<PAGE>
May 14, 1998
Dear Shareholders,
We are pleased to present this annual report for the 12 months ended April
30, 1998, a period that was kind to equity and fixed-income investors alike.
Shareholders who were invested for the entire period in any of our Centura Funds
were rewarded with gains that were generous by historical standards. Our three
stock funds all posted performance numbers that were appreciably higher than
long-term market norms, while our two bond funds provided solid "real returns"
(total return minus inflation).
THE LAST 12 MONTHS: MARKET PROVIDES GENEROUS RETURNS
This past fiscal year witnessed a number of remarkable events in the
financial markets. First, in the spring of 1997, stocks and bonds began a climb
back from a short, but painfully sharp, correction that had pushed down the
value of most financial instruments. Not the least of the catalysts behind the
decline was the Federal Reserve's decision in March 1997 to raise short-term
interest rates 25 basis points (0.25%). (Since that time, stocks and bonds have
benefited from the fact that the Fed has not raised rates again.)
Throughout much of the summer, times were good for most investors, who
watched the value of their holdings rise steadily. On August 6, for example, the
Dow Jones Industrial Average reached an all-time high of 8259. But then came
news of problems in Asia, and it soon became evident that what is now known as
the "Asian flu" was a raft of potentially catastrophic problems that would shake
the world's markets. In short order, a wave of currency shocks, bankruptcies and
plunging stock-market values swept over Thailand, Indonesia, South Korea,
Malaysia and even Japan, then the world's second-largest economy.
The U.S. stock market was not immune to anxiety generated by the situation
in Asia, and equities fell into a pattern of decline, culminating in a
frightening plunge on October 27, when the Dow fell 554 points.
Yet despite the cries of doom emanating from the mouths of market pundits,
stocks surged once more. In fact, when the Dow ended 1997 with an annual return
of 22%, the occasion marked the first time in history that the blue-chip average
had risen more than 20% for three consecutive years.
While stocks were gyrating, the bond market, especially longer-term, U.S.
Treasury issues, actually got a boost from the Asian crisis. Many investors
throughout the world, seeking a safe haven for their money, produced a classic
"flight to quality" by rushing into Treasuries. During the fourth quarter of
1997, the yield on 30-year bonds fell a full 50 basis points (0.50%), which
pushed bond prices significantly higher (rates and prices move in opposite
directions). What followed in the beginning of 1998 was more of the same: short
bursts of volatility, ending with markedly higher stock prices and modest gains
for bonds.
Throughout the fiscal year that ended on April 30, 1998, investors were
subjected to what must have felt like the financial roller-coaster ride of their
lives. However, as we noted earlier, those shareholders who remained invested in
any of our funds, and who stayed the course despite the unpleasant intrusion of
occasionally foul weather, were rewarded for their prudence and their patience.
CENTURA EQUITY GROWTH FUND
For the 12 months ended April 30, 1998, the fund produced a total return of
36.89% (Class C -- Institutional shares). In comparison, the Standard & Poor's
500 Index rose 41.07%. Although the fund lagged the unmanaged benchmark to some
degree, we feel we had a successful year, providing significant returns while
employing our value philosophy. We don't believe in making large, risky bets in
"hot," high-flying issues, nor do we "follow the crowd." Rather, our strategy is
to search for growth at a reasonable price, focusing on out-of-favor stocks that
we believe are attractively valued and offer the potential for substantial,
long-term gains.
During the last year, the market was led by a small cluster of
large-capitalization, multinational, "household-name" stocks. Few of those
stocks are in our portfolio, for good reason. With the market in general
exceeding just about every historical standard of reasonable valuation, we
believe the most excessive overvaluations can be found in this large-cap group.
Buying these stocks' modest growth prospects at expensive prices is not
consistent with our value approach to investing.
<PAGE>
A careful look at the stocks in our portfolio underscores our emphasis on
value. Based on fiscal 1999 estimates, the fund's holdings have an average
price-to-sales ratio of 1.14, versus 1.75 for the S&P 500; a price-to-book-value
ratio of 3.3, versus 4.2; and a price-to-earnings ratio of 18.5, versus 21.7. We
also estimate that our holdings will, on average, grow earnings 14% in the
coming year, while the S&P 500's earnings growth is projected at just 7%. We
believe we've built a portfolio of stocks that has the potential to increase
earnings growth faster than the S&P 500, while selling at a discount to the
market.
Along with requiring solid fundamentals, we like to buy companies that may
possess hidden value. One example is Dial Corp. (1.8% of the fund's assets). We
bought the stock at a time when the market priced the company as a stodgy
conglomerate, ignoring the value of its core business franchise, the Dial Soap
brand name. In the time we've owned the stock, it has approximately doubled in
price. We've followed this strategy of buying companies with value that is not
readily apparent to the masses.
We're also drawn to companies whose stock prices are attractive relative to
their competitors'. For example, a year ago we bought PepsiCo (1.9%), instead of
the more popular Coca-Cola. Although Pepsi was having some problems at the time,
we liked its bottling franchise and, particularly, its snack food business.
While we didn't think Pepsi stock was necessarily "cheap," it was inexpensive in
relation to Coke's valuation.
We believe the fund is positioned to not only provide significant long-term
gains, but also to outperform the broader market during a prolonged decline in
stock prices.
CENTURA EQUITY INCOME FUND
For the 12 months ended April 30, 1998, the fund produced a total return of
30.72% (Class C -- Institutional shares). In comparison, the Lipper Equity
Income Fund average rose 34.07%. Our performance was penalized somewhat by a
significant underweighting in technology, a sector that performed exceptionally
well during the last year. However, we couldn't find any reasonably valued
technology stocks that offered decent yields, so we stayed away from much of the
tech group.
The subject of yield is particularly relevant to this discussion. Our fund
is a true equity income portfolio. Since the fund's inception, we have pursued
both growth AND income. To underscore our commitment, the fund's 30 day yield as
of April 30, 1998 was 2.36%, substantially higher than the S&P 500's 1.4% yield.
A look at other data also reveals that based on fiscal 1999 estimates, the
fund's holdings have an average price-to-earnings ratio of 16.9, versus 21.7 for
the S&P 500; a price-to-sales ratio of 1.25, versus 1.75; and a
price-to-book-value ratio of 3.4, versus 4.2. It is obvious that we are seeking
to buy attractively valued stocks that trade at a discount to the broader
market.
Further, we believe that to find good value, you can't just buy the large,
household-name stocks. You have to dig beneath the surface and identify stocks
with attractive fundamentals. A case in point is BCE, Inc. (2.1% of the
portfolio's assets), the Canadian equivalent of AT&T. BCE is a utility colossus,
but the company also owns 50% of Northern Telecom, a rapidly growing
communications equipment company. Buying the stock was a way for us to share in
the growth potential of Northern Telecom, while tempering the risk with a more
stable, traditional telephone utility business that throws off a relatively
healthy dividend.
Other examples of our strategic approach to value investing are AT&T (2.2%)
and Mellon Bank Corp. (2.5%). We bought AT&T because it offered a relatively
high dividend and we knew that it had a strong franchise that wasn't going away.
The company had some management problems that masked its true potential,
circumstances which made the stock price attractive to us. After AT&T made a
management change, the stock surged from $33 a share to $60 a share. As for
Mellon, it stood out as an exceptional value among bank stocks, primarily due to
its Dreyfus money-management franchise. Dreyfus adds fee-based revenue to
Mellon's bottom line, lessening its dependence on interest rate spreads.
2
<PAGE>
We believe that the fund will have the potential to provide attractive,
long-term returns and a relatively handsome yield while seeking to stand up to
the challenges of a market correction.
CENTURA SOUTHEAST EQUITY FUND*
The Centura Southeast Equity Fund was opened to investors on May 2, 1997.
For the period ended April 30, 1998, which represents just less than 12 months
of performance, the fund produced a total return of 60.98% (Class C --
Institutional shares). In comparison, the Russell 2000 rose 42.40%. The fund's
outstanding performance was due to a number of factors -- including judicious
stockpicking, a surge in the type of small-capitalization stocks the fund
favors, and robust economic growth in the Southeast region of the U.S.
The fund invests in small companies headquartered in the southeastern United
States, including Texas.** To underscore our definition of "small company," as
of April 30, 1998, the portfolio's weighted average market capitalization was
just $1.05 billion, compared to the S&P 500's weighted average market cap of $65
billion. Further, we concentrate on the sectors most prominent among those
represented in the Russell 2000: utilities, communication services, financials,
transportation, capital goods, basic industries, energy, consumer staples,
consumer cyclicals, health care and technology.
In our search for the best stocks within these parameters, we look for
relative value, as well as absolute value. We ask a number of questions about
each company we're considering for purchase. First, is this an attractive
business and is the company's relative position in its industry improving?
Second, does the management of this company have the unique ability to take the
business and make it work? And third, is the common stock available at a price
that's attractive to us?
One stock that illustrates our strategy is Benchmark Electronics, Inc. (1.4%
of the portfolio's assets), a contract electronics manufacturer. Along with its
solid fundamentals, Benchmark is benefiting from the trend toward outsourcing
among many of the larger PC manufacturers, such as Compaq and Hewlett-Packard.
Another stock about which we can speak with absolute conviction is Goodmark
Foods, Inc. (2.6%, the fund's largest holding), which produces Slim Jims and
other meat snack products. The company has significantly increased its operating
capacity and is functioning at a high level of efficiency. We believe that
Goodmark is going to continue to grow its earnings and generate outstanding cash
flows.
We are confident that by focusing on a broadly diversified group of
companies that operate in relative proximity to our own headquarters, we can
provide shareholders with a unique opportunity to realize potentially
significant, long-term growth to their investment.
CENTURA FEDERAL SECURITIES INCOME FUND
For the 12 months ended April 30, 1998, the fund produced a total return of
8.48% (Class C -- Institutional shares). In comparison, the Lehman Brothers
Intermediate Government Bond Index rose 8.68%.
As of April 30, 1998, approximately 23% of the fund's assets were invested
in U.S. Treasury securities, 73% in securities issued by U.S. Government
Agencies and 4% in cash. The average weighted maturity of the fund's holdings
was 5.58 years.
*Investing in a regional equity fund may involve more risk, since the companies
are located within the same geographical area.
**Small-capitalization funds typically carry additional risks, since smaller
companies generally have a higher risk of failure. Historically, smaller
companies' stocks have experienced greater-than-average market volatility.
3
<PAGE>
The fund's average weighted maturity has moved only slightly since our last
report to you six months ago; however, we have shifted our portfolio allocation
rather dramatically. While the greatest portion of our assets was invested in
Treasuries at the end of October 1997, we are now committing most of the
portfolio to agency securities. Although agency debt is not guaranteed by the
U.S. Treasury, we feel that the risk of default is extremely low -- it's
unlikely that the Treasury is going to let agencies such as the Federal Home
Loan Mortgage Corporation go bankrupt -- and the yields offered by these
securities are higher than those of Treasury paper with similar maturities. In
recent months, we also bought several large pools of mortgages that offer
relatively generous yields.
The ongoing problems in Asia continue to act as a brake on inflation, a
situation which has given the Federal Reserve adequate reason to refrain from
either raising or lowering rates. We also don't believe interest rates can rise
significantly while commodity prices are basically flat, as they have been for
the last few months. Therefore, at least for the short term, we have positioned
the fund to take advantage of a neutral interest-rate environment.
CENTURA NORTH CAROLINA TAX-FREE BOND FUND*
For the 12 months ended April 30, 1998, the fund produced a total return of
7.89% (Class C -- Institutional shares). In comparison, the Lehman Brothers
5-Year Municipal Bond Index rose 6.74%.
As of April 30, 1998, approximately 57.4% of the fund's assets were invested
in general obligation bonds, 12.8% in certificates of participation, 28.3% in
revenue bonds and 1.5% in cash. Credit quality remained excellent, with 68.5% in
AAA-rated bonds, 21.9% in AA-rated bonds and 8.1% in A-rated bonds. The average
weighted maturity of the fund's holdings was 6.58 years. Since our last report
six months ago, there has been little change in the composition of the fund's
portfolio or credit quality.
The North Carolina municipal bond market is highly regarded throughout the
country. This reputation is well-deserved; for example, a disproportionately
high percentage of the AAA-rated general obligation bonds issued in the U.S.
come from North Carolina. Shareholders who reside in the state benefit both from
the relative stability of the North Carolina muni market, and the distribution
of income that is free from both federal and North Carolina state income taxes.
We maintain as much diversification as possible in the portfolio, buying
bonds issued from a wide variety of municipalities and issue types -- such as
hospital, power and housing bonds. This diversification, along with our bias
toward the highest-quality issues, can offer a measure of protection to our
shareholders.
OUR OUTLOOK FOR THE MARKETS
To this point in our letter, we have focused on the past: the direction of
the equity and fixed-income markets during the last 12 months and the
performance of our five mutual funds. But investing is about looking to the
future, and to that end, we have some definite ideas about the year to come.
To put it simply, we believe the stock market is generally overvalued. The
last three years -- indeed, the last 16 years -- have been a tremendous period
for equity investors. We are not pessimists, nor do we believe that a run-up in
stock prices must always be followed by a sharp decline. However, by every
historical measure, valuation levels are very high in many areas of the market,
and we would be remiss if we didn't suggest that investors temper their
expectations for near-term results.
History has taught us that it's not reasonable to expect 20% or even 15%
annual returns, year after year. While we don't anticipate a sudden market
crash, neither would we be very surprised if the equity bubble were to burst.
*Income may be subject to Federal Alternative Minimum Tax.
4
<PAGE>
Having said that, we would like to remind you, as we remind ourselves every
day, that we are not market timers, but long-term investors. As such, we will
continue to search for value in what we believe is an overvalued market. Because
it is our style to buy stocks that have lower expectations, we would expect our
portfolios to suffer less during a market correction than funds that are filled
with the large-cap, multinational companies that we feel are so vulnerable in
our current environment.
Valuation levels aside, a key determinant in the future direction of both
the stock and bond markets is interest rates. Right now, we're neutral on
interest rates. Two significant, ongoing economic situations are weighing on the
minds of Alan Greenspan and his colleagues at the Federal Reserve. First is the
Asian crisis, which is hurting U.S. exports, dampening the earnings growth of
many American companies and keeping economic growth in check. Second is the fact
that unemployment in this country has fallen sharply and threatens to push up
the cost of wages employers must pay to attract and retain workers. So we have
two offsetting factors: the impact of Asia, which is restraining earnings, and
rising wages, which could ignite a broader inflationary environment. At least
for the short term, we believe the Fed will take no action on interest rates.
However, if Mr. Greenspan and company were to raise rates, the positive market
trend we have enjoyed may reverse.
LOOKING AHEAD
Finally, we would like to announce that in June, we will introduce the
Centura Money Market Fund.* Investing in short-term debt issued by the U.S.
Government and corporations with the highest grades of creditworthiness, the
fund will provide investors with an attractive place to "park" excess cash while
earning a competitive rate of interest. Shareholders can also use the fund when
switching among our other portfolios.**
We thank you for your continued support and look forward to serving all your
investments needs.
Sincerely,
[FRANK G. JOLLEY SIGNATURE]
Frank G. Jolley, CFA
Chief Investment Officer
Centura Bank/Trust Investments
*An investment in the fund is neither insured nor guaranteed by the U.S.
Government. Yields will fluctuate, and there can be no assurance that the fund
will be able to maintain a stable net asset value of $1.00 per share.
**For more complete information about the Centura Money Market Fund including
charges and expenses, obtain a prospectus from Centura Funds, Inc., P.O. Box
182485, Columbus, Ohio 43218-2485; or call 1-800-44CENTURA (1-800-442-3688).
Read it carefully before you invest or send money.
