outsourcing, and
pricing analysis to more than 600 banks nationwide. BISYS Investment Services
Group designs, administers and distributes over 60 families of proprietary
mutual funds consisting of more than 365 portfolios, and provides 401(k)
marketing support, administration, and recordkeeping services in partnership
with banking institutions and investment management companies.

Pursuant to an Administration Agreement with the Company, BISYS provides
certain management and administrative services necessary for the Funds'
operations including: (a) general supervision of the operation of the Funds
including coordination of the services performed by the Funds' Adviser,
custodian, independent

27
<PAGE> 28

accountants and legal counsel; (b) regulatory compliance, including the
compilation of information for documents such as reports to, and filings with,
the SEC and state securities commissions, and preparation of proxy statements
and shareholder reports for the Funds; (c) general supervision relative to the
compilation of data required for the preparation of periodic reports distributed
to the Funds' officers and Board of Directors; and (d) furnishing office space
and certain facilities required for conducting the business of the Funds. For
these services, BISYS receives from each Fund a fee, payable monthly, at the
annual rate of 0.15% of each Fund's average daily net assets. Prior to January
1, 1997, Furman Selz LLC served as the Funds' Administrator under a contract
substantially similar to the Administration Agreement with BISYS. For the fiscal
year ended April 30, 1997, BISYS and Furman Selz received a total of $241,593
and $179,087 in administrative services fees from the Equity Growth Fund and the
Federal Securities Income Fund, respectively. For the fiscal year ended April
30, 1997, Furman Selz and BISYS earned $60,352 from the North Carolina Tax-Free
Bond Fund of which $43,051 was waived. For the period from October 1, 1996
(commencement of operations) through April 30, 1997, Furman Selz and BISYS
earned $46,523 from the Equity Income Fund of which $23,882 was waived.

Prior to January 1, 1997, Furman Selz also acted as the Funds' transfer and
fund accounting agent and effective January 1, 1997, BISYS Fund Services, Inc.
("BFSI") serves in that capacity (for which it receives a fee of $15 per account
per year, plus out-of-pocket expenses) and provides assistance in calculating
the Funds' net asset values and provides other accounting services for the Funds
(for an annual fee of $30,000 per Fund plus out-of-pocket expenses). For the
fiscal year ended April 30, 1997, Furman Selz and BFSI earned $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 transfer agent fees. For the
period from October 1, 1996 (commencement of operations) to April 30, 1997,
Furman Selz and BFSI earned $16,260 in transfer agent fees from the Equity
Income Fund.

BFSI and Furman Selz earned $28,792, $31,735 and $39,742 in fund accounting
fees for the Equity Growth Fund, the Federal Securities Income Fund and the
North Carolina Tax-Free Bond Fund, respectively, for the same period. For the
period from October 1, 1996 (commencement of operations) to April 30, 1997, BFSI
and Furman Selz earned $19,212 in fund accounting fees for the Equity Income
Fund.

OTHER EXPENSES

Each Fund bears all costs of its operations other than expenses
specifically the responsibility of the Administrator, the Adviser or other
service providers. In addition to fees paid to service providers described
above, the costs borne by the Funds, some of which may vary among the classes,
as noted above, include: legal and accounting expenses; Directors' fees and
expenses; insurance premiums; custodian and transfer agent fees and expenses;
expenses incurred in acquiring or disposing of the Funds' portfolio securities;
expenses of registering the Funds' shares for sale with the SEC and of
satisfying requirements of various state securities commissions; expenses of
maintaining the Funds' legal existence and of shareholders' meetings; and
expenses of preparing and distributing reports, proxy statements and
prospectuses to existing shareholders. Each Fund bears its own expenses
associated with its establishment as a portfolio of the Company; these expenses
are amortized over a five-year period from the commencement of a Fund's
operations. Company expenses directly attributable to a Fund or class are
charged to that Fund or class; other expenses are allocated proportionately
among all of the Funds and classes in the Company in relation to the net assets
of each Fund and class.

MINIMUM PURCHASE REQUIREMENTS

The minimum initial investment in each of the Funds is $1,000, except that
the minimum investment requirement for an IRA or other qualified retirement plan
is $250. Any subsequent investments must be at least

28
<PAGE> 29

$250, except for an IRA or qualified retirement plan investment. All initial
investments should be accompanied by a completed Purchase Application. A
Purchase Application may be obtained by calling Fund Services at 1-800-44CENTURA
(442-3688). However, a separate application is required for IRA and other
qualified retirement plan investments. Centura North Carolina Tax-Free Bond Fund
is not a recommended investment for an IRA or other qualified retirement plan.
The Funds reserve the right to reject purchase orders.

PRICING AND PURCHASE OF FUND SHARES

Each Fund offers its Class C shares at their net asset value next
determined after a purchase order has been received. All consideration received
by the Funds for the purchase of Class C shares is invested in full and
fractional Class C shares of the appropriate Fund. Certificates for shares are
not issued. BISYS maintains records of each shareholder's holdings of Fund
shares, and each shareholder receives a monthly statement of transactions,
holdings and dividends. The Funds reserve the right to reject any purchase.

EXCHANGE OF FUND SHARES

The Funds offer two convenient ways to exchange Class C shares in one Fund
for Class C shares of another Fund in the Company. Before engaging in an
exchange transaction, a shareholder should read carefully the information in the
Prospectus describing the Fund into which the exchange will occur. A Class C
shareholder may not exchange shares of one Fund for Class C shares of another
Fund unless the latter Fund's Class C shares have satisfied applicable
requirements for sale in the state of the shareholder's residence. There is no
minimum amount required for exchanges, provided the investor has satisfied the
$1,000 minimum investment requirement for the Fund into which he or she is
exchanging, and no service fee is imposed for an exchange. The Company may
terminate or amend the terms of the exchange privilege at any time upon 60 days
notice to shareholders.

A new account opened by exchange must be established with the same name(s),
address and social security number as the existing account. All exchanges will
be made based on the respective net asset values next determined following
receipt of the request by a Fund in good order.