5
<PAGE>
EQUITY GROWTH FUND
A $10,000 investment in the Equity Growth Fund, Class A, with a maximum sales
load of 4.50%, made on the inception date would have increased to $36,448. The
graph on the right shows how this compares to our benchmark over the same
period. Average annualized total return for the life of the Fund was 19.30%,
reflecting the sales load. Without the sales load, the return would have been
20.04%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS A S&P 500 LIPPER GROWTH AVERAGE
<S> <C> <C> <C>
12/90 $9,550 $10,000 $10,000
12/91 12,503 13,055 13,748
12/92 14,498 14,056 14,915
12/93 17,121 15,460 16,563
12/94 15,683 15,663 16,267
12/95 21,158 21,525 21,324
12/96 26,234 26,492 25,521
12/97 33,130 35,330 31,962
4/98 36,448 40,665 36,530
Average Annual Total Return* 1 Year 5 Year Since Inception
Class A (a) 30.42% 18.58% 19.30%
S&P 500 41.07% 23.25% 21.08%
Lipper Growth Average 39.13% 20.03% 19.09%
</TABLE>
A $10,000 investment in the Equity Growth Fund, Class B, made on the inception
date would have increased to $36,252. The graph on the right shows how this
compares to our benchmark over the same period. Average annualized total return
for the life of the Fund was 19.21%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS B S&P 500 LIPPER GROWTH AVERAGE
<S> <C> <C> <C>
12/90 $10,000 $10,000 $10,000
12/91 12,996 13,055 13,748
12/92 14,966 14,056 14,915
12/93 17,542 15,460 16,563
12/94 15,984 15,663 16,267
12/95 21,395 21,525 21,324
12/96 26,365 26,492 25,521
12/97 33,056 35,330 31,962
4/98 36,252 40,665 36,530
Average Annual Total Return* 1 Year 5 Year Since Inception
Class B (b) 30.55% 18.75% 19.21%
S&P 500 41.07% 23.25% 21.08%
Lipper Growth Average 39.13% 20.03% 19.09%
</TABLE>
A $10,000 investment in the Equity Growth Fund, Class C, made on the inception
date would have increased to $38,701. The graph on the right shows how this
compares to our benchmark over the same period. Average annualized total return
for the life of the Fund was 20.28%.
The Lipper Growth Average is representative of the average of the total returns
reported by all of the mutual funds designated by Lipper Analytical Services,
Inc. as falling into this category.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS C S&P 500 LIPPER GROWTH AVERAGE
<S> <C> <C> <C>
12/90 $10,000 $10,000 $10,000
12/91 13,096 13,055 13,748
12/92 15,235 14,056 14,915
12/93 18,035 15,460 16,563
12/94 16,546 15,663 16,267
12/95 22,337 21,525 21,324
12/96 27,776 26,492 25,521
12/97 35,176 35,330 31,962
4/98 38,701 40,665 36,530
Average Annual Total Return* 1 Year 5 Year Since Inception
Class C 36.89% 19.90% 20.28%
S&P 500 41.07% 23.25% 21.08%
Lipper Growth Average 39.13% 20.03% 19.09%
</TABLE>
(a) Returns reflect maximum sales load of 4.50%. Without the sales load, the
returns would have been 36.55%, 19.67% and 20.04% for the one year, five
year and since inception returns, respectively.
(b) Returns reflect the appropriate contingent deferred sales charges (maximum
deferred sales load is 5.00%). Without such charges, the returns would
have been 35.55%, 18.85% and 19.21% for the one year, five year and since
inception returns, respectively.
* The inception date for performance purposes is December 31, 1990. The
quoted performance of the Centura Equity Growth Fund includes performance
of certain collective trust funds ("Commingled Accounts") advised by
Centura Bank prior to the establishment of the Fund on June 1, 1994. On
that date, the assets of the Commingled Accounts were transferred to the
Fund in connection with its commencement of operations. The Commingled
Accounts were operated using substantially the same investment objective,
policies and techniques of the Fund. During that time, the Commingled
Accounts were not registered under the Investment Company Act of 1940 (the
"1940 Act") and therefore were not subject to certain investment
restrictions that are imposed under the 1940 Act. If the Commingled
Accounts had been registered under the 1940 Act, the Commingled Accounts'
performance may have been adversely affected. Because the Commingled
Accounts did not charge any expenses, its performance has been adjusted to
reflect the Fund's estimated expenses at the time of its inception, which
were 1.25%, 2.00% and 1.00% of average daily net assets for Class A, Class
B and Class C, respectively. The performance information for the period
subsequent to the Fund's inception also assumes reinvestment of all net
investment income and realized capital gains and takes into account actual
expenses of the appropriate share class.
Past performance is no guarantee. The investment return and NAV will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than the
original cost.
The total return set forth may reflect the waiver of a portion of the fund's
fees for certain periods. Without the waiver of fees, returns would have been
lower.
6
<PAGE>
EQUITY INCOME FUND
A $10,000 investment in the Equity Income Fund, Class A, with a maximum sales
load of 4.50%, made on the inception date would have increased to $29,700. The
graph on the right shows how this compares to our benchmark over the same
period. Average annualized total return for the life of the Fund was 16.01%,
reflecting the sales load. Without the sales load, the return would have been
16.74%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS A LIPPER EQUITY INCOME AVERAGE S&P 500
<S> <C> <C> <C>
12/90 $9,550 $10,000 $10,000
12/91 11,382 12,701 13,055
12/92 12,596 14,009 14,056
12/93 14,284 16,007 15,460
12/94 13,872 15,719 15,663
12/95 18,339 20,519 21,525
12/96 22,133 24,459 26,492
12/97 28,278 31,119 35,330
4/98 29,700 34,300 40,665
Average Annual Total Return 1 Year 5 Year Since Inception
Class A (a) 24.54% 16.41% 16.01%
Lipper Equity Income Average 34.07% 18.33% 18.15%
S&P 500 41.07% 23.25% 21.08%
</TABLE>
A $10,000 investment in the Equity Income Fund, Class B, made on the inception
date would have increased to $29,387. The graph on the right shows how this
compares to our benchmark over the same period. Average annualized total return
for the life of the Fund was 15.85%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS B LIPPER EQUITY INCOME AVERAGE S&P 500
<S> <C> <C> <C>
12/90 $10,000 $10,000 $10,000
12/91 11,814 12,701 13,055
12/92 12,990 14,009 14,056
12/93 14,598 16,007 15,460
12/94 14,083 15,719 15,663
12/95 18,474 20,519 21,525
12/96 22,127 24,459 26,492
12/97 28,046 31,119 35,330
4/98 29,387 34,300 40,665
Average Annual Total Return* 1 Year 5 Year Since Inception
Class B (b) 24.39% 16.47% 15.85%
Lipper Equity Income Average 34.07% 18.33% 18.15%
S&P 500 41.07% 23.25% 21.08%
</TABLE>
A $10,000 investment in the Equity Income Fund, Class C, made on the inception
date would have increased to $31,579. The graph on the right shows how this
compares to our benchmark over the same period. Average annualized total return
for the life of the Fund was 16.99%.
The Lipper Equity Income Average is representative of the average of the total
returns reported by all of the mutual funds designated by Lipper Analytical
Services, Inc. as falling into this category.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS C LIPPER EQUITY INCOME AVERAGE S&P 500
<S> <C> <C> <C>
12/90 $10,000 $10,000 $10,000
12/91 11,943 12,701 13,055
12/92 13,253 14,009 14,056
12/93 15,044 16,007 15,460
12/94 14,651 15,719 15,663
12/95 19,410 20,519 21,525
12/96 23,474 24,459 26,492
12/97 30,049 31,119 35,330
4/98 31,579 34,300 40,665
Average Annual Total Return* 1 Year 5 Year Since Inception
Class C 30.72% 17.71% 16.99%
Lipper Equity Income Average 34.07% 18.33% 18.15%
S&P 500 41.07% 23.25% 21.08%
</TABLE>
(a) Returns reflect maximum sales load of 4.50%. Without the sales load, the
returns would have been 30.36%, 17.47% and 16.74% for the one year, five
year and since inception returns, respectively.
(b) Returns reflect the appropriate contingent deferred sales charges (maximum
deferred sales load is 5.00%). Without such charges, the returns would
have been 29.39%, 16.58% and 15.85% for the one year, five year and since
inception returns, respectively.
* The inception date for performance purposes is December 31, 1990. The
quoted performance of the Centura Equity Income Fund includes performance
of certain collective trust funds ("Commingled Accounts") advised by
Centura Bank prior to the establishment of the Fund on June 1, 1994. On
that date, the assets of the Commingled Accounts were transferred to the
Fund in connection with its commencement of operations. The Commingled
Accounts were operated using substantially the same investment objective,
policies and techniques of the Fund. During that time, the Commingled
Accounts were not registered under the Investment Company Act of 1940 (the
"1940 Act") and therefore were not subject to certain investment
restrictions that are imposed under the 1940 Act. If the Commingled
Accounts had been registered under the 1940 Act, the Commingled Accounts'
performance may have been adversely affected. Because the Commingled
Accounts did not charge any expenses, its performance has been adjusted to
reflect the Fund's estimated expenses at the time of its inception, which
were 1.00%, 1.75% and 0.75% of average daily net assets for Class A, Class
B and Class C, respectively. The performance information for the period
subsequent to the Fund's inception also assumes reinvestment of all net
investment income and realized capital gains and takes into account actual
expenses of the appropriate share class.
Past performance is no guarantee. The investment return and NAV will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than the
original cost.
The total return set forth may reflect the waiver of a portion of the fund's
fees for certain periods. Without the waiver of fees, returns would have been
lower.
7
<PAGE>
SOUTHEAST EQUITY FUND
A $10,000 investment in the Southeast Equity Fund, Class A, with a maximum sales
load of 4.50%, made on the inception date would have increased to $45,928. The
graph on the right shows how this compares to our benchmark over the same
period. Average annualized total return for the life of the Fund was 23.12%,
reflecting the sales load. Without the sales load, the return would have been
23.91%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RUSSELL 2000 LIPPER SMALL CAP FUNDS AVERAGE
CLASS A INDEX
<S> <C> <C> <C>
12/90 $9,550 $10,000 $10,000
12/91 13,925 14,605 15,154
12/92 17,041 17,294 17,198
12/93 20,472 20,564 20,213
12/94 20,101 20,189 20,102
12/95 24,361 25,931 26,551
12/96 30,022 30,208 31,869
12/97 39,573 36,963 38,472
4/98 45,928 40,906 43,042
Since
Average Annual Total Return* 1 Year 5 Year Inception
Class A (a) 54.12% 19.52% 23.12%
Russell 2000 Index 42.40% 18.45% 21.18%
Lipper Small Cap Funds Average 45.62% 19.45% 21.10%
</TABLE>
A $10,000 investment in the Southeast Equity Fund, Class B, made on the
inception date would have increased to $45,573. The graph on the right shows how
this compares to our benchmark over the same period. Average annualized total
return for the life of the Fund was 22.99%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RUSSELL 2000 LIPPER SMALL CAP FUNDS AVERAGE
CLASS B INDEX
<S> <C> <C> <C>
12/90 $10,000 $10,000 $10,000
12/91 14,486 14,605 15,154
12/92 17,571 17,294 17,198
12/93 20,971 20,564 20,213
12/94 20,457 20,189 20,102
12/95 24,600 25,931 26,551
12/96 30,086 30,208 31,869
12/97 39,364 36,963 38,472
4/98 45,573 40,906 43,042
Since
Average Annual Total Return* 1 Year 5 Year Inception
Class B (b) 55.15% 19.61% 22.99%
Russell 2000 Index 42.40% 18.45% 21.18%
Lipper Small Cap Funds Average 45.62% 19.45% 21.10%
</TABLE>
A $10,000 investment in the Southeast Equity Fund, Class C, made on the
inception date would have increased to $48,930. The graph on the right shows how
this compares to our benchmark over the same period. Average annualized total
return for the life of the Fund was 24.19%.
The Lipper Small-Cap Average is representative of the average of the total
returns reported by all of the mutual funds designated by Lipper Analytical
Services, Inc. as falling into this category.
The Russell 2000 Index is a broad-based unmanaged index that represents the
general performance of domestically traded common stocks of small- to mid-sized
companies.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RUSSELL 2000 LIPPER SMALL CAP FUNDS AVERAGE
CLASS C INDEX
<S> <C> <C> <C>
12/90 $10,000 $10,000 $10,000
12/91 14,620 14,605 15,154
12/92 17,903 17,294 17,198
12/93 21,581 20,564 20,213
12/94 21,246 20,189 20,102
12/95 25,805 25,931 26,551
12/96 31,884 30,208 31,869
12/97 42,119 36,963 38,472
4/98 48,930 40,906 43,042
Since
Average Annual Total Return* 1 Year 5 Year Inception
Class C 61.63% 20.91% 24.19%
Russell 2000 Index 42.40% 18.45% 21.18%
Lipper Small Cap Funds Average 45.62% 19.45% 21.10%
</TABLE>
(a) Returns reflect maximum sales load of 4.50%. Without the sales load, the
returns would have been 61.40%, 20.64% and 23.91% for the one year, five
year and since inception returns, respectively.
(b) Returns reflect the appropriate contingent deferred sales charges (maximum
deferred sales load is 5.00%). Without such charges, the returns would
have been 60.15%, 19.70% and 22.99% for the one year, five year and since
inception returns, respectively.
* The inception date for performance purposes is December 31, 1990. The
quoted performance of the Centura Southeast Equity Fund includes
performance of certain collective trust funds ("Commingled Accounts")
advised by Centura Bank prior to the establishment of the Fund on May 2,
1997. On that date, the assets of the Commingled Accounts were transferred
to the Fund in connection with its commencement of operations. The
Commingled Accounts were operated using substantially the same investment
objective, policies and techniques of the Fund. During that time, the
Commingled Accounts were not registered under the Investment Company Act
of 1940 (the "1940 Act") and therefore were not subject to certain
investment restrictions that are imposed under the 1940 Act. If the
Commingled Accounts had been registered under the 1940 Act, the Commingled
Accounts' performance may have been adversely affected. Because the
Commingled Accounts did not charge any expenses, its performance has been
adjusted to reflect the Fund's estimated expenses at the time of its
inception, which were 1.50%, 2.25% and 1.25% of average daily net assets
for Class A, Class B and Class C, respectively. The performance
information for the period subsequent to the Fund's inception also assumes
reinvestment of all net investment income and realized capital gains and
takes into account actual expenses of the appropriate share class.
Past performance is no guarantee. The investment return and NAV will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than the
original cost.
The total return set forth may reflect the waiver of a portion of the fund's
fees for certain periods. Without the waiver of fees, returns would have been
lower.
8
<PAGE>
FEDERAL SECURITIES INCOME FUND
A $10,000 investment in the Federal Securities Income Fund, Class A, with a
maximum sales load of 2.75%, made on the inception date would have increased to
$15,183. The graph on the right shows how this compares to our benchmark over
the same period. Average annualized total return for the life of the Fund was
5.86%, reflecting the sales load. Without the sales load, the return would have
been 6.27%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS LIPPER SHORT-INTERMEDIATE
INTERMEDIATE GOVERNMENT US GOVERNMENT
CLASS A BOND INDEX AVERAGE
<S> <C> <C> <C>
12/90 $9,725 $10,000 $10,000
12/91 10,839 11,411 11,299
12/92 11,462 12,202 11,972
12/93 12,228 13,199 12,815
12/94 12,006 12,968 12,497
12/95 13,591 14,836 14,072
12/96 13,930 15,439 14,567
12/97 14,915 16,631 15,548
4/98 15,183 16,963 15,812
Average Annual Total Return* 1 Year 5 Year Since Inception
Class A(a) 5.25% 4.40% 5.86%
Lehman Brothers Intermediate
Government Bond Index 8.68% 5.87% 7.47%
Lipper Short-Intermeditate
US Government Average 7.36% 5.01% 6.61%
</TABLE>
A $10,000 investment in the Federal Securities Income Fund, Class B, made on the
inception date would have increased to $14,830. The graph on the right shows how
this compares to our benchmark over the same period. Average annualized total
return for the life of the Fund was 5.52%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS LIPPER SHORT-INTERMEDIATE
INTERMEDIATE GOVERNMENT US GOVERNMENT
CLASS B BOND INDEX AVERAGE
<S> <C> <C> <C>
12/90 $10,000 $10,000 $10,000
12/91 11,057 11,411 11,299
12/92 11,609 12,202 11,972
12/93 12,293 13,199 12,815
12/94 11,984 12,968 12,497
12/95 13,464 14,836 14,072
12/96 13,709 15,439 14,567
12/97 14,591 16,631 15,548
4/98 14,830 16,963 15,812
Average Annual Total Return* 1 Year 5 Year Since Inception
Class B(b) 4.58% 4.11% 5.52%
Lehman Brothers Intermediate
Government Bond Index 8.68% 5.87% 7.47%
Lipper Short-Intermeditate
US Government Average 7.36% 5.01% 6.61%
</TABLE>
A $10,000 investment in the Federal Securities Income Fund, Class C, made on the
inception date would have increased to $15,885. The graph on the right shows how
this compares to our benchmark over the same period. Average annualized total
return for the life of the Fund was 6.52%.
The Lipper Short-Intermediate U.S. Government Fund Average is representative of
the average of the total returns reported by all of the mutual funds designated
by Lipper Analytical Services, Inc. as falling into this category.
The Lehman Brothers Intermediate Government Bond Index is an unmanaged index
generally representative of the government bond market.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS LIPPER SHORT-INTERMEDIATE
INTERMEDIATE GOVERNMENT US GOVERNMENT
CLASS C BOND INDEX AVERAGE
<S> <C> <C> <C>
12/90 $10,000 $10,000 $10,000
12/91 11,154 11,411 11,299
12/92 11,836 12,202 11,972
12/93 12,655 13,199 12,815
12/94 12,457 12,968 12,497
12/95 14,137 14,836 14,072
12/96 14,540 15,439 14,567
12/97 15,592 16,631 15,548
4/98 15,885 16,963 15,812
Average Annual Total Return* 1 Year 5 Year Since Inception
Class C 8.48% 5.26% 6.52%
Lehman Brothers Intermediate
Government Bond Index 8.68% 5.87% 7.47%
Lipper Short-Intermeditate
US Government Average 7.36% 5.01% 6.61%
</TABLE>
(a) Returns reflect maximum sales load of 2.75%. Without the sales load, the
returns would have been 8.21%, 4.99% and 6.27% for the one year, five year
and since inception returns, respectively.
(b) Returns reflect the appropriate contingent deferred sales charges (maximum
deferred sales load is 3.00%). Without such charges, the returns would
have been 7.58%, 4.28% and 5.52% for the one year, five year and since
inception returns, respectively.
* The inception date for performance purposes is December 31, 1990. The
quoted performance of the Centura Federal Securities Fund includes
performance of certain collective trust funds ("Commingled Accounts")
advised by Centura Bank prior to the establishment of the Fund on June 1,
1994. On that date, the assets of the Commingled Accounts were transferred
to the Fund in connection with its commencement of operations. The
Commingled Accounts were operated using substantially the same investment
objective, policies and techniques of the Fund. During that time, the
Commingled Accounts were not registered under the Investment Company Act
of 1940 (the "1940 Act") and therefore were not subject to certain
investment restrictions that are imposed under the 1940 Act. If the
Commingled Accounts had been registered under the 1940 Act, the Commingled
Accounts' performance may have been adversely affected. Because the
Commingled Accounts did not charge any expenses, its performance has been
adjusted to reflect the Fund's estimated expenses at the time of its
inception, which were 0.94%, 1.69% and 0.69% of average daily net assets
for Class A, Class B and Class C, respectively. The performance
information for the period subsequent to the Fund's inception also assumes
reinvestment of all net investment income and realized capital gains and
takes into account actual expenses of the appropriate share class.
Past performance is no guarantee. The investment return and NAV will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than the
original cost.
The total return set forth may reflect the waiver of a portion of the fund's
fees for certain periods. Without the waiver of fees, returns would have been
lower.
9
<PAGE>
NORTH CAROLINA TAX-FREE BOND FUND
A $10,000 investment in the North Carolina Tax-Free Bond Fund, Class A, with a
maximum sales load of 2.75%, made on the inception date would have increased to
$14,002. The graph on the right shows how this compares to our benchmark over
the same period. Average annualized total return for the life of the Fund was
4.76%, reflecting the sales load. Without the sales load, the return would have
been 5.16%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LIPPER STATE
LEHMAN BROTHERS LEHMAN BROTHERS INTERMEDIATE
CLASS A MUNICIPAL BOND INDEX 5-YEAR MUNICIPAL INDEX MUNICIPAL AVERAGE
<S> <C> <C> <C> <C>
1/91 9,725 $10,000 $10,000 $10,000
12/91 10,327 11,167 10,986 10,876
12/92 10,871 12,152 11,823 11,690
12/93 11,734 13,645 12,856 12,882
12/94 11,249 12,939 12,692 12,377
12/95 12,626 15,198 14,169 13,976
12/96 12,944 15,872 14,770 14,447
12/97 13,982 17,330 15,712 15,439
4/98 14,002 17,451 15,828 15,481
Average Annual Total Return* 1 Year 5 Year Since Inception
Class A (a) 4.68% 4.08% 4.76%
Lehman Brothers Municipal Bond Index 9.30% 6.51% 7.95%
Lehman Brothers 5-Year Municipal Bond Index 6.74% 5.34% 6.54%
Lipper State Intermediate Municipal Average 6.84% 4.97% 6.20%
</TABLE>
A $10,000 investment in the North Carolina Tax-Free Bond Fund, Class B, made on
the inception date would have increased to $13,736. The graph on the right shows
how this compares to our benchmark over the same period. Average annualized
total return for the life of the Fund was 4.48%, reflecting the sales load.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LIPPER STATE
LEHMAN BROTHERS LEHMAN BROTHERS INTERMEDIATE
CLASS B MUNICIPAL BOND INDEX 5-YEAR MUNICIPAL INDEX MUNICIPAL AVERAGE
<S> <C> <C> <C> <C>
1/91 $10,000 $10,000 $10,000 $10,000
12/91 10,548 11,167 10,986 10,876
12/92 11,027 12,152 11,823 11,690
12/93 11,838 13,645 12,856 12,882
12/94 11,268 12,939 12,692 12,377
12/95 12,553 15,198 14,169 13,976
12/96 12,772 15,872 14,770 14,447
12/97 13,729 17,330 15,712 15,439
4/98 13,736 17,451 15,828 15,481
Average Annual Total Return* 1 Year 5 Year Since Inception
Class B (b) 4.09% 3.83% 4.48%
Lehman Brothers Municipal Bond Index 9.30% 6.51% 7.95%
Lehman Brothers 5-Year Municipal Bond Index 6.74% 5.34% 6.54%
Lipper State Intermediate Municipal Average 6.84% 4.97% 6.20%
</TABLE>
A $10,000 investment in the North Carolina Tax-Free Bond Fund, Class C, made on
the inception date would have increased to $14,662. The graph on the right shows
how this compares to our benchmark over the same period. Average annualized
total return for the life of the Fund was 5.42%.
The Lehman Brothers Municipal Bond Index and 5-year Municipal Index are
unmanaged indexes generally representative of the municipal bond market.
The Lipper State Intermediate Municipal Average is representative of the average
of the total returns reported by all of the mutual funds designated by Lipper
Analytical Services, Inc. as falling into this category.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LIPPER STATE
LEHMAN BROTHERS LEHMAN BROTHERS INTERMEDIATE
CLASS C MUNICIPAL BOND INDEX 5-YEAR MUNICIPAL INDEX MUNICIPAL AVERAGE
<S> <C> <C> <C> <C>
1/91 $10,000 $10,000 $10,000 $10,000
12/91 10,635 11,167 10,986 10,876
12/92 11,223 12,152 11,823 11,690
12/93 12,153 13,645 12,856 12,882
12/94 11,685 12,939 12,692 12,377
12/95 13,148 15,198 14,169 13,976
12/96 13,513 15,872 14,770 14,447
12/97 14,634 17,330 15,712 15,439
4/98 14,662 17,451 15,828 15,481
Average Annual Total Return* 1 Year 5 Year Since Inception
Class C 7.89% 4.93% 5.42%
Lehman Brothers Municipal Bond Index 9.30% 6.51% 7.95%
Lehman Brothers 5-Year Municipal Bond Index 6.74% 5.34% 6.54%
Lipper State Intermediate Municipal Average 6.84% 4.97% 6.20%
</TABLE>
(a) Returns reflect maximum sales load of 2.75%. Without the sales load, the
returns would have been 7.61%, 4.67%, and 5.16% for the one year, five
year and since inception returns, respectively.
(b) Returns reflect the appropriate contingent deferred sales charges (maximum
deferred sales load is 3.00%). Without such charges, the returns would
have been 7.09%, 4.00% and 4.48% for the one year, five year and since
inception returns, respectively.
* The inception date for performance purposes is January 31, 1991. The
quoted performance of the Centura North Carolina Tax-Free Fund includes
performance of certain collective trust funds ("Commingled Accounts")
advised by Centura Bank prior to the establishment of the Fund on June 1,
1994. On that date, the assets of the Commingled Accounts were transferred
to the Fund in connection with its commencement of operations. The
Commingled Accounts were operated using substantially the same investment
objective, policies and techniques of the Fund. During that time, the
Commingled Accounts were not registered under the Investment Company Act
of 1940 (the "1940 Act") and therefore were not subject to certain
investment restrictions that are imposed under the 1940 Act. If the
Commingled Accounts had been registered under the 1940 Act, the Commingled
Accounts' performance may have been adversely affected. Because the
Commingled Accounts did not charge any expenses, its performance had been
adjusted to reflect the Fund's estimated expenses at the time of its
inception, which were 1.04%, 1.79% and 0.79% of average daily net assets
for Class A, Class B and Class C, respectively. The performance
information for the period subsequent to the Fund's inception also assumes
reinvestment of all net investment income and realized capital gains and
takes into account actual expenses of the appropriate share class.
Past performance is no guarantee. The investment return and NAV will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than the
original cost.
The total return set forth may reflect the waiver of a portion of the fund's
fees for certain periods. Without the waiver of fees, returns would have been
lower.
10
<PAGE>
CENTURA FUNDS, INC.
EQUITY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ----------- -------------------------------------------------------------------------------- -------------
<C> <S> <C>
COMMON STOCKS -- 96.6%
AEROSPACE/DEFENSE -- 1.7%
70,000 Boeing Co. ..................................................................... $ 3,504,375
-------------
BANKING & FINANCIAL SERVICES -- 5.6%
45,000 American Express Co. ........................................................... 4,590,000
63,800 First American Corp. ........................................................... 3,146,138
56,000 Mellon Bank Corp. .............................................................. 4,032,000
-------------
11,768,138
-------------
BUSINESS EQUIPMENT & SERVICES -- 2.6%
275,000 Rollins, Inc. .................................................................. 5,482,813
-------------
CHEMICALS -- 6.6%
138,600 Cabot Corp. .................................................................... 4,980,938
70,000 Monsanto Co. ................................................................... 3,701,250
40,000 Potash Corp. of Saskatchewan, Inc. ............................................. 3,572,500
73,200 Schulman, Inc. ................................................................. 1,637,850
-------------
13,892,538
-------------
COMPUTER EQUIPMENT -- 1.3%
37,500 Cisco Systems, Inc. (b) ........................................................ 2,746,875
-------------
CONSUMER GOODS AND SERVICES -- 6.7%
189,000 Archer-Daniels-Midland Co. ..................................................... 4,063,500
90,000 Briggs & Stratton Corp. ........................................................ 4,072,500
44,900 Dow Jones & Co., Inc. .......................................................... 2,186,069
110,000 Millipore Corp. ................................................................ 3,795,000
-------------
14,117,069
-------------
DIVERSIFIED OPERATIONS -- 4.4%
56,300 Corning, Inc. .................................................................. 2,252,000
100,000 Seagram Co., Ltd ............................................................... 4,268,750
55,600 Varian Associates, Inc. ........................................................ 2,720,925
-------------
9,241,675
-------------
ELECTRICAL & ELECTRONICS -- 3.9%
74,000 AMP, Inc. ...................................................................... 2,909,125
63,000 General Electric Co. ........................................................... 5,362,875
-------------
8,272,000
-------------
ELECTRONIC COMPONENTS/INSTRUMENTS -- 0.8%
84,000 AVX Corp. ...................................................................... 1,727,250
-------------
ENERGY -- 6.8%
80,000 Amoco Corp. .................................................................... 3,540,000
110,000 Dresser Industries, Inc. ....................................................... 5,816,250
140,000 Tosco Corp. .................................................................... 4,987,500
-------------
14,343,750
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
CENTURA FUNDS, INC.
EQUITY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ----------- -------------------------------------------------------------------------------- -------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
FOOD AND BEVERAGES -- 7.3%
80,900 Albertson's, Inc. .............................................................. $ 4,045,000
150,000 IBP, Inc. ...................................................................... 3,093,750
100,000 PepsiCo, Inc. .................................................................. 3,968,750
237,000 Whitman Corp. .................................................................. 4,636,312
-------------
15,743,812
-------------
HEALTH CARE -- 12.9%
126,000 Allegiance Corp. ............................................................... 5,748,749
54,300 Amgen, Inc. (b) ................................................................ 3,237,638
40,000 Bristol Myers Squibb Co. ....................................................... 4,235,000
47,100 Genentech, Inc. (b) ............................................................ 3,261,675
64,900 R.P. Scherer Corp. (b) ......................................................... 4,737,699
125,000 Trigon Healthcare, Inc. (b) .................................................... 3,796,875
91,500 Vencor, Inc. (b) ............................................................... 2,481,938
-------------
27,499,574
-------------
HOUSEHOLD PRODUCTS -- 4.5%
158,400 Dial Corp. ..................................................................... 3,861,000
71,500 Rubbermaid, Inc. ............................................................... 2,046,688
100,000 Sherwin-Williams Co. ........................................................... 3,562,500
-------------
9,470,188
-------------
INSURANCE -- 8.4%
5,400 Allegheny Corp. (b) ............................................................ 1,863,000
20,000 General Re Corp. ............................................................... 4,471,250
105,000 Jefferson-Pilot Corp. .......................................................... 6,162,187
140,000 Provident Companies, Inc. ...................................................... 5,468,750
-------------
17,965,187
-------------
LEISURE -- 1.5%
100,000 Brunswick Corp. ................................................................ 3,250,000
-------------
MACHINERY & EQUIPMENT -- 1.4%
65,000 A.O. Smith Corp. ............................................................... 2,933,125
-------------
MEDIA -- 1.2%
52,650 Media General, Inc., Class A ................................................... 2,500,875
-------------
RETAIL -- 2.4%
100,000 Wal-Mart Stores, Inc. .......................................................... 5,056,250
-------------
TECHNOLOGY -- 6.5%
76,950 Computer Science Corp. ......................................................... 4,059,113
34,000 Intel Corp. .................................................................... 2,747,625
40,000 International Business Machines Corp. .......................................... 4,634,999
125,800 Western Digital Corp. (b) ...................................................... 2,353,693
-------------
13,795,430
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
CENTURA FUNDS, INC.
EQUITY GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ----------- -------------------------------------------------------------------------------- -------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
TELECOMMUNICATIONS -- 6.0%
61,300 AT&T Corp. ..................................................................... $ 3,681,831
97,000 BCE, Inc. ...................................................................... 4,128,563
61,800 Comsat Corp .................................................................... 2,495,175
45,000 Motorola, Inc. ................................................................. 2,503,125
-------------
12,808,694
-------------
TEXTILES & TOOLS -- 4.1%
83,800 Kennametal, Inc. ............................................................... 4,467,588
110,500 Unifi, Inc. .................................................................... 4,233,531
-------------
8,701,119
-------------
TOTAL COMMON STOCKS (COST $145,824,567) ........................................ 204,820,737
-------------
INVESTMENT COMPANIES -- 3.4%
3,561,794 Goldman Financial Square Prime Money Market Fund ............................... 3,561,794
3,630,640 Temporary Investment Fund ...................................................... 3,630,639
-------------
TOTAL INVESTMENT COMPANIES (COST $7,192,433) ................................... 7,192,433
-------------
TOTAL INVESTMENTS (COST $153,017,000) (a) -- 100.0% ............................ 212,013,170
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.0% .................................. 5,822
-------------
TOTAL NET ASSETS -- 100.0% ..................................................... $212,018,992
-------------
-------------
</TABLE>
- -------------
Percentages indicated are based on net assets of $212,018,992.
(a) Represents cost for financial reporting purposes and federal income tax
purposes and differs from value by net unrealized appreciation of securities
as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $60,996,768
Unrealized depreciation............................................. (2,000,598)
-------------
Net unrealized appreciation......................................... $58,996,170
-------------
-------------
</TABLE>
(b) Represents non-income producing securities.
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
CENTURA FUNDS, INC.