An exchange is taxable as a sale of a security on which a gain or loss may
be recognized. Shareholders should receive written confirmation of the exchange
within a few days of the completion of the transaction. See "Dividends,
Distributions and Federal Income Taxation" for an explanation of circumstances
in which a sales charge paid to acquire shares of the Funds may not be taken
into account in determining gain or loss on the disposition of those shares.

Exchange By Mail. To exchange Fund shares by mail, shareholders should
simply send a letter of instruction to the Funds. The letter of instruction must
include: (a) the investor's account number; (b) the class of shares to be
exchanged; (c) the Fund from and the Fund into which the exchange is to be made;
(d) the dollar or share amount to be exchanged; and (e) the signatures of all
registered owners or authorized parties.

Exchange By Telephone. To exchange Fund shares by telephone or to ask any
questions, shareholders may call the Fund at 1-800-44CENTURA (442-3688). Please
be prepared to give the telephone representative the following information: (a)
the account number, social security number and account registration; (b) the
class of shares to be exchanged; (c) the name of the Fund from which and the
Fund into which the exchange is to be made; and (d) the dollar or share amount
to be exchanged. Telephone exchanges are provided automatically to each
shareholder unless otherwise specifically indicated on the Purchase Application.
The Funds employ procedures, including recording telephone calls, testing a
caller's identity, and sending written confirmation of telephone transactions,
designed to give reasonable assurance that instructions communicated by
telephone are genuine, and to discourage fraud. To the extent that a Fund does
not follow such procedures, it may be liable for

29
<PAGE> 30

losses due to unauthorized or fraudulent telephone instructions. A Fund will not
be liable for acting upon instructions communicated by telephone that it
reasonably believes to be genuine. The Funds reserve the right to suspend or
terminate the privilege of exchanging by mail or by telephone at any time.
Telephone Redemption and Telephone Exchange will be suspended for a period of 10
days following a telephonic address change.

REDEMPTION OF FUND SHARES

Shareholders may redeem their shares, in whole or in part, on any business
day. If a shareholder holds shares in more than one class of a Fund, any request
for redemption must specify the class from which shares are to be redeemed. In
the event a shareholder fails to make such a specification or if there are
insufficient shares of the specified class to satisfy the redemption order, the
redemption order will be delayed until the Fund's transfer agent receives
further instructions from the shareholder.

Class C shares will be redeemed at the net asset value next determined
after a redemption request in good order has been received by the applicable
Fund. See "Pricing and Purchase of Fund Shares."

Where the shares have been purchased by check, the redemption request will
be held until the purchasing check has cleared, which may take up to 15 days.
Shareholders may avoid this delay by investing through wire transfers of Federal
funds. During the period prior to the time the shares are redeemed, dividends on
the shares will continue to accrue and be payable and the shareholder will be
entitled to exercise all other beneficial rights of ownership.

Once the shares are redeemed, a Fund will ordinarily send the proceeds by
check to the shareholder at the address of record on the next business day. The
Fund may, however, take up to seven days to make payment although this will not
be the customary practice. Also, if the New York Stock Exchange is closed (or
when trading is restricted) for any reason other than the customary weekend or
holiday closing or if an emergency condition as determined by the SEC merits
such action, the Funds may suspend redemptions or postpone payment dates. A
redemption may be a taxable transaction on which gain or loss may be recognized.

REDEMPTION METHODS

To ensure acceptance of a redemption request, it is important that
shareholders follow the procedures described below. Although the Funds have no
present intention to do so, the Funds reserve the right to refuse or to limit
the frequency of any telephone or wire redemptions. Of course, it may be
difficult to place orders by telephone during periods of severe market or
economic change, and a shareholder should consider alternative methods of
communications, such as couriers. The Funds' services and their provisions may
be modified or terminated at any time by the Funds. If the Funds terminate any
particular service, they will do so only after giving written notice to
shareholders. Redemption by mail will always be available to shareholders.
Requests in "proper order" must include the following documentation: (a) a
letter of instruction, if required, signed by all registered owners of the
shares in the exact names in which they are registered; (b) any required
signature guarantees (see "Signature Guarantees" below); and (c) other
supporting legal documents, if required, in the case of estate, trusts,
guardianships, custodianships, corporations, pension and profit sharing plans
and other organizations.

A shareholder may redeem shares using any of the following methods:

Through an Authorized Broker, Investment Adviser or Service
Organization. The shareholder should contact his or her broker, investment
adviser or Service Organization and provide instructions to redeem shares. Such
organizations are responsible for prompt transmission of orders. The broker will
contact the Funds and place a redemption trade. The broker may charge a fee for
this service.

30
<PAGE> 31

By Mail. Shareholders may redeem shares by sending a letter directly to
the Funds. To be accepted, a letter requesting redemption must include: (a) the
Fund name, class of shares and account registration from which shares are being
redeemed; (b) the account number; (c) the amount to be redeemed; (d) the
signatures of all registered owners; and (e) a signature guarantee by any
eligible guarantor institution including members of national securities
exchanges, commercial banks or trust companies, broker-dealers, credit unions
and savings associations. Corporations, partnerships, trusts or other legal
entities will be required to submit additional documentation.

By Telephone. Shareholders may redeem shares by calling the Funds toll
free at 1-800-44CENTURA (442-3688). Be prepared to give the telephone
representative the following information: (a) the account number, social
security number and account registration; (b) the name of the class (if
applicable) and the Fund from which shares are being redeemed; and (c) the
amount to be redeemed. Telephone redemptions are available unless otherwise
indicated on the Purchase Application or on the Optional Services Form. The
Funds employ procedures, including recording telephone calls, testing a caller's
identity, and sending written confirmation of telephone transactions, designed
to give reasonable assurance that instructions communicated by telephone are
genuine, and to discourage fraud. To the extent that a Fund does not follow such
procedures, it may be liable for losses due to unauthorized or fraudulent
telephone instructions. A Fund will not be liable for acting upon instructions
communicated by telephone that it reasonably believes to be genuine. Telephone
Redemption and Telephone Exchange will be suspended for a period of 10 days
following a telephonic address change.