EQUITY INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS -- 90.6%
AEROSPACE/DEFENSE -- 1.5%
20,000 Boeing Co. ....................................................................... $ 1,001,250
------------
AUTOMOBILES & TRUCKS -- 2.0%
20,000 General Motors Corp. ............................................................. 1,347,500
------------
BANKING & FINANCIAL SERVICES -- 8.5%
13,500 CCB Financial Corp. .............................................................. 1,468,125
24,000 Mellon Bank Corp. ................................................................ 1,728,000
50,000 United Asset Management Corp. .................................................... 1,325,000
16,000 Wachovia Corp. ................................................................... 1,359,000
------------
5,880,125
------------
BUSINESS EQUIPMENT & SERVICES -- 2.9%
100,000 Rollins, Inc. .................................................................... 1,993,750
------------
CHEMICALS -- 6.6%
20,000 Betzdearborn, Inc. ............................................................... 1,072,500
18,000 E.I. du Pont de Nemours & Co. .................................................... 1,310,625
30,000 Lubrizol Corp. ................................................................... 1,106,250
12,000 Potash Corp. of Saskatchewan, Inc. ............................................... 1,071,750
------------
4,561,125
------------
CONSUMER GOODS AND SERVICES -- 7.7%
33,200 Bassett Furniture Industries, Inc. ............................................... 1,037,500
30,000 Briggs & Stratton Corp. .......................................................... 1,357,500
14,700 Dow Jones & Co., Inc. ............................................................ 715,706
35,000 Mattel, Inc. ..................................................................... 1,340,938
30,000 Tupperware Corp. ................................................................. 811,875
------------
5,263,519
------------
ELECTRICAL & ELECTRONICS -- 4.0%
26,000 AMP, Inc. ........................................................................ 1,022,125
20,000 General Electric Co. ............................................................. 1,702,500
------------
2,724,625
------------
ENERGY -- 8.7%
32,000 Amoco Corp. ...................................................................... 1,416,000
31,000 Royal Dutch Petroleum Co. ........................................................ 1,753,437
21,000 Schlumberger Ltd. ................................................................ 1,740,375
25,000 Sonat, Inc. ...................................................................... 1,109,375
------------
6,019,187
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
CENTURA FUNDS, INC.
EQUITY INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
FOOD AND BEVERAGES -- 6.5%
30,000 Anheuser Busch Co., Inc. ......................................................... $ 1,374,375
70,000 J.M. Smucker Co. ................................................................. 1,688,750
66,200 Lance, Inc. ...................................................................... 1,423,300
------------
4,486,425
------------
HEALTH CARE -- 8.5%
20,000 Abbott Laboratories .............................................................. 1,462,500
15,000 American Home Products Corp. ..................................................... 1,396,875
34,000 Glaxo Holdings, ADR .............................................................. 1,923,124
19,000 Smithkline Beecham PLC, ADR ...................................................... 1,131,688
------------
5,914,187
------------
INSURANCE -- 2.7%
31,500 Jefferson-Pilot Corp. ............................................................ 1,848,656
------------
METALS -- 3.3%
18,000 Aluminum Company of America ...................................................... 1,395,000
50,000 Worthington Industries, Inc. ..................................................... 898,438
------------
2,293,438
------------
PUBLISHING & PRINTING -- 2.0%
50,000 Readers Digest Assoc., Inc., Class A ............................................. 1,343,750
------------
RAILROADS -- 1.5%
30,000 Norfolk Southern Corp. ........................................................... 1,003,125
------------
REAL ESTATE INVESTMENT TRUST -- 2.2%
44,700 Highwoods Properties, Inc. ....................................................... 1,519,800
------------
RETAIL -- 4.6%
110,000 Ingles Markets, Inc., Class A .................................................... 1,375,000
25,000 J.C. Penney, Inc. ................................................................ 1,776,563
------------
3,151,563
------------
TECHNOLOGY -- 2.5%
15,000 International Business Machines Corp. ............................................ 1,738,125
------------
TELECOMMUNICATIONS -- 6.8%
25,200 AT&T Corp. ....................................................................... 1,513,575
34,300 BCE, Inc. ........................................................................ 1,459,894
26,000 Bellsouth Corp. .................................................................. 1,668,875
------------
4,642,344
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
CENTURA FUNDS, INC.
EQUITY INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ---------------------------------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
UTILITIES -- 8.1%
20,000 GTE Corp. ........................................................................ $ 1,168,750
16,000 Piedmont Natural Gas Co., Inc. ................................................... 545,000
55,000 Southern Co. ..................................................................... 1,457,500
40,000 UGI Corp. ........................................................................ 1,110,000
40,000 Williams Cos., Inc. .............................................................. 1,265,000
------------
5,546,250
------------
TOTAL COMMON STOCKS (COST $44,079,336) ........................................... 62,278,744
------------
PREFERRED STOCKS -- 4.3%
COMPUTER SOFTWARE -- 2.4%
18,000 Microsoft Corp., Convertible ..................................................... 1,676,250
------------
FOOD AND BEVERAGES -- 1.9%
27,000 Chiquita Brands, Convertible ..................................................... 1,282,500
------------
TOTAL PREFERRED STOCKS (COST $2,747,723) ......................................... 2,958,750
------------
INVESTMENT COMPANIES -- 3.4%
1,166,646 Goldman Financial Square Prime Money Market Fund ................................. 1,166,646
1,185,104 Temporary Investment Fund ........................................................ 1,185,104
------------
TOTAL INVESTMENT COMPANIES (COST $2,351,750) ..................................... 2,351,750
------------
TOTAL INVESTMENTS (COST $49,178,808) (a) -- 98.3% ................................ 67,589,244
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.7% .................................... 1,136,196
------------
TOTAL NET ASSETS -- 100.0% ....................................................... $ 68,725,440
------------
------------
</TABLE>
- -------------
Percentages indicated are based on net assets of $68,725,440.
(a) Represent cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting purposes in excess of federal income tax reporting of
approximately $26,552. Cost for federal tax purposes differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 19,315,153
Unrealized depreciation............................................. (878,165)
-------------
Net unrealized appreciation......................................... $ 18,436,988
-------------
-------------
</TABLE>
ADR -- American Depositary Receipt
PLC -- Public Liability Company
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
CENTURA FUNDS, INC.
SOUTHEAST EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ------------------------------------------------------------------------------------ ------------
<C> <S> <C>
COMMON STOCKS -- 96.6%
AEROSPACE/DEFENSE -- 0.9%
12,500 Nichols Research Corp. (b) ......................................................... $ 339,063
------------
AIRLINES -- 1.5%
16,000 Atlantic Southeast Airlines, Inc. .................................................. 608,000
------------
BANKING & FINANCIAL SERVICES -- 8.2%
25,000 Carolina First Corp. ............................................................... 725,000
9,400 CCB Financial Corp. ................................................................ 1,022,249
27,000 Cenit Bancorp, Inc. ................................................................ 735,750
17,250 First Liberty Financial Corp. ...................................................... 435,563
12,000 Premier Bancshares, Inc. ........................................................... 308,250
------------
3,226,812
------------
BUSINESS EQUIPMENT & SERVICES -- 1.5%
30,000 Rollins, Inc. ...................................................................... 598,125
------------
COMMERCIAL SERVICES -- 2.1%
60,000 Aviall, Inc. (b) ................................................................... 840,000
------------
COMPUTER SOFTWARE -- 2.5%
72,500 Broadway & Seymour, Inc. (b) ....................................................... 507,500
20,000 Datastream Systems, Inc. (b) ....................................................... 460,000
------------
967,500
------------
ELECTRONIC COMPONENTS/INSTRUMENTS -- 13.2%
17,000 AVX Corp. .......................................................................... 349,563
25,300 Benchmark Electronics, Inc. (b) .................................................... 567,669
16,000 C & D Technologies, Inc. ........................................................... 883,999
10,000 Dallas Semi-Conductors ............................................................. 385,625
15,000 Dupont Photomask, Inc. (b) ......................................................... 813,749
10,000 General Cable ...................................................................... 453,125
15,000 Jabil Circuit, Inc. (b) ............................................................ 526,875
13,000 Photronics, Inc. (b) ............................................................... 479,375
20,500 World Access, Inc. (b) ............................................................. 791,813
------------
5,251,793
------------
ENERGY -- 2.5%
18,000 Forcenergy, Inc. (b) ............................................................... 415,125
23,800 Pride International, Inc. (b) ...................................................... 578,638
------------
993,763
------------
FOOD AND BEVERAGES -- 2.6%
45,000 Goodmark Foods, Inc. ............................................................... 1,029,375
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
CENTURA FUNDS, INC.
SOUTHEAST EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ------------------------------------------------------------------------------------ ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
FOREST PRODUCTS -- 2.9%
27,000 Buckeye Technologies, Inc. (b) ..................................................... $ 627,750
18,000 Deltic Timber Corp. ................................................................ 514,125
------------
1,141,875
------------
HEALTH CARE -- 12.5%
30,000 Coventry Health Care, Inc. (b) ..................................................... 508,125
18,700 Maxxim Medical, Inc. (b) ........................................................... 488,538
90,000 Omega Health Systems, Inc. (b) ..................................................... 663,750
40,000 Owens & Minor, Inc. Holding Co. .................................................... 712,500
40,000 Pharmaceutical Product Development, Inc. (b) ....................................... 1,002,499
35,000 Phycor, Inc. (b) ................................................................... 796,250
25,000 Trigon Healthcare, Inc. (b) ....................................................... 759,375
------------
4,931,037
------------
INSURANCE -- 8.1%
30,000 American Heritage Life Insurance ................................................... 688,125
25,000 FPIC Insurance Group, Inc. (b) ..................................................... 862,500
33,000 Highlands Insurance Group (b) ...................................................... 895,125
19,400 Provident Companies, Inc. .......................................................... 757,813
------------
3,203,563
------------
INVESTMENT COMPANY -- 1.6%
25,000 Allied Capital Corp. ............................................................... 650,000
------------
MEDIA -- 5.5%
18,000 Cox Communications (b) ............................................................. 803,250
12,000 Media General, Inc., Class A ....................................................... 570,000
60,000 Paxson Communications Corp. (b) .................................................... 806,250
------------
2,179,500
------------
METALS -- 4.3%
35,000 Commonwealth Industries, Inc. ...................................................... 595,000
11,000 Kaydon Corp. ....................................................................... 481,938
35,000 Maverick Tube Corp. (b) ............................................................ 610,312
------------
1,687,250
------------
OIL/GAS SERVICES -- 5.3%
35,400 American Oilfield Divers, Inc. (b) ................................................. 557,550
55,500 Dailey Petroleum Services (b) ...................................................... 499,500
25,000 Global Industries Ltd. (b) ......................................................... 567,188
21,500 Midcoast Energy Resources .......................................................... 482,406
------------
2,106,644
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
CENTURA FUNDS, INC.
SOUTHEAST EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ------------------------------------------------------------------------------------ ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
PHOTOGRAPHY -- 1.6%
25,000 PCA International, Inc. ............................................................ $ 640,625
------------
POLLUTION CONTROL -- 1.2%
76,100 Trion, Inc. ........................................................................ 456,600
------------
PUBLISHING & PRINTING -- 1.0%
30,000 Nelson (Thomas), Inc. .............................................................. 399,375
------------
REAL ESTATE INVESTMENT TRUST -- 1.5%
25,000 Capstone Capital Corp. ............................................................. 596,875
------------
RESTAURANTS -- 0.8%
25,000 Rare Hospitality International, Inc. (b) ........................................... 325,000
------------
RETAIL -- 5.8%
31,300 Heilig Meyers Co. .................................................................. 440,156
35,000 Ingles Markets, Inc., Class A ...................................................... 437,500
4,000 Lowes Co. .......................................................................... 279,750
10,000 Stein Mart, Inc. (b) ............................................................... 352,500
45,000 Tropical Sportswear International (b) .............................................. 765,000
------------
2,274,906
------------
TELECOMMUNICATIONS -- 3.4%
10,000 Excel Communications, Inc. (b) ..................................................... 235,000
20,000 Premiere Technologies, Inc. (b) .................................................... 637,500
25,000 Vanguard Cellular System -- Class A (b) ............................................ 475,000
------------
1,347,500
------------
TEXTILES & TOOLS -- 1.0%
10,000 Unifi, Inc. ........................................................................ 383,125
------------
TOBACCO -- 1.2%
35,000 Standard Commercial Corp. (b) ...................................................... 463,750
------------
UTILITIES -- 2.0%
10,000 Piedmont Natural Gas Co., Inc. ..................................................... 340,625
15,000 Scana Corp. ........................................................................ 448,125
------------
788,750
------------
WIRE & CABLE PRODUCTS -- 1.9%
100,000 Insteel Industries, Inc. ........................................................... 731,250
------------
TOTAL COMMON STOCKS (COST $30,321,370) ............................................. 38,162,056
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
CENTURA FUNDS, INC.
SOUTHEAST EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ------------------------------------------------------------------------------------ ------------
<C> <S> <C>
INVESTMENT COMPANIES -- 4.0%
809,495 Goldman Financial Square Prime Money Market Fund ................................... $ 809,495
787,070 Temporary Investment Fund .......................................................... 787,070
------------
TOTAL INVESTMENT COMPANIES (COST $1,596,565) ....................................... 1,596,565
------------
TOTAL INVESTMENTS (COST $31,917,935) (A) -- 100.6% ................................. 39,758,621
LIABILITIES IN EXCESS OF OTHER ASSETS (0.6)% ....................................... (238,439)
------------
TOTAL NET ASSETS -- 100.0% ......................................................... $ 39,520,182
------------
------------
</TABLE>
- -------------
Percentages indicated are based on net assets of $39,520,182.
(a) Represent cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting purposes in excess of federal income tax reporting of
approximately $2,709. Cost for federal tax purposes differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 8,599,818
Unrealized depreciation............................................. (756,423)
-------------
Net unrealized appreciation......................................... $ 7,843,395
-------------
-------------
</TABLE>
(b) Represents non-income producing securities.
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
CENTURA FUNDS, INC.
FEDERAL SECURITIES INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------------------------------------------- -------------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS -- 23.1%
U.S. TREASURY NOTES -- 23.1%
$ 5,000,000 5.13%, 12/31/98 ................................................................ $ 4,991,350
5,000,000 7.00%, 4/15/99 ................................................................. 5,068,650
5,000,000 5.50%, 2/28/03 ................................................................. 4,966,150
5,000,000 6.50%, 8/15/05 ................................................................. 5,220,150
8,000,000 6.13%, 8/15/07 ................................................................. 8,212,720
2,000,000 5.50%, 2/15/08 ................................................................. 1,974,520
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $30,091,846) ........................... 30,433,540
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 73.1%
FEDERAL FARM CREDIT BANK -- 1.5%
2,000,000 5.84%, 11/21/03 ................................................................ 1,992,400
-------------
FEDERAL HOME LOAN BANK -- 16.4%
5,000,000 5.91%, 11/5/99 ................................................................. 5,012,800
5,000,000 6.24%, 6/23/00 ................................................................. 5,049,250
4,500,000 5.62%, 1/12/01 ................................................................. 4,477,320
5,000,000 6.09%, 12/23/02 ................................................................ 5,047,300
2,000,000 5.92%, 3/19/08 ................................................................. 1,990,220
-------------
21,576,890
-------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 11.0%
4,606,832 6.50%, 2/1/04, Pool # N97461 ................................................... 4,638,481
4,798,286 6.50%, 9/1/04, Pool# 97771 ..................................................... 4,831,250
5,000,000 6.13%, 2/27/06 ................................................................. 5,030,249
-------------
14,499,980
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 44.2%
5,000,000 5.43%, 1/27/00 ................................................................. 4,974,150
5,000,000 5.44%, 1/29/01 ................................................................. 4,954,400
5,000,000 6.18%, 3/15/01 ................................................................. 5,047,800
2,915,084 6.00%, 11/1/03, Pool #50948 .................................................... 2,909,604
1,822,542 6.00%, 1/1/04, Pool #50968 ..................................................... 1,816,838
4,704,807 6.50%, 7/1/04, Pool # 250995 ................................................... 4,734,212
4,888,518 6.50%, 10/1/04, Pool #251243 ................................................... 4,919,072
5,031,582 6.00%, 11/1/04, Pool #251413 ................................................... 4,996,965
3,809,112 6.50%, 11/1/07, Pool #251509 ................................................... 3,847,203
3,796,950 6.00%, 1/1/08, Pool #251627 .................................................... 3,751,843
9,210,120 6.00%, 2/1/08, Pool #251660 .................................................... 9,100,703
5,000,000 5.75%, 2/15/08 ................................................................. 4,918,750
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
CENTURA FUNDS, INC.
FEDERAL SECURITIES INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------------------------------------------- -------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- (CONTINUED)
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- (CONTINUED)
$ 1,293,803 6.00%, 4/1/08, Pool# 251725 .................................................... $ 1,289,753
1,000,000 6.00%, 4/1/08, Pool# 251725 .................................................... 996,870
-------------
58,258,163
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $96,533,578) .................... 96,327,433
-------------
INVESTMENT COMPANIES -- 4.0%
2,300,471 ILA Treasury Portfolio Money Market Fund ....................................... 2,300,471
2,996,455 PNC Treasury Trust Fund ........................................................ 2,996,455
-------------
TOTAL INVESTMENT COMPANIES (COST $5,296,926) ................................... 5,296,926
-------------
TOTAL INVESTMENTS (COST $131,922,350) (A) -- 100.2% ............................ 132,057,899
LIABILITIES IN EXCESS OF OTHER ASSETS (0.2)% ................................... (328,717)
-------------
TOTAL NET ASSETS -- 100.0% ..................................................... $ 131,729,182
-------------
-------------
</TABLE>
<TABLE>
<CAPTION>
EXPIRATION
NO. OF DATE/
CONTRACTS STRIKE PRICE
- ----------- ---------------
<C> <S> <C> <C>
PUT OPTIONS WRITTEN AT MARKET VALUE
5,000,000 U.S. Treasury Note, 5 1/2% .................................... 5/7/98 / 99.78 $ 23,437
5,000,000 U.S. Treasury Note, 5 1/2% .................................... 5/19/98 / 99.41 17,188
-------------
Total written put options (premium received $41,797)........... $ 40,625
-------------
-------------
</TABLE>
- -------------
Percentages indicated are based on net assets of $131,729,182.
(a) Represents cost for financial reporting purposes and federal income tax
purposes and differs from value by net unrealized appreciation of securities
as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 672,274
Unrealized depreciation (535,553)
-------------
Net unrealized appreciation......................................... $ 136,721
-------------
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
CENTURA FUNDS, INC.
NORTH CAROLINA TAX-FREE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- --------------------------------------------------------------------------------- ------------
<C> <S> <C>
NORTH CAROLINA MUNICIPAL OBLIGATIONS -- 97.6%
$900,000 Cabarrus County GO, 5.30%, 2/1/10, Callable 2/1/07 @ 101.5, (MBIA Insured) ...... $ 940,815
935,000 Cabarrus County GO, 5.30%, 2/1/08, Callable 2/1/07 @ 100.5, (MBIA Insured) ...... 982,152
1,000,000 Carteret County GO, 5.40%, 5/1/09, Callable 5/1/06 @ 101.5, (MBIA Insured) ...... 1,056,580
1,000,000 Centennial Authority North Carolina Hotel Tax Revenue, Arena Project, 4.65%,
9/1/06, (FSA Insured) ......................................................... 1,002,680
620,000 Charlotte County Mecklenberg GO, 6.00%, 1/1/04, Callable 1/1/02 @ 102 ........... 662,929
1,000,000 Charlotte County Mecklenberg Hospital Authority GO, 4.90%, 1/15/10, Callable
1/15/07 @ 102 ................................................................. 1,005,060
250,000 Charlotte County Water & Sewer, GO, 5.25%, 4/1/00 ............................... 255,943
1,500,000 Charlotte UTGO, Refunding, 5.10%, 6/1/09, Callable 6/1/05 @ 102 ................. 1,560,540
1,400,000 Cleveland County UTGO, Refunding, 5.10%, 6/1/07, Callable 6/1/03 @ 102, (FGIC
Insured) ...................................................................... 1,451,450
1,630,000 Concord North Carolina Utilities Systems RB, 6.00%, 12/1/10, Callable 12/1/02
@ 102, Sinkable 12/1/06 @ 100, (MBIA Insured) ................................. 1,748,516
1,000,000 Craven County GO, 5.40%, 6/1/02, (MBIA Insured) ................................. 1,041,540
1,535,000 Cumberland County Civic Center Project, Series A, CP, 6.20%, 12/1/07, Callable
12/1/04 @ 102, (AMBAC Insured) ................................................ 1,695,868
500,000 Cumberland County, GO, 4.80%, 3/1/03, (FGIC Insured) ............................ 509,755
1,000,000 Dare County, Certificate Participation Series A, 4.50%, 5/1/04, (MBIA
Insured) ...................................................................... 1,002,610
880,000 Durham County GO, 5.75%, 2/1/07, Callable 2/1/02 @ 102 .......................... 937,147
500,000 Durham County Public Improvements, 4.60%, 3/1/04 ................................ 507,385
300,000 Educational Facilities Finance Agency, Duke University Project, Series B, 4.70%,
10/1/08, Callable 10/1/06 @ 102 ............................................... 302,154
1,280,000 Fayetteville Public Works Commission Revenue, Series A, 5.25%, 3/1/08, Callable
3/1/05 @ 102, (AMBAC Insured) ................................................. 1,330,342
1,000,000 Gaston County Public Facilities Project, CP, 4.75%, 12/1/05, (MBIA Insured) ..... 1,010,750
1,000,000 Gaston County UTGO, 5.70%, 3/1/05, Callable 3/1/04 @ 100.5, (MBIA Insured) ...... 1,064,780
600,000 Greensboro County, GO, 4.60%, 4/1/03 ............................................ 609,216
1,000,000 Iredell County, 4.75%, 2/1/12, Callable 2/1/07 @ 102 ............................ 970,440
1,000,000 Iredell County Memorial Hospital Revenue, 5.10%, 10/1/11, Callable 10/1/07
@ 101, (AMBAC Insured) ........................................................ 1,012,050
1,000,000 Lee County GO, 5.00% 4/1/06, (MBIA Insured) ..................................... 1,029,610
1,000,000 Mecklenburg County UTGO, Series B, 4.80%, 3/1/06 ................................ 1,022,220
1,500,000 North Carolina Municipal Power Agency #1, Catawba Electric Revenue, Refunding,
5.25%, 1/1/09, (MBIA Insured) ................................................. 1,562,745
1,000,000 North Carolina State, Series A, 5.10%, 3/1/08, Callable 3/1/07 @ 100.5 .......... 1,044,430
1,000,000 Onslow County UTGO, 5.60%, 3/1/05 ............................................... 1,064,050
1,050,000 Orange County UTGO, Refunding, 5.10%, 6/1/03 .................................... 1,088,304
1,000,000 Pitt County Memorial Hospital Revenue, 5.38%, 12/1/10, Callable 12/1/05 @ 102 ... 1,034,010
625,000 Pitt County Public Facilities, CP, Series A, 5.35%, 4/1/07, (MBIA Insured) ...... 655,225
1,250,000 Raleigh UTGO, Refunding, 6.40% 3/1/02 ........................................... 1,329,138
250,000 State of North Carolina, Clean Water & Sewer, GO, Series A, 5.20%, 6/1/00 ....... 256,305
1,000,000 Union City, Refunding, GO, 4.80%, 5/1/05, (MBIA Insured) ........................ 1,017,850
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
CENTURA FUNDS, INC.
NORTH CAROLINA TAX-FREE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS -- (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- --------------------------------------------------------------------------------- ------------
<C> <S> <C>
NORTH CAROLINA MUNICIPAL OBLIGATIONS -- (CONTINUED)
$ 870,000 University of North Carolina, Dining System Revenue, 5.30%, 5/15/12, Callable
5/15/07 @ 102 ................................................................. $ 891,472
1,460,000 University of North Carolina, Utility System RB, Refunding, 5.00%, 8/1/09,
Callable 8/1/02 @ 102 ......................................................... 1,484,966
1,000,000 Wake County, 4.50%, 3/1/10, Callable 3/1/06 @ 102 ............................... 979,280
500,000 Wake County Public Improvement, 4.50%, 3/1/03 ................................... 505,825
500,000 Wake Forest University Education Facility, 5.00%, 11/1/12, Callable 11/1/07 @
102, Sinkable 11/1/09 @ 100 ................................................... 499,490
1,275,000 Wilkes County UTGO, Refunding, 5.20%, 6/1/05, Callable 6/1/03 @ 101 ............. 1,322,341
1,000,000 Winston Salem CP, Series A, 5.30%, 6/1/09, Callable 6/1/06 @ 102, Sinkable 6/1/08
@ 100 ......................................................................... 1,046,080
1,000,000 Winston Salem Water & Sewer System RB, 6.30%, 6/1/06 ............................ 1,089,880
------------
TOTAL NORTH CAROLINA MUNICIPAL OBLIGATIONS (COST $40,471,606) ................... 41,583,923
------------
INVESTMENT COMPANIES -- 1.4%
244,356 Institutional Liquid Assets Tax-Free Money Market Fund .......................... 244,356
367,954 PNC Investment Money Market Fund ................................................ 367,954
------------
TOTAL INVESTMENT COMPANIES (COST $612,310) ...................................... 612,310
------------
TOTAL INVESTMENTS (COST $41,083,916) (A) -- 99.0% ............................... 42,196,233
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.0% ................................... 434,898
------------
TOTAL NET ASSETS -- 100.0% ...................................................... $ 42,631,131
------------
------------
</TABLE>
- -------------
Percentages indicated are based on net assets of $42,631,131.
(a) Represents cost for financial reporting purposes and federal income tax
purposes and differs from value by net unrealized appreciation of securities
as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............................................. $ 1,174,207
Unrealized depreciation.............................................. (61,890)
-------------
Net unrealized appreciation.......................................... $ 1,112,317
-------------
-------------
</TABLE>
AMBAC -- American Municipal Bond Assurance Corp.
CP -- Certificate of Participation
FGIC -- Financial Guaranty Insurance Corp.
GO -- General Obligation
MBIA -- Municipal Bond Insurance Association
RB -- Revenue Bond
UTGO -- Unlimited Tax General Obligation
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
CENTURA FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 1998
<TABLE>
<CAPTION>
FEDERAL NORTH
EQUITY EQUITY SOUTHEAST SECURITIES CAROLINA
GROWTH INCOME EQUITY INCOME TAX-FREE
FUND FUND FUND FUND BOND FUND
------------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (cost $153,017,000,
$49,178,808, $31,917,935, $131,922,350,
and $41,083,916, respectively) .......... $ 212,013,170 $ 67,589,244 $ 39,758,621 $ 132,057,899 $ 42,196,233
Interest and dividends receivable ......... 218,329 168,656 31,543 1,406,598 621,150
Receivable for capital shares issued ...... 30,814 1,910 1,910 -- --
Receivable for investments sold ........... 2,339,273 1,130,534 110,371 -- --
Deferred organization costs ............... 7,690 -- 12,017 10,174 3,389
------------- ------------ ------------ ------------- ------------
Total Assets: ......................... 214,609,276 68,890,344 39,914,462 133,474,671 42,820,772
------------- ------------ ------------ ------------- ------------
LIABILITIES:
Distributions payable ..................... 85,021 95,325 -- 629,763 157,831
Payable for investments purchased ......... 2,353,693 -- 356,043 996,719 --
Option contracts written, at market value
-- premiums received $41,797 ............ -- -- -- 40,625 --
Payable for capital shares redeemed ....... 14,362 -- 99 -- --
Accrued expenses and other payables:
Investment advisory fees ................ 16,106 2,677 2,964 1,436 467
Administration fees ..................... 3,451 1,116 635 1,149 201
Distribution fees ....................... 17,547 2,024 4,412 101 1,260
Other ................................... 100,104 63,762 30,127 75,696 29,882
------------- ------------ ------------ ------------- ------------
Total Liabilities: .................... 2,590,284 164,904 394,280 1,745,489 189,641
------------- ------------ ------------ ------------- ------------
NET ASSETS:
Shares of common stock outstanding (par
value $.001 per share) 600,000,000 shares
authorized .............................. 13,144 5,462 2,639 12,928 4,140
Additional paid-in-capital ................ 144,102,918 46,928,474 28,700,171 129,501,185 41,400,121
Undistributed (distributions in excess of)
net investment income ................... -- 28,732 -- -- 3,737
Undistributed (distributions in excess of)
net realized gains ...................... 8,906,760 3,352,336 2,976,686 2,078,348 110,816
Net unrealized appreciation (depreciation)
from investments ........................ 58,996,170 18,410,436 7,840,686 136,721 1,112,317
------------- ------------ ------------ ------------- ------------
Net Assets: ........................... $ 212,018,992 $ 68,725,440 $ 39,520,182 $ 131,729,182 $ 42,631,131
------------- ------------ ------------ ------------- ------------
------------- ------------ ------------ ------------- ------------
Class A:
Net Assets .............................. $ 13,934,649 $ 1,489,916 $ 2,999,803 $ 530,775 $ 4,663,611
Shares .................................. 863,512 118,257 200,102 52,105 452,905
Net Asset Value Per Share ............... $16.14 $12.60 $14.99 $10.19 $10.30
------------- ------------ ------------ ------------- ------------
------------- ------------ ------------ ------------- ------------
Maximum Sales Charge ...................... 4.50% 4.50% 4.50% 2.75% 2.75%
Maximum Offering Price Per Share (100%/
(100% -- Maximum Sales Charge) of net
asset value adjusted to the nearest cent)
per share ............................... $16.90 $13.19 $15.70 $10.48 $10.59
------------- ------------ ------------ ------------- ------------
------------- ------------ ------------ ------------- ------------
Class B:
Net Assets .............................. $ 18,225,429 $ 2,182,462 $ 4,937,781 $ 130,599 $ 511,126
Shares .................................. 1,147,809 173,892 331,481 12,826 49,621
Net Asset Value Per Share ............... $15.88 $12.55 $14.90 $10.18 $10.30
------------- ------------ ------------ ------------- ------------
------------- ------------ ------------ ------------- ------------
Class C:
Net Assets .............................. $ 179,858,914 $ 65,053,062 $ 31,582,598 $ 131,067,808 $ 37,456,394
Shares .................................. 11,132,633 5,169,938 2,107,038 12,862,715 3,637,419
Net Asset Value Per Share ............... $16.16 $12.58 $14.99 $10.19 $10.30
------------- ------------ ------------ ------------- ------------
------------- ------------ ------------ ------------- ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
CENTURA FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1998
<TABLE>
<CAPTION>
FEDERAL NORTH
EQUITY SOUTHEAST SECURITIES CAROLINA
GROWTH EQUITY EQUITY INCOME TAX-FREE
FUND INCOME FUND FUND(A) FUND BOND FUND
------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income............................. $ 14,992 $ 22,057 $ 10,643 $ 7,709,951 $ 1,930,378
Dividend income............................. 3,020,115 1,899,732 431,800 277,916 24,007
------------ ------------ ------------ ------------ -----------
Total income: 3,035,107 1,921,789 442,443 7,987,867 1,954,385
------------ ------------ ------------ ------------ -----------
EXPENSES:
Investment advisory fees.................... 1,362,369 442,170 191,290 382,159 140,332
Administration fees......................... 291,936 94,751 40,991 191,079 60,117
Distribution fees -- Class A................ 56,167 4,374 7,065 2,534 21,661
Distribution fees -- Class B................ 137,815 12,538 22,936 1,532 4,088
Audit fees.................................. 17,000 17,000 17,000 17,000 17,000
Custodian fees.............................. 44,842 15,560 12,766 26,313 11,962
Fund accounting fees........................ 32,519 31,269 34,581 38,031 35,374
Legal fees.................................. 18,629 9,065 3,357 16,745 6,315
Transfer agent fees......................... 102,555 10,165 18,453 16,220 10,627
Directors' fees............................. 13,251 7,304 3,090 7,808 4,028
Other fees.................................. 56,603 52,109 30,107 61,178 29,726
------------ ------------ ------------ ------------ -----------
Total expenses before voluntary fee
reductions: 2,133,686 696,305 381,636 760,599 341,230
Expenses voluntarily reduced.............. (28,084) (257,412) (34,081) (1,650) (154,973)
------------ ------------ ------------ ------------ -----------
Net expenses: 2,105,602 438,893 347,555 758,949 186,257
------------ ------------ ------------ ------------ -----------
Net investment income: 929,505 1,482,896 94,888 7,228,918 1,768,128
------------ ------------ ------------ ------------ -----------
REALIZED/UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS:
Net realized gain (loss) from investment
transactions.............................. 25,429,484 5,422,320 4,803,926 2,499,631 235,790
Net change in unrealized gain (loss) from
investment transactions................... 32,952,332 9,444,095 7,061,973 545,699 903,842
------------ ------------ ------------ ------------ -----------
Net realized/unrealized gains (losses) from
investments: 58,381,816 14,866,415 11,865,899 3,045,330 1,139,632
------------ ------------ ------------ ------------ -----------
Change in net assets resulting from
operations.................................. $ 59,311,321 $ 16,349,311 $ 11,960,787 $ 10,274,248 $ 2,907,760
------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ -----------
</TABLE>
- ------------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
CENTURA FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
EQUITY GROWTH FUND EQUITY INCOME FUND
---------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30, APRIL 30, APRIL 30,
1998 1997 1998 1997(A)
------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income...................... $ 929,505 $ 983,129 $ 1,482,896 $ 757,965
Net realized gain (loss) from investment
transactions............................. 25,429,484 30,002,586 5,422,320 3,967,356
Net change in unrealized gain (loss) from
investment transactions.................. 32,952,332 (11,207,750) 9,444,095 638,500
------------- ------------- ------------- ---------------
Change in net assets from operations......... 59,311,321 19,777,965 16,349,311 5,363,821
------------- ------------- ------------- ---------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income............... (34,856) (28,839) (17,787) (2,507)
In excess of net investment income....... -- -- (526) --
From net realized gain on investment
transactions........................... (2,494,669) (283,432) (83,795) (221)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income............... -- (3,989) (15,848) (1,604)
In excess of net investment income....... (2,655) -- (1,642) --
From net realized gain on investment
transactions........................... (3,086,722) (322,055) (124,900) (127)
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income............... (876,414) (950,301) (1,418,361) (753,854)
From net realized gain on investment
transactions........................... (37,488,913) (5,790,963) (5,725,838) (102,459)
------------- ------------- ------------- ---------------
Change in net assets from shareholder
distributions.............................. (43,984,229) (7,379,579) (7,388,697) (860,772)
------------- ------------- ------------- ---------------
Change in net assets from share transactions
(note 8) 31,216,606 7,428,507 6,514,129 48,747,648
------------- ------------- ------------- ---------------
Change in net assets......................... 46,543,698 19,826,893 15,474,743 53,250,697
NET ASSETS:
Beginning of period........................ 165,475,294 145,648,401 53,250,697 --
------------- ------------- ------------- ---------------
End of period.............................. $ 212,018,992 $ 165,475,294 $68,725,440 $ 53,250,697
------------- ------------- ------------- ---------------
------------- ------------- ------------- ---------------
</TABLE>
- -------------
(a) For the period from October 1, 1996 (commencement of operations) to April
30, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
CENTURA FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
<TABLE>
<CAPTION>
SOUTHEAST FEDERAL SECURITIES INCOME
EQUITY FUND
FUND ----------------------------
PERIOD ENDED YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30, APRIL 30,
1998(A) 1998 1997
--------------- ------------- -------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income..................................... $ 94,888 $ 7,228,918 $ 7,011,483
Net realized gain (loss) from investment transactions..... 4,803,926 2,499,631 (421,283)
Net change in unrealized gain (loss) from investment
transactions............................................ 7,061,973 545,699 (348,816)
--------------- ------------- -------------
Change in net assets from operations........................ 11,960,787 10,274,248 6,241,384
--------------- ------------- -------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income.............................. (1,298) (27,502) (30,280)
In excess of net investment income...................... (1,536) -- --
From net realized gain on investment transactions....... (103,629) -- (171)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income.............................. -- (7,553) (9,729)
In excess of net investment income...................... (1,083) -- --
From net realized gain on investment transactions....... (159,881) -- (65)
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income.............................. (102,073) (7,193,863) (6,971,474)
From net realized gain on investment transactions....... (1,557,628) -- (38,775)
--------------- ------------- -------------
Change in net assets from shareholder distributions......... (1,927,128) (7,228,918) (7,050,494)
--------------- ------------- -------------
Change in net assets from share transactions................ 29,486,523 8,575,052 10,440,233
--------------- ------------- -------------
Change in net assets........................................ 39,520,182 11,620,382 9,631,123
NET ASSETS:
Beginning of period....................................... -- 120,108,800 110,477,677
--------------- ------------- -------------
End of period............................................. $ 39,520,182 $ 131,729,182 $ 120,108,800
--------------- ------------- -------------
--------------- ------------- -------------
</TABLE>
- ------------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
CENTURA FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
<TABLE>
<CAPTION>
NORTH CAROLINA
TAX-FREE BOND FUND
----------------------------
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1998 1997
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income..................................... $ 1,768,128 $ 1,820,433
Net realized gain (loss) from investment transactions..... 235,790 (121,237)
Net change in unrealized gain (loss) from investment
transactions............................................ 903,842 294,839
------------- -------------
Change in net assets from operations........................ 2,907,760 1,994,035
------------- -------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income.............................. (181,765) (165,050)
From net realized gain on investment transactions....... -- (35,190)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income.............................. (15,117) (15,612)
From net realized gain on investment transactions....... -- (3,918)
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income.............................. (1,571,246) (1,636,471)
From net realized gain on investment transactions....... -- (325,775)
------------- -------------
Change in net assets from shareholder distributions......... (1,768,128) (2,182,016)
------------- -------------
Change in net assets from share transactions................ 5,080,448 (4,730,188)
------------- -------------
Change in net assets........................................ 6,220,080 (4,918,169)
NET ASSETS:
Beginning of period....................................... 36,411,051 41,329,220
------------- -------------
End of period............................................. $42,631,131 $36,411,051
------------- -------------
------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998
1. DESCRIPTION -- Centura Funds, Inc. (the "Company") is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company, a Maryland corporation on March 1, 1994. At April 30, 1998
the Company consisted of five separate investment portfolios: Centura Equity
Growth Fund, Centura Equity Income Fund, Centura Southeast Equity Fund which
commenced operation on May 2, 1997, Centura Federal Securities Income Fund, and
Centura North Carolina Tax-Free Bond Fund (collectively, the "Funds").