By Wire. Shareholders may redeem shares by contacting the Funds by mail or
telephone and instructing the Funds to send a wire transmission to the
shareholder's bank.

The shareholder's instructions should include: (a) the account number,
social security number and account registration; (b) the name of the class and
the Fund from which shares are being redeemed; and (c) the amount to be
redeemed. Wire redemptions can be made unless otherwise indicated on the
shareholder's Purchase Application, and a copy is attached of a void check on an
account where proceeds are to be wired. The bank may charge a fee for receiving
a wire payment on behalf of its customer.

Systematic Withdrawal Plan. An owner of $12,000 or more of shares of a
Fund may elect to have periodic redemptions made from this account to be paid on
a monthly, quarterly, semiannual or annual basis. The maximum withdrawal per
year is 12% of the account value at the time of the election. A sufficient
number of shares to make the scheduled redemption will normally be redeemed on
the date selected by the shareholder. Depending on the size of the payment
requested and fluctuation in the net asset value, if any, of the shares
redeemed, redemptions for the purpose of making such payments may reduce or even
exhaust the account. A shareholder may request that these payments be sent to a
predesignated bank or other designated party. Capital gains and dividend
distributions paid to the account will automatically be reinvested at net asset
value on the distribution payment date.

Redemption of Small Accounts. Due to the disproportionately higher cost of
servicing small accounts, the Funds reserve the right to redeem, on not less
than 30 days' notice, an account in a Fund that has been reduced by a
shareholder (not by market action) below $1,000. If during the 30-day notice
period the shareholder purchases sufficient shares to bring the value of the
account to $1,000, the account will not be redeemed.

Redemption in Kind. All redemptions of shares of the Funds shall be made
in cash, except that the commitment to redeem shares in cash extends only to
redemption requests made by each shareholder of a Fund during any 90-day period
of up to the lesser of $250,000 or 1% of the net asset value of the Fund at the
beginning of such period. This commitment is irrevocable without the prior
approval of the SEC. In the case of redemption requests by shareholders in
excess of such amounts, the Board of Directors reserves the right to have a Fund
make payment, in whole or in part, in securities or other assets, in case of an
emergency or any time a cash

31
<PAGE> 32

distribution would impair the liquidity of the Fund to the detriment of the
existing shareholders. In this event, the securities would be valued generally
in the same manner as the securities of that Fund are valued generally. If the
recipient were to sell such securities, he or she would incur brokerage charges.

Signature Guarantees. To protect shareholder accounts, the Funds and the
Administrator from fraud, signature guarantees are required to enable the Funds
to verify the identity of the person who has authorized a redemption by mail
from an account. Signature guarantees are required for (1) redemptions where the
proceeds are to be sent to someone other than the registered shareholder(s) and
the registered address, (2) a redemption of $25,000 or more, and (3) share
transfer requests. Signature guarantees may be obtained from certain eligible
financial institutions, including but not limited to, the following: banks,
trust companies, credit unions, securities brokers and dealers, savings and loan
associations and participants in the Securities and Transfer Association
Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP") or
the New York Stock Exchange Medallion Signature Program ("MSP"). Shareholders
may contact the Funds at 1-800-442-3688 for further details.

PORTFOLIO TRANSACTIONS

Pursuant to the Investment Advisory Agreement, the Adviser places orders
for the purchase and sale of portfolio investments for the Funds' accounts with
brokers or dealers it selects in its discretion.

In effecting purchases and sales of portfolio securities for the account of
a Fund, the Adviser will seek the best execution of the Fund's orders. Purchases
and sales of portfolio debt securities for the Funds are generally placed by the
Adviser with primary market makers for these securities on a net basis, without
any brokerage commission being paid by the Funds. Trading does, however, involve
transaction costs. Transactions with dealers serving as primary market makers
reflect the spread between the bid and asked prices. The Funds may purchase
securities during an underwriting, which will include an underwriting fee paid
to the underwriter. Purchases and sales of common stocks are generally placed by
the Adviser with broker-dealers which, in the judgment of the Adviser, provide
prompt and reliable execution at favorable security prices and reasonable
commission rates. Broker-dealers are selected on the basis of a variety of
factors such as reputation, capital strength, size and difficulty of order, sale
of Fund shares and research provided to the Adviser. The Adviser may cause a
Fund to pay commissions higher than another broker-dealer would have charged if
the Adviser believes the commission paid is reasonable in relation to the value
of the brokerage and research services received by the Adviser.

Each of the Funds may buy and sell securities to take advantage of
investment opportunities when such transactions are consistent with a Fund's
investment objectives and policies and when the Adviser believes such
transactions may improve a Fund's overall investment return. These transactions
involve costs in the form of spreads or brokerage commissions. The Funds are not
normally expected to have portfolio turnover rates in excess of 50%.

Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to seeking the most favorable price and
execution available and such other policies as the Directors may determine, the
Adviser may consider sales of shares of the Funds as a factor in the selection
of broker-dealers to execute portfolio transactions for the Funds.

FUND SHARE VALUATION

The net asset value per share for each class of shares of each Fund is
calculated at 4:00 p.m. (Eastern time), Monday through Friday, on each day the
New York Stock Exchange is open for trading, which excludes the following
business holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day,
Good Friday,

32
<PAGE> 33

Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The net asset value per share of each class of shares of the Funds is computed
by dividing the value of net assets of each class (i.e., the value of the assets
less the liabilities) by the total number of such class' outstanding shares. All
expenses, including fees paid to the Adviser and Administrator, are accrued
daily and taken into account for the purpose of determining the net asset value.