The Equity Growth Fund seeks to achieve its investment objective of
long-term capital appreciation by investing in a diversified portfolio comprised
mainly of publicly traded common and preferred stocks and securities convertible
into or exchangeable for common stock. The Federal Securities Fund seeks to
achieve its investment objective of providing relatively high current income
consistent with relative stability of principal and safety by investing
primarily in securities issued by the U.S. Government, its agencies and
instrumentalities. The North Carolina Tax-Free Bond Fund seeks to achieve its
investment objective of providing relatively high current income that is free of
both federal and North Carolina personal income tax together with relative
safety of principal by investing primarily in a portfolio of high quality North
Carolina municipal securities. The Equity Income Fund seeks to achieve its
investment objective of providing long-term capital appreciation and income by
investing primarily in dividend-paying common stocks, convertible preferred
stocks, and convertible bonds, notes and debentures. The Southeast Equity Fund
seeks to achieve long-term capital appreciation by investing 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 Southeast region of the United States.
The Funds offer three classes of shares known as Class A, Class B and Class
C Shares. Class A Shares are offered with a maximum front-end sales charge of
4.50% for the Equity Growth Fund, Equity Income Fund, and Southeast Equity Fund,
and 2.75% for the Federal Securities Income Fund and North Carolina Tax-Free
Bond Fund. Class B Shares are offered with a contingent deferred sales charge
("CDSC") declining from a maximum in the first year after purchase of 5.00% for
the Equity Income Fund, Equity Growth Fund, and Southeast Equity Fund, and 3.00%
for each of the other Funds to a minimum in the fifth year after purchase of
1.00% for all of the Funds. This charge is imposed if shareholders redeem their
shares within five years from the date of purchase. On the seventh anniversary
of their purchase date, Class B Shares convert automatically to Class A Shares.
Class C Shares are offered to accounts managed by the Advisor's Trust Department
and to non-profit institutions who invest at least $100,000, and there is no
sales charge or CDSC imposed on this class.
2. SIGNIFICANT ACCOUNTING POLICIES -- The following is a summary of
significant accounting policies followed by the Funds in the preparation of
their financial statements. The policies are in conformity with generally
accepted accounting principles. The preparation of financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of income and expenses for the period. Actual results could differ from
those estimates.
30
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1998
a. SECURITY VALUATION Securities listed on an exchange are valued on the
basis of the last sale prior to the time the valuation is made. If there has
been no sale since the immediately previous valuation, then the current bid
price is used. Quotations are taken from the exchange where the security is
primarily traded. Over-the-counter securities are valued on the basis of the bid
price at the close of business on each business day. Securities for which market
quotations are not readily available are valued at fair value as determined in
good faith by or at the direction of the Board of Directors. Notwithstanding the
above, bonds and other fixed-income securities are valued by using market
quotations and may be valued on the basis of prices provided by a pricing
service approved by the Board of Directors. Short-term securities with remaining
maturities of 60 days or less are valued at amortized cost.
b. INVESTMENT TRANSACTIONS Transactions are recorded on the trade date.
Identified cost of investments sold is used for both financial statement and
federal income tax purposes. Interest income, including the amortization of
discount or premium, is recorded as accrued. Dividends are recorded on the
ex-dividend date.
c. FEDERAL INCOME TAXES Each Fund's policy is to qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended. By so qualifying, the Funds will not be subject to federal income taxes
to the extent that they distribute all taxable and tax-exempt income for their
fiscal year. The Funds also intend to meet the distribution requirements to
avoid the payment of an excise tax.
d. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS The Equity Growth Fund,
Equity Income Fund, and Southeast Equity Fund declare and pay dividends of
substantially all of its net investment income monthly. The Federal Securities
Income Fund and North Carolina Tax-Free Bond Fund declare dividends of
substantially all of their net investment income daily and pay those dividends
monthly. Each Fund will distribute, at least annually, substantially all net
capital gains, if any, earned by such Fund. Distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax basis treatment; temporary
differences do not require reclassification. Dividends and distributions which
exceed net investment income and net realized capital gains for financial
reporting purposes but not for tax purposes are reported as dividends in excess
of net investment income or distributions in excess of net realized capital
gains.
e. ORGANIZATION EXPENSES Costs incurred in connection with the organization
and initial registration of the Company, which have been allocated among the
Funds, have been deferred and are being amortized over a five year period,
beginning with each Fund's commencement of operations.
f. DETERMINATION OF NET ASSET VALUE AND ALLOCATION OF EXPENSES Expenses
directly attributable to a Fund are charged to that Fund; other expenses are
allocated proportionately among each Fund within the Company in relation to the
net assets of each Fund or on another reasonable basis. In calculating net asset
value per share of each class, investment income, realized and unrealized gains
and losses and expenses other than class specific expenses, are allocated daily
to each class of shares based upon the proportion of
31
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1998
net assets of each class at the beginning of each day. Class specific expenses,
as determined under applicable law and regulatory policy, are borne by the class
incurring the expense.
g. OPTION WRITING When the Fund writes an option, an amount equal to the
premium received by the Fund is recorded as a liability and is subsequently
adjusted to the current fair value of the option written. Premiums received from
writing options that expire unexercised are treated by the Fund on the
expiration date as realized gains from investments. The difference between the
premium and the amount paid on effecting a closing purchase transaction,
including brokerage commissions, is also treated as a realized gain, or if the
premium is less than the amount paid for the closing purchase transaction, as a
realized loss. If a call option is exercised, the premium is added to the
proceeds from the sale of the underlying security or currency in determining
whether the Fund has realized a gain or loss. If a put option is exercised, the
premium reduces the cost basis of the securities purchased by the Fund. The Fund
as writer of an option bears the market risk of an unfavorable change in the
price of the security underlying the written option.
3. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES -- Centura Bank
("Advisor") serves as the Company's investment Advisor. Pursuant to the Advisory
Contracts, the Advisor manages the investments of the Funds and continuously
reviews, supervises and administers the Funds' investments. The Advisor is
responsible for placing orders for the purchase and sale of investment
securities directly with brokers and dealers selected at its discretion. The
terms of the Advisory Contracts provide for annual fees at the following
percentages of average daily net assets:
<TABLE>
<S> <C>
Equity Growth Fund............................................. 0.70%
Equity Income Fund............................................. 0.70%
Southeast Equity Fund (a)...................................... 0.70%
Federal Securities Income Fund................................. 0.30%
North Carolina Tax-Free Bond Fund.............................. 0.35%
</TABLE>
- -------------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
For the year ended April 30, 1998, the Advisor waived fees listed below:
<TABLE>
<S> <C>
Equity Income Fund........................................... $ 214,769
Southeast Equity (a)......................................... 25,157
North Carolina Tax-Free Bond................................. 100,237
</TABLE>
- -------------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
BISYS Fund Services, Inc. ("BISYS") serves as the Fund's administrator ("the
Administrator"), transfer agent, and fund accounting agent. Services provided
under the Administrative Services Contracts include providing day-to-day
administration of matters related to the corporate existence of the Company,
maintenance of its records and the preparation of reports. The terms of the
Administrative Services Contracts provide for annual fees of 0.15% of average
daily net assets of each Fund.
32
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1998
For the year ended April 30, 1998, the Administrator waived fees listed
below:
<TABLE>
<S> <C>
Equity Income Fund............................................ $ 40,456
Southeast Equity (a).......................................... 5,391
North Carolina Tax-Free Bond Fund............................. 42,883
</TABLE>
- -------------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
Services provided under the Transfer Agency Agreements include providing
personnel and facilities to perform shareholder servicing and transfer agency
related services. The Transfer Agency Agreements provide for a per account fee
and reimbursement for out-of-pocket expenses in connection with shareholder
servicing. For the year ended April 30, 1998, transfer agent expenses incurred
were $102,555, $10,165, $18,453 and $10,627 for the Equity Growth Fund, Equity
Income Fund, Federal Securities Income Fund and North Carolina Tax-Free Bond
Fund, respectively. For the period from May 2, 1997 (commencement of operations)
to April 30, 1998, transfer agent expenses incurred by the Southeast Equity Fund
were $16,220.
The terms of the Fund Accounting Agreements provide for each of the Funds to
pay $2,500 per month to the fund accounting servicer, BISYS Fund Services. For
the year ended April 30, 1998, fund accounting fees incurred were $32,519,
$31,269, $38,031 and $35,374 for the Equity Growth Fund, Equity Income Fund,
Federal Securities Income Fund and North Carolina Tax-Free Bond Fund,
respectively. For the period from May 2, 1997 (commencement of operations) to
April 30, 1998, fund accounting expenses incurred by the Southeast Equity Fund
were $34,581.
Centura Funds Distributor, Inc. ("the Distributor") acts as the Funds'
Distributor. The Distributor is an affiliate of the Funds' Administrator and was
formed specifically to distribute the Funds.
Each of the Funds has adopted a Service and Distribution Plan (the "Plan")
with respect to its Class A and Class B Shares. The Plans provide that each
class of shares will pay the Distributor a fee calculated as a percentage of the
value of average daily net assets of that class as reimbursement for its costs
incurred in financing certain distribution and shareholder service activities
related to that class.
The Class A Plan provides for payments by each Fund to the Distributor at an
annual rate not to exceed 0.50% of the Fund's average net assets attributable to
its Class A Shares. Such fees may include a Service Fee totaling up to 0.25% of
the average annual net assets attributable to a Fund's Class A Shares. Service
Fees are paid to securities dealers and other financial institutions for
maintaining shareholder accounts and providing related services to shareholders.
During the current fiscal year the Advisor has
33
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1998
undertaken to limit 12b-1 fees for Class A Shares to 0.25%. For the year ended
April 30, 1998, gross 12b-1 fees for Class A Shares waived by the Distributor
are listed below:
<TABLE>
<S> <C>
Equity Growth Fund............................................ $ 28,084
Equity Income Fund............................................ 2,187
Southeast Equity (a).......................................... 3,533
Federal Securities Income Fund................................ 1,267
North Carolina Tax-Free Bond Fund............................. 10,831
</TABLE>
- -------------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
In addition, the Distributor also retains a portion of the front-end sales
charge. The following is a summary of dealer commissions paid to the Distributor
and Centura Bank for Class A Shares:
<TABLE>
<CAPTION>
DISTRIBUTOR CENTURA BANK
----------- -------------
<S> <C> <C>
Equity Growth Fund........................................... $ 1,221 $ 23,917
Equity Income Fund........................................... 45 4,964
Southeast Equity (a)......................................... 246 10,463
Federal Securities Income Fund............................... -- 1,540
</TABLE>
- -------------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
The Class B Plan provides for payments by the Fund to the Distributor at an
annual rate not to exceed 1.00% of the Fund's average net assets attributable to
its Class B Shares. Such fees may include a Service Fee totaling up to 0.25% of
the average annual net assets attributable to a Fund's Class B Shares. For the
year ended April 30, 1998, 12b-1 fees waived by the Distributor for Class B
Shares are listed below:
<TABLE>
<S> <C>
Federal Securities Income Fund................................................. $ 383
North Carolina Tax-Free Bond Fund.............................................. 1,022
</TABLE>
The Distributor also receives the proceeds of any CDSC imposed on
redemptions of Class B Shares. The following is a summary of the dealer
commissions paid to the distributor and Centura Bank for Class B Shares:
<TABLE>
<CAPTION>
DISTRIBUTOR CENTURA BANK
----------- -------------
<S> <C> <C>
Equity Growth Fund........................................... $ 1,288 $ 43,070
Equity Income Fund........................................... 422 7,363
Southeast Equity (a)......................................... 364 16,559
Federal Securities Income Fund............................... -- 54
North Carolina Tax-Free Bond Fund............................ -- 625
</TABLE>
- -------------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
Centura Bank acts as custodian for the Funds. For furnishing custodial
services, Centura Bank is paid a monthly fee with respect to the Funds at an
annual rate based on a percentage of average daily net assets plus certain
transaction and out-of-pocket expenses. For the year ended April 30, 1998,
Centura Bank earned custodian fees and out-of-pocket expenses of $44,842,
$15,560, $26,313 and $11,962 for the Equity
34
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1998
Growth Fund, Equity Income Fund, Federal Securities Income Fund and North
Carolina Tax-Free Bond Fund, respectively. For the period from May 2, 1997
(commencement of operations) to April 30, 1998, custodian expenses incurred by
the Southeast Equity Fund were $12,766.
4. CONCENTRATION OF CREDIT RISK -- The North Carolina Tax-Free Bond Fund
invests substantially all of its assets in a varied portfolio of debt
obligations issued by the State of North Carolina and its authorities and
agencies. The issuers' abilities to meet their obligations may be affected by
economic or political developments in the state of North Carolina.
5. COMMON TRUST CONVERSION -- On May 2, 1997, the Southeast Equity Fund
issued Class C Shares to acquire all of the assets and liabilities of the
Centura Southeast Fund and Centura Southeast Employee Benefit Fund. The
following is a summary of shares issued, net assets acquired, net asset value
per share and unrealized appreciation as of the date acquired:
<TABLE>
<S> <C>
Shares..................................................... 1,592,422
Net Assets................................................. $15,924,220
Net Asset Value............................................ $ 10.00
Unrealized Appreciation.................................... $ 778,713
</TABLE>
6. SECURITIES TRANSACTIONS -- The cost of securities purchased and proceeds
from securities sold (excluding short-term securities) for the year ended April
30, 1998, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------- --------------
<S> <C> <C>
Equity Growth Fund..................................... $ 93,253,240 $ 104,630,192
Equity Income Fund..................................... 23,682,346 24,313,342
Southeast Equity (a)................................... 29,533,937 18,357,769
Federal Securities Income Fund......................... 160,707,248 148,138,054
North Carolina Tax-Free Bond Fund...................... 16,505,406 11,490,064
</TABLE>
- ------------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
7. OPTIONS WRITTEN -- Investing in financial instruments such as written
options, futures and sales of forward foreign currency contracts involves risk
in excess of the amounts reflected in the Statement of Assets and Liabilities.
The face or contract amounts reflect the extent of the involvement the Funds
have in the particular class of instrument. Risks associated with these
instruments include an imperfect correlation between the movements in the price
of the instruments and the price of the underlying securities and interest
rates, and illiquid secondary market for the instruments or inability of
counter-parties to perform under the terms of the contract, and changes in the
value of currency relative to the U.S. dollar. The Federal Securities Income
Fund enters into these contracts primarily as a means to hedge against changes
in interest rates, stock prices, currency fluctuations and other market
developments.
35
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1998
The following is a summary of written put option activity for the year ended
April 30, 1998 by the Federal Securities Income Fund:
<TABLE>
<CAPTION>
SHARES SUBJECT
TO CONTRACT PREMIUMS
-------------- ----------
<S> <C> <C>
Balance at beginning of year............................... $ -- $ --
Options written............................................ 80,000,000 358,985
Options expired............................................ (40,000,000) (179,883)
Option exercised........................................... (30,000,000) (137,305)
-------------- ----------
Options outstanding at end of period....................... 10,000,000 $ 41,797
-------------- ----------
-------------- ----------
</TABLE>
For the year ended April 30, 1998, total gains on options written and
expired amounted to $179,883.
36
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1998
8. CAPITAL SHARE TRANSACTIONS -- The Company is authorized to issue 600
million shares of capital stock with a par value of $.001. Transactions in
shares of the Funds for the years ended April 30, 1998 and April 30, 1997,
respectively, were as follows:
<TABLE>
<CAPTION>
EQUITY GROWTH FUND EQUITY INCOME FUND
-------------------------- --------------------------
APRIL 30, APRIL 30, APRIL 30, APRIL 30,
1998 1997 1998 1997 (A)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
CLASS A
Proceeds from shares issued.................... $ 3,163,397 $ 2,662,321 $ 1,056,102 $ 335,666
Dividends reinvested........................... 2,526,452 312,197 101,011 1,994
Cost of shares redeemed........................ (1,043,262) (761,290) (91,029) (5,711)
------------ ------------ ------------ ------------
Class A share transactions................... $ 4,646,587 $ 2,213,228 $ 1,066,084 $ 331,949
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
CLASS B
Proceeds from shares issued.................... $ 5,645,351 $ 3,195,251 $ 1,553,426 $ 421,394
Dividends reinvested........................... 3,082,774 325,799 142,262 1,009
Cost of shares redeemed........................ (1,107,231) (559,565) (53,441) (1,450)
------------ ------------ ------------ ------------
Class B share transactions................... $ 7,620,894 $ 2,961,485 $ 1,642,247 $ 420,953
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
CLASS C
Proceeds from shares issued.................... $ 27,803,088 $ 38,962,086 $ 12,594,171 $ 56,368,725
Dividends reinvested........................... 37,998,422 4,585,592 6,397,356 339,771
Cost of shares redeemed........................ (46,852,385) (41,293,884) (15,185,729) (8,713,750)
------------ ------------ ------------ ------------
Class C share transactions................... $ 18,949,125 $ 2,253,794 $ 3,805,798 $ 47,994,746
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
SHARE TRANSACTIONS:
CLASS A
Issued......................................... 192,395 184,402 86,108 31,415
Reinvested..................................... 179,802 20,703 8,728 185
Redeemed....................................... (63,367) (51,492) (7,551) (628)
------------ ------------ ------------ ------------
Change in Class A Shares..................... 308,830 153,613 87,285 30,972
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
CLASS B
Issued......................................... 351,351 223,156 126,611 39,170
Reinvested..................................... 222,891 21,728 12,376 93
Redeemed....................................... (68,477) (37,680) (4,320) (38)
------------ ------------ ------------ ------------
Change in Class B Shares..................... 505,765 207,204 134,667 39,225
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
CLASS C
Issued......................................... 1,694,904 2,721,890 1,029,572 5,592,029
Reinvested..................................... 2,700,946 304,531 555,815 31,634
Redeemed....................................... (2,863,739) (2,770,234) (1,233,017) (806,095)
------------ ------------ ------------ ------------
Change in Class C Shares..................... 1,532,111 256,187 352,370 4,817,568
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
- ------------
(a) For the period from October 1, 1996 (commencement of operations) to April
30, 1997.
37
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
SOUTHEAST FEDERAL SECURITIES INCOME NORTH CAROLINA
EQUITY FUND FUND TAX-FREE BOND FUND
------------ -------------------------- --------------------------
APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30,
1998 (A) 1998 1997 1998 1997
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
CLASS A
Proceeds from shares issued....... $ 2,565,282 $ 235,089 $ 100,235 $ 988,212 $ 53,925
Dividends reinvested.............. 106,607 27,234 32,140 178,156 198,536
Cost of shares redeemed........... (88,016) (224,712) (174,691) (442,204) (335,666)
------------ ------------ ------------ ------------ ------------
Class A share transactions...... $ 2,583,873 $ 37,611 $ (42,316) $ 724,164 (83,205)
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
CLASS B
Proceeds from shares issued....... $ 4,157,063 $ 44,620 $ 42,895 $ 138,381 $ 27,431
Dividends reinvested.............. 161,960 6,601 7,598 13,731 14,712
Cost of shares redeemed........... (59,035) (118,485) (31,751) (81,485) (3,153)
------------ ------------ ------------ ------------ ------------
Class B share transactions...... $ 4,259,988 $ (67,264) $ 18,742 $ 70,627 $ 38,990
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
CLASS C
Proceeds from shares issued....... $ 25,455,780 $ 30,411,839 $ 30,929,370 $ 8,617,011 $ 5,386,444
Dividends reinvested.............. 1,604,687 4,288,523 4,050,940 24,738 47,828
Cost of shares redeemed........... (4,417,805) (26,095,657) (24,516,503) (4,356,092) (10,120,245)
------------ ------------ ------------ ------------ ------------
Class C share transactions...... $ 22,642,662 $ 8,604,705 $ 10,463,807 $ 4,285,657 $ (4,685,973)
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
SHARE TRANSACTIONS:
CLASS A
Issued............................ 198,109 23,306 10,024 95,975 5,368
Reinvested........................ 8,398 2,693 3,216 17,311 19,744
Redeemed.......................... (6,405) (22,272) (17,468) (43,267) (33,512)
------------ ------------ ------------ ------------ ------------
Change in Class A Shares........ 200,102 3,727 (4,228) 70,019 (8,400)
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
CLASS B
Issued............................ 323,090 4,431 4,302 13,248 2,738
Reinvested........................ 12,804 654 759 1,335 1,464
Redeemed.......................... (4,413) (11,768) (3,177) (7,984) (311)
------------ ------------ ------------ ------------ ------------
Change in Class B Shares........ 331,481 (6,683) 1,884 6,599 3,891
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
CLASS C
Issued............................ 2,318,413 2,999,680 3,090,869 836,663 536,937
Reinvested........................ 126,558 424,095 404,673 2,411 4,759
Redeemed.......................... (337,933) (2,571,444) (2,454,782) (422,570) (1,008,532)
------------ ------------ ------------ ------------ ------------
Change in Class C Shares........ 2,107,038 852,331 1,040,760 416,504 (466,836)
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
</TABLE>
- ------------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
9. FEDERAL INCOME TAX INFORMATION (UNAUDITED) -- During the year ended April
30, 1998, the North-Carolina Tax-Free Bond Fund declared tax-exempt income
distributions in the amount of $1,760,950.
38
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 1998
During the year ended April 30, 1998, the following Funds declared long-term
capital gain distributions in the following amounts:
<TABLE>
<CAPTION>
LONG-TERM
MID-TERM 28% 20%
------------- ------------
<S> <C> <C>
Equity Growth Fund......................................... 27,084,873 7,526,584
Equity Income Fund......................................... 3,217,274 2,069,944
Southeast Equity Fund (a).................................. 113,441 378,383
</TABLE>
- -------------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
For the taxable year ended April 30, 1998, the following percentages of
income dividends paid by the following Funds qualify for the dividends received
deduction available to corporations:
<TABLE>
<S> <C>
Equity Growth Fund............................................. 25.16%
Equity Income Fund............................................. 64.73%
Southeast Equity Fund (a)...................................... 7.97%
</TABLE>
- -------------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
10. SUBSEQUENT EVENTS -- At a special meeting held May 11, 1998, the Board
of Directors of Centura Funds, Inc. approved the following changes to Centura
Equity Growth Fund and Centura Equity Income Fund, to take effect on or about
August 1, 1998. The planned changes for Centura Equity Income Fund are subject
to shareholder approval of a new investment objective. The changes approved by
the Board are as follows:
1.CENTURA EQUITY GROWTH FUND. The Board approved a change in this fund's
investment policies so that its primary investments would be in equity
securities of mid-sized companies -- those companies whose market
capitalization falls within the range of the companies in the S&P 400
Mid Cap Index at the time of purchase by the fund. To reflect this
change, the fund's name would be changed to Centura Mid Cap Equity Fund.
These changes do not require shareholder approval.
2.CENTURA EQUITY INCOME FUND. The Board approved a change in this fund's
investment objective and policies. The fund's current investment
objective is long-term capital appreciation and income. The new
investment objective, subject to shareholder approval, would be
long-term capital appreciation. The fund would pursue this objective by
investing primarily in equity securities of large U.S. companies --
those with market capitalization in excess of $1 billion. Income would
no longer be an objective of this fund, and the fund would not continue
to place a primary investment focus on a company's dividends. If
shareholders approve the change in investment objective, the fund's name
would be changed to Centura Large Cap Equity Fund.
Shareholders of Centura Equity Income Fund will soon receive a proxy
statement for a meeting of shareholders scheduled to be held July 23, 1998 to
consider the proposed new investment objective.
39
<PAGE>
CENTURA FUNDS, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
EQUITY GROWTH FUND
----------------------------------------------------------------
YEAR ENDED YEAR ENDED
APRIL 30, 1998 APRIL 30, 1997
------------------------------- -------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.................... $ 15.33 $ 15.20 $ 15.33 $ 14.31 $ 14.24 $ 14.31
--------- --------- --------- --------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income................................. 0.05 (0.05) 0.09 0.06 (0.04) 0.09
Net realized and unrealized gains from investment
transactions........................................ 4.92 4.84 4.94 1.58 1.57 1.58
--------- --------- --------- --------- --------- ---------
Total from Investment Activities...................... 4.97 4.79 5.03 1.64 1.53 1.67
--------- --------- --------- --------- --------- ---------
DISTRIBUTIONS
From net investment income............................ (0.05) -- (0.09) (0.06) (0.01) (0.09)
From net realized gains............................... (4.11) (4.11) (4.11) (0.56) (0.56) (0.56)
--------- --------- --------- --------- --------- ---------
Total Distributions................................... (4.16) (4.11) (4.20) (0.62) (0.57) (0.65)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD.......................... $ 16.14 $ 15.88 $ 16.16 $ 15.33 $ 15.20 $ 15.33
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Total Return (excludes sales or redemption charges)..... 36.55% 35.55% 36.89% 11.55% 10.78% 11.82%
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)..................... $ 13,935 $ 18,225 $ 179,859 $ 8,501 $ 9,761 $ 147,213
Ratio of expenses to average net assets............... 1.23% 1.98% 1.00% 1.30% 2.05% 1.05%
Ratio of net investment income to average net
assets.............................................. 0.31% (0.43)% 0.56% 0.42% (0.33)% 0.67%
Ratio of expenses to average net assets*.............. 1.48% (b) (b) 1.55% 2.05% 1.05%
Ratio of net investment income to average net
assets*............................................. 0.06% (b) (b) 0.17% (0.33)% 0.67%
Portfolio turnover rate (a)........................... 49% 49% 49% 67% 67% 67%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(b) There were no waivers or reimbursements during the period.
SEE NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
CENTURA FUNDS, INC.
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
EQUITY GROWTH FUND
----------------------------------
YEAR ENDED
APRIL 30, 1996
----------------------------------
CLASS CLASS CLASS
A B C
-------- -------- --------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 10.70 $ 10.69 $ 10.70
-------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.03 (0.06) 0.07
Net realized and unrealized gains from
investment transactions............. 3.67 3.65 3.65
-------- -------- --------
Total from Investment Activities...... 3.70 3.59 3.72
-------- -------- --------
DISTRIBUTIONS
From net investment income............ (0.05) -- (0.07)
From net realized gains............... (0.04) (0.04) (0.04)
-------- -------- --------
Total Distributions................... (0.09) (0.04) (0.11)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 14.31 $ 14.24 $ 14.31
-------- -------- --------
-------- -------- --------
Total Return (excludes sales and
redemption charges)................... 34.72% 33.73% 34.97%
-------- -------- --------
-------- -------- --------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $ 5,740 $ 6,194 $133,714
Ratio of expenses to average net
assets.............................. 1.26% 2.02% 1.04%
Ratio of net investment income (loss)
to average net assets............... 0.27% (0.48)% 0.55%
Ratio of expenses to average net
assets*............................. (d) (d) (d)
Ratio of net investment income (loss)
to average net assets*.............. (d) (d) (d)
Portfolio Turnover (c)................ 46% 46% 46%
<CAPTION>
PERIOD ENDED
APRIL 30, 1995(a)
----------------------------------
CLASS CLASS CLASS
A B C
-------- -------- --------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 10.00 $ 10.00 $ 10.00
-------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.06 0.03 0.07
Net realized and unrealized gains from
investment transactions............. 0.70 0.69 0.70
-------- -------- --------
Total from Investment Activities...... 0.76 0.72 0.77
-------- -------- --------
DISTRIBUTIONS
From net investment income............ (0.06) (0.03) (0.07)
From net realized gains............... -- -- --
-------- -------- --------
Total Distributions................... (0.06) (0.03) (0.07)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 10.70 $ 10.69 $ 10.70
-------- -------- --------
-------- -------- --------
Total Return (excludes sales and
redemption charges)................... 7.64%(e) 7.23%(e) 7.71%(e)
-------- -------- --------
-------- -------- --------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $ 968 $ 1,362 $ 84,004
Ratio of expenses to average net
assets.............................. 1.29%(b) 2.03%(b) 1.04%(b)
Ratio of net investment income (loss)
to average net assets............... 0.63%(b) 0.00%(b) 0.79%(b)
Ratio of expenses to average net
assets*............................. 1.32%(b) 2.06%(b) 1.07%(b)
Ratio of net investment income (loss)
to average net assets*.............. 0.60%(b) (0.03)%(b) 0.76%(b)
Portfolio Turnover (c)................ 44% 44% 44%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) For the period from June 1, 1994 (commencement of operations) to April 30,
1995.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(d) There were no waivers or reimbursements during the period.
(e) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
41
<PAGE>
CENTURA FUNDS, INC.