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 current bid price is used. Quotations
are taken for the exchange where the security is primarily traded. Portfolio
securities which are primarily traded on foreign exchanges may be valued with
the assistance of a pricing service and are generally valued at the preceding
closing values of such securities on their respective exchanges, except that
when an occurrence subsequent to the time a foreign security is valued is likely
to have changed such value, then the fair value of those securities will be
determined by consideration of other factors by or under the direction of the
Board of Directors. 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. All assets and liabilities
initially expressed in foreign currencies will be converted into U.S. dollars at
the mean between the bid and asked prices of such currencies against U.S.
dollars as last quoted by any major bank.

DIVIDENDS, DISTRIBUTIONS, AND FEDERAL INCOME TAXATION

Each Fund intends to qualify annually to elect to be treated as a regulated
investment company pursuant to the provisions of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). To qualify, each Fund must meet
certain income, distribution and diversification requirements. In any year in
which a Fund qualifies as a regulated investment company and timely distributes
all of its taxable income and substantially all of its net tax-exempt interest
income, the Fund generally will not pay any U.S. federal income or excise tax.

Each Fund intends to distribute to its shareholders substantially all of
its investment company taxable income (which includes, among other items,
dividends and interest and the excess, if any, of net short-term capital gains
over net long-term capital losses). Investment company taxable income (other
than the capital gain component thereof) will be declared and paid monthly by
Centura Equity Growth Fund, Centura Equity Income Fund and Centura Southeast
Equity Fund. Centura Federal Securities Income Fund and Centura North Carolina
Tax-Free Bond Fund will declare dividends daily and pay them out monthly. Each
Fund intends to distribute, at least annually, substantially all net realized
long- and short-term capital gain. In determining amounts of capital gains to be
distributed, any capital loss carryovers from prior years will be applied
against capital gains.

In the case of Centura Federal Securities Income Fund and Centura North
Carolina Tax-Free Bond Fund, the amount declared each day as a dividend may be
based on projections of estimated monthly net investment income and may differ
from the actual investment income determined in accordance with generally
accepted accounting principles. An adjustment will be made to the dividend each
month to account for any difference between the projected and actual monthly
investment income.

Distributions will be paid in additional Fund shares of the relevant class
based on the net asset value of shares of that class at the close of business of
the payment date of the distribution, unless the shareholder elects in writing,
not less than five full business days prior to the record date, to receive such
distributions in cash. Dividends declared in, and attributable to, the preceding
month will be paid within five business days after the end of each month. In the
case of the Funds that declare daily dividends, shares purchased will begin
earning

33
<PAGE> 34

dividends on the day after the purchase order is executed, and shares redeemed
will earn dividends through the day the redemption is executed.

Any dividend or other distribution paid by a Fund has the effect of
reducing the net asset value per share on the record date by the amount thereof.
Therefore, in the case of Centura Equity Growth Fund, Centura Equity Income Fund
and Centura Southeast Equity Fund, which do not declare dividends daily, a
dividend or other distribution paid shortly after a purchase of shares would
represent, in substance, a return of capital to the shareholder (to the extent
it is paid on the shares so purchased), even though subject to income taxes, as
discussed below.

Dividends distributed by Centura North Carolina Tax-Free Bond Fund that are
derived from interest income exempt from federal income tax and are designated
by the Fund as "exempt-interest dividends" will be exempt from the regular
federal income tax. Capital gains distributions and any other distributions of
Fund earnings not designated by the Fund as exempt-interest dividends will,
however, generally be subject to federal, state and local tax. The Fund's
investment policies permit it to earn income which cannot be designated as
exempt-interest dividends.

Distributions of investment company taxable income (regardless of whether
derived from dividends, interest or short-term capital gains) will be taxable to
shareholders as ordinary income. If a portion of the income of Centura Equity
Growth Fund, Centura Equity Income Fund or Centura Southeast Equity Fund
consists of dividends paid by U.S. corporations, a portion of the dividends paid
by that Fund may qualify for the deduction for dividends received by
corporations. No portion of the dividends paid by Centura Federal Securities
Income Fund or Centura North Carolina Tax-Free Bond Fund is expected to so
qualify. Distributions of net long-term capital gains designated by a Fund as
capital gain dividends will be taxable as long-term capital gains, regardless of
how long a shareholder has held the Fund shares. Distributions are taxable in
the same manner whether received in additional shares or in cash.

A distribution, including an "exempt-interest dividend," will be treated as
paid on December 31 of the calendar year if it is declared by a Fund during
October, November, or December of that year to shareholders of record in such a
month and paid by the Fund during January of the following calendar year. Such
distributions will be taxable to shareholders in the calendar year in which the
distributions are declared, rather than the calendar year in which the
distributions are received.

Any gain or loss realized by a shareholder upon the sale or other
disposition of shares of a Fund, or upon receipt of a distribution in complete
liquidation of a Fund, generally will be a capital gain or loss which will be
long-term or short-term generally depending upon the shareholder's holding
period for the shares.

If a shareholder elects to receive distributions in cash, and checks (1)
are returned and marked as "undeliverable" or (2) remain uncashed for six
months, the shareholder's cash election will be changed automatically and future
dividend and capital gains contributions will be reinvested in the Fund at the
per share net asset value determined as of date of payment of the distribution.
In addition, any undeliverable check or check that remain uncashed for six
months will be canceled and will be reinvested in the Fund at the per share net
asset value determined as of the date of cancellation.

The timing of a shareholder's investment could have undesirable tax
consequences. If a shareholder opens a new account or buys more shares for his
or her current account just before the day a capital gain distribution was
reflected in the Fund's share price, the shareholder would receive a portion of
his or her investment back as a taxable capital gain distribution.

Shareholders should also be aware that redeeming shares of the Centura
North Carolina Tax-Free Bond Fund after tax-exempt interest income has been
accrued by the Fund but before that income has been distributed as a

34
<PAGE> 35

dividend may be disadvantageous. This is because the gain, if any, on the
redemption will be taxable, even though such gain may be attributable in part to
the accrued tax-exempt interest, which, if distributed to the shareholder as a
dividend rather than as redemption proceeds, might have qualified as an
exempt-interest dividend.

The Funds may be required to withhold federal income tax of 31% ("backup
withholding") of the distributions and the proceeds of redemptions payable to
shareholders who fail to provide a correct taxpayer identification number or to
make required certifications, or where a Fund or shareholder has been notified
by the Internal Revenue Service that the shareholder is subject to backup
withholding. Corporate shareholders and certain other shareholders specified in
the Code are exempt from backup withholding. Backup withholding is not an
additional tax. Any amounts withheld may be credited against the shareholder's
U.S. federal income tax liability.

Further information relating to tax consequences is contained in the SAI.

Shareholders will be notified annually by the Company as to the federal tax
status of distributions made by the Fund(s) in which they invest. Depending on
the residence of the shareholder for tax purposes, distributions also may be
subject to state and local taxes, including withholding taxes. Foreign
shareholders may also be subject to special withholding requirements. Special
tax treatment, including a penalty on certain pre-retirement distributions, is
accorded to accounts maintained as IRAs. With respect to Centura North Carolina
Tax-Free Bond Fund, North Carolina law exempts from income taxation dividends
received from a regulated investment company in proportion to the income of the
regulated investment company that is attributable to interest on bonds or
securities of the U.S. government or any agency or instrumentality thereof or on
bonds of the State of North Carolina or any county, municipality or political
subdivision thereof. Shareholders should consult their own tax advisers as to
the federal, state and local tax consequences of ownership of shares of the
Funds in their particular circumstances.

OTHER INFORMATION

CAPITALIZATION

Centura Funds, Inc. was organized as a Maryland corporation on March 1,
1994 and currently consists of five separately managed portfolios. The Board of
Directors may establish additional portfolios in the future. The capitalization
of the Company consists solely of seven hundred fifty million (750,000,000)
shares of common stock with a par value of $0.001 per share. When issued, shares
of the Funds are fully paid, non-assessable and freely transferable.

This Prospectus relates to Class C shares of the Funds. Each Fund also
offers Class A and Class B shares. Class A shares are offered with a front-end
sales charge (unless waived), and a contingent deferred sales charge is imposed
(unless waived) on redemptions of Class B shares within five years of purchase.
Because of differences in expenses, the performance of each class will typically
be different. Information about Class A and Class B shares may be obtained from
your sales representative or by calling the Funds at (800) 442-3688.

VOTING

Shareholders have the right to vote in the election of Directors and on any
and all matters on which, by law or under the provisions of the Company's
Articles of Incorporation, they may be entitled to vote. The Company is not
required to hold regular annual meetings of the Funds' shareholders and does not
intend to do so. Each Fund's shareholders vote separately on items affecting
only that Fund, and shareholders of each class within a Fund vote separately on
matters affecting only that class.

35
<PAGE> 36

The Articles of Incorporation provide that the holders of not less than
two-thirds of the outstanding shares of the Company may remove a person serving
as Director either by declaration in writing or at a meeting called for such
purpose. The Directors are required to call a meeting for the purpose of
considering the removal of a person serving as Director if requested in writing
to do so by the holders of not less than 10% of the outstanding shares of the
Company. See "Other Information -- Voting Rights" in the SAI.

Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of a
majority of the outstanding shares" of a Fund, a class or the Company, as
applicable, means the vote of the lesser of: (1) 67% of the shares of the Fund
(a class or the Company) present at a meeting if the holders of more than 50% of
the outstanding shares are present in person or by proxy; or (2) more than 50%
of the outstanding shares of the Fund (a class or the Company).

36
<PAGE> 37

TOTAL RETURN SUMMARY

THE CENTURA FUNDS (C CLASS)

PERIOD ENDED OCTOBER 31, 1997

NO LOAD TOTAL RETURN

<TABLE>
<CAPTION>
AGGREGATE
RETURNS AVERAGE ANNUAL RETURNS
INCEPTION ---------------- SINCE ----------------------------------
FUND DATE* YTD QTRLY INCEPTION 1 YEAR 3 YEAR 5 YEAR 10 YEAR
- -------------------------- --------- ------- ------- --------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
The Centura Equity Growth
Fund.................... 12/31/90 21.07% (1.53)% 19.41% 32.90% 26.15% 18.76% N/A
The Centura Equity Income
Fund.................... 12/31/90 20.56% 1.63% 16.43% 26.85% 22.92% 17.21% N/A
The Centura Southeast
Equity Fund............. 12/31/90 29.92% 6.93% 23.09% 40.20% 23.14% 21.19% N/A
The Centura Federal
Securities Fund......... 12/31/90 6.03% 1.83% 6.55% 6.71% 7.25% 5.57% N/A
The Centura North Carolina
Tax-Free Bond Fund...... 01/31/91 6.15% 0.45% 5.50% 7.59% 7.26% 5.30% N/A
</TABLE>

* The quoted performance of the Southeast Equity, Equity Income, Equity Growth,
North Carolina Tax-Free, Federal Securities Income, includes performance of
certain collective trust fund accounts advised by Centura Bank, for periods
dating back to December 31, 1990, December 31, 1990, January 31, 1991,
December 31, 1990, respectively, and prior to the mutual funds' commencement
of operations on May 1, 1997, October 1, 1996, June 1, 1994, June 1, 1994,
respectively, as adjusted to reflect the expenses associated with the Centura
Funds. The commingled accounts were not registered with the Securities and
Exchange Commission and, therefore, were not subject to the investment
restrictions imposed by law on registered mutual funds. If the commingled
accounts had been registered, the commingled accounts' performance may have
been adversely affected.

The performance data quoted represents past performance and is not an
indication of future results as yields fluctuate daily.

Centura Funds Distributor, Inc. is the Distributor for The Centura Group of
Funds.