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
EQUITY INCOME FUND
----------------------------------------------------------------
YEAR ENDED APRIL 30, 1998 PERIOD ENDED APRIL 30, 1997(a)
------------------------------- -------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.................. $ 10.91 $ 10.88 $ 10.89 $ 10.00 $ 10.00 $ 10.00
--------- --------- --------- --------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income............................... 0.26 0.17 0.29 0.14 0.11 0.15
Net realized and unrealized gains from investment
transactions...................................... 2.90 2.88 2.89 0.93 0.90 0.91
--------- --------- --------- --------- --------- ---------
Total from Investment Activities.................... 3.16 3.05 3.18 1.07 1.01 1.06
--------- --------- --------- --------- --------- ---------
DISTRIBUTIONS
From net investment income.......................... (0.26) (0.17) (0.28) (0.14) (0.11) (0.15)
From net realized gains............................. (1.21) (1.21) (1.21) (0.02) (0.02) (0.02)
--------- --------- --------- --------- --------- ---------
Total Distributions................................. (1.47) (1.38) (1.49) (0.16) (0.13) (0.17)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD........................ $ 12.60 $ 12.55 $ 12.58 $ 10.91 $ 10.88 $ 10.89
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Total Return (excludes sales or redemption charges)... 30.36% 29.39% 30.72% 10.69%(c) 10.15%(c) 10.65%(c)
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)................... $ 1,490 $ 2,182 $ 65,053 $ 338 $ 427 $ 52,486
Ratio of expenses to average net assets............. 0.90% 1.64% 0.67% 0.99% 1.71% 0.75%
Ratio of net investment income to average net
assets............................................ 2.05% 1.30% 2.37% 2.15% 1.52% 2.45%
Ratio of expenses to average net assets*............ 1.55% 2.05% 1.08% 1.65% 2.12% 1.17%
Ratio of net investment income to average net
assets*........................................... 1.40% 0.89% 1.96% 1.48% 1.10% 2.03%
Portfolio turnover rate (b)......................... 39% 39% 39% 24% 24% 24%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements 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) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
(c) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
42
<PAGE>
CENTURA FUNDS, INC.
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
SOUTHEAST EQUITY FUND PERIOD ENDED
APRIL 30, 1998 (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.................................................................. 0.03 (0.03) 0.06
Net realized and unrealized gains from investment transactions......................... 5.87 5.82 5.86
----------- ----------- -----------
Total from Investment Activities....................................................... 5.90 5.79 5.92
----------- ----------- -----------
DISTRIBUTIONS
From net investment income............................................................. (0.03) -- (0.06)
In excess of net investment income..................................................... (0.01) (0.02) --
From net realized gains................................................................ (0.87) (0.87) (0.87)
----------- ----------- -----------
Total Distributions.................................................................... (0.91) (0.89) (0.93)
----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD........................................................... $ 14.99 $ 14.90 $ 14.99
----------- ----------- -----------
----------- ----------- -----------
Total Return (excludes sales or redemption charges) (d).................................. 60.75% 59.50% 60.98%
----------- ----------- -----------
----------- ----------- -----------
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)...................................................... $ 3,000 $ 4,938 $ 31,583
Ratio of expenses to average net assets (b)............................................ 1.46% 2.21% 1.16%
Ratio of net investment income to average net assets (b)............................... 0.09% (0.66)% 0.46%
Ratio of expenses to average net assets* (b)........................................... 1.82% 2.32% 1.27%
Ratio of net investment income to average net assets* (b).............................. (0.27 )% (0.77 )% 0.35%
Portfolio turnover rate (c)............................................................ 71% 71% 71%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
43
<PAGE>
CENTURA FUNDS, INC.
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
FEDERAL SECURITIES INCOME FUND
------------------------------------------------------------------
YEAR ENDED APRIL 30, 1998 YEAR ENDED APRIL 30, 1997
------------------------------- ----------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD...................... $ 9.94 $ 9.94 $ 9.94 $ 10.01 $ 10.01 $ 10.01
--------- --------- --------- -------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................................... 0.55 0.50 0.57 0.56 0.50 0.59
Net realized and unrealized gains from investment
transactions.......................................... 0.25 0.24 0.25 (0.07) (0.07) (0.07)
--------- --------- --------- -------- -------- --------
Total from Investment Activities........................ 0.80 0.74 0.82 0.49 0.43 0.52
--------- --------- --------- -------- -------- --------
DISTRIBUTIONS
From net investment income.............................. (0.55) (0.50) (0.57) (0.56) (0.50) (0.59)
--------- --------- --------- -------- -------- --------
Total Distributions..................................... (0.55) (0.50) (0.57) (0.56) (0.50) (0.59)
--------- --------- --------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD............................ $ 10.19 $ 10.18 $ 10.19 $ 9.94 $ 9.94 $ 9.94
--------- --------- --------- -------- -------- --------
--------- --------- --------- -------- -------- --------
Total Return (excludes sales or redemption charges)....... 8.21% 7.58% 8.48% 5.07% 4.46% 5.33%
--------- --------- --------- -------- -------- --------
--------- --------- --------- -------- -------- --------
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)....................... $ 531 $ 131 $ 131,068 $ 481 $ 194 $119,434
Ratio of expenses to average net assets................. 0.84% 1.36% 0.59% 0.82% 1.40% 0.58%
Ratio of net investment income to average net assets.... 5.42% 4.93% 5.68% 5.63% 5.04% 5.88%
Ratio of expenses to average net assets*................ 1.09% 1.61% 0.59% 1.07% 1.65% 0.58%
Ratio of net investment income to average net assets*... 5.17% 4.68% 5.68% 5.38% 4.79% 5.88%
Portfolio turnover rate (a)............................. 121% 121% 121% 26% 26% 26%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
SEE NOTES TO FINANCIAL STATEMENTS.
44
<PAGE>
CENTURA FUNDS, INC.
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
FEDERAL SECURITIES INCOME FUND
----------------------------------
YEAR ENDED
APRIL 30, 1996
----------------------------------
CLASS CLASS CLASS
A B C
-------- -------- --------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 9.97 $ 9.97 $ 9.97
-------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.57 0.50 0.60
Net realized and unrealized gains
(losses) from investments........... 0.04 0.04 0.04
-------- -------- --------
Total from Investment Activities...... 0.61 0.54 0.64
-------- -------- --------
DISTRIBUTIONS
From net investment income............ (0.57) (0.50) (0.60)
-------- -------- --------
Total Distributions................... (0.57) (0.50) (0.60)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 10.01 $ 10.01 $ 10.01
-------- -------- --------
-------- -------- --------
Total Return (excludes sales and
redemption charges)................... 6.20% 5.40% 6.47%
-------- -------- --------
-------- -------- --------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $ 526 $ 176 $109,775
Ratio of expenses to average net
assets.............................. 0.85% 1.61% 0.61%
Ratio of net investment income to
average net assets.................. 5.61% 4.84% 5.88%
Ratio of expenses to average net
assets*............................. (d) (d) (d)
Ratio of net investment income to
average net assets*................. (d) (d) (d)
Portfolio Turnover (c)................ 34% 34% 34%
<CAPTION>
PERIOD ENDED
APRIL 30, 1995(a)
----------------------------------
CLASS CLASS CLASS
A B C
-------- -------- --------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 10.00 $ 10.00 $ 10.00
-------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.52 0.45 0.54
Net realized and unrealized gains
(losses) from investments........... (0.03) (0.03) (0.03)
-------- -------- --------
Total from Investment Activities...... 0.49 0.42 0.51
-------- -------- --------
DISTRIBUTIONS
From net investment income............ (0.52) (0.45) (0.54)
-------- -------- --------
Total Distributions................... (0.52) (0.45) (0.54)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 9.97 $ 9.97 $ 9.97
-------- -------- --------
-------- -------- --------
Total Return (excludes sales and
redemption charges)................... 5.02%(e) 4.32%(e) 5.28%(e)
-------- -------- --------
-------- -------- --------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $ 247 $ 118 $ 93,807
Ratio of expenses to average net
assets.............................. 0.86%(b) 1.61%(b) 0.63%(b)
Ratio of net investment income to
average net assets.................. 5.58%(b) 4.86%(b) 5.97%(b)
Ratio of expenses to average net
assets*............................. 0.89%(b) 1.64%(b) 0.66%(b)
Ratio of net investment income to
average net assets*................. 5.55%(b) 4.83%(b) 5.94%(b)
Portfolio Turnover (c)................ 42% 42% 42%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) For the period from June 1, 1994 (commencement of operations) to April 30,
1995.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(d) There were no waivers or reimbursements during the period.
(e) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
45
<PAGE>
CENTURA FUNDS, INC.
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
NORTH CAROLINA TAX-FREE BOND FUND
---------------------------------------------------------------
YEAR ENDED APRIL 30,
YEAR ENDED APRIL 30, 1998 1997
------------------------------------- ------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......................... $ 9.98 $ 9.98 $ 9.98 $ 10.04 $ 10.04
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITIES
Net investment income...................................... 0.43 0.38 0.46 0.43 0.37
Net realized and unrealized gains from investment
transactions............................................. 0.32 0.32 0.32 0.03 0.03
----------- ----------- ----------- ----------- -----------
Total from Investment Activities........................... 0.75 0.70 0.78 0.46 0.40
----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS
From net investment income................................. (0.43) (0.38) (0.46) (0.43) (0.37)
From net realized gains.................................... -- -- -- (0.09) (0.09)
----------- ----------- ----------- ----------- -----------
Total Distributions........................................ (0.43) (0.38) (0.46) (0.52) (0.46)
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD............................... $ 10.30 $ 10.30 $ 10.30 $ 9.98 $ 9.98
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total Return (excludes sales or redemption charges).......... 7.61% 7.09% 7.89% 4.71% 4.11%
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000).......................... $ 4,664 $ 511 $ 37,456 $ 3,823 $ 430
Ratio of expenses to average net assets.................... 0.69% 1.18% 0.44% 0.69% 1.27%
Ratio of net investment income to average net assets....... 4.19% 3.70% 4.44% 4.31% 3.73%
Ratio of expenses to average net assets*................... 1.29% 1.78% 0.79% 1.30% 1.88%
Ratio of net investment income to average net assets*...... 3.59% 3.10% 4.09% 3.70% 3.12%
Portfolio turnover rate (b)................................ 29% 29% 29% 34% 34%
<CAPTION>
CLASS C
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......................... $ 10.04
-----------
INVESTMENT ACTIVITIES
Net investment income...................................... 0.46
Net realized and unrealized gains from investment
transactions............................................. 0.03
-----------
Total from Investment Activities........................... 0.49
-----------
DISTRIBUTIONS
From net investment income................................. (0.46)
From net realized gains.................................... (0.09)
-----------
Total Distributions........................................ (0.55)
-----------
NET ASSET VALUE, END OF PERIOD............................... $ 9.98
-----------
-----------
Total Return (excludes sales or redemption charges).......... 4.97%
-----------
-----------
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000).......................... $ 32,159
Ratio of expenses to average net assets.................... 0.44%
Ratio of net investment income to average net assets....... 4.56%
Ratio of expenses to average net assets*................... 0.80%
Ratio of net investment income to average net assets*...... 4.20%
Portfolio turnover rate (b)................................ 34%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements 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) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
SEE NOTES TO FINANCIAL STATEMENTS.
46
<PAGE>
CENTURA FUNDS, INC.
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<TABLE>
<CAPTION>
NORTH CAROLINA TAX-FREE BOND FUND
----------------------------------
YEAR ENDED
APRIL 30, 1996
----------------------------------
CLASS CLASS CLASS
A B C
-------- -------- --------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 9.98 $ 9.98 $ 9.98
-------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.42 0.34 0.44
Net realized and unrealized gains
(losses) from investments........... 0.13 0.13 0.13
-------- -------- --------
Total from Investment Activities...... 0.55 0.47 0.57
-------- -------- --------
DISTRIBUTIONS
From net investment income............ (0.42) (0.34) (0.44)
From net realized gains............... (0.07) (0.07) (0.07)
-------- -------- --------
Total Distributions................... (0.49) (0.41) (0.51)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 10.04 $ 10.04 $ 10.04
-------- -------- --------
-------- -------- --------
Total Return (excludes sales and
redemption charges)................... 5.50% 4.72% 5.78%
-------- -------- --------
-------- -------- --------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $ 3,927 $ 393 $ 37,009
Ratio of expenses to average net
assets.............................. 0.68% 1.44% 0.44%
Ratio of net investment income to
average net assets.................. 3.98% 3.30% 4.32%
Ratio of expenses to average net
assets*............................. 1.04% 1.80% 0.80%
Ratio of net investment income to
average net assets*................. 3.62% 2.94% 3.96%
Portfolio Turnover (c)................ 80% 80% 80%
<CAPTION>
PERIOD ENDED
APRIL 30, 1995(a)
----------------------------------
CLASS CLASS CLASS
A B C
-------- -------- --------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 10.00 $ 10.00 $ 10.00
-------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.39 0.32 0.41
Net realized and unrealized gains
(losses) from investments........... (0.02) (0.02) (0.02)
-------- -------- --------
Total from Investment Activities...... 0.37 0.30 0.39
-------- -------- --------
DISTRIBUTIONS
From net investment income............ (0.39) (0.32) (0.41)
From net realized gains............... -- -- --
-------- -------- --------
Total Distributions................... (0.39) (0.32) (0.41)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 9.98 $ 9.98 $ 9.98
-------- -------- --------
-------- -------- --------
Total Return (excludes sales and
redemption charges)................... 3.77%(d) 3.09%(d) 4.08%(d)
-------- -------- --------
-------- -------- --------
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $ 429 $ 275 $ 34,885
Ratio of expenses to average net
assets.............................. 0.42%(b) 0.99%(b) 0.41%(b)
Ratio of net investment income to
average net assets.................. 4.46%(b) 3.89%(b) 4.64%(b)
Ratio of expenses to average net
assets*............................. 0.92%(b) 1.49%(b) 0.91%(b)
Ratio of net investment income to
average net assets*................. 3.96%(b) 3.39%(b) 4.14%(b)
Portfolio Turnover (c)................ 121% 121% 121%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) For the period from June 1, 1994 (commencement of operations) to April 30,
1995.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(d) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
47
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders
Centura Funds, Inc.
We have audited the accompanying statements of assets and liabilities of
Centura Equity Growth Fund, Centura Equity Income Fund, Centura Southeast Equity
Fund, Centura Federal Securities Income Fund and Centura North Carolina Tax-Free
Bond Fund, separate portfolios of Centura Funds, Inc., including the schedules
of portfolio investments, as of April 30, 1998, and the related statements of
operations, changes in net assets, and the financial highlights for the periods
indicated in the accompanying financial statements. These financial statements
and financial highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1998, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Centura Equity Growth Fund, Centura Equity Income Fund, Centura Southeast Equity
Fund, Centura Federal Securities Income Fund and Centura North Carolina Tax-Free
Bond Fund as of April 30, 1998, the results of their operations, the changes in
their net assets and the financial highlights for the periods indicated, in
conformity with generally accepted accounting principles.
McGladrey & Pullen, LLP
New York, New York
May 22, 1998
48
<PAGE>
[LOGO]
FOR ADDITIONAL INFORMATION ON THE
CENTURA FUNDS, CALL
1-800-44-CENTURA
(800-442-3688).
INVESTMENT ADVISER AND CUSTODIAN
Centura Bank
131 North Church Street
Rocky Mount, NC 27802
ADMINISTRATOR AND SPONSOR
BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, OH 43219
DISTRIBUTOR
Centura Funds Distributor, Inc.
3435 Stelzer Road
Columbus, OH 43219
LEGAL COUNSEL
Dechert Price & Rhoads
1775 Eye Street
Washington, D.C. 20006
INDEPENDENT AUDITORS
McGladrey & Pullen LLP
555 Fifth Avenue
New York, NY 10017
This report is for the information of the shareholders of
Centura Funds. Its use in connection with any offering of the
Funds' shares is authorized only in case of a concurrent or
prior delivery of the Funds' current prospectus.
Investments in mutual funds involve risk, including possible
loss of principal. Centura Funds are not deposits, guaran-
teed by or obligations of Centura Bank or its affiliates and are
not insured by the FDIC, the Federal Reserve Board or
any other government agency.
[LOGO]
CENTURA
EQUITY GROWTH
FUND
CENTURA
EQUITY INCOME
FUND
CENTURA
FEDERAL SECURITIES
INCOME FUND
CENTURA
NORTH CAROLINA
TAX-FREE BOND
FUND
CENTURA
SOUTHEAST EQUITY
FUND
ANNUAL
REPORT
April 30, 1998