37
<PAGE> 38

NOTES ABOUT THE PERFORMANCE INFORMATION

(a) BACKGROUND OF THE FUNDS

From 1/1/91 to 5/31/94, Centura Equity Growth Fund and Centura Federal
Securities Income Fund were bank collective trust funds maintained and managed
by Centura Bank, and from 2/1/91 to 5/31/94, Centura North Carolina Tax-Free
Bond Fund was a common trust fund maintained and managed by Centura Bank. From
1/1/91 to 9/30/96, Centura Equity Income Fund was a common trust fund maintained
and managed by Centura Bank. From 1/1/91 to 4/30/97, Centura Southeast Equity
Fund was a bank common trust fund maintained and managed by Centura Bank. Bank
collective and common trust funds are not required to register as investment
companies under the Investment Company Act of 1940. Accordingly, performance
achieved by a Fund's predecessor collective or common trust fund reflects
performance prior to the Fund's commencement of operations as a series of a
registered investment company.

The investment objectives and policies of each of these Funds prior to its
conversion to a registered mutual fund were substantially comparable to those of
its successor registered mutual fund. Prior to 1/1/95, however, the predecessor
common trust fund to Centura Southeast Equity Fund was known as the Centura
Carolinas Fund, with investments limited to companies headquartered or with
substantial operations in North Carolina or South Carolina. That common trust
fund's name was changed to Centura Southeast Equity Fund as of 1/1/95, when its
investment policies were expanded to include all the southeastern states, which
policies are continued with the successor registered mutual fund.

(b) HOW THE PERFORMANCE INFORMATION WAS CALCULATED

Investment performance for the Funds during their maintenance as common or
collective trust funds has been calculated on a monthly basis utilizing the Bank
Administration Institute's recommended time-weighted rate of return method to
compute the investment performance reflected in the above Schedule.

The performance figures assume reinvestment of dividends and interest and
include the cost of brokerage commissions. The investment performance excludes
taxes an investor might have incurred as a result of taxable ordinary income and
capital gains realized by the accounts. Bank common and collective trust funds
are not subject to certain expenses normally incurred by a mutual fund. Thus,
the performance figures, for periods prior to conversion to registered funds
have been adjusted, on a quarterly basis, to reflect the impact of the estimated
expense ratios for the registered funds at the time of the conversion.

It should be noted, however, that the bank-maintained common and collective
trust funds are not subject to the same tax and regulatory requirements,
including certain investment restrictions, applicable to registered mutual
funds. These regulatory and tax requirements could have adversely affected
performance of the Funds' collective and common trust Fund predecessors.

The performance of the Funds may be compared to various widely recognized
indexes of market performance. The indexes are unmanaged and thus reflect no
management fees. They also do not reflect the transaction costs that would be
incurred by an investor to acquire the included securities. Because the
securities reflected in an index will typically differ in many respects from
those held by a Fund, various factors that can affect performance may affect a
Fund in different ways than an index to which it is compared.

Indexes to which the Funds' performance may be compared may include:

- Standard & Poor's 500 Composite Stock Price Index -- an index of market
activity based on the aggregate performance of a selected portfolio of
publicly traded common stocks, including monthly

38
<PAGE> 39

adjustments to reflect the reinvestment of dividends. The Index thus
reflects the total return of its portfolio, including changes in market
prices as well as accrued income interest;

- The Russell 2000 Index -- an index comprised of the smallest 2000
companies in the Russell 3000 Index, representing approximately 11% of
the Russell 3000 total market capitalization. The Index was developed
with the base value of 135.00 as of December 31, 1986;

- Merrill Lynch Government, U.S. Treasury Short-Term Index -- this index
shows total return for all outstanding U.S. Treasury securities maturing
in from one to 2.99 years. Price, coupon and total return are reported
using market weighted value including accrued interest; and

- Lehman Brothers Municipal Bond Index -- a total return performance index
of approximately 21,000 municipal bonds that meet certain criteria.
Price, coupon, and total return are reported using market weighted value
including accrued interest.

In addition to those indexes listed above, the following indexes to which
the Funds' performance may be compared may include:

- Lehman Brothers Intermediate Government Index
- Lipper Short U.S. Treasury Funds Index
- Lipper Growth Index
- Lipper Equity Income Index
- S&P Mid-Cap 400 Index
- Valueline Index

When performance records are developed by the Funds, they may, from time to
time, include the yield and total return for shares (including each class, as
applicable) in advertisements or reports to shareholders or prospective
investors. The methods used to calculate the yield and total return of the Funds
are mandated by the SEC. In general, the performance of the classes of each Fund
will differ due to (a) differences in the level of class specific expenses,
including service and distribution fees and (b) the fact that total return
figures for Class A shares will reflect the deduction of the maximum front-end
sales charge applicable for each Fund while the total return figures for Class B
shares will reflect the maximum CDSC for the particular Fund. Performance
figures for Class C shares will reflect the absence of any service and
distribution fee, front-end sales charge or CDSC. Due to these differences in
fees and/or expenses borne by Class A, Class B and Class C shares, yield and
total return on Class A and Class B shares can be expected to be lower than the
yield and total return on Class C shares for the same period.

Quotations of "yield" will be based on the investment income per share
during a particular 30-day (or one month) period (including dividends and
interest), less expenses accrued during the period ("net investment income"),
and will be computed by dividing net investment income by the maximum public
offering price per share (for each class, as applicable) on the last day of the
period.

Quotations of yield reflect a Fund's (and its classes') performance only
during the particular period on which the calculations are based. Yields will
vary based on changes in market conditions, the level of interest rates and the
level of the particular Fund's expenses, including class-specific expenses, and
no reported performance figure should be considered an indication of performance
which may be expected in the future. Quotations of average annual total return
will be expressed in terms of the average annual compounded rate of return of a
hypothetical investment in shares of a Fund (or class) over periods of 1, 5 and
10 years (up to the life of the Fund), reflect the deduction of a proportional
share of Fund and class-specific expenses, as applicable, on an annual basis,
and assume that all dividends and distributions are reinvested when paid.

39
<PAGE> 40

Centura North Carolina Tax-Free Bond Fund may also advertise its "taxable
equivalent yield." Taxable equivalent yield is the yield that an investment,
subject to regular federal and North Carolina personal income taxes, would need
to earn in order to equal, on an after-tax basis, the yield on an investment
exempt from such taxes (normally calculated assuming the maximum combined
federal and North Carolina marginal tax rate). A taxable equivalent yield
quotation for the Fund will be higher than the yield quotations for the Fund.

The following table shows how to translate the yield of an investment that
is exempt from regular federal and North Carolina personal income taxes into a
taxable equivalent yield for the 1997 taxable year. The last five columns of the
table show approximately how much a taxable investment would have to yield in
order to generate an after-tax (regular federal and North Carolina personal
income taxes) yield of 4%, 5%, 6%, 7% or 8%. For example, the table shows that a
married taxpayer filing a joint return with taxable income of $80,000 would have
to earn a yield of approximately 10.45% before regular federal and North
Carolina personal income taxes in order to earn a yield after such taxes of 7%.

1997 TAXABLE YEAR

TAXABLE EQUIVALENT YIELD TABLE(1) -- FEDERAL AND
NORTH CAROLINA PERSONAL INCOME TAXES

<TABLE>
<CAPTION>
TO EQUAL HYPOTHETICAL TAX-FREE YIELD OF
4%, 5%, 6%, 7% OR 8%, A TAXABLE INVESTMENT
TAXABLE INCOME(2) COMBINED WOULD HAVE TO YIELD APPROXIMATELY
- ---------------------------------------- MARGINAL -------------------------------------------------
SINGLE RETURN JOINT RETURN RATE 4% 5% 6% 7% 8%
- ------------------ ------------------ -------- ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
up to $24,650 up to $41,200 20.95% 5.06% 6.33% 7.59% 8.86% 10.12%
$ 24,651-$ 59,750 $ 41,201-$ 99,600 33.04% 5.97% 7.47% 8.96% 10.45% 11.95%
$ 59,751-$ 60,000 $ 99,601-$100,000 35.83% 6.23% 7.79% 9.35% 10.91% 12.47%
$ 60,001-$124,650 $100,001-$147,700 36.35% 6.28% 7.86% 9.43% 11.00% 12.57%
$124,650-$271,050 $147,701-$271,050 40.96% 6.78% 8.47% 10.16% 11.86% 13.55%
$271,051 and over $271,051 and over 44.28% 7.18% 8.98% 10.77% 12.57% 14.36%
</TABLE>

- ---------------
(1) This chart is presented for general information purposes only. Tax
equivalent yields are a useful tool in determining the desirability of a
tax-exempt investment; tax equivalent yields should not be regarded as
determinative of the of such an investment. In addition, this chart is based
on a number of assumptions which may not apply in your case. You should,
therefore, consult a competent tax advisor regarding tax-equivalent yields
in your situation.

(2) Assuming the federal alternative minimum tax is not applicable.

(3) The combined marginal rates were calculated using federal and North Carolina
tax rate tables for the 1997 taxable year. The federal tax rate tables are
indexed each year to reflect changes in the Consumer Price Index. The
combined federal and North Carolina income tax marginal rates assume that
North Carolina personal income taxes are fully deductible for federal income
tax purposes as an itemized deduction. However, the ability to deduct
itemized deductions (including state income taxes) for federal income tax
purposes is limited for those taxpayers whose federal adjusted gross income
for 1997 exceeds $121,200 ($60,600 in the case of a married individual
filing a separate return). In addition, for federal income tax purposes the
tax benefit of personal exemptions is phased out for taxpayers whose
adjusted gross incomes exceed specified thresholds (for 1997, $121,200 in
the case of single individuals and $181,800 in the case of married
individuals filing a joint return).

40
<PAGE> 41

Performance information for the Funds may be compared to various unmanaged
indices, such as the Standard & Poor's 500 Stock Index, the Dow Jones Industrial
Average, indices prepared by Lipper Analytical Services, and other entities or
organizations which track the performance of investment companies. Any
performance information should be considered in light of each Fund's investment
objectives and policies, characteristics and quality of the Fund and the market
conditions during the time period indicated, and should not be considered to be
representative of what may be achieved in the future. For a description of the
methods used to determine yield and total return for the Funds, see the SAI.

ACCOUNT SERVICES

All transactions in shares of the Funds will be reflected in a statement
for each shareholder. In those cases where a Service Organization or its nominee
is shareholder of record of shares purchased for its customer, the Funds have
been advised that the statement may be transmitted to the customer at the
discretion of the Service Organization.

BISYS Fund Services, Inc. provides fund accounting functions for the Funds,
and provides personnel and facilities to perform shareholder servicing and
transfer agency-related services for the Company.

SHAREHOLDER INQUIRIES

All shareholder inquiries should be directed to Centura Funds, P.O. Box
182485, Columbus, Ohio 43218-2485.

General and Account Information: (800) 44CENTURA (442-3688).

41
<PAGE> 42

APPENDIX

DESCRIPTION OF BOND RATINGS

DESCRIPTION OF MOODY'S BOND RATINGS

Excerpts from Moody's description of its bond ratings are listed as
follows: AAA -- judged to be the best quality and they carry the smallest degree
of investment risk; AA -- judged to be of high quality by all
standards -- together with the Aaa group, they comprise what are generally known
as high grade bonds; A -- possess many favorable investment attributes and are
to be considered as "upper medium grade obligations"; BAA -- considered to be
medium grade obligations, i.e., they are neither highly protected nor poorly
secured -- interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time; BA -- judged to
have speculative elements, their future cannot be considered as well assured;
B -- generally lack characteristics of the desirable investment; CAA -- are of
poor standing -- such issues may be in default or there may be present elements
of danger with respect to principal or interest; CA -- speculative in a high
degree, often in default; C -- lowest rated class of bonds, regarded as having
extremely poor prospects.

Moody's also supplies numerical indicators 1, 2 and 3 to rating categories.
The modifier 1 indicates that the security is in the higher end of its rating
category; the modifier 2 indicates a mid-range ranking; and modifier 3 indicates
a ranking toward the lower end of the category.

DESCRIPTION OF S&P'S BOND RATINGS

Excerpts from S&P's description of its bond ratings are listed as follows:
AAA -- highest grade obligations, in which capacity to pay interest and repay
principal is extremely strong; AA -- has a very strong capacity to pay interest
and repay principal, and differs from AAA issues only in a small degree;
A -- has a strong capacity to pay interest and repay principal, although they
are somewhat more susceptible to the adverse effects of changes in circumstances
and economic conditions than debt in higher rated categories; BBB -- regarded as
having an adequate capacity to pay interest and repay principal; whereas it
normally exhibits adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rated
categories. This group is the lowest which qualifies for commercial bank
investment. BB, B, CCC, CC, C -- predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with terms of the
obligations; BB indicates the highest grade and C the lowest within the
speculative rating categories. D -- interest or principal payments are in
default.

S&P applies indicators "+," no character, and "-" to its rating categories.
The indicators show relative standing within the major rating categories.

DESCRIPTION OF MOODY'S RATINGS OF SHORT-TERM MUNICIPAL OBLIGATIONS

Moody's ratings for state and municipal short-term obligations will be
designated Moody's Investment Grade or MIG. Such ratings recognize the
differences between short-term credit and long-term risk. Short-term ratings on
issues with demand features (variable rate demand obligations) are
differentiated by the use of the VMIG symbol to reflect such characteristics as
payment upon periodic demand rather than fixed maturity dates and payments
relying on external liquidity. Ratings categories for securities in these groups
are as follows: MIG 1/VMIG 1 -- denotes best quality, there is present strong
protection by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing; MIG 2/VMIG 2 -- denotes high
quality, margins of protection are ample although not as large as in the
preceding group; MIG 3/VMIG 3 --

i
<PAGE> 43

denotes high quality, all security elements are accounted for but there is
lacking the undeniable strength of the preceding grades; MIG 4/VMIG 4 -- denotes
adequate quality, protection commonly regarded as required of an investment
security is present, but there is specific risk; SQ -- denotes speculative
quality, instruments in this category lack margins of protection.

DESCRIPTION OF MOODY'S COMMERCIAL PAPER RATINGS

Excerpts from Moody's commercial paper ratings are listed as follows:
PRIME-1 -- issuers (or supporting institutions) have a superior ability for
repayment of senior short-term promissory obligations; PRIME-2 -- issuers (or
supporting institutions) have a strong ability for repayment of senior
short-term promissory obligations; PRIME-3 -- issuers (or supporting
institutions) have an acceptable ability for repayment of senior short-term
promissory obligations; NOT PRIME -- issuers do not fall within any of the Prime
categories.

DESCRIPTION OF S&P'S RATINGS FOR CORPORATE AND MUNICIPAL BONDS

Investment grade ratings: AAA -- the highest rating assigned by S&P,
capacity to pay interest and repay principal is extremely strong; AA -- has a
very strong capacity to pay interest and repay principal and differs from the
highest rated issues only in a small degree; A -- has strong capacity to pay
interest and repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher rated categories; BBB -- regarded as having an adequate capacity to pay
interest and repay principal -- whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

Speculative grade ratings: BB, B, CCC, CC, C -- debt rated in these
categories is regarded as having predominantly speculative characteristics with
respect to capacity to pay interest and repay principal -- while such debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions;
CI -- reserved for income bonds on which no interest is being paid; D -- in
default, and payment of interest and/or repayment of principal is in arrears.
Plus (+) or Minus (-) -- the ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories. Description of S&P's rating for municipal notes and
short-term municipal demand obligations:

Rating categories are as follows: SP-1 -- has a very strong or strong
capacity to pay principal and interest -- those issues determined to possess
overwhelming safety characteristics will be given a plus (+) designation;
SP-2 -- has a satisfactory capacity to pay principal and interest;
SP-3 -- issues carrying this designation have a speculative capacity to pay
principal and interest.

DESCRIPTION OF S&P'S RATINGS FOR SHORT-TERM CORPORATE DEMAND OBLIGATIONS AND
COMMERCIAL PAPER

An S&P commercial paper rating is a current assessment of the likelihood of
timely repayment of debt having an original maturity of no more than 365 days.
Excerpts from S&P's description of its commercial paper ratings are listed as
follows: A-1 -- the degree of safety regarding timely payment is strong -- those
issues determined to possess extremely strong safety characteristics will be
denoted with a plus (+) designation; A-2 -- capacity for timely payment is
satisfactory -- however, the relative degree of safety is not as high as for
issues designated "A-1;" A-3 -- has adequate capacity for timely
payment -- however, is more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations; B -- regarded
as having only speculative capacity for timely payment; C -- a doubtful capacity
for payment; D -- in payment default -- the "D" rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period.

ii
<PAGE> 44

CENTURA LOGO

Address for:

GENERAL SHAREHOLDER INQUIRIES
Centura Funds, Inc.
P.O. Box 182485
Columbus, Ohio 43218-2485

INVESTMENT ADVISER AND CUSTODIAN
Centura Bank
131 North Church Street
Rocky Mount, North Carolina 27802

ADMINISTRATOR AND SPONSOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219

DISTRIBUTOR
Centura Funds Distributor, Inc.
125 West 55th Street
New York, New York 10019

COUNSEL
Dechert Price & Rhoads
1500 K Street,
N.W. Washington, D.C. 20005

INDEPENDENT ACCOUNTANTS
McGladrey & Pullen, LLP
555 Fifth Avenue
New York, NY 10017

CENTURA LOGO

CENTURA FUNDS, INC.
PROSPECTUS
CLASS C SHARES
CENTURA BANK
ADVISER

BISYS FUND SERVICES
ADMINISTRATOR AND SPONSOR

CENTURA FUNDS DISTRIBUTOR, INC.
DISTRIBUTOR

AUGUST 28, 1997

AS SUPPLEMENTED NOVEMBER 25, 1997

AND DECEMBER 11, 1997

CNPROSPC 1297